AMY BERMAN JACKSON, United States District Judge.
Plaintiffs the Chamber of Commerce of the United States of America, the Coalition for a Democratic Workplace, the National Association of Manufacturers, the National Retail Federation, and the Society for Human Resource Management ("the Chamber plaintiffs") have brought this action challenging a new set of regulations promulgated by the National Labor Relations Board ("NLRB" or "the Board") to govern union elections. They claim that the rule, entitled "Representation—Case Procedures," 79 Fed.Reg. 74,308 (Dec. 15, 2014) ("the Final Rule"), exceeds the Board's statutory authority under the National Labor Relations Act ("NLRA"), 29 U.S.C. §§ 151-169. They also contend that the Final Rule is arbitrary and capricious and should be set aside under the Administrative Procedure Act ("APA"), 5 U.S.C. § 706, and that it violates employers' First and Fifth Amendment rights. Compl. [Dkt. # 1] ("Chamber Compl."). In a separate action, Baker DC, LLC ("Baker") and three of its employees (collectively, "the Baker plaintiffs") also challenged the Final Rule on similar grounds, Am. Compl., Baker DC, LLC v. NLRB, No. 15-0571(ABJ) [Dkt. # 12] ("Baker Am. Compl."), and the Court consolidated the two cases. Order (Apr. 22, 2015) [Dkt. # 31] ("Consolidation Order"). After considering the points and authorities set forth in the briefs submitted by both sides and the arguments presented at the hearing, the Court will uphold the Final Rule.
Plaintiffs mount a broad attack on the rule as a whole, claiming that it "makes sweeping changes to the election process" and that it "sharply curtails" employers' statutory, due process, and constitutional rights. Pls.' Mot. for Summ. J. & Mem. in Supp. [Dkt. # 17] ("Chamber Mot.") at 1-3; see also Baker Am. Compl. ¶¶ 4-5, 11. But these dramatic pronouncements are predicated on mischaracterizations of what the Final Rule actually provides and the disregard of provisions that contradict plaintiffs' narrative. And the claims that the regulation contravenes the NLRA are largely based upon statutory language or legislative history that has been excerpted or paraphrased in a misleading fashion. Ultimately, the statutory and constitutional challenges do not withstand close inspection, and what is left is a significant policy disagreement with the outcome of a lengthy rulemaking process. This is apparent from the Chamber plaintiffs' heavy
Plaintiffs' policy objections may very well be sincere and legitimately based, but in the end, this case comes down to a disagreement with choices made by the agency entrusted by Congress with broad discretion to implement the provisions of the NLRA and to craft appropriate procedures. Given the level of deference that applies in an APA case, particularly in the labor context, and for the additional reasons set forth in more detail below, the Court does not find grounds to overturn the Final Rule.
The Chamber plaintiffs are organizations and associations that "collectively represent millions of employers and human resource professionals in companies covered by the NLRA and subject to the Final Rule." Chamber Compl. ¶¶ 11-16. They bring this action challenging the Final Rule on behalf of their members. Id. ¶¶ 11-15. The Chamber plaintiffs filed a motion for summary judgment, and the Board filed a combined partial motion to dismiss pursuant to Rule 12(b)(1) and cross-motion for summary judgment, and those motions have been fully briefed. Chamber Mot.; Def.'s Partial Mot. to Dismiss & Cross-Mot. for Summ. J. [Dkt. # 22] ("Board Mot."); Pls.' Mem. in Opp. to Board Mot. & in Further Supp. of Chamber Mot. [Dkt. # 25] ("Chamber Reply"); Def.'s Reply in Supp. of Board Mot. [Dkt. # 27] ("Board Reply"). The Court also received an amicus brief in support of the Chamber plaintiffs. Amicus Brief of the Nat'l Right to Work Legal Def. & Educ. Found., Inc., in Supp. of Pls. [Dkt. # 19] ("Amicus Brief").
The Baker plaintiffs are a District of Columbia employer and three of its employees. Baker Am. Compl. ¶¶ 9-10. After the United Construction Workers Local Union No. 202-Metropolitan Regional Council of Carpenters ("UCW") filed a petition with the Board seeking to represent Baker's employees for collective bargaining purposes, Baker filed a separate action with this Court on April 17, 2015, challenging the application of the Final Rule to Baker and its employees on many of the same grounds as the Chamber plaintiffs. Compl., Baker DC, LLC v. NLRB, No. 15-0571(ABJ) [Dkt. # 1] ("Baker Compl."). That same day, Baker filed a motion for a temporary restraining order seeking to enjoin the enforcement of the Final Rule. Pl.'s Mot. for TRO, Baker DC, LLC v. NLRB, No. 15-0571(ABJ) [Dkt. # 3] ("Baker TRO Mot."); Pl.'s Mem. in Supp. of Baker TRO Mot., Baker DC, LLC v. NLRB, No. 15-0571(ABJ) [Dkt. # 3-1] ("Baker TRO Mem."). Baker filed an amended complaint, adding three of its employees as plaintiffs, on April 21, 2015. Baker Am. Compl. After finding that the Baker plaintiffs had failed to show that they would suffer irreparable harm if they were subjected to the regulatory regime implemented by the Final Rule pending resolution of the case on the merits, the Court denied the motion for injunctive relief and consolidated the Baker action with the Chamber plaintiffs' case. Baker DC, LLC v. NLRB, No. 15-0571(ABJ),
After the consolidation, the Baker plaintiffs joined the Chamber plaintiffs' motion for summary judgment and filed a supplemental opposition to the Board's motion, Opp. of Baker Pls. to Board Mot. [Dkt. # 32] ("Baker Opp."), to which the Board replied. Def.'s Reply to Baker Opp. [Dkt. # 33] ("Board 2d Reply"). All parties were heard at a hearing on the summary judgment motions on May 15, 2015. See Tr. of Hr'g (May 15, 2015) [Dkt. # 38] ("Hr'g Tr."). The Baker plaintiffs also filed a supplemental brief at the Court's direction. Supplemental Post-Hr'g Br. of Baker Pls. in Resp. to Ct.'s Req. [Dkt. # 37] ("Baker Br."). In joining the Chamber plaintiffs' challenge to the Final Rule, the Baker plaintiffs also rely on the arguments advanced in Baker's motion for a temporary restraining order. See Baker Opp. at 1.
The National Labor Relations Act is the federal statute that regulates private sector labor-employer relations in the United States. 29 U.S.C. §§ 151-169. It was first passed by Congress in 1935, Pub.L. No. 74-198, 49 Stat. 449 (1935), and it has since been amended several times. See, e.g., Labor Management Relations (Taft-Hartley) Act, Pub.L. No. 80-101, 61 Stat. 136 (1947); Labor-Management Reporting and Disclosure (Landrum-Griffin) Act, Pub. L. No. 86-257, 73 Stat. 519 (1959); Act of July 26, 1974, Pub.L. No. 93-360, 88 Stat. 395 (1974).
The Act begins with a declaration of national policy:
29 U.S.C. § 151. This statement is followed by a number of substantive provisions, including several that are relevant to this case.
Sections 153 through 156 establish the National Labor Relations Board. Id. §§ 153-156. Section 156 provides the Board with "authority from time to time to make, amend, and rescind ... such rules and regulations as may be necessary to carry out the provisions" of the NLRA. Id. § 156. Section 157 is a declaration of the rights that employees "shall have," including "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively ... [and] to refrain from any or all of such activities." Id. § 157. Section 158(a) defines unfair labor practices for both employers and labor organizations, and, in particular, it provides: "[i]t shall be an unfair labor practice for an employer ... to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title." Id. § 158(a)(1). Section 158(c) protects parties' free speech, and it provides that "[t]he expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit." Id. § 158(c).
Section 153 of the NLRA allows the Board to delegate its section 159 authority to its regional directors, permitting them "to determine the unit appropriate for the purpose of collective bargaining, to investigate and provide for hearings, and determine whether a question of representation exists, and to direct an election or take a secret ballot ... and certify the results thereof." Id. § 153(b). While a hearing officer may conduct the pre-election hearing, he may not make "any recommendations with respect thereto," as decisions regarding elections are reserved for the regional directors and the Board. See id. § 159(c)(1). "[U]pon the filing of a request [for review] with the Board by any interested person, the Board may review any action of a regional director delegated to him," but review by the Board does not operate as a stay of the regional director's action. Id. § 153(b).
After announcing the proposed rule and subjecting it to a notice and comment period,
Although the Chamber plaintiffs seek to have the entire Final Rule invalidated, see
Under Rule 12(b)(1), the plaintiff bears the burden of establishing jurisdiction by a preponderance of the evidence. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992); Shekoyan v. Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C.2002). Federal courts are courts of limited jurisdiction and the law presumes that "a cause lies outside this limited jurisdiction." Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994); see also Gen. Motors Corp. v. EPA, 363 F.3d 442, 448 (D.C.Cir.2004) ("As a court of limited jurisdiction, we begin, and end, with an examination of our jurisdiction."). "[B]ecause subject-matter jurisdiction is `an Art[icle] III as well as a statutory requirement ... no action of the parties can confer subject-matter jurisdiction upon a federal court.'" Akinseye v. District of Columbia, 339 F.3d 970, 971 (D.C.Cir.2003), quoting Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 702, 102 S.Ct. 2099, 72 L.Ed.2d 492 (1982).
When considering a motion to dismiss for lack of jurisdiction, unlike when deciding a motion to dismiss under Rule 12(b)(6), the court "is not limited to the allegations of the complaint." Hohri v. United States, 782 F.2d 227, 241 (D.C.Cir.1986), vacated on other grounds, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987). Rather, "a court may consider such materials outside the pleadings as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case." Scolaro v. D.C. Bd. of Elections & Ethics, 104 F.Supp.2d 18, 22 (D.D.C.2000), citing Herbert v. Nat'l Acad. of Scis., 974 F.2d 192, 197 (D.C.Cir.1992); see also Jerome Stevens Pharms., Inc. v. FDA, 402 F.3d 1249, 1253 (D.C.Cir.2005).
Summary judgment is appropriate when the pleadings and evidence show that "there is no genuine dispute as to any material fact and [that] the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). However, in cases involving review of agency action under the APA, Rule 56 does not apply due to the limited role of a court in reviewing the administrative record. Select Specialty Hosp.-Akron, LLC v. Sebelius, 820 F.Supp.2d 13, 21 (D.D.C.2011).
Under the APA, a court must "hold unlawful and set aside agency action, findings, and conclusions" that are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law," 5 U.S.C. § 706(2)(A), in excess of statutory authority, id. § 706(2)(C), or "without observance of procedure required by law." Id. § 706(2)(D). However, the scope of review is narrow. See Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). The agency's decision is presumed to be valid, see Am. Radio Relay League, Inc. v. FCC, 617 F.2d 875, 879 (D.C.Cir.1980), and a court must not "substitute its judgment for that of the agency." State Farm, 463 U.S. at 43, 103 S.Ct. 2856.
