Legal brief challenges NLRB rulemaking authority under NLRA

54040 Federal Register/Vol. 76, No. 168/Tuesday, August 30, 2011/Rules and Regulations provision, it did not include two additional provisions that the Board declared were necessary to prevent “unlawful encouragement of union membership.” The Court disagreed, stating Perhaps the conditions which the Board attaches to hiring-hall arrangements will in time appeal to the Congress. Yet, where Congress has adopted a selective system for dealing with evils, the Board is confined to that system. National Labor Relations Board v. Drivers, etc. Local Union, 362 U.S. 274, 284-290, 80 S.Ct. 706, 712-715, 4 L.Ed.2d 710. Where, as here, Congress has aimed its sanctions only at specific discriminatory practices, the Board cannot go farther and establish a broader, more pervasive regulatory scheme.182 Congress in Section 8(a)(1) aimed its sanctions only at employer actions that interfere with the exercise of Section 7 rights. By this rulemaking, my colleagues go farther and establish a broader, more pervasive regulatory scheme that targets employer inaction, or silence, as unlawful interference. As Local 357 instructs, they lack the authority to do this.183 American Hospital Association v. NLRB, 499 U.S. 606 (1991) (AHA), upon which the majority heavily relies, illustrates a valid exercise of authority under Section 6. In AHA, the Supreme Court unanimously upheld the Board’s health care unit rule, finding that Section 6’s general grant of rulemaking authority “was unquestionably sufficient to authorize the rule at issue in this case unless limited by some other provision in the Act.” Id. at 609- 10 (emphasis added). The Court further found that the rule was clearly consistent with authority under Section 9(b) to make appropriate bargaining unit determinations. It specifically rejected the argument that language in 9(b) directing the Board to decide the appropriate bargaining unit “in each case”’ limited its authority to define appropriate units by rulemaking. Congress expressly authorized the Board in Section 9(b) to determine appropriate bargaining units and the Board exercised its rulemaking authority to promulgate a rule “necessary to carry out’ Section 9(b). In contrast, as previously stated, there is no reasonable basis for finding that a rule making it unlawful for employers to fail to post and maintain a notice of employee rights and selected illustrative 182 365 U.S. at 676. 183 My colleagues attempt to distinguish Local 357 as limited to an interpretation of Sec. 8(a)(3) and 8(b)(2)’s prohibition of discriminatory practices. That may have been the issue before the Court, but I do not view the quoted rationale as so limited. unfair labor practices is necessary to carry out any substantive section of the NLRA. Nevertheless, the majority construes AHA as an endorsement of deference to the exercise of Section 6 rulemaking authority whenever Congress did not expressly limit this authority. This is patently incorrect. “To suggest, as the [majority] effectively does, that Chevron deference is required any time a statute does not expressly negate the existence of a claimed administrative power * * *, is both flatly unfaithful to the principles of administrative law * * * and refuted by precedent.” Railway Labor Executives’ Ass’nv. National Mediation Bd., 29 F.3d 655, 671 (D.C.Cir.1994) (citation omitted). Were courts “‘to presume a delegation of power absent an express withholding of such power, agencies would enjoy virtually limitless hegemony, a result plainly out of keeping with Chevron and quite likely with the Constitution as well.” Id. In sum, the majority’s notice rule does not address a gap that Congress delegated authority to the Board to fill, whether by rulemaking or adjudication. The Supreme Court has made clear that “Tw]here Congress has in the statute given the Board a question to answer, the courts will give respect to that answer; but they must be sure the question has been asked.’’ NLRB v. Insurance Agents’ Int’] Union, 361 U.S. 419, 432-433 (1960). The Supreme Court also has made clear: ‘‘[Congress] does not * * * hide elephants in mouseholes.” Whitman v. American Trucking Associations, 531 U.S. 457, 468 (2001). My colleagues’ action here is markedly like the Federal Trade Commission (FTC) regulation rejected as ultra vires by the court of appeals in Am. Bar Ass’n v. FTC, supra. The FTC issued a ruling that attorneys engaged in certain practices were financial institutions subject to the privacy provision of the Gramm-Leach-Bliley Act (GBLA). Upon review of the detailed statutory scheme at issue, the court found it ‘difficult to believe that Congress, by any remaining ambiguity, intended to undertake the regulation [of a subject] * * * and never mentioned [it] in the statute.” 430 F.3d at 469. The court further opined that to find the FTC’s interpretation to be ‘‘deference- worthy, we would have to conclude that Congress not only had hidden a rather large elephant in a rather obscure mousehole, but had buried the ambiguity in which the pachyderm lurks beneath an incredibly deep mound of specificity, none of which bears the footprints of the beast or any indication that Congress even suspected its presence.” Id. No such conclusion was possible in that case. No such conclusion is possible here. Quite simply, the Board lacks statutory authority to promulgate a rule that imposes a new obligation on employers and creates a new unfair labor practice to enforce it. The Rule Is Arbitrary and Capricious Even if the Board arguably has rulemaking authority in this area, deference is unwarranted under Chevron and the Administrative Procedure Act if the rule promulgated is “arbitrary or capricious in substance, or manifestly contrary to the statute.” United States v. Mead Corp., 533 U.S. 218, 227 (2001). Also see AHA, 499 U.S. at 618-20 (applying arbitrary and capricious standard in its consideration of the Board’s rule on acute care hospital bargaining units). “Normally, an agency rule would be arbitrary and capricious if the agency has relied on factors which Congress has not intended it to consider, entirely failed to consider an important aspect of the problem, offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise.” Motor Vehicle Mfg. Ass’n of the U.S., Inc. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). “[Tlhe agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’ ”’ Id. (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)). See also Business Roundtable et al. v. S.E.C.,— F.3d—, 2011 WL 2936808 (D.C. Cir., July 22, 2011) (finding SEC acted arbitrarily and capriciously by relying on insufficient empirical data supporting its rule and by completely discounting contrary studies). In AHA, the Board’s health care bargaining units rule was supported by “the extensive record developed during the rulemaking proceedings, as well as its experience in the adjudication of health care cases during the 13-year period between the enactment of the health care amendments and its notice of proposed rulemaking.’’ AHA, 499 U.S. at 618. The Supreme Court upheld the validity of the rule finding it ‘“‘based on substantial evidence and supported by a ‘reasoned analysis.” Id. at 619 (citing Motor Vehicle Mfrs. Ass., 463 U.S. at 57). By contrast, the majority’s articulation of the need to mandate that employers violate Section 8(a)(1) unless they post a notice of employee rights is not based HOUSE_OVERSIGHT_022311