Corporate giants aim to hobble National Labor Relations Board

Major companies have taken aim at the National Labor Relations Board (NLRB), seeking to thwart the agency charged with protecting labor unions and their members.

Amazon, Starbucks, SpaceX, and Trader Joe’s all face charges from the NLRB for allegedly harassing, intimidating, and wrongful termination of unionized employees. The companies are fighting back by challenging the NLRB’s constitutionality in federal court, a move that could upend the New Deal-era structure of the agency.

The NLRB is central to President Biden’s mission to be the most “pro-union” president in history and has become a bulwark against rising union activity. But if a company successfully challenges its legitimacy, the organization could face a serious blow to its power.

“This energy in the labor movement is fueled, at least in part, by the knowledge that workers are protected when they engage in this type of activity,” said former NLRB member and current university professor. says Sharon Block, who works as a professor and executive director of . Center for Economics of Labor and Justice at Harvard Law School.

“If that protection slips, continues to slip, or slips further, the calculus for determining whether or not a worker will engage in that type of activity is different,” she added.

The NLRB is composed of five members appointed by the President to a five-year term. According to the agency’s websiteThe NLRB receives approximately 20,000 to 30,000 claims from employees, employers, and labor unions each year.

If the NLRB investigation finds sufficient evidence to support the charges, the agency will either facilitate a settlement or issue a complaint on behalf of the complaining party at a hearing before an NLRB administrative law judge.

“When you investigate a charge, you should be completely neutral. You’re fact-finding and doing an investigation,” said Lana Honigman, a partner at the Honigman law firm who spent 23 years as an NLRB attorney. Roumaya told The Hill.

“Once the NLRB determines there is sufficient evidence of a violation, it will switch gears. And it will step out of its neutral role and into the role of prosecutor.”

Companies facing pressure from the NLRB for alleged labor law violations have reversed those charges, arguing that the NLRB is overstepping the law.

Companies argue that NLRB members and administrative law judges are inadequately protected from removal because they cannot be immediately fired by the president or can only be fired for “just cause,” which usually involves misconduct. ing.

Elon Musk’s SpaceX first filed a complaint It filed a complaint with the NLRB in January after the labor board accused the rocket company of illegally firing eight employees for distributing an open letter criticizing the rocket company and Mr. Musk.

SpaceX said in its filing that board members and NLRB judges “lack the constitutionally required degree of control” because they can only be removed for cause and cannot be immediately removed by the president. ‘ he claimed.

SpaceX also argued that the NLRB’s procedures violated its Fifth Amendment right to due process and Seventh Amendment right to a jury trial.

Block said the complaint calls into question the “fundamental structure” of the NLRB.

“If SpaceX were successful, the government agencies responsible for protecting people’s rights to unionize would have an even harder time coordinating and doing their jobs.” ” she said.

SpaceX is the only company so far to have filed a separate lawsuit against the board. But more major companies facing union-busting allegations from the NLRB have since joined the fray, including Trader Joe’s, Amazon, and Starbucks.

Trader Joe’s lawyers argued at a hearing in mid-January that the “structure and organization” of the board and its judges were unconstitutional.

Amazon also said in a recent filing that NLRB board members and judges are primarily protected from presidential oversight or removal, “thwarting the executive power” provided for in Article II of the Constitution. Therefore, he argued that the NLRB’s structure “violates the separation of powers.”

Starbucks similarly recently argued that restrictions on the removal of NLRB members and judges “prevent the presidential control required by Article II.”

Starbucks spokesman Andrew Trull said in a statement that “unlike other employers,” the coffee chain has not filed a lawsuit challenging the NLRB’s constitutionality, and instead “among other affirmative defenses, “We have included that allegation in the unfair labor practice charges.”

When asked about the purpose or goal of including this argument, a recent analysis by Bloomberg Law found that such an argument is “the standard employer defense to NLRB complaints until a final federal decision is made.” “That’s a pretty good picture,” Trull said. Court ruling on this latest corporate challenge. ”

Wilma Liebman, who served as NLRB chair under former President Barack Obama, called recent debate over the agency “extreme and alarming.”