If the court concludes that the statute is either silent or ambiguous, the second step of the review process is to determine whether the interpretation proffered by the agency is "based on a permissible construction of the statute." Chevron, 467 U.S. at 843, 104 S.Ct. 2778. Once a reviewing court reaches the second step, it must accord "considerable weight" to an executive agency's construction of a statutory scheme it has been "entrusted to administer." Id. at 844, 104 S.Ct. 2778. Indeed, "under Chevron, courts are bound to uphold an agency interpretation as long as it is reasonable—regardless whether there may be other reasonable, or even more reasonable, views." Serono Labs., 158 F.3d at 1321.
If an agency's construction of the applicable statute satisfies Chevron, the court is still bound to ensure that the challenged action is not otherwise arbitrary and capricious. Nat'l Ass'n of Clean Air Agencies v. EPA, 489 F.3d 1221, 1228 (D.C.Cir.2007). Agency action will be upheld if the agency involved "has considered the relevant factors and articulated a `rational connection between the facts found and the choice made.'" Id. quoting Allied Local & Reg'l Mfrs. Caucus v. EPA, 215 F.3d 61, 68 (D.C.Cir.2000). The review is "[h]ighly deferential" and it "presumes the validity of agency action." AT & T Corp. v. FCC, 220 F.3d 607, 616 (D.C.Cir.2000). The agency may rely on comments submitted during the notice and comment period as justification for the rule, so long as the submissions are examined critically. See Nat'l Ass'n of Regulatory Util. Comm'rs v. FCC, 737 F.2d 1095, 1125 (D.C.Cir.1984). But it "need not—indeed cannot—base its every action upon empirical data; depending upon the nature of the problem, an agency may be `entitled to conduct ... a general analysis based on informed conjecture.'" Chamber of Commerce v. SEC, 412 F.3d 133, 142 (D.C.Cir.2005), quoting Melcher v. FCC, 134 F.3d 1143, 1158 (D.C.Cir.1998).
The Court must first address the Board's contention that those provisions of the Final Rule that provide regional directors with a measure of discretion, such as those concerning the scope of the pre-election hearing and the length of the campaigning period, are "not ripe for a pre-enforcement facial challenge," and that plaintiffs' challenges to those provisions
The Chamber plaintiffs submit that because they "challenge an agency's purely legal interpretation of a statute, not an exercise of discretion," their "pre-implementation challenge" to the discretionary aspects of the Final Rule is ripe. Chamber Reply at 2-3. In other words, because the Final Rule has gone into effect, their attacks on its facial validity are justiciable, even as to the discretionary provisions. Hr'g Tr. 21:19-22:18. The Court agrees with this contention; as the D.C. Circuit has observed, "a purely legal claim in the context of a facial challenge ... is presumptively reviewable," especially where it is a claim "that an agency's action is arbitrary and capricious or contrary to law." Cement Kiln Recycling Coal. v. EPA, 493 F.3d 207, 215 (D.C.Cir.2007), quoting Nat'l Ass'n of Home Builders v. U.S. Army Corps of Eng'rs, 417 F.3d 1272, 1282 (D.C.Cir.2005). Indeed, this interpretation is consistent with Flores, which set out the no set of circumstances test as the standard for consideration of a facial challenge on its merits. See 507 U.S. at 301, 113 S.Ct. 1439.
The Chamber plaintiffs maintain, though, that the no set of circumstances test should not apply. They state that "[t]he D.C. Circuit has made clear that `[t]he Supreme Court has never adopted a no set of circumstances test to assess the validity of a regulation challenged as facially incompatible with governing statutory law.'" Chamber Reply at 3-4, quoting Nat'l Mining Assoc. v. U.S. Army Corps of Eng'rs, 145 F.3d 1399, 1407 (D.C.Cir.1998). But the Court of Appeals subsequently clarified that observation, and it has stated that the National Mining Association decision "was made in the mistaken belief" that the Supreme Court had never before applied the "no set of circumstances" test to a facial statutory challenge, when in fact it "had done just that several years earlier in Flores." Sherley v. Sebelius, 644 F.3d 388, 397 n. ** (D.C.Cir.2011); see also Amfac Resorts, LLC v. Dep't of Interior, 282 F.3d 818, 826 (D.C.Cir.2002) (stating that the National Mining Association decision "apparently overlooked" the Supreme Court's ruling in Flores), vacated in part on other grounds sub nom. Nat'l Park Hospitality Ass'n v. Dep't of Interior, 538 U.S. 803, 123 S.Ct. 2026, 155 L.Ed.2d 1017 (2003). Recognizing that it was "bound ... by a higher authority," the Sherley Court followed Flores in applying the no set of circumstances test to a facial challenge to agency regulations, despite the conflicting panel decision in National Mining Association. 644 F.3d at 397 n.**.
Id. at 300-01, 113 S.Ct. 1439. Under the circumstances, the Court held that "[t]o prevail in such a facial challenge," the respondents "must establish that no set of circumstances exists under which the [regulation] would be valid." Id. at 301, 113 S.Ct. 1439, quoting United States v. Salerno, 481 U.S. 739, 745, 107 S.Ct. 2095; 95 L.Ed.2d 697 (1987). This test applied to "both the constitutional challenges, and the statutory challenge." Id., citing Schall v. Martin, 467 U.S. 253, 268 n.18, 104 S.Ct. 2403, 81 L.Ed.2d 207 (1984), and INS v. Nat'l Ctr. for Immigrants' Rights, Inc., 502 U.S. 183, 188, 112 S.Ct. 551, 116 L.Ed.2d 546 (1991).
Given the procedural posture of this case, the Court will adopt the approach taken by the D.C. Circuit panel in Sherley and follow Flores here. Accord Associated Builders & Contractors of Tex., Inc. v. NLRB, No. 1-15-CV-026 RP, 2015 WL 3609116, at *4 (W.D.Tex. June 1, 2015). (applying no set of circumstances test in parallel challenge to the Final Rule). Applying that precedent, the Court finds that the facial challenge to the discretionary provisions of the Final Rule is ripe for consideration, and the Board's partial motion to dismiss will be denied. To succeed on their motion for summary judgment, plaintiffs must show that there is no set of circumstances under which the Final Rule could be applied consistently with the NLRA or the Constitution.
Baker filed its initial complaint on April 17, 2015, three days after the Final Rule went into effect and before proceedings under the Final Rule had begun. But while this action has been pending, the Baker plaintiffs have proffered evidence along the way, alerting the Court about how the Final Rule is being applied in the ongoing election proceeding at the company. See, e.g., Baker Opp. at 1-2 ("appris[ing] the Court of events that have transpired in the related Board representation proceeding since the filing of the [UCW] petition").
As discussed above, the Court agrees that plaintiffs' facial challenge to the Final Rule is justiciable at this time, even absent any specific developments in the Baker election proceeding. But to the extent that the Baker plaintiffs seek to recharacterize their complaint as including an as-applied challenge, see Baker Br. at 1 ("Baker's Complaint states both a facial and as-applied challenge to the [Final] Rule."), that challenge would not be ripe. Essentially, the Baker plaintiffs are asking this Court to hit a moving target—to take notice of, and rule on, the propriety of the regional director's decisions in their representation case as it unfolds and before it is complete. The very nature of this request makes it clear that any as-applied claims are not justiciable until the entire election process and the subsequent Board review has come to its conclusion.
At the outset, the Court questions whether Baker's original or amended complaint can even be construed as asserting an as-applied challenge. The original complaint was filed on April 17, 2015, just three days after the Final Rule went into effect and well before any of its provisions had been applied to Baker. See Baker Compl. And the amended complaint is identical in every material respect to the original complaint. Compare Baker Compl. with Baker Am. Compl. Both complaints allege only that the Final Rule on its face is contrary to the NLRA, the APA, and the Constitution, and that it is arbitrary and capricious—not because of how it has been or will be applied to Baker
Further, even if the Court generously construed the Baker complaints to include such a challenge, it would not be ripe. The Baker plaintiffs assert that their extrinsic evidence "show[s] as a matter of public record and undisputed facts that the allegations of the Complaint regarding the [Final] Rule's adverse impact on the Baker plaintiffs were true." Baker Br. at 2; see also id. at 3 ("Baker's supplemental information merely establishes that a number of these identified adverse impacts have in fact occurred."). But these assertions of ongoing or imminent injury-in-fact go to the Baker plaintiffs' standing to bring these challenges—which has not been contested—and they do not establish the ripeness of any as-applied challenge as a prudential matter.
"The fundamental purpose of the ripeness doctrine is `to prevent the courts, through avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies, and also to protect the agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.'" Sprint Corp. v. FCC, 331 F.3d 952, 957 (D.C.Cir.2003), quoting Nat'l Park Hospitality, 538 U.S. at 807-08, 123 S.Ct. 2026. While the constitutional aspect of ripeness may involve the same impending injury-in-fact requirement that is necessary for standing, the prudential aspect of ripeness requires more: a court must "balance[] `the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.'" Nat'l Treasury Emps. Union v. United States, 101 F.3d 1423, 1427-28 (D.C.Cir.1996), quoting Abbott Labs. v. Gardner, 387 U.S. 136, 149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), and citing Duke Power Co. v. Carolina Envtl. Study Grp., Inc., 438 U.S. 59, 81-82, 98 S.Ct. 2620, 57 L.Ed.2d 595 (1978). The fitness of an issue for judicial decision depends on whether there are "contingent future events that may not occur as anticipated, or indeed may not occur at all." Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580-81, 105 S.Ct. 3325, 87 L.Ed.2d 409 (1985) (citations omitted).
Here, to the extent the Baker plaintiffs wish to reformulate their claim as an as-applied challenge, they are asking the Court to engage in precisely the sort of premature analysis of an unfinished administrative process that the ripeness doctrine is designed to prevent. There are many points in the representation election
Furthermore, once the process is complete, this would not be the forum in which the Baker plaintiffs could obtain review in any event. Even if Baker loses at each of these administrative stages, it can refuse to bargain with UCW, thereby triggering an unfair labor practice hearing, and it can seek review of the result of that hearing before the D.C. Circuit pursuant to 29 U.S.C. § 160(f). Through that provision, "Congress declared that the person aggrieved by a Board representation decision is obliged to precipitate an unfair labor practice proceeding as a means of securing review in the appellate courts." Hartz Mountain Corp. v. Dotson, 727 F.2d 1308, 1311 (D.C.Cir.1984) (emphasis added) (citation omitted); see also id. at 1310 ("The cases are legion holding that, as a general rule, Board orders emanating from representation proceedings are not directly reviewable in court."). The Baker plaintiffs insist that they are "not actually asking [the Court] to enjoin the representation proceeding that's ongoing," and that they are only asking the Court "to enjoin, to vacate" the Final Rule. Hr'g Tr. 69:1-5; see also Baker Opp. at 5 n.3 ("Plaintiffs are not seeking to enjoin an ongoing representation proceeding; they are seeking to set aside an unlawful Rule."). If that is so, then the facial challenge, which is the only aspect of the Baker plaintiffs' complaint that is ripe, should suffice to serve that purpose.
