NLRB Election Regulation Invalidation Clarification from Decide Jackson

By Jason Wilson On Dec 10, 2020

As we discussed earlier this month, District Court Judge Ketanji Brown Jackson issued an order in the American Federation of Labor and Congress of Industrial Organizations against the National Labor Relations Board, Civil Case No. 2020-0675, under the five invalidated by the National Labor Relations Board (NLRB or Board) New electoral rules (rules for 2019) will be implemented shortly. Judge Jackson’s Medal, issued in a hurry on May 30th to prevent the board from implementing the new rules on May 31st, offered little explanation for her decision other than saying that she would apply any of the challenged new rules to the Considered electoral procedures to be unlawful and repealed them because they were “no rules of procedure” that are exempt from the requirements of the Administrative Procedure Act (APA) for publicizing and commenting on rules.

Given that the new Governing Body (lay) rules were designed to change the procedures the Agency would use in handling future election cases, it was difficult to characterize the Order as anything other than “procedural ” capture. . However, on June 7, Judge Jackson issued a 52-page Memorandum Opinion explaining the underlying basis for their earlier “non-procedural” finding. Your decision on this important case is likely to be contested in the DC Circuit. Meanwhile, their June 7th memorandum speaks volumes about the Governing Body and any rule change the NLRB may wish to make in the future, if what it says in it is right. Here’s why.

The National Labor Relation Act (NLRA or Act), Section 6, from time to time gives the NLRB the power to make, amend, and repeal the necessary rules and regulations in such manner as required by the Administrative Procedure Act (APA) execute. “Until recently, the Board of Directors has rarely used this regulatory authority to instead determine and announce its significant or doctrinal legislative changes on a case-by-case basis. Accordingly, it could reconsider later, as long as its decisions are consistent with the clear wording and limitations of the Statute, based on substantive evidence and subject to judicial review by the appellate courts, the substantive policy the Chamber has put in place by a decision and vice versa by simply adding a a new decision is issued amending the substantive law of the law – without prior public notice or comment.

The APA, on the other hand, separates agency legislative or substantive rules that have the force and effect of law (and which both the agency and the public are legally bound by until amended) from procedural rules that do not. Indeed, legal regulations have the effect of laws that the APA requires a managing authority to adhere to those rules until they are changed and prevents the agency from deviating from or making changes to them without first asking To publish an announcement about the proposed rule-setting and to obtain public comments about significant changes and taking these public contributions into account before implementing a new or changed content rule. However, procedural rules are not seen as substantive or legislative. You do not have the power or effect of the law. Accordingly, the APA authorizes an agency wishing to make changes to its rules of procedure to do so without going through the notification and commenting process. The distinction between what constitutes a substantive / legislative rule and what is a procedural rule under the APA changed Judge Jackson’s decision.

The purpose of the new Board of Directors’ electoral rules (2019 rules) was to repeal and correct certain aspects of the “quickie” electoral process adopted by the Board in 2014 (2014 rules) that the current Board of Directors considered to be seriously flawed. Before the 2019 rules were published, the Board asked the public for input on the effectiveness of the 2014 rules and received nearly 7,000 responses from the public. However, since the Board of Directors believed that the 2014 rules (which arose from a formal notice and comment process) and the 2019 rule changes it requested were procedural, they decided to move towards the formality of a notice of the proposed rule-making waive, and never asked for a formal public comment on the 2019 changes. Included in the changes to the new electoral rules, the board wanted to do the following:

A rule that enables employers to ask and sue questions about individual eligibility and the exclusion of units, ie supervisory issues, before an election.
A rule that prohibits holding an election for twenty days after an election direction has been issued so that the board can review and decide on a request for review of that direction;
A rule that prohibits issuing a certificate of election results until the board has decided on a request for review or the deadline for filing a request for review by the board has passed;
A rule that extends the time it takes to compile an eligibility list for an employer from two business days after the election to five business days; and
A rule that requires a party to select either a current member of the voting unit or a current non-prudential employee to act as election observer.

Although Judge Jackson certainly looked and sounded like electoral processes, he noted that these rule changes are not “procedures” of the Agency for the purposes of the APA, as the new rules were not mere budgetary measures, i.e. those aimed at improving the internal processes of the Board of Directors to change operations, but aimed at reversing the rules of the Board of Directors for 2014. On the basis of this finding and the fact that the changes to the 2019 rules could significantly affect the material rights of workers under the law, it concluded that “each of the provisions. . . that the AFL-CIO challenge[d] as a hint-and-comment violation[ed] well outside the internal workings of the Board of Directors, and the NLRB has not demonstrated any provision. . . fit[ted] within the narrow framework of the procedural rule exception. Indeed, Judge Jackson even conceded that “while these rules can be characterized as procedural at a certain level of abstraction, because they apply in general [relate] on the procedures to be followed in order to hold representative elections. But [they] . . . not yet meaningfully influence the agency’s sensible internal processes. . . have a significant impact on. . . Employees’ ability to launch a successful union education campaign ”. Accordingly, she concluded that each of the five new rules “transcends[ed] the narrow scope of the exemption for procedural rules of the APA “, which is excluded from the notification and comment requirements of the APA.

But Judge Jackson didn’t stop there. Using a “belt and suspenders” approach to her decision-making, she found and explained why each of the five new rules were sufficient “content” rules within the meaning of the APA to require a notification and comment process. Judge Jackson noted that the 2019 rules not only affected the agency’s internal financial management, but merely set schedules for asserting material rights or simply changed the way a party or its positions would present themselves to the board , and concluded the new rules, which granted certain new rights, imposed new obligations and could have a significant impact on private interests as the new rules “are deemed essential for the purposes of the APA’s notice and commentary requirements”.

IMPORTANT TAKEAWAYS:

The board’s rules for 2019 included many other changes that Judge Jackson did not invalidate. The Board of Directors implemented these other changes on June 1st. The Board of Directors has also announced that it will appeal its decision to the DC Circuit. This is an extremely narrow legal issue with compelling arguments on both sides. Hence, it is difficult to predict the final outcome of the case.

The standards Judge Jackson used to invalidate the board’s five rules for 2019 are not clear lines. These are grades that are difficult to apply with real certainty in the real world, making almost all seemingly procedural rules that are implemented without a corresponding notification and comment process susceptible to contestation and judicial second assessments.

Unless Judge Jackson’s decision is overturned, the five rules of 2014 that were left intact by the invalidation of the rules of 2019 and the rest of the rules for the Board’s quickie voting process of 2014 that were replaced by the new rules, which the board introduced on June 1, remain unaffected, are not subject to change, unless and until they are the subject of a formal notification and comment process.