But she stressed that such arguments have been “pervasive for a long time,” especially in conservative legal circles.

The Federalist Society, a conservative legal nonprofit that compiled former President Trump’s short list of Supreme Court nominees, Blog post published By contributors who questioned the constitutionality of the NLRB in November.

“To some extent, I think this is companies jumping on the bandwagon,” Liebman said, adding that companies may be “trying to use yet another argument to protect themselves.”

Block noted that while applying this argument to the NLRB is “novel,” similar arguments have been made for years for other federal agencies with similar structures to labor boards.

The Supreme Court just last fall heard three cases challenging the structure and authority of various agencies, including the legitimacy of the SEC’s administrative law judges.

SpaceX’s filing points to one of those cases, SEC v. Jarkesy, in which the 5th Circuit Court of Appeals previously ruled that removal power extends to these judges who “perform substantive executive functions.” It points out that the court found that

“We thought the question of whether the NLRB was constitutional was settled decades ago,” said David Wimmer, a labor and employment attorney and partner at Swerdlow, Florence, Sanchez, Swerdlow & Wimmer. told The Hill.

“However, the U.S. Supreme Court appears willing to reconsider the scope of authority granted to federal agencies, whether through the ‘serious issue’ doctrine or through the ‘Chevron’ deference review,” he added. Ta.

Block suggested that such arguments are proliferating because “the courts are effectively giving us a very broad invitation to bring these kinds of challenges.”

“Companies that don’t want their workers’ collective bargaining rights recognized in order to engage in concerted action are being lured in,” she said.

The latest attacks on the constitutionality of the NLRB come as the organized labor movement is experiencing a renaissance.

Hollywood shut down last year after both writers and actors went on strike for months. The United Auto Workers (UAW) also won significant concessions from three major automakers after a six-week strike last fall.

Employees at SpaceX, Trader Joe’s, Amazon and Starbucks are among the companies that have launched high-profile unionization efforts in recent years.

“Many of these companies lost union elections,” said Kamron Daulatshahi, a partner at the law firm Mills Sadat Daulat, who advocates labor rights cases for both employees and workers. The Lords told The Hill.

Union membership remains stagnant, even though surveys show Americans are beginning to view labor unions more favorably. According to the Bureau of Labor Statistics, approximately 10% of U.S. workers will be members of a labor union as of 2023, a figure that has remained largely unchanged despite increased labor union activity.

While the outcome of NLRB challenges remains in doubt, labor law experts have warned that NLRB drag could make it more difficult to organize and bring cases against employers. .

“If we were to eliminate the NLRB and sue directly in federal court, many employees would be at a disadvantage because they would have to hire their own personal attorneys; Because you’re going to have to pay for it out of pocket, and no one knows how.”It’s going to take a long time to get through federal court,” Roumaya, a former NLRB attorney, told The Hill. Ta.

Roumayya said the 2024 election could have a more direct impact on the labor movement.

The board’s ideology has already fluctuated depending on which party controls the White House, in what Roumayya described as a “game of ping-pong.” Boards with a Democratic majority tend to side with unions, while Republican-controlled boards tend to side with employers.

“If you have a Republican president in office, a Republican majority, and a conservative majority on the board, everything just starts to go back to normal,” Roumayya said.

Both President Biden and former President Trump are courting organized labor ahead of the presidential election.

Biden recently won significant support from the UAW after becoming the first president to visit the picket line during a strike last fall.

The Teamsters, which narrowly avoided a financially devastating blow amid contract negotiations with UPS, received the first large-scale payment to the Republican National Committee in more than 20 years on the same day that President Trump met with the union in January. Officials reported that the donation had been made. Filings to the Federal Election Commission.

Labor unions have historically supported and donated to Democratic candidates over Republican candidates, but Dowlatshahi cautioned against viewing the latest challenge to the NLRB as a partisan issue.

“Most Americans are employees,” Daulatshahi said. “Therefore, regardless of where they stand on the political spectrum, they need to be aware of the potential seriousness of violating employee rights and potentially restricting employee rights. .”