As for the Baker plaintiffs' APA challenge, the Court cannot consider evidence of what is transpiring in the ongoing representation case proceedings, because its review of the Board's action under the APA is limited to the administrative record that was before the agency at the time it made its decision. See 5 U.S.C. § 706; James Madison Ltd. v. Ludwig, 82 F.3d 1085, 1095 (D.C.Cir.1996); see also Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973) (per curiam) ("In applying [the abuse of discretion] standard, the focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court."). Thus, how the Final Rule has been applied to Baker and its employees since it went into effect is not properly part of any challenge under the APA,
In examining each of plaintiffs' challenges to the Final Rule, the Court cannot help but notice that the complaints are largely conclusory and argumentative.
Plaintiffs fended off the Court's attempts to zero in on specific regulatory language, maintaining that it is the entire Final Rule—the combination of the requirement to submit an early Statement of Position, the claimed elimination of the pre-election hearing on voter eligibility issues, the shortening of the presumptive minimum time period between the petition and the election, and the denial of an opportunity to agree to stipulate to full Board review—that violates the statutory regime as a whole. But this attempt to look at the regulatory changes in the aggregate fails if the component parts have been inaccurately portrayed, or if they each pass muster under the applicable statutory and constitutional provisions. So the Court must proceed to examine each of the challenged regulations individually, notwithstanding plaintiffs' disinclination to do so.
The motions present no genuine issues of material fact, and so the case may be properly decided on summary judgment as a matter of law. See Fed. R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The questions presented are: (1) whether the challenged portions of the Final Rule violate the NLRA; (2) whether those provisions violate the First and Fifth Amendments of the Constitution of the United States; and (3) whether the decision to implement the Final Rule was arbitrary and capricious under the APA. The Court undertakes
The Final Rule provides that "[w]ithin 2 business days after service of the notice of hearing, the employer shall post the [Board's] Notice of Petition for Election in conspicuous places, including all places where notices to employees are customarily posted, and shall also distribute it electronically if the employer customarily communicates with its employees electronically." 29 C.F.R. § 102.63(a)(2) ("the Posting Requirement"). Under the prior regulations, the posting of such a notice was voluntary, and the notice was less detailed. 79 Fed.Reg. at 74,309.
As an exhibit to its motion for a TRO, Baker submitted a copy of the notice it was required to post, making it part of the record in this case. See Ex. 1 to Baker TRO Mot., Baker DC, LLC v. NLRB, No. 15-0571(ABJ) [Dkt. # 3-2] at 11-12. The notice is emblazoned with the text "National Labor Relations Board" at the top and bottom, and that text is bracketed by two NLRB seals. Id. The phrase "THIS IS AN OFFICIAL GOVERNMENT NOTICE" is printed in bold-face, capital letters at the bottom of the second page. Id. at 12.
The notice informs employees that a petition has been filed by UCW, which is "seeking an election to become certified as the representative" of Baker's employees. Id. at 11. It also states that, under "Federal Law," employees have certain rights:
Id.
The notice outlines the procedure for processing the petition for election. Id. It states that the NLRB's goal is to apply rules "that are intended to keep its elections fair and honest and that result in a free choice," and it sets forth examples of conduct that would interfere with employees' rights and may result in setting aside the election. Id. at 12. The notice additionally informs the reader that "every effort will be made to protect your right to a free choice under the law," and that "[t]he NLRB as an agency of the United
The Final Rule provides that an employer's failure to post or distribute the Notice of Petition for Election may be grounds for setting aside the election if proper and timely objections are filed. 29 C.F.R. § 102.63(a)(2).
Both sets of plaintiffs challenge the Posting Requirement on the grounds that it impermissibly compels employers to engage in speech about unionization, even before the Board has determined whether a petition is valid and will result in an election. Chamber Mot. at 42-44; Baker TRO Mem. at 5-7. The Chamber plaintiffs argue that the Final Rule violates the First Amendment, Chamber Mot. at 42-44, and the Baker plaintiffs claim that it contravenes the NLRA and the First Amendment. Baker TRO Mem. at 5-7; Baker Am. Compl. ¶¶ 23-24.
Section 8(c) of the NLRA provides:
29 U.S.C. § 158(c).
The Baker plaintiffs cite National Association of Manufacturers v. NLRB (NAM), 717 F.3d 947, 955 (D.C.Cir.2013), overruled in part by American Meat Institute v. Department of Agriculture, 760 F.3d 18, 22-23 (D.C.Cir.2014), in support of their claim that the Posting Requirement is contrary to section 8(c). Baker Am. Compl. ¶ 24; see also Baker TRO, Mem. at 5-6. But as this Court has already indicated in its Memorandum Opinion denying Baker's motion for a TRO, that case is distinguishable, and it does not stand for the proposition that a requirement to post an election notice—or any NLRB-issued poster—contravenes the statute. See Baker, 102 F.Supp.3d at 199-201, 2015 WL 1941516, at *4-*5.
In the NAM case, the trade association challenged a Board rule which would have required all employers to post a general notice informing employees of their rights under the NLRA. 717 F.3d at 949-50. The rule included three possible sanctions for the failure to comply: it declared that an employer's failure to post the notice would constitute an unfair labor practice; it permitted the Board to "suspend the running of the six-month limitations period for filing any unfair-labor-practice charge" for a failure to post; and it authorized the Board to consider an employer's failure to post "as evidence of unlawful motive in a case in which motive is an issue." Id. at 950-51.
Because the posting rule made an employer's failure to post the Board's notice an unfair labor practice, and because it deemed such a failure to be evidence of unlawful motive in other cases, the D.C. Circuit found, as the District Court did below, that the enforcement provisions of the posting rule violated the guarantee in section 8(c) that "[t]he expressing of any views, argument, or opinion, or the dissemination thereof ... shall not constitute or be evidence of an unfair labor practice." NAM, 717 F.3d at 951, 954, 959; 29 U.S.C. § 158(c). Since the means for enforcing the Board's posting requirement were invalid, and the Court concluded that the enforcement provisions could not be severed from the posting rule itself, it struck
If anything, the case is contrary to the Baker plaintiffs' position, because the D.C. Circuit specifically distinguished the general employee rights notice involved in that case, which carried with it the unfair labor practice penalty, from the then-existing NLRB election notice posting requirement, which made the failure to post "a basis for setting aside the election." Id. at 959 n. 19 ("Our conclusion here does not affect the Board's rule requiring employers to post an election notice.... Because the failure to post the required election notice does not constitute an unfair labor practice but may be a basis for setting aside the election, the rule does not implicate § 8(c)."), citing 29 C.F.R. § 103.20(d) (2013). Like the election notice posting requirement deemed to be lawful by the D.C. Circuit, the Final Rule provides only that an employer's "failure properly to post or distribute the Notice of Petition for Election may be grounds for setting aside the election." 29 C.F.R. § 102.63(a)(2). So the Court finds that the Posting Requirement "does not implicate § 8(c)," see NAM, 717 F.3d at 959 n. 19, and the Baker plaintiff's section 8(c) challenge to the Posting Requirement fails.
Both sets of plaintiffs also complain that the Posting Requirement compels employers to speak and forces them "to disseminate a message the employer may not support or agree with," and that it therefore violates employers' free speech rights. Chamber Mot. at 42; see also Baker TRO Mem. at 5 ("The [Final] Rule ... runs afoul of the First Amendment's prohibition against compelled speech by impermissibly co-opting employers to deliver the government's own preferred message."). The Board takes the position that the notice is government speech which is not subject to scrutiny under the free speech clause, and that since the Posting Requirement does not interfere with employer speech, it does not violate the First Amendment. Board Mot. at 42-43.
In the NAM case, this Court held that the requirement to post the NLRB notice of employee rights did not violate the Constitution. Nat'l Ass'n of Mfrs. v. NLRB, 846 F.Supp.2d 34, 58-61 (D.D.C.2012), aff'd in part, rev'd in part on other grounds, 717 F.3d 947. And another judge in this District recently addressed a similar First Amendment challenge to a Board posting rule, and it found that the requirement to post a notice of employee rights "does not unconstitutionally compel speech." Nat'l Ass'n of Mfrs. v. Perez, 103 F.Supp.3d 7, 14-16, No. 1:13-cv-01998 (APM), 2015 WL 2148230, at *5 (D.D.C. May 7, 2015). The Court agrees with the thorough analysis in that case.
First, the Court finds that the Notice of Petition for Election is government speech.
It is true, though, that "the First Amendment does not `le[ave] it open to public authorities to compel [a person] to utter' a message with which he does not agree." Johanns, 544 U.S. at 557, 125 S.Ct. 2055, quoting W. Va. State Bd. of Educ. v. Barnette, 319 U.S. 624, 634, 63 S.Ct. 1178, 87 L.Ed. 1628 (1943). For that reason, the Supreme Court has held that threatening schoolchildren with expulsion for refusing to recite the Pledge of Allegiance, Barnette, 319 U.S. 624, 63 S.Ct. 1178, or fining and jailing a Jehovah's Witness for refusing to display the state motto "Live Free or Die," Wooley v. Maynard, 430 U.S. 705, 97 S.Ct. 1428, 51 L.Ed.2d 752 (1977), violates the First Amendment.
But a review of the case law indicates that the Posting Requirement is not unconstitutional, even if the employers dispute the content of its message. In Rumsfeld v. Forum for Academic and Institutional Rights, Inc. (FAIR), 547 U.S. 47, 126 S.Ct. 1297, 164 L.Ed.2d 156 (2006), the Supreme Court found that the Solomon Amendment, which required universities to permit military recruiters to recruit on campus at the risk of losing their federal funding, did not abridge the schools' free speech rights. Id. at 70, 126 S.Ct. 1297. The Court distinguished its prior government speech cases, noting that "[t]he compelled-speech violation in each of our prior cases ... resulted from the fact that the complaining speaker's own message was affected by the speech it was forced to accommodate." Id. at 63, 126 S.Ct. 1297. In other words, in those cases, the government's required speech "interfered with the [speaker's] ability to communicate its own message." Id. at 64, 126 S.Ct. 1297, citing Pac. Gas & Elec. Co. v. Pub. Util. Comm'n of Cal., 475 U.S. 1, 8-9, 16-18, 106 S.Ct. 903, 89 L.Ed.2d 1 (1986) (holding that ordering a utility company to mail a third-party newsletter along with its own newsletter interfered with the utility's ability to communicate its own message), and Miami Herald Publ'g Co. v. Tornillo, 418 U.S. 241, 256-58, 94 S.Ct. 2831, 41 L.Ed.2d 730 (1974) (noting that "the compelled printing of a reply ... tak[es] up space that could be devoted to other material the newspaper may have preferred to print," and alters the message the paper wished to express). The Court concluded that, because "nothing in the Solomon Amendment restricts what the law schools may say about the military's policies," and because students "can appreciate the difference between speech a school sponsors and speech the school permits because legally required to do so," there was no
Here, the Final Rule requires employers to display the NLRB's message, but it does not dictate "what they may or may not say" about the notice, the petition, or the representation election process. See id. at 60, 126 S.Ct. 1297.
