Earlier this month, Space X filed a lawsuit claiming the structure of the National Labor Relations Board (NLRB) is unconstitutional.
The company has been embroiled in employment-related complaints with the NLRB and other federal agencies. If successful, the suit would immediately throw the NLRB’s authority to police the workplace into chaos and create a thorny political issue in an area that for decades has divided Congress.
The complaint, filed in the southern district of Texas, relies heavily on a case currently pending before the Supreme Court, Jarkesy v. SEC. The plaintiff in that case alleges agency tribunals infringe on the constitutional right to a jury trial in civil cases and [argues that] administrative law judges — as utilized by the NLRB and many other federal agencies — violate the constitution’s separation of powers…
“The NLRB’s current way of functioning is miles away from the traditional understanding of the separation of powers,” the filing states.
Citing a Federalist Paper written by James Madison, it compares the NLRB’s structure to “the very definition of tyranny.”
I’m somewhat familiar with Administrative Law Judges because I worked for a group of them as part of the Social Security Administration many years ago. ALJs are basically in house judges who only hear cases related to their specific agency. In the case of SSA, if the government says you’re not eligible for Social Security money you have the right to appeal and have a hearing before an ALJ who will look over the details and whatever documents you have to make your case and then issue a ruling within a week or so.
But that ALJ also draws a paycheck from SSA and their support staff are all SSA employees housed at an SSA branch office called an Office of Hearings and Appeals. There are a bunch of these all around the country. What you don’t get at an SSA hearing is a chance to have your case heard in a regular court, by a non-SSA judge with a jury present to decide your case. The basic idea is that doing all of this in house with specialized judges streamlines the workflow. And for an agency that is sending money to tens of millions of Americans every month you can sort of see how streamlining makes sense. If all of these cases were dumped into the regular court system that system would be overwhelmed.
And yet, Musk’s attorneys at Space X are arguing that in the case of the NLRB these judges don’t really allow for a distinct branch of government to decide cases the way the constitution presumes. The ALJs at the NLRB are all employed by the NLRB. And though I’ve never been part of one of those hearings, it sounds like they are similar to SSA Hearings in that there is no jury option available. Last week, Trader Joe’s jumped on the same bandwagon.
Trader Joe’s is facing a litany of union-busting charges before the National Labor Relations Board. The agency’s prosecutors have accused the company of illegally retaliating against workers, firing a union supporter and spreading false information in an effort to chill an organizing campaign…
Trader Joe’s’ attorney, Christopher Murphy of the law firm Morgan Lewis, informed the judge, Charles Muhl, that there was “one final thing” the grocery chain wanted to add to its defense before proceedings began.
“The National Labor Relations Act as interpreted and/or applied in this matter, including but not limited to the structure and organization of the National Labor Relations Board and the agency’s administrative law judges, is unconstitutional,” Murphy said.
All of this is terrifying to Democrats for whom unions are very much at the center of their political power. Any threat to the current balance of power regarding unions could be a pretty fundamental threat to the party’s ability to compete in elections using all those one-sided union donations. Democrats worry that legal challenges like these could ultimately wind up before the Supreme Court where the NLRB could wind up with less power than it currently has. In fact, several challenge that goes to the regulatory power of all executive agencies have already gone before the court.
This term, the U.S. Supreme Court is set to hear three major cases involving the power of federal agencies. While those cases are understandably getting a lot of attention, they’re only the tip of the iceberg. Americans are increasingly questioning agencies’ role in our government. They have sued agencies from the FTC to the DOL, arguing that the agencies’ very structures are unconstitutional. These lawsuits rely on different theories, but their thrust is the same: modern agencies have too much power. They insert themselves into private disputes and decide cases involving private rights. In other words, they act like courts. But they have none of courts’ traditional safeguards, such as independent judges and juries.
That problem is most obvious in the National Labor Relations Board. For nearly 100 years, the Board has exercised power over private rights. It decides who can unionize and when. It decides whether union organizers can come on private property. And it decides when and under what circumstances people can bargain about their own employment…
The Board’s constitutional flaws are also different from those of other agencies. For example, in a recent case involving the SEC, the Fifth Circuit Court of Appeals held that the agency’s structure violated the Seventh Amendment. That was because the SEC can impose civil fines—the kind of claims that must be tried to a jury. The Board has no authority to impose civil fines, so it doesn’t have the same Seventh Amendment problem. Its problem instead comes instead from its unchecked power to decide cases. It controls the outcome in disputes affecting a range of private rights. And those disputes, according to Article III of the Constitution, should be decided only by real judges.
The specific case which is being considered by SCOTUS now is called Loper Bright Enterprises v. Raimondo and the underlying question is how much should courts defer to agencies of the executive, such as the NLRB, using something called the Chevron doctrine. It’s fairly complicated but you can read a really good explanation of this case (and a companion case) here.
The doctrine at the center of the case is known as the Chevron doctrine. It is named after the Supreme Court’s 1984 opinion in Chevron v. Natural Resources Defense Council, upholding a regulation issued by the Environmental Protection Agency. Justice John Paul Stevens set out a two-part test for courts to review an agency’s interpretation of a statute it administers. The court must first determine whether Congress has directly addressed the question at the center of the case. If it has not, the court must uphold the agency’s interpretation of the statute as long as it is reasonable.
In an article published in 2014, law professor Thomas Merrill suggested that the Chevron decision was not regarded as a particularly consequential one when it was issued. But in the decades since then, it became one of the most significant rulings on federal administrative law, cited by federal courts more than 18,000 times.
The claim that courts should defer to agencies is really a fundamental element of these agencies powers. But a couple of small fishing companies are challenging it:
…even if the court were bound by stare decisis, both Loper Bright and Relentless contend, Chevron should still be overturned. The decision is “egregiously wrong” – one of the factors that courts consider in determining whether stare decisis applies – because it gives the power delegated by the Constitution to the courts and to Congress to federal agencies, they say.
By instructing courts to defer to agency interpretations of ambiguous statutes as long as those interpretations are reasonable, Relentless tells the justices, the Chevron doctrine conflicts with the duty of judges under the Constitution to “apply their own independent judgment” – based on factors such as the text, history, and purpose of the law at issue, as well as the prior cases applying it – to determine what the best interpretation of the law is.
Chevron is also inconsistent with the plain text of the federal law governing administrative agencies, the fishing companies observe, “which makes clear that courts, not agencies, are supposed to interpret statutes.”
We’ll have to wait and see but overturning Chevron would be an earthquake for federal agencies, potentially limiting the power of the NLRB among many others.