BY: JACK MURER, Senior Staffer

“The Court’s recent jurisprudence sends a clear message to the Board and other interested parties that swift resolution of labor disputes will likely lay outside Board proceedings.” 

The rights guaranteed under the National Labor Relations Act (NLRA or the Act) are almost entirely secured by the administrative scaffold of the National Labor Relations Board (NLRB or the Board). The right to organize, or not, with your fellow employees currently rests almost entirely on the assumption that the Board and all its components quickly and effectively tamp down any inhibition on their exercise. As members of Congress and the public often emphasize, the Board must operate in a way that ensures the public enjoys the “fullest freedom in exercising [their] rights” under the Act.

The rights promised under the Act now face several challenges arising out of recent jurisprudence from the Supreme Court of the United States. The Court’s recent decisions in Jarkesy, Loper Bright Enterprises, and Corner Post all create complications for the Act’s enforcement. These complications come not through direct challenges but by exposing the administrative state to continuous litigation, slowing down processes, and subjecting workers to increased delays. This presents further complications as prospective issues from the aforementioned Supreme Court decisions compound against the Board’s preexisting budgetary shortfalls and case holdover.

I. Current Board Holdover and Budgetary Constraints

The Board, irrespective of any additional circumstances, already faces an onslaught of cases and an increasing amount of holdover year-over-year in cases concerning both union representation and unfair labor practice (ULP) litigation. Workers seeking formal representation brought 3% more cases before the Board in fiscal year 2023 compared to fiscal year 2022. ULP charges filings further increased by 10% over that same time period. The Board ended FY2023 with 191 cases pending, increasing from 145 the year before. Additionally, the Board faces this increase in litigation with a largely stagnant budget. The Board has received only a single increase in its federal budget over the past decade, leading to an average 46% increase in expected workload per Board employee over that time as resources dwindle.

II. The Administrative Impact of Recent Court Decisions

Understanding that the Board currently faces practical restrictions on its ability to enforce rights under the Act, the Supreme Court’s recent administrative law decisions introduce unique issues that could all reasonably contribute to delays in the Board’s administrative remedies.

• A. Corner Post, Inc. v. Board of Governors of the Federal Reserve System

Corner Post, Inc. presents an avenue for administrative delay by retroactively subjecting the Board to litigation over rules and adjudications that were previously thought to be beyond the statute of limitations for parties aggrieved by agency action. The case stemmed from a 2021 complaint by a North Dakota truck stop, Corner Post, which alleged harm from a rule issued by the Federal Reserve Board in 2011.

Because the Administrative Procedure Act does not explicitly set a default statute of limitations for parties aggrieved by agency action, courts have generally applied a six-year default period. In Corner Post, the Court was asked to determine when this six-year period begins—whether at the moment of agency action or the moment of injury. The Court decided that the appropriate moment was the latter. This exposes administrative agencies to a permanent threat of litigation over rules and other agency actions. Importantly, this threat is entirely impossible to forecast since this new interpretation does not only apply to entities in existence at the time of a particular agency action but also those that come into existence after. This particular wrinkle in the Corner Post ruling comes out of the case itself, as the truck stop company in question did not incorporate until 2017, six years after the issuance of that Federal Reserve rule, by which they were aggrieved.

• B. SEC v. Jarkesy

Conversely, the Court’s decision in SEC v. Jarkesy presents issues for the Board, and administrative agencies at large, in future actions and the implementation of novel enforcement mechanisms. Jarkesy asked the Court to decide whether administrative agencies were subject to the regulations of the Seventh Amendment when enforcing civil monetary penalties. Although narrowly posed in the context of securities fraud, the Court’s disposition carries implications for all agency actions that sound in common law infractions.

The Court ultimately found that securities fraud, by nature of the punitive damages sought by the SEC, constituted a common law action that required a jury trial to be properly enforced under the Seventh Amendment. While narrowly applied by the Court in this case, the threat of a possible jury requirement poses a significant challenge to administrative agencies, including the Board. This could lead to possible resource requirements agencies cannot afford in administering their respective statutory mandates.

• C. Starbucks Corp. v. McKinney; Loper Bright Enterprises v. Raimondo

Finally, the combination of the Court’s decisions in McKinney and Loper Bright create unique issues for the Board in interpreting its statute, further exposing the Board to litigation and administrative delay. In short, Loper Bright, in answering a question about the proper interpretation of the Magnuson-Stevens Act, overruled Chevron deference and empowered federal courts to make final decisions on the correct interpretations of agencies’ enabling statutes. Where federal agencies were once afforded deference in their interpretation of genuinely ambiguous portions of their enabling statutes, the Court’s decision in Loper Bright returns these questions back to the courts. Chief Justice Roberts indicated that federal courts should now apply a framework of Skidmore deference under which agencies will have to persuade a Court of their interpretation of a statute rather than being owed deference.

For the Board in particular, this does not immediately present substantial issues as their statutory authority to implement and enforce the rights under the Act has been routinely recognized in the past. However, the certainty of Board persuasion was recently undercut by the Court’s decision in McKinney, in which the Court disagreed with a long-standing Sixth Circuit interpretation of section 10(j) of the Act. In substituting its own application of the 10(j) injunction, the Court signals that the interpretive persuasion the Board has historically enjoyed might now be waning, exposing the Board to protracted interpretive litigation under the new Loper Bright framework.

III. Impact on the Board and Proactive Steps Interested Parties Could Take

All four of these cases create circumstances under which the Board is newly subject to litigation, further exacerbating the resource issues that the Board already faces. Labor advocates have often warned of the dangers the labor movement faces when enforcement actions, representation elections, and other administrative proceedings remain in limbo for too long. The Court’s recent jurisprudence sends a clear message to the Board and other interested parties that swift resolution of labor disputes will likely lay outside Board proceedings. While the current shape or viability of alternative enforcement avenues is unclear, recent organizing trends offer some direction moving forward. Card-check elections under the Board’s new Cemex framework or short-term rotating lockouts like those employed by hospitality workers both show how those interested in organizing their workplaces can do so without enforcement by the Board. Whatever the most effective method ends up being, recent developments in administrative jurisprudence clearly show that the labor movement will likely have to operate outside the Board to see substantial progress.