Nothing in the Final Rule constrains an employer from expressing its own position about the election. And nothing about the poster, which outlines the Board's election procedures and accurately sets forth employees' statutory rights to be free from coercion from either side, undermines or dilutes an employer's ability to convey its own pre-election message to counteract what it sees as disagreeable government speech. See FAIR, 547 U.S. at 65, 126 S.Ct. 1297; NAM, 717 F.3d at 958 n. 15 ("We suppose an employer could post a statement next to the poster pointing out its compulsory nature.").
The Baker plaintiffs argue that the Notice of Petition for Election "is controversial, one-sided and in some respects untrue" because it "improperly conditions the right of employees under Section 7 to refrain from any and all [representation] activities," and because it asserts that the Board's rules are designed to keep elections fair and honest, and to provide employees with a free choice—a message with which Baker apparently disagrees. Baker TRO Mem. at 5 & n.2. But it is well settled that the government may "make content-based choices" in its speech, and that it is permitted to "regulate the content of what is or is not expressed when it is the speaker or when it enlists private entities to convey its own message." Rosenberger v. Rector & Visitors of the Univ. of Va., 515 U.S. 819, 833, 115 S.Ct. 2510, 132 L.Ed.2d 700 (1995).
Both sets of plaintiffs rely heavily on Wooley, but that case is distinguishable. In Wooley, the Supreme Court held that
In the Final Rule, the Board addressed the conduct of the pre-election hearing, and it emphasized at the start of the provision that "[t]he purpose of a hearing conducted under Section 9(c) of the Act is to determine if a question of representation exists." 29 C.F.R. § 102.64(a). In accordance with that understanding, the new provision permits hearing officers and regional directors to decline to hear evidence on other issues—in particular, the eligibility of individual employees to vote—that do not bear directly on that question. Specifically, the new regulation states that "[d]isputes concerning individuals' eligibility to vote or inclusion in an appropriate unit ordinarily need not be litigated or resolved before an election is conducted." Id. The regulation mandates, though, that "it shall be the duty of the hearing officer to inquire fully into all matters and issues necessary to obtain a full and complete record upon which the Board or the regional director may discharge their duties under Section 9(c) of the Act." Id. § 102.64(b). And in a subsequent section, the Final Rule further provides that no party shall be precluded, "on the grounds that a voter's eligibility or inclusion was not contested at the pre-election hearing, from challenging the eligibility of any voter during the election." Id. § 102.66(d).
The regulations that immediately preceded those enacted by the Final Rule "did not expressly state the purpose of the hearing," 79 Fed.Reg. at 74,309, and provided any party with the right "to introduce into the record documentary and other evidence" on any issue. 29 C.F.R. § 102.66(a) (2014); see also 79 Fed.Reg. at 74,309 (stating that the prior rules "required... litigation of any voter eligibility issues that any party wished to litigate, even if the regional director was not going to be deciding that question, and even if the particular voter eligibility question was not necessary to resolving the existence of a question of representation").
Both sets of plaintiffs object to the new provision on the grounds that it "severely restricts the scope of the pre-election hearing required by the NLRA." Chamber Mot. at 16; see also Baker Am. Compl. ¶¶ 18-22. They allege that "[t]he Final Rule violates the Act's requirement of an `appropriate' pre-election hearing by restricting the employer's ability to present evidence and litigate issues of voter eligibility or inclusion in the putative bargaining unit," and that it "deprives employers of due process in NLRB representation case proceedings, in violation of the Fifth Amendment, by preventing employers from litigating issues of voter eligibility and inclusion at the pre-election hearing."
These claims fail because the Final Rule on its face does not "prevent" or "restrict" the presentation of such evidence at a pre-election hearing. The regulation simply indicates that consideration of these issues will "ordinarily" be deferred until after the election, 29 C.F.R. § 102.64(a), when it will be clear whether or not the challenged voters could affect the outcome. In other words, the regulation articulates an expectation that litigation on these topics will be deferred, but it does not eliminate the possibility that a hearing officer could address these issues at an early stage, and it accords the regional director the discretion to authorize a hearing on the record in advance of an election in an appropriate case. See 79 Fed.Reg. at 74,390 (stating that the Board "expect[s] regional directors to permit litigation of, and to resolve, [individual eligibility or inclusion] questions when they might significantly change the size or character of the unit").
Notwithstanding the language of the complaints, plaintiffs indicated at oral argument that the real gravamen of their concern is not that they are being denied the right to present this evidence at all, but that section 9(c) of the NLRA requires that evidence about the composition of the unit must be presented at a pre-election hearing. In other words, plaintiffs maintain that the Board did not have the authority to make this decision discretionary:
Chamber Mot. at 15-16; see also Baker Am. Compl. ¶¶ 15, 18-19; Amicus Brief at 5-9.
Here again, plaintiffs overstate the terms of the Final Rule, which provides that ordinarily, disputes concerning "individuals'" eligibility or inclusion will be deferred, and does not speak to the inclusion of groups of employees. 29 C.F.R. § 102.64(a). But more important, the text of the statute does not support plaintiffs' contention that the NLRA requires that all voter eligibility issues be heard and resolved in advance of the election.
In their complaint, the Chambers plaintiffs allege:
Chamber Compl. ¶ 64.
The Baker plaintiffs similarly allege:
It is telling that both sets of plaintiffs have chosen to paraphrase section 9(c), because a reading of the text itself immediately reveals the problem with plaintiffs' statutory argument.
29 U.S.C. §§ 159(c)(1)-(2) (emphasis added).
According to the Chamber plaintiffs, "[a] hearing is `appropriate' under § 9(c)(1) only if it gives interested parties a full and adequate opportunity to present their evidence on all substantial issues—including important election issues of voter eligibility, inclusion, and supervisory status." Chamber Reply at 6; see also Chamber Mot. at 6 ("The hearing provides an opportunity for the parties to present evidence on issues that will affect the election, such as whether the employees are covered by the NLRA, whether the collective bargaining unit defined in the petition is an appropriate one, and whether certain individuals... would be eligible to vote ....").
Plaintiffs gloss over the plain language of section 9, and they point instead to its legislative history. Putting aside the question of whether that step is necessary in the absence of ambiguity, see Ratzlaf v. United States, 510 U.S. 135, 147-48, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) (stating that a court need "not resort to legislative history to cloud a statutory text that is clear"), the effort is ultimately unpersuasive, since it is also incomplete and misleading. The Chamber plaintiffs assert that "[t]he purpose of pre-election hearings, as reflected in the legislative history of the 1947 amendments, is to collect evidence concerning all of the issues relevant to the election—including the eligibility of employees to vote in the election." Chamber Mot. at 21. In support of that contention, they set out this quotation, without an ellipsis:
Id. quoting S.Rep. No. 74-573, at 14 (1935), reprinted in 2 NLRB, Legislative History of the NLRA 1935, at 2313 (1949) (emphasis added in plaintiffs' memorandum).
But the Chamber plaintiffs have omitted the first sentence of that excerpt, which makes it plain that Congress was talking about section 9(b)—the provision of the NLRA that grants the Board authority to decide the appropriate collective bargaining unit—and not section 9(c):
S. Rep. No. 74-573, at 14. The next sentence of the report after the language quoted by the Chamber plaintiffs does address section 9(c), but it observes only that the provision empowers the Board to conduct an investigation to determine collective bargaining representatives, and that "[i]n any such investigation, an appropriate hearing must be held." Id. So this snippet of legislative history sheds no light on the intended scope of the pre-election hearing under section 9(c).
Both sets of plaintiffs also point to a statement by Senator Taft in the Congressional Record: "[i]t is the function of hearings in representation cases to determine whether an election may be properly held at the time; and if so, to decide questions of unit and eligibility to vote." Chamber Reply at 10, quoting 79 Fed.Reg. at 74,386 n.363; see also Baker Am. Compl. ¶ 15. But this single sentence by Senator Taft cannot bear the weight that plaintiffs would have it carry. It does not detail his position on the scope of the pre-election hearing as clearly as plaintiffs suggest, but even if it was his preference or intention that all issues be resolved in advance, "[t]he `remarks of [a] single legislator, even the sponsor, are not controlling in analyzing legislative history,'" Pac. Legal Found. v. Council on Envtl. Quality, 636 F.2d 1259, 1264 (D.C.Cir.1980), quoting Chrysler Corp. v. Brown, 441 U.S. 281, 311, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979), especially where that statement did not find its way into the statutory text or even a committee report.
Furthermore, that remark cannot alter the clear language in the statute identifying the purpose of the hearing, especially given the context of the Senator's comments: they were contained in a supplementary analysis produced after the Act had already passed and they were directed at a provision authorizing pre-hearing elections—in Taft's words, "a device of holding the election first and then providing the hearing to which the parties were entitled by law"—which was ultimately omitted from the Act. 93 Cong. Rec. 6,860 (1947); see also 79 Fed.Reg. at 74,386 n.363. Senator Taft's lone comment is therefore not dispositive of the meaning of an "appropriate
As they marshal these and other excerpts of legislative history, the Chamber plaintiffs emphasize the importance of defining the bargaining unit before an election, see, e.g., Chamber Mot. at 21, but they consistently blur the distinction between the determination of the appropriate bargaining unit and challenges to individual voters.
The Chamber plaintiffs' citation of Supreme Court authority does little more to advance their argument. They reiterate that section 9(c) calls for an "appropriate hearing," and then they purport to quote Inland Empire District Council v. Millis, 325 U.S. 697, 65 S.Ct. 1316, 89 L.Ed. 1877 (1945):
Chamber Mot. at 23 (emphasis in original), quoting Inland Empire, 325 U.S. at 708, 65 S.Ct. 1316. But this edited reference to the opinion completely distorts the Inland Empire holding, which was that there must be a hearing at some point, and not that it must necessarily occur before the election. What the Court said was:
325 U.S. at 707-08, 65 S.Ct. 1316 (emphasis added). And the Court reiterated the "broad discretion" conferred by Congress upon the Board "as to the hearing which [section] 9(c) required before certification." Id. at 708, 65 S.Ct. 1316. Like the legislative history, then, the Supreme Court precedent provided by plaintiffs underscores the importance of affording parties a full opportunity to present evidence on a range of substantial issues, but it does not specify that the evidence must be heard on every issue before an election can proceed. Indeed, it says precisely the opposite.
