On January 17, 2023, a divided D.C. Circuit panel struck down three provisions of the National Labor Relations Board's 2019 final rule on representation case procedures related to union elections, while upholding two challenged provisions.
The majority panel affirmed the district court's May 2020 decision to invalidate three of the Trump-era election changes that were promulgated without a notice and comment period, finding that they dealt with substantive rather than procedural rights. Namely, the panel struck down the 2019 rule provisions regarding:
- The timeline for submission of employee voter lists;
- The timeline for certification of election results; and
- Eligibility of election observers.
The panel found those provisions are "substantive" and thus the NLRB was required to provide for notice and comment prior to issuance. However, the panel reversed the lower court with respect to two other provisions regarding:
- Pre-election litigation of certain voter eligibility issues; and
- The time period for scheduling elections.
The panel ruled that these provisions of the 2019 final rule are "procedural," and therefore were properly enacted. If the NLRB now implements and follows the 2019 rule, it could impact organizing and election strategy for unions and employers alike. Notably, it comes at a time when union density has reached a historic low.
The 2019 Rule Changes and Subsequent Litigation
In 2019, the Board issued a new final rule on election procedures that scaled back the Obama-era 2014 "quickie election" rules. The 2019 rule modified the 2014 amendments to provide parties additional time to comply with various pre-election requirements, clarified and reinstated procedures for litigation to resolve issues prior to a union election, and made other changes to balance procedural rights with expeditious scheduling of elections. The Board did not provide a notice and comment period when it issued the 2019 rule on the ground that the rules were procedural, an exception to the federal Administrative Procedure Act's (APA) notice and comment requirement.
In March 2020, the AFL-CIO filed suit to invalidate the rules, alleging that skipping notice and comment violated the APA and that the rules themselves were arbitrary and capricious. Shortly before the effective date of the 2019 final rule, now-Supreme Court Justice Ketanji Brown Jackson, then a district court judge, vacated the rules, agreeing with the AFL-CIO that none of the challenged provisions fell within the APA's procedural exception. To date, the NLRB has not enforced the vacated rules.
2019 Final Rule Provisions Struck Down
On appeal, the three-member D.C. Circuit panel affirmed the district court decision in part. The court vacated and remanded the following provisions of the 2019 final rule, finding them "substantive" rather than procedural:
- VOTER LIST TIMING – The 2019 rule would have extended the time for an employer to provide a complete list of all eligible voters to the union, including their personal contact information such as home address, telephone numbers, and email addresses, from 2 to 5 business days after a stipulated election agreement is reached, or after the Board issues a decision and direction of election. Accordingly, given the panel ruling, the abbreviated 2-business-day deadline remains in effect for employers to produce the voter list.
- DELAYED CERTIFICATION – The 2019 rule would have restricted the regional director's right to certify election results until after the period for a party to file a request for review (RFR) had passed, or until after the Board had ruled on such RFR, if filed. However, because the court's decision invalidated this provision, regional directors retain authority to certify election results without waiting on an RFR.
- ELECTION OBSERVER QUALIFICATIONS – The 2019 rule would have limited a party's selection of election observers to current members of the voting unit "whenever possible." With such rule vacated, the parties may continue to select non-voting unit employees to serve as observers.
The three invalidated provisions above are null unless and until the Board re-promulgates them with notice and comment. Additionally, the court struck down as violative of the National Labor Relations Act the provision of the 2019 rule that required election ballots be impounded while related RFRs are pending.
Procedural Provisions Upheld
The panel confirmed the validity of two challenged provisions of the 2019 rule: those regarding pre-election litigation of certain voter eligibility and inclusion issues, and a related adjustment to the default rule for the election timeline. Contrary to the AFL-CIO's arguments and the district court's decision, the panel concluded that, because these are rules of agency procedure and regulate "internal house-keeping" and operational matters, they did not require notice and comment under the APA:
- PRE-ELECTION LITIGATION – Per the court's ruling, parties have the right to litigate most voter eligibility, unit scope, and supervisory status issues prior to an election, rather than, as under the 2014 rules, waiting to resolve such disputes until after an election takes place.
- ELECTION SCHEDULING – Related, the court approved the 2019 rule's 20-business-day presumptive waiting period before the regional director schedules an election, which will allow time for the agency to handle disputes between the parties prior to the election.
- The revised timeline for representation elections would afford employers more time before an election to communicate with employees, and the opportunity to litigate and resolve unit scope would clarify voter eligibility issues before an election.
- Early preparation will continue to be necessary for employers to meet the tight 2-business-day deadline for producing the voter list.
- Since filing an RFR will not pause certification of a union election, employers should anticipate claims that they have a duty to bargain upon request regardless of a pending RFR.
- This decision may not be the final word on the 2019 final rule. The Board could issue a notice and comment period for the vacated rules, although this is very unlikely with the change in administration. Further, on remand the district court will revisit the AFL-CIO's remaining claims related to the two rules upheld under the APA. Further, the current Board is unlikely to support the two changes that the court's decision authorizes, so it remains to be seen whether the Board will actually implement them or whether, using the decision as its guideline, it will issue a new rule rescinding them without notice or comment.
- The D.C. Circuit decision is one of many recent developments in federal labor law, including the Board's proposed rules on the joint employer standard and rescission of the 2020 Election Protection Rule.
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