Labor & Employment Law Daily On second look at NLRB election rule, court sees nothing arbitrary or capricious
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Wednesday, July 8, 2020

On second look at NLRB election rule, court sees nothing arbitrary or capricious

By Ronald Miller, J.D.

The NLRB’s action was not arbitrary or capricious in promulgating the 2019 election rule as a whole; nor was its ballot-impoundment provision, specifically.

The federal district court for the District of Columbia, on a motion for reconsideration, has revised its order invalidating several provisions of the NLRB’s 2019 election rule and remanding to the Board without addressing several counts of the AFL-CIO’s complaint challenging the Board’s rulemaking. Addressing those remaining counts on the merits, the court now found that the election rule as a whole cleared the APA’s arbitrary-and-capricious hurdle, as did a specific provision requiring election ballots to be automatically impounded pending Board review. The Board was entitled to summary judgment on several counts of the AFL-CIO’s complain, and that portion of the earlier order remanding the case to the Board was rescinded (AFL-CIO v. NLRB, July 1, 2020, Jackson, K.).

Election rule challenge. The AFL-CIO filed suit challenging the NLRB’s 2019 rule revising procedures for Board-conducted representation elections. The complaint invoked the Administrative Procedure Act and claimed that the rulemaking was unlawful in several respects:

  • In Count One, the AFL-CIO alleged that the Board wrongfully eschewed the required notice-and-comment process;
  • Count Two claimed that the rule was arbitrary and capricious as a whole;
  • Count Three asserted that several individual provisions, including the ballot impoundment requirement, were arbitrary and capricious;
  • Count Four maintained that the impoundment provision violated Section 153(b) of the NLRA.

On June 7, the court granted summary judgment in favor of the AFL-CIO on Count One, holding that five provisions of the Election Rule were procedurally improper because the Board did not engage in notice-and-comment rulemaking. However, the court expressly declined to reach the other APA claims and remanded the case to the agency.

Motion for reconsideration. The AFL-CIO filed a motion for reconsideration, contending that the court misinterpreted its “suggestion that the Court did not need to proceed to Counts Two to Four.” In essence, the AFL-CIO wanted the court to rescind that part of its order that remands the dispute, asking the court instead to “proceed to rule on Counts Two, Three, and Four.” The court granted the motion, concluding that the AFL-CIO made a persuasive argument that the court had misunderstood its statement concerning whether or not the court should proceed to consider the remaining claims in the complaint. On the merits, however, the court granted summary judgment in the NLRB’s favor on Counts Two, Three, and Four of the complaint.

Not arbitrary or capricious as a whole. The court was persuaded that the NLRB’s decisionmaking process was sufficiently reasoned as to the election rule as a whole to satisfy the APA’s standard. To start, the record plainly established that the Board fully recognized it was changing the existing policy concerning representation election practices. Further, the text of the 2019 rule demonstrated the Board’s awareness of the values upon which the prior, Obama-era rule was based. Thus, the court rejected the AFL-CIO’s argument that the agency acted arbitrarily and capriciously.

Impoundment provision not arbitrary or capricious. Nor did the impoundment provision specifically run afoul of the APA, because the Board advanced a reasonable interpretation of the agency’s limits when it adopted the impoundment policy. The court observed that the 2019 election rule plainly articulated the NLRB’s policy-driven view that the impoundment provision will enhance “finality and certainty, fair and accurate voting, transparency and uniformity, ballot secrecy, and even efficiency.” Thus, the court could not find that the impoundment provision was arbitrary or capricious.

Impoundment provision did not violate NLRA. The court also held the impoundment provision did not violate the NLRA. Section 153(b) of the Act authorizes the Board to delegate the Board’s own authority in representation cases to its regional directors, and also establishes that the Board may review any action of a regional director, upon the request of an interested person. The issue here is whether the NLRA prohibits the agency from preventing the regional director from making a future decision, which the stay provision amounts to. The court found nothing in the legislative history or elsewhere suggesting that Congress would bar “all stays of any action the Board delegates to its regional directors, retrospective and prospective.” Consequently, the NLRA permits the Board to postpone future actions of a regional director.

Revised ruling. Accordingly, the AFL-CIO’s motion for summary judgment was granted with respect to the notice-and-comment provision, while the NLRB’s cross-motion for summary judgment was granted as to the remaining counts of the complaint. The court now held the impoundment provision survives APA scrutiny and the 2019 election rule as a whole was neither arbitrary nor capricious. The court amended that portion of its order to rescind the provision remanding those counts of the complaint to the Board.

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