Therefore, the Court finds that this aspect of the Final Rule does not violate section 9(c) of the NLRA.
Both sets of plaintiffs also rely upon the Board's prior opinions in Barre-National, Inc., 316 N.L.R.B. 877 (1995), and North Manchester Foundry, Inc., 328 N.L.R.B. 372 (1999), asserting that in those opinions, "the Board recognized that § 9(c) provides a statutory right to introduce evidence on issues of voter eligibility and inclusion at the pre-election hearing." Chamber Mot. at 24; see also Baker Opp. at 6. This overstates the holding of both cases somewhat, and in any event, the Board's departure from its previous precedent does not, standing alone, render the Final Rule arbitrary and capricious.
In Barre-National, pursuant to the regional director's instructions, the hearing officer ruled that the supervisory status of a number of employees—who made up approximately eight to nine percent of the unit—would not be resolved at the pre-election hearing, and he ordered that they be permitted to vote subject to challenge. 316 N.L.R.B. at 877-78. The employer instructed those individuals not to vote in the election on the grounds that they were supervisors. Id. at 878. By the time the matter was decided by the Board, the employer had eliminated all but one of the earlier contested positions, the election had been held, and the result had been impounded. Id. at 877. The Board found, "[u]nder all the circumstances, the preelection hearing held in this case did not meet the requirements of the Act and Board's Rules and Statements of Procedure," id. at 878, but it did not specifically address the question of whether the hearing would have been mandated by the statute alone. Given the posture of the case and the nature of the employer's arguments, it did not void the election, but remanded the matter back to the regional director to open and count the ballots and take appropriate action thereafter as part of the election objection process. Id. at 877, 879. The Board also took pains to point out: "[t]his conclusion is based on the facts of this case. We do not express a view as to whether a different result would be warranted if one or more of those facts were different." Id. at 878 n.9. The Board went on: "[w]e note that reviewing courts have held that there is no general requirement that the Board decide all voter eligibility issues prior to an election, although in some circumstances the size and character of the group of individuals whose status is left unresolved may be deemed a basis for invalidating the election." Id.
Similarly, in North Manchester, the hearing officer declined to take evidence on whether a particular group of employees should be included in the unit, and the
The Board did not specifically state in either opinion that its determination was mandated by the language of the statute alone. Plaintiffs are correct, though, when they point out that the Final Rule marks a departure from the approach the Board called for in those cases. But as the Sixth Circuit explained in Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir.2013), that does not necessarily render the Final Rule unlawful under the APA:
Id. at 560 (internal citations omitted).
Here, the Board directly addressed Barre-National and North Manchester in its discussion of this provision in the Final Rule, it explained and justified any change in its approach, and it explicitly overruled those holdings. 79 Fed.Reg. at 74,385-86 (finding that Barre-National "cannot be read to rest on a construction of the [NLRA]," that its statutory analysis "is essentially non-existent," and that its end result "is not administratively rational" and is contrary to legislative history). Moreover, the decisions in Barre-National and North Manchester that it was error for the regional director to fail to take up voter inclusion issues at the pre-election stage were based on the specific circumstances presented in those cases, and there is nothing in the Final Rule that would bar a regional director from following that guidance in any particular instance in the future, or that would preclude the Board from granting an employer's request for review and finding that a particular regional director abused his discretion in a particular instance in the future.
Plaintiffs also allege that permitting regional directors to exclude individual voter eligibility and inclusion evidence at the pre-election hearing violates an employer's Fifth Amendment due process rights, because it denies the employer "the opportunity to be heard at a meaningful time and in a meaningful manner." Chamber Mot. at 25, quoting Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976); see also Baker Am. Compl. ¶¶ 22. While that general proposition of law is undisputed, plaintiffs have neglected to mention the other aspect of a due process claim: the deprivation of a liberty or property interest. See, e.g., Atherton v. D.C. Office of Mayor, 567 F.3d 672, 689 (D.C.Cir.2009) ("A procedural due process violation occurs when an official deprives an individual of a liberty or property interest without providing appropriate procedural protections."); see also Mathews, 424 U.S. at 333, 96 S.Ct. 893 ("[S]ome form of hearing is required before an individual is finally deprived of a property interest.") (emphasis added). And as their counsel conceded during oral argument, the Chamber plaintiffs were unable to direct the Court to any case that identifies a due process interest in what takes place during a representation election proceeding. Hr'g Tr. 13:17-20 ("The Court: I know what [Mathews v. Eldridge] says, but is there a case in your brief that ties due process to these proceedings? Ms. Ho: No, Your Honor.").
Essentially, the Chamber plaintiffs are asserting that they have a due process right to be afforded due process. Id. 13:24-14:3 ("I think . . . the liberty or process interest at stake is how Mathews describes it, is the interest in fair—in fair and meaningful proceedings. In other words, to a meaningful opportunity to be heard on an issue."). This is a circular argument which carries no weight. Moreover, as counsel for the Chamber recognized, what process is due depends upon the nature of the interest at stake. Id. 14:7-12 ("I think a meaningful opportunity to be heard, obviously that doesn't—that doesn't mean you have a right to stand up in court and say anything you want. And I think we certainly acknowledge, as the case law has held, that the due process clause is, of course, quite context specific. . . .").
In any event, as the Supreme Court observed in Inland Empire, "[t]he demands of due process do not require a hearing, at the initial stage or at any particular point or at more than one point in an administrative proceeding so long as the requisite hearing is held before the final order becomes effective." 325 U.S. at 710, 65 S.Ct. 1316, quoting Opp Cotton Mills, Inc. v. Adm'r of Wage & Hour Div. of Dep't of Labor, 312 U.S. 126, 152-53, 61 S.Ct. 524, 85 L.Ed. 624 (1941). Because parties retain the right to petition the Board for review, both pre- and post-election, and because they can refuse to bargain and obtain a hearing on their claims
The Final Rule requires that an employer file a written Statement of Position one day before the pre-election hearing. 29 C.F.R. § 102.63. The Statement of Position must:
Id. § 102.63(b)(1)(i). The Statement of Position must also "include a list of the full names, work locations, shifts, and job classifications of all individuals in the proposed unit," as well as any individuals the employer wishes to add to or exclude from the proposed unit. Id. § 102.63(b)(1)(iii).
The Final Rule provides that "[a] party shall be precluded from raising any issue. . . that the party failed to raise in its timely Statement of Position," id. § 102.66(d), but "[t]he regional director may permit the Statement of Position to be amended in a timely manner for good cause." Id. § 102.66(b).
The Final Rule explains that "[p]rior practice requested parties to state positions and provide a list of employees and job classifications before the hearing, but did not require production of such information prior to the hearing." 79 Fed.Reg. at 74,309. In addition, "[p]rior best practices required parties to take positions on the issues orally at the hearing," but the approach was not uniform, and parties were permitted at times "to remain silent on their position or to take shifting positions during the hearing." Id.
The Baker plaintiffs allege that the requirement "that Baker file a written Statement of Position on each and every potential [sic] that could arise during a hearing, at a time when no pre-hearing discovery is permissible, upon penalty of precluding Baker from presenting evidence on unit and voter eligibility issues as expressly permitted by the Act, violates Section 9 and Congressional intent." Baker Am. Compl. ¶ 19; see also Baker TRO Mem. at 7-9. They also object that they are required to "disclose to the petitioning union the names and work locations of employees inside and outside the petitioned for unit, again upon penalty of precluding Baker from exercising its statutory right to submit evidence on all issues." Baker TRO Mem. at 7. Because they assert that Baker is "entitled . . . under the statute" to "contest numerous aspects of [UCW's] petition, including voter eligibility issues" at the hearing, the Baker plaintiffs contend
Although it is not entirely clear from their pleadings, the Baker plaintiffs appear to be arguing that the Statement of Position Requirement, which could limit an employer's ability to litigate certain issues at the pre-election hearing if those issues were not raised in the Statement of Position, violates the section 9(c) requirement that there be an "appropriate" pre-election hearing. See Baker Am. Compl. ¶¶ 4, 11, 19 (stating only that the Statement of Position Requirement "violates Section 9"); Baker TRO Mem. at 7 (stating that Statement of Position Requirement "preclud[es] Baker from exercising its statutory right to submit evidence on all issues" and citing 29 U.S.C. § 159(c)(1)). But as discussed in detail above, section 9(c) of the NLRA does not guarantee an employer the right to present or litigate individual voter eligibility and inclusion issues at the pre-election hearing, as the Baker plaintiffs claim. Rather, it provides that parties to a representation proceeding are entitled to "an appropriate hearing upon due notice" that addresses whether a "question of representation exists." 29 U.S.C. § 159(c). So the possibility that the preclusive aspect of the requirement that an employer file a Statement of Position might operate to streamline the pre-election hearing in this manner does not violate section 9(c) of the NLRA.
Plaintiffs also allege that the issue preclusion embodied in this regulation is "contrary to the [NLRA's] goal of ensuring employees `the fullest freedom in exercising the rights guaranteed'" by the Act. Baker TRO Mem. at 7, quoting 29 U.S.C. § 159(b); see also Hr'g Tr. 9:6-15 (stating that the Chamber plaintiffs object to the Statement of Position Requirement "to the extent that it truncates the fullest freedom guaranteed by Section 8" of the NLRA). The parties provide no additional argument on this point, see Baker TRO Mem. at 7-9; Baker Am. Compl. ¶¶ 18-22, and they do not articulate how section 9(b) is implicated here or how a requirement governing the evidence an employer may present at the pre-election hearing would curtail employees' rights. See 29 U.S.C. § 159(b) (stating that the Board shall decide the appropriate unit for collective bargaining purposes "in order to assure to employees the fullest freedom in exercising the rights guaranteed" by the NLRA). But the Final Rule specifically includes an exception to the preclusion aspect of the Final Rule for individual voter eligibility and inclusion evidence in any event:
29 C.F.R. § 102.66(d) (emphasis added). So even if an employer failed—or refused—to include the required information in its Statement of Position, and was therefore precluded from raising or litigating individual voter eligibility and inclusion issues at the pre-election hearing, the employer would still be able to raise and litigate those issues later and protect its employees' rights.
Baker also objects to the requirement that it must list the names and work assignments of the employees in the proposed unit in its Statement of Position, arguing that "[n]othing in the Act authorizes the Board to require" such a disclosure. Baker Am. Compl. ¶ 16. While it may be true that nothing in the statute explicitly directs the Board to require such disclosures, nothing in the statute prohibits it, either. See Serono Labs., 158 F.3d at 1319 (D.C.Cir.1998).
