DC District Court Strikes Down Part of NLRB's Election Rule Amendments; NLRB Implements and Provides Guidance on Remaining Amendments | Practical Law

DC District Court Strikes Down Part of NLRB's Election Rule Amendments; NLRB Implements and Provides Guidance on Remaining Amendments | Practical Law

The US District Court for the District of Columbia issued an order vacating in part a National Labor Relations Board (NLRB) rule amending its representation election procedures as unlawfully promulgated. The NLRB provided guidance on how it is implementing the remaining amendments. The court later issued a memorandum opinion explaining its order and a memorandum opinion and new order amending in part its first order.

DC District Court Strikes Down Part of NLRB's Election Rule Amendments; NLRB Implements and Provides Guidance on Remaining Amendments

by Practical Law Labor & Employment
Law stated as of 25 Aug 2023 • USA (National/Federal)
The US District Court for the District of Columbia issued an order vacating in part a National Labor Relations Board (NLRB) rule amending its representation election procedures as unlawfully promulgated. The NLRB provided guidance on how it is implementing the remaining amendments. The court later issued a memorandum opinion explaining its order and a memorandum opinion and new order amending in part its first order.
On May 30, 2020, in AFL-CIO v. NLRB, Judge Ketanji Brown Jackson of the US District Court for the District of Columbia issued an Order vacating portions of an NLRB rule amending its union election procedures containing what it held to be more than procedural rule changes that should have been but were not subject to notice-and-comments rulemaking requirements in violation of the Administrative Procedure Act (APA) (5 U.S.C. § 553(b)(3)(A)). The court noted that it was setting aside only the amendments alluded to in Count 1 of the AFL-CIO's complaint, remanding consideration of the remaining procedural election procedure amendments to the NLRB, and issuing a memorandum order explaining its conclusions soon. (Order, AFL-CIO v. NLRB, Civ. No. 20-CV-0675, Docket No. 34 (May 30, 2020); see Legal Update, NLRB Announces Modifications to Representation Case Procedures.)
On June 1, 2020, the NLRB issued General Counsel Memo 20-07, Guidance Memorandum on Representation Case Procedure Changes. The NLRB General Counsel:
  • Views the DC District Court order as enjoining the NLRB from implementing only five aspects of its election procedure amendments providing that:
    • parties may litigate most voter eligibility and inclusion issues prior to the election (29 C.F.R. § 102.64(a));
    • the Regional Director normally would not schedule an election before the 20th business day after the date of the direction of election (29 C.F.R. § 102.67(b));
    • employers must furnish the required voter list to the Regional Director and other parties within five business days (rather than the two business days under the prior rules) after the issuance of a direction of election (29 C.F.R. § 102.67(l));
    • parties generally must select individuals who are current members of the voting unit as election observers, whenever possible (29 C.F.R. § 102.69(a)(5)); and
    • the Regional Director no longer would issue certifications following elections if a request for review were pending or before the time has passed during which a request for review could be filed (29 C.F.R. § 102.69(b) and (c)).
  • Issued guidance to the NLRB regions and the public about how the remaining election procedure changes, which became effective May 31, 2020, are being implemented.
In the June 1, 2020 news release accompanying the General Counsel Memo 20-07, the NLRB also asserted that it:
  • Complied with all legal requirements in issuing the amendments to its election procedures.
  • Intends to appeal the court's order to the court of appeals after the court issues its memorandum opinion.

UPDATE

On June 7, 2020, the DC District Court issued a memorandum opinion explaining its May 30, 2020 Order and responding to the AFL-CIO's June 3, 2020 motion seeking clarification of that order. The court supplied analysis supporting its rulings that:
  • It has subject-matter jurisdiction to decide the AFL-CIO’s challenges under 28 U.S.C. § 1331.
  • The case need not be transferred to the U.S. Court of Appeals for the District of Columbia Circuit, because the direct review provision of the NLRA that channels review of certain NLRB actions directly to the DC Circuit or other US courts of appeals does not apply to this rulemaking, non-order, agency action (see 29 U.S.C. § 160(f)).
  • The challenged parts of the NLRB's election rule amendments:
    • do not qualify as procedural rules within the meaning of the APA’s exception to notice-and-comment rulemaking; and
    • the particular provisions that were promulgated unlawfully must be set aside.
The court also held that:
  • Nothing in the APA requires that it must invalidate an entire rulemaking based on the unlawfulness of any of its parts.
  • The NLRB ought to decide in the first instance on remand how it proceeds with the remainder of the amendments in the rulemaking.
  • There is no precedent permitting the court to review an agency's discretionary determination regarding whether to implement a rule that it has previously promulgated and that has not been deemed unlawful, no matter how swiftly the agency undertakes to make that decision (see Ctr. for Biological Diversity v. Zinke, 260 F. Supp. 3d 11, 29 (D.D.C. 2017). The AFL-CIO's challenge of the NLRB's decision to enforce the remaining amendments from its rulemaking without sufficient deliberation is not justiciable.
  • There was no prejudice to the AFL-CIO when the court set aside only the challenged amendments in the rulemaking and did not reach the merits of its alternative claims that the entire rulemaking ought to be vacated as arbitrary and capricious or violating the NLRA. The AFL-CIO asserted that the court need not reach its other claims if the court set aside the specifically challenged amendments.
  • In any event, the challenged amendments were severable from the remainder of the amendments in the rulemaking, because:
    • there is no doubt the NLRB would adopt the severed portions of the rulemaking on its own because the rulemaking included a severability provision so stating; and
    • the balance of the amendments can function sensibly without the stricken provisions.
(AFL-CIO v. NLRB, 466 F. Supp.3d 68 (D.D.C. 2020).)
The practical implications of the DC District Court's decision and order, and the NLRB General Counsel Memorandum, are that the NLRB's election procedures:
  • Now include many procedural changes effective as of May 31, 2020.
  • Do not include several changes intended to be effective as of May 31, 2020, that the AFL-CIO successfully argued were more substantive than procedural.
For analysis of which amendments have and have not been implemented, see Key 2020 Amendments to the NLRB Union Election Process Chart.
For analysis of union organizational and election processes as changed by the implemented amendments, see:

UPDATE

On July 1, 2020, the DC District Court issued an amended order:
  • Confirming that it was granting the AFL-CIO's motion for summary judgment as to Count One of its complaint concerning five aspects of the NLRB's rule amending election procedures that the court previously held were invalidly promulgated.
  • Granting summary judgment for the NLRB and denying summary judgment for the AFL-CIO concerning the three other counts in the AFL-CIO's complaint against the NLRB, in which the AFL-CIO alleged the parts of the amendments not referenced in the first count of its complaint and the amendments in their entirety were invalid and must be vacated.
(Order, AFL-CIO v. NLRB, 20-cv-675 (KBJ) (D.D.C. July 1, 2020).)
In the memorandum opinion accompanying its July 1, 2020 Order, the court explained that it was:
  • Granting the AFL-CIO's motion for reconsideration and therefore would provide a substantive ruling on the AFL-CIO's three remaining counts of its complaint.
  • Amending its May 30, 2020 Order to rescind the court's remand of the matter to the NLRB to rule on the AFL-CIO's remaining claims.
  • Holding that the NLRB is entitled to summary judgment as to:
    • Count Two challenging under the APA the NLRB’s decisionmaking process concerning the rule amending its election procedures as a whole, because the process was sufficiently reasoned not to be arbitrary and capricious;
    • Count Three challenging under the APA the NLRB's decisionmaking process concerning the amendment provision providing for the automatic impoundment of election ballots pending NLRB review, because the process was sufficiently reasoned not to be arbitrary and capricious; and
    • Count Four challenging the impoundment provision under the NLRA, because the NLRA is silent regarding the issue, and the NLRB advanced a reasonable interpretation of the NLRA’s limits when it adopted the impoundment policy.
(AFL-CIO v. NLRB, 471 F. Supp. 3d 228 (D.D.C. 2020).)

UPDATE

In late July, the NLRB and the AFL-CIO appealed the respective grants of summary judgment by the DC District Court (see AFL-CIO v. NLRB, 20-5226 (D.C. Cir.), consolidated with NLRB's cross-appeal in 20-5223).
On July 15, 2021, the AFL-CIO also challenged the NLRB's separate rulemaking concerning blocking charges, and sought a declaratory judgment invalidating the rule under the Administrative Procedures Act as arbitrary and capricious (see Legal Update, NLRB Publishes Final Rule on Blocking Charges, Election Bars, Proof of Majority Support in the Construction Industry). That case is stayed pending the DC Circuit's determinations on the cross-appeals of the DC District Court's rulings in 20-CV-0675 (see Minute Order, Civ. No. 20-CV-01909 (D.C. Dist. Oct. 23, 2020)).

UPDATE

On January 17, 2023, in AFL-CIO v. NLRB, a three-member DC Circuit panel affirmed in part and reversed in part the DC District Court's decision, ruling that:
  • The statutory provision for direct review in federal appellate courts of NLRB orders regarding unfair labor practices, 29 U.S.C. § 160(f), does not divest the district court of jurisdiction over challenges to NLRB rules exclusively concerning union representation elections.
  • The waiting period and pre-election litigation amendments were procedural and, contrary to the district court's holding, could validly be implemented without notice and comment.
  • The voter list, election certification and election observer amendments, as the district court concluded, were substantive and invalidly promulgated without notice and comment.
  • The impoundment of ballots amendment, validated by the district court and codified in 29 C.F.R. § 102.67(c), was invalid as running contrary to Section 3(b) of the NLRA.
  • The NLRB's rule, considered as a whole, was not arbitrary and capricious.
The DC Circuit remanded to the DC District consideration of additional challenges to the unimplemented waiting period and pre-election litigation amendments. (57 F.4th 1023 (D.C. Cir. 2023).) For more information, see 2023 Traditional Labor Law Developments Tracker: Pre-Election Hearings, Procedures, and Election Bars.

UPDATE

On March 10, 2023, the NLRB rescinded the four representation election regulation amendments struck down by the DC Circuit and stayed implementation of the two representation election regulation amendments the DC Circuit remanded to the DC District Court for consideration of additional challenges (88 Fed. Reg. 14908 (Mar. 10, 2023); 88 Fed. Reg. 14913 (Mar. 10, 2023); see 2023 Traditional Labor Law Developments Tracker: National Labor Relations Board (NLRB)).

UPDATE

On August 25, 2023, the NLRB issued a final rule amending its procedures governing union representation elections, largely reversing the amendments made by the 2019 election rule and returning election procedures to those adopted in the predecessor 2014 rule. The rule becomes effective on December 26, 2023. In a companion rulemaking, the NLRB also extended the stay of the two never-implemented provisions of the 2019 rule until December 26, 2023, the effective date of the rule formally repealing those provisions. (88 Fed. Reg. 58076 (Aug. 25, 2023); 88 Fed. Reg. 58075 (Aug. 25, 2023); for more information, see 2023 Traditional Labor Law Developments Tracker: National Labor Relations Board (NLRB)).