Plaintiffs also argue that "the burdensome requirement of the Statement of Position violates Baker's due process rights by not providing it sufficient time to respond to [UCW's] petition." Baker TRO Mem. at 7-8, citing Mathews, 424 U.S. at 333, 96 S.Ct. 893; Hr'g Tr. at 9:25-10:11 (stating that the Chamber plaintiffs challenge the same requirement "to the extent that it provides less time to prepare for the hearing," because "it raises due process concerns").
The general proposition in Mathews v. Eldridge—that due process requires "the opportunity to be heard `at a meaningful time and in a meaningful manner,'" 424 U.S. at 333, 96 S.Ct. 893, quoting Armstrong v. Manzo, 380 U.S. 545, 552, 85 S.Ct. 1187, 14 L.Ed.2d 62 (1965)—is undisputed. But as with their argument regarding the scope of the pre-election hearing, plaintiffs have failed to identify—either in their pleadings or during the hearing—precisely what liberty or property interest could be infringed by the Statement of Position Requirement. See Hr'g Tr. 12:16-15:2; 129:10-131:23. Without that information, the Court cannot assess what appears to be a half-hearted due process claim.
The prior version of the regulations stated that the regional director "will normally not schedule an election until a date between the 25th and 30th days after the date of the decision, to permit the Board to rule on any request for review which may be filed." 29 C.F.R. § 101.21(d) (2014). Under the Final Rule, "[e]lections will no longer be automatically stayed in anticipation of requests for review," 79 Fed.Reg. at 74,309, and instead, "[t]he regional director shall schedule the election for the earliest date practicable" consistent with the NLRA and the relevant regulations. 29 C.F.R. § 102.67(b).
Both sets of plaintiffs contend that the Final Rule's elimination of the "normal" pre-election waiting period and its instruction to hold elections on "the earliest date practicable" violate the NLRA and the First Amendment by "impermissibly curtail[ing] an employer's right to communicate with its employees." Chamber Compl. ¶ 70; Baker Am. Compl. ¶ 26; see also Chamber Mot. at 26-31. The Chamber plaintiffs argue that section 9(b) of the Act, which directs the Board to "assure to employees the fullest freedom" in exercising their rights under the Act, and the free speech protections afforded by section 8(c), combine together to guarantee employers the right to "sufficient time to engage in free speech before an election." Chamber Mot. at 27.
The Court acknowledges that section 8(c) of the NLRA reflects a "policy judgment, which suffuses the NLRA as a whole, as `favoring uninhibited, robust, and wide open debate in labor disputes.'" Chamber of Commerce v. Brown, 554 U.S. 60, 67-68, 128 S.Ct. 2408, 171 L.Ed.2d 264 (2008), quoting Letter Carriers v. Austin, 418 U.S. 264, 272-73, 94 S.Ct. 2770, 41 L.Ed.2d 745 (1974). But plaintiffs have failed to show that the Final Rule inhibits this debate in any meaningful way, and they certainly have not shown that there is "no set of circumstances" in which this aspect of the Final Rule can be enforced consistently with the NLRA or the First
Furthermore, this aspect of the Final Rule does not specifically burden employer speech, because all parties to the election proceeding are constrained by the same timeframe in disseminating their views to employees. As the Board observed, employers likely have an advantage in communicating with their employees during a shortened election period, in that they "can compel employees to attend meetings on working time at the employer's convenience," including meetings at which employees "are often expressly urged to vote against representation." 79 Fed.Reg. at 74,322-23. By contrast, a union's "organizers normally have no right of access to plant premises" and do not have the same captive audience that an employer may have. Id. at 74,337.
The Chamber plaintiffs also contend that the legislative history of the Act—specifically, comments by then-Senator John F. Kennedy—makes clear "that Congress believed that at least 30 days between petition and election was necessary to adequately assure employees the statutorily guaranteed `fullest freedom' in choosing whether to be represented by a union." Chamber Mot. at 29, citing 105 Cong. Rec. 5,361 (1959), reprinted in 2 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, at 1024 (1974) ("LMRDA Hist.") ("[T]his provision would permit a representation election 30 days after a petition is filed . . . if there are no substantial issues of fact or law which require a hearing. . . . The 30 day waiting period is an additional safeguard against rushing employees into an election where they are unfamiliar with the issues."); see also Chamber Mot. at 29, citing 105 Cong. Rec. 5,770 (1959), reprinted in 2 LMRDA Hist. at 1085 ("[T]here should be at least a 30-day interval between the request for an election and the holding of the election.").
But plaintiffs do not—and cannot—point to language in the NLRA which provides a right to a waiting period of some specified length prior to an election, because there is no such language in the statute. Accord Associated Builders, 2015 WL 3609116, at *12. Where, as here, the statute is unambiguous on its face, a court need "not resort to legislative history to cloud a statutory text that is clear." Ratzlaf, 510 U.S. at 147-48, 114 S.Ct. 655; see also Ala.
In any event, as with plaintiffs' citation to legislative history with regard to the appropriate hearing requirement, their reliance on Senator Kennedy's comments is misplaced. Senator Kennedy made his comments when Congress was considering a proposal to reinstate the pre-hearing election procedure. This proposal would have permitted an election to take place before any hearing at all, and the Senator made his comments about the need for a waiting period in that context. The proposal was ultimately rejected by Congress, see 79 Fed.Reg. at 74,326, and Senator Kennedy's comments are therefore entitled to little weight in this Court's analysis of the Final Rule. See, e.g., Cent. Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A., 511 U.S. 164, 187, 114 S.Ct. 1439, 128 L.Ed.2d 119 (1994) ("[F]ailed legislative proposals are `a particularly dangerous ground on which to rest an interpretation of a prior statute.'"), quoting Pension Benefit Guar. Corp. v. LTV Corp., 496 U.S. 633, 650, 110 S.Ct. 2668, 110 L.Ed.2d 579 (1990).
Finally, the Court agrees with the Board that because the Final Rule "does not in any way permit the Board to use speech or its dissemination as evidence of an unfair labor practice, the literal language of [s]ection 8(c) is not implicated." 79 Fed.Reg. at 74,319, citing NAM, 717 F.3d at 956, 959 n. 19 (invalidating employee rights posting rule which permitted Board to consider failure to post notice as unfair labor practice, but noting that similar rule which lacked such a penalty "does not implicate § 8(c)"). For all these reasons, the Court finds that this aspect of the Final Rule survives plaintiffs' statutory and constitutional challenges.
For similar reasons, to the extent that plaintiffs attempt to argue that this particular aspect of the Final Rule is arbitrary and capricious, see Chamber Compl. ¶¶ 79-81; Baker Am. Compl. ¶¶ 30-32, that challenge also fails. The discretion afforded to the regional director in setting the election date effectively precludes a finding that the Board acted arbitrarily or capriciously in the context of a facial challenge. See, e.g., Am. Hosp. Ass'n v. NLRB, 499 U.S. 606, 619, 111 S.Ct. 1539, 113 L.Ed.2d 675 (1991) ("The fact that petitioner can point to a hypothetical case in which the rule might lead to an arbitrary result does not render the rule `arbitrary or capricious.'").
Plaintiffs also attack the Final Rule's requirement that employers disclose employees' personal contact information in a voter list. The NLRB first required employers to disclose employee contact information in its 1966 decision in Excelsior:
Excelsior Underwear, Inc., 156 N.L.R.B. 1236, 1239-40 (1966). In that case, the Board found that "a lack of information with respect to one of the choices available" in a representation election impeded employees' exercise of free choice in those elections under section 9(b) of the NLRA, and it determined that "by providing all parties with employees' names and addresses, we maximize the likelihood that all the voters will be exposed to the arguments for, as well as against, union representation." Id. at 1240-41. The Supreme Court later endorsed this rationale. NLRB v. Wyman-Gordon Co., 394 U.S. 759, 767, 89 S.Ct. 1426, 22 L.Ed.2d 709 (1969) ("The disclosure requirement furthers this objective [to ensure the fair and free choice of bargaining representatives] by encouraging an informed employee electorate and by allowing unions the right of access to employees that management already possesses.").
The Final Rule expands Excelsior, requiring employers to produce a voter list containing "the full names, work locations, shifts, job classifications, and contact information (including home addresses, available personal email addresses, and available home and personal cellular (`cell') telephone numbers) of all eligible voters" within two business days of a direction of election. 29 C.F.R. § 102.67(l) ("the Employee Information Disclosure Requirement"). The Baker plaintiffs contend that this requirement is contrary to the NLRA, and both sets of plaintiffs claim that it is arbitrary and capricious. Chamber Mot. at 40-41; Baker TRO Mem. at 9-11; see also Amicus Brief at 21-24.
The Baker plaintiffs do not identify a specific provision of the NLRA that the Employee Information Disclosure Requirement allegedly violates. Instead, they seek to invalidate this requirement on the sole grounds that "[n]othing in the Act authorizes the Board to require employers to disclose the personal and private phone numbers and personal email addresses of their employees." Baker Am. Compl. ¶ 17. But, again, the fact that the NLRA does not specifically authorize the Board to mandate these disclosures does not mean that the statute prohibits it. See Serono Labs., 158 F.3d at 1319. Without more, the Court does not find that the Employee Information Disclosure Requirement violates any provision of the NLRA.
The Baker plaintiffs also argue that this requirement runs counter to "privacy statutes. . . in which Congress has expressed its intent to increase employee privacy and not decrease it." Hr'g Tr. 18:5-8; see also Baker TRO Mem. at 10-11 (discussing the Privacy Act, the privacy exemption to the Freedom of Information Act, the Telemarketing and Consumer Fraud and Abuse Protection Act, and the Controlling the Assault of Non-Solicited Pornography and Marketing Act). They assert generally that the requirement "conflicts with Congressional intent to protect worker privacy against further intrusion," and that it is "the Board's obligation to accommodate its rules to the competing interests of other federal laws." Baker TRO Mem. at 11. But they do not elaborate upon or provide authorities in support of this contention.
Regardless, as the court observed in the Western District of Texas litigation, not one of the statutes the Baker plaintiffs cite restricts the disclosure of employee information by employers or to unions: the Privacy Act and FOIA relate to the disclosure of information maintained by federal agencies, and the other two statutes restrict
Both sets of plaintiffs argue that the Employee Information Disclosure Requirement is arbitrary and capricious because it disregards employees' substantial privacy concerns, fails to provide an opt-out mechanism, and lacks a meaningful penalty for misuse of the voter list. Chamber Compl. ¶ 82; Chamber Mot. at 40-41; Baker Am. Compl. ¶ 33; Baker TRO Mem. at 9-11; see also Amicus Brief at 21. The Board counters that the Final Rule's expansion of the voter list requirement is consistent with the purpose of the NLRA and that it simply modernizes the existing requirement to disclose employees' home addresses in a way that reflects "the communications revolution that has transformed our country." Board Mot. at 35-37.
The Final Rule requires employers to supply "available" personal email addresses and "available" home and personal cell phone numbers, 29 C.F.R. § 102.62(d),
79 Fed.Reg. at 74,335, citing Excelsior, 156 N.L.R.B. at 1240-41, 1242-42, 1246. The Court must accord the agency the deference to which it is entitled, but it also must determine whether the Board considered the relevant factors when seeking to further these goals, and whether it articulated a rational connection between the facts it found and the choices it made. Clean Air Agencies, 489 F.3d at 1228.
The Board first found that the Employee Information Disclosure Requirement would further Excelsior's goal of "ensuring the fair and free choice of bargaining representatives by maximizing the likelihood that all the voters will be exposed to the nonemployer party arguments concerning
Id. at 74,336-41.
The Board engaged in a review of statistics and studies showing that the most common methods of communication have changed drastically since Excelsior, shifting away from face-to-face and traditional mail communications and toward cellular phones and email. See id. at 74,335-40. For example, the Board cited a Census Bureau study showing that, whereas only 78% of households possessed a telephone in 1960, 97.6% of households had at least one phone as of the year 2000. Id. at 74,338-39. In addition, the Board noted that while "door to door solicitation is nearly extinct, and first class mail is at its lowest volume in 25 years," "39.6 billion emails were being sent every day" as of 2010, and that while cellular phones were "a non-existent technology at the time of Excelsior," 90% of American adults owned one as of 2014. Id. at 74,337, 74,339.
The Board also specifically considered the comments it received that took the position that "because the Board chose not to mandate disclosure of phone numbers in [Excelsior], at a time when at least basic telephone technology existed, then it should not do so today." Id. at 74,338. In response, the Board observed that home telephones in 1966 lacked voicemail or answering machine technology and therefore did not necessarily facilitate communication with potential voters, but cellular and home telephones today can receive and store voicemails and text messages and are therefore more useful and dependable tools for communication. Id. It also noted that home phone ownership has increased significantly, and that cellular phones and the advances in text messaging technology had increased the value of phones as a communication tool, and it concluded: "the changes in phone ownership and use make personal phones a universal point of contact today in a way that was unimaginable" when Excelsior was decided. Id. Therefore, the Board found that the precedent it set in Excelsior did not preclude it from expanding the requirement in the Final Rule. Id.
The Board's analysis reflects consideration of the relevant issues, and there is a rational connection between its discussion of the increased use of digital communications technology in lieu of face-to-face communication and the U.S. mail and the regulation that was promulgated. As the Supreme Court has observed, "[t]he responsibility to adapt the [NLRA] to changing patterns of industrial life" has been entrusted to the Board, NLRB v. J. Weingarten, Inc., 420 U.S. 251, 266, 95 S.Ct. 959, 43 L.Ed.2d 171 (1975), and its
The Board also found that the expanded disclosure regime would further Excelsior's second goal of "facilitating the public interest in the expeditious resolution of questions of representation by enabling the parties on the ballot to avoid having to challenge voters based solely on lack of knowledge as to the voter's identity." 79 Fed.Reg. at 74,335. The Board noted that "in many cases at least some of the names on the employer's list of eligible voters are unknown to the other parties," which might force a union to challenge those unknown voters, delaying the results of an election. Id. at 74,340. The Board found that the new requirement would help the parties "investigate the identity of any unknown employees on the employer's voter list in a more timely manner, thereby helping to decrease the chances that the [party] will have to challenge voters based solely on the ignorance of their identities." Id.
While the Board did not provide statistical support for its determination that the disclosure rule would facilitate the resolution of questions of representation on a more timely basis, this finding is "of a judgmental or predictive nature," and "a forecast of the direction in which future public interest lies necessarily involves deductions based on the expert knowledge of the agency." FCC v. Nat'l Citizens Comm. for Broad., 436 U.S. 775, 813-14, 98 S.Ct. 2096, 56 L.Ed.2d 697 (1978), quoting FPC v. Transcon. Gas Pipe Line Corp., 365 U.S. 1, 29, 81 S.Ct. 435, 5 L.Ed.2d 377 (1961). And plaintiffs did not challenge the validity of this stated rationale, or the Board's finding that the disclosure requirement would further that goal. Thus, the Court does not find this aspect of the Final Rule to be arbitrary and capricious.
Plaintiffs do not attack the underlying justification for the original Excelsior requirement and they do not question the connection between the facts the Board lays out in support of the Final Rule and the Employee Information Disclosure Requirement. But, they claim that the disclosure requirement is arbitrary and capricious because it disregards employees' substantial privacy concerns, it lacks an opt-out mechanism, and it does not contain a meaningful penalty for misuse of the voter list. Chamber Compl. ¶ 82; Chamber Mot. at 40-41; Baker Am. Compl. ¶ 33; Baker TRO Mem. at 9-11.
Plaintiffs contend in their memoranda that the Board "brushed aside all concerns for employee privacy and security," Baker TRO Mem. at 10, that it "concluded, without adequate justification and concern for employee rights" that the risks to employee privacy were worth taking, Chamber Compl. ¶ 82, and that it acted "without any reasoning or analysis." Chamber Mot. at 41. But these conclusory allegations are belied by the text of the Final Rule, which indicates that the Board engaged in a lengthy and thorough analysis of the privacy risks and other concerns raised by the commenters before reaching its conclusion that the Employee Information Disclosure Requirement was warranted. 79 Fed.Reg. at 74,341-52.
The Board acknowledged that "`[employees] have [a] nontrivial privacy interest in nondisclosure' of home address information," and that "some employees will consider disclosure of the additional contact information . . . to invade their privacy, even if they are never contacted." Id., quoting Dep't of Def. v. FLRA, 510 U.S. 487, 501, 114 S.Ct. 1006, 127 L.Ed.2d 325 (1994). But it noted that the risk that an employee's privacy rights would be infringed "should be more pronounced surrounding an employee's home address—long disclosable under Excelsior—than for the additional contact information (phone numbers and email addresses)" mandated under the Final Rule. Id. at 74,343. The Court agrees with the Board's observation that, in contrast to the home addresses, which "may lead to face-to-face contact" at an employee's home, "disclosure of employee phone numbers and email addresses may simply lead to phone calls or email messages, which are more easily ignored." Id.; see also Associated Builders, 2015 WL 3609116, at *11 ("Virtual contact can be readily ignored. And virtual contact information can be and is routinely changed, unlike a physical home address."). And the Board reiterated that the Final Rule requires only the disclosure of available employee contact information, so if an employee has not shared a personal email address or cell phone number with his or her employer, the employer will not be able to disclose it to the other parties. 79 Fed.Reg. at 74,343 n.169.
Finally, the Board noted that the information to be disclosed "is limited in scope" and does not reveal any sensitive information "about the employees' politics, their religion, their associations, or even their position regarding the labor organization in question." Id. at 74,343-44. It pointed out that "the voter list information will be provided to a limited set of recipients," and "will not be made available to the public at large." Id. at 74,344. Ultimately, the Board found that "the substantial public interests—in fair and free elections and in the speedy resolution of questions of representation—served by the voter list amendments outweigh the employees' acknowledged privacy interest in the information that will be disclosed." Id. at 74,343. Given the Board's consideration of the comments it received raising employees' privacy concerns, its reasoned analysis as to why the expanded disclosure requirement was necessary, and the deferential standard that must be applied, the Court does not find that the Board acted arbitrarily and capriciously in enacting the Final Rule despite its implications for employee privacy.
Plaintiffs also contend that the failure to incorporate an opt-out provision in the Final Rule, which would permit an employee
The Board considered commenters' suggestions on this point, and it determined that "it would hardly be consistent with the policy underlying Excelsior—ensuring that employees receive sufficient information from the nonemployer party to make an educated decision—to begin allowing employees to opt in or opt out of such disclosures." 79 Fed.Reg. at 74,347. It also found that including an opt-out mechanism in the Final Rule could "impose significant administrative burdens on the government and the parties," that it could "invite new areas of litigation resulting in additional costs to the parties and the Board," and that it would delay the election "if extra time were allotted between an election's direction and its conduct for communication with the subject employees concerning their ability to opt in or out" of the union's communications. Id. For those reasons, the Board found that "attempting to craft a universally applicable opt-out requirement unique to Board elections would have highly uncertain benefits at a cost of generating new election disputes and possible conflicts with other Federal regulation of the same subject matter." Id. at 74,348. Instead, it determined that "the existing self help remedy available to anyone who objects to unwanted communications—ignoring calls or letters and deleting emails—seems for the time being to be a more cost-effective option." Id.
Plaintiffs do not challenge the Board's findings on this issue, and they do not identify evidence on this point that the Board failed to consider. They simply disagree with the choice the Board made, and that is not enough to mount a successful APA challenge. Because the Board's decision not to include an opt-out provision in the Final Rule bears a rational connection to the facts it found and the factors it considered, the Court finds that it was not arbitrary and capricious.
Finally, plaintiffs contend that Final Rule is arbitrary and capricious because the Board "declin[ed] to announce penalties for misusing the [voter list]," which could lead to the abuse of employees' personal contact information. Chamber Mot. at 41; see also Baker TRO Mem. at 12; Amicus Brief at 22. But the Final Rule does prohibit abuse: it mandates that parties "shall not use the [voter] list for purposes other than the representation proceeding, Board proceedings arising from it, and related matters." 29 C.F.R. § 102.67(l). The Board addressed some of the commenters' concerns that the prohibition was not explicit enough, observing that "it goes without saying that nonemployer parties would run afoul of the restriction if, for example, they sold the list to telemarketers, gave it to a political campaign or used the list to harass, coerce, or rob employees." 79 Fed.Reg. at 74,358. The Board added that "if the disclosure of the additional contact information does subject employees to harm, the Board `shall provide an appropriate remedy,'" id. at 74,342, quoting Excelsior, 156 N.L.R.B. at 1244, and that leaving the "question of remedies to case-by-case adjudication," as the Board did in Excelsior, was the best approach. Id. at 74,359.
The Board also addressed commenters' objections that the disclosure of employees' personal phone and email information "could lead to harassment and coercion" in the absence of an explicit penalty provision. Id. at 74,341-42. Similar concerns were raised at the time of Excelsior, and the Board stated that no instances of abuse specifically linked to the Excelsior list had been reported in the nearly fifty
In Wyman-Gordon, the Supreme Court stated that it is for the Board and not for the Court to weigh the interest in an informed employee electorate against "the asserted interest of employees in avoiding the problems that union solicitation may present." 394 U.S. at 767, 89 S.Ct. 1426. Because the Board did just that in reaching its conclusion that the risks to employees' privacy interests "are worth taking" to ensure that "communication about organizational issues is going to take place using tools of communication that are prevalent today," 79 Fed.Reg. at 74,342, the Court will not substitute its judgment for the Board's. Therefore, the Court finds that the Employee Information Disclosure Requirement does not violate the APA.
Under the prior regulations, all pre-election review and some post-election review by the Board was discretionary, but the parties could agree in a stipulated election agreement
The Final Rule eliminates the parties' ability to stipulate that post-election disputes will be resolved by the Board. 79 Fed.Reg. at 74,331. Instead, "the regional director will resolve any post-election disputes subject to discretionary Board review." Id. And the Final Rule provides that "[t]he Board will grant a request for review only where compelling reasons exist therefor," such as: where a petitioning party has shown that (1) "a substantial question of law or policy is raised;" (2) "the regional director's decision on a substantial factual issue is clearly erroneous;" (3) "the conduct of any hearing or any ruling made in connection with the proceeding has resulted in prejudicial error;" or (4) "there are compelling reasons for reconsideration of an important Board rule or policy." 29 C.F.R. § 102.67(d).
Both the Chamber plaintiffs and the Baker plaintiffs assert that the Final Rule's "elimination of mandatory Board review of post-election disputes, during a period of dramatically reduced case loads, is arbitrary and capricious given the Board's statutory obligation to oversee the election process." Chamber Compl. ¶ 83; Baker Am. Compl. ¶¶ 34-35. The Chamber plaintiffs warn that "without the failsafe of mandatory post-election review, employers will be more reluctant to enter into binding election agreements," Chamber Mot. at 35, and they contend that the Final Rule "will result in more, not less, litigation overall, including more litigation in federal court," Chamber Compl. ¶ 84; Baker Am Compl. ¶ 36, because it "will force more employers to turn to the federal courts for the review that is denied by the Board." Chamber Mot. at 36. But the only support plaintiffs marshal for these predictions is the dissenting opinion to the Final Rule. See id., citing 79 Fed. Reg. at 74,451 (dissent). Plaintiffs point to no authority that demands that every agency action be unanimous, and the fact that individual Board members were out-voted on a matter of policy does not mean that the Board overlooked "evidence" in the record.
Upon review of the Final Rule as a whole, the Court finds that the Board gave substantial consideration to this and other issues in deciding to eliminate parties'
The Board determined that it was appropriate to eliminate the parties' ability to stipulate to mandatory Board review based on the following findings:
79 Fed.Reg. at 74,331-32.
Plaintiffs maintain that the Final Rule contravenes the Board's "statutory obligation to oversee the election process," Chamber Compl. ¶ 83; Baker Am. Compl. ¶¶ 34-35, but the Board found it was not "abdicating its statutory responsibility and function," because section 153 of the NLRA expressly provides for the delegation of the Board's authority to its regional directors. 79 Fed.Reg. at 74,332, quoting 29 U.S.C. § 153(b). Further, because the rules had long provided that pre-election disputes were subject only to discretionary review, and that decision had been upheld by the Supreme Court, the Board found that it was "clearly permit[ted] . . . to adopt the final rule's amendments concerning post-election review." Id. at 74,332-33, citing Magnesium Casting Co. v. NLRB, 401 U.S. 137, 141-42, 91 S.Ct. 599, 27 L.Ed.2d 735 (1971) (rejecting employer's contention that "plenary review by the Board of the regional director's unit determination is necessary at some point" and holding that "the fact that the Board has only discretionary review of the determination of the regional director creates no possible infirmity within the range of our imagination"). These findings are consistent with the statute and controlling authority.
Plaintiffs expressed concern that "employers will be more reluctant to enter into binding election agreements" if they cannot stipulate to mandatory post-election Board review, and that litigation will increase as a result. Chamber Mot. at 35; see also Chamber Compl. ¶ 84; Baker Am. Compl. ¶ 36. But the Board considered these arguments, and it predicted that the calculus of whether to litigate pre-election issues or enter into an election agreement would remain the same under the Final Rule as it did under the prior regime: parties will weigh "the likelihood of success, the importance of the issue, and the cost of litigation." 79 Fed.Reg. at 74,334. Because preelection agreements enable parties "to avoid[] the time, expense and risk associated with a preelection hearing" and provide "certainty with respect to the unit description and the election date," the Board concluded that "parties will continue to have ample reason to enter into stipulated election agreements" under the Final Rule. Id.
The Board also found that it was "at best, highly speculative" that employers will refuse to bargain in order to obtain judicial review of regional directors' decisions, resulting in an increase in federal court litigation. Id. It observed that the Final Rule "merely applies precisely the
While plaintiffs may believe that the Board's analysis of this issue is not sufficiently sensitive to their concerns, they do not point to any evidence, let alone any evidence that was before the Board during the rulemaking process, that contradicts the Board's findings or that should have led the Board to a different conclusion. Accordingly, given the Board's consideration of plaintiffs' concerns during the rulemaking process, the rational connection between the Board's findings and its decision, and the deferential standard of review, the Court finds that the Board's decision to eliminate the parties' ability to stipulate to mandatory Board review of post-election disputes was not arbitrary and capricious.
Finally, both sets of plaintiffs contend that the Final Rule—when reviewed as a single comprehensive rule change and not as the set of its component parts—must be invalidated because it is arbitrary and capricious. Chamber Compl. ¶¶ 76-86; Chamber Mot. at 31-39; Baker Am. Compl. ¶¶ 28-38. Indeed, counsel for the Chamber plaintiffs stated that their "primary position" is that the entire Final Rule "fail[s] . . . under the arbitrary and capriciousness inquiry, in that . . . the rule as a whole is a vastly overbroad solution to a very narrow problem." Hr'g Tr. 7:21-25.
Plaintiffs complain that "[t]he Final Rule promotes speed in holding elections at the expense of all other statutory goals and requirements." Chamber Compl. ¶ 81; Baker Am. Compl. ¶ 32. The Chamber plaintiffs tell the Court that "[t]he Final Rule is overly broad in changing election procedures in a manner impacting all cases" and in "seek[ing] to arbitrarily expedite the election process, even though. . . the Board already conducts elections below its established time targets in more than 90 percent of cases." Chamber Compl. ¶¶ 78-79; see also Chamber Mot. at 32. The Baker plaintiffs agree that the Final Rule is not "necessary," in light of the speed with which the vast majority of elections were already being resolved prior to the Final Rule. Baker Am. Compl. ¶¶ 29-30; Hr'g Tr. at 73:5-19.
But this argument presupposes that the lone goal of the Final Rule was speedier elections, and that is not the case. Many of the Final Rule's provisions, including the Posting Requirement, the Employee Information Disclosure Requirement, and the sections providing for electronic transmission and filing of elections materials, do not relate to the length of the election cycle. And the Board found that the Final Rule was necessary to further a variety of
79 Fed.Reg. at 74,315.
Expedition is a valid concern, well within the Board's purview, but the Final Rule makes clear that it was aimed not only at increasing the speed and efficiency with which representation elections are carried out, but that it was also designed to increase transparency and uniformity, to ensure more fair and accurate voting, and to adapt the Board's rules to modern technology. Id. These goals all further the Board's mandate to "adopt policies and promulgate rules and regulations in order that employees' votes may be recorded accurately, efficiently and speedily." A.J. Tower, 329 U.S. at 331, 67 S.Ct. 324. There is nothing improper about an agency attempting to improve its regulatory scheme, even if its processes have been working relatively effectively. Accord Associated Builders, 2015 WL 3609116, at *17. So while some of the changes may have the effect of expediting the elections timeline, those provisions accord the regional directors considerable discretion to adapt to specific circumstances, and they have been individually upheld by this Court, as discussed above, in part because there were other permissible objectives underlying the decision to adopt the Final Rule as a whole that were entirely unrelated to speed. The Court therefore rejects plaintiffs' contention that the Board acted arbitrarily by expediting elections "at the expense of all other statutory goals and requirements." See Chamber Compl. ¶ 81; Baker Am. Compl. ¶ 32.
The Chamber plaintiffs also assert that "the Board cannot create a rule to `defeat a bogeyman'"—here, unnecessary delays in representation elections—"whose existence was never verified.'" Chamber Mot. at 32-33, quoting Sorenson Commc'ns, Inc. v. FCC, 755 F.3d 702, 710 (D.C.Cir. 2014). In the Sorenson case, the D.C. Circuit found that an FCC rule which imposed sales charges on phones manufactured for the hearing impaired, in order to deter fraudulent use of that equipment, was arbitrary and capricious because the agency had "offer[ed] no evidence suggesting there is fraud to deter." 755 F.3d at 707, 709-10. Here, the Board has offered evidence to support the need for the Final Rule—it considered not only the fact that some elections were being unnecessarily delayed in fully-litigated cases, 79 Fed. Reg. at 74,317-18, but also that "some rules have become outdated as a result of changes in communications technology and practice," that its election processes had not been updated despite those changes, and that best practices were not being implemented uniformly across its regions. Id. at 74,308, 74,315-16. Accordingly, unlike in Sorenson, the Board has offered grounds to show that the issues targeted by the Final Rule were sufficiently tangible to warrant action, and the Court cannot find that the Board acted arbitrarily or
The NLRA declares it to be "the policy of the United States" to facilitate the free flow of commerce "by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection." 29 U.S.C. § 151. And in enacting that statute, Congress authorized the Board "to make, amend, and rescind. . . such rules and regulations as may be necessary to carry out the provisions" of the NLRA. Id. § 156. Plaintiffs complain that "[t]he hundreds of pages in the Board's Final Rule contain remarkably little logic or sound explanation for the sweeping changes made by the Final Rule," Chamber Mot. at 31, but in reality, the Board engaged in a comprehensive analysis of a multitude of issues relating to the need for and the propriety of the Final Rule, and it directly addressed the commenters' many concerns, including a number of the arguments plaintiffs raised here. Since plaintiffs have not shown that the Final Rule contravenes either the NLRA or the Constitution, or that the Final Rule is arbitrary and capricious or an abuse of Board discretion, plaintiffs' motion for summary judgment will be denied, and the Board's motion for summary judgment will be granted.
A separate order will issue.
In addition, the reasoning underlying the decision to apply Chevron rather than Flores in those cases is distinguishable from the situation faced by the Court here. In the API case, the question presented was one of pure statutory interpretation: the agency had undertaken to define a statutory term in its new regulations. 541 F.Supp.2d at 187-89. And the Mineral Policy case also involved a question of statutory interpretation, and the court noted that Chevron was "adequately deferential" to the decisions of the agency, and found that the regulation did not pass muster under Chevron in any event. 292 F.Supp.2d at 38-40. Here, in contrast, plaintiffs are challenging a procedural regime that involves considerable discretion and for which there is no history of enforcement. This differentiates the Final Rule from the sort of regulations to which other courts in this District have applied Chevron rather than Flores, and it presents the very situation that led the Supreme Court in Flores to apply the no set of circumstances test.