D.C. Circuit Signals Labor Board Shielded From Chevron’s Shift

The US Court of Appeals for the District of Columbia Circuit has indicated that the US Supreme Court’s landmark decision bolstering judicial review of agency actions will have far more limited application to the National Labor Relations Board than other federal agencies.

In a ruling Friday on a Puerto Rico hospital’s challenge of an NLRB order to bargain with a union, the court reaffirmed that it continues to hold “a very high degree of deference” to the board’s expertise. The court only sets aside an NLRB decision when it upends precedent “without reasoned justification” or when facts clearly don’t support the board’s conclusion, the D.C. Circuit judges said.

The ruling stands in contrast with the June 28 high court decision in Loper Bright Enterprises v. Raimondo that overturned the requirement that judges defer to agency interpretations of ambiguous laws.

It’s the first time a federal appeals court has weighed in on an NLRB order since the Supreme Court court tossed Chevron U.S.A., Inc. v. Natural Resources Defense Council in a decision that has already put several Biden administration rules in legal jeopardy. But the new D.C. Circuit opinion suggests judges have far less ground to stand on in overruling NLRB decisions.

Legal scholars already believed the shift is unlikely to have a major effect on the NLRB, since the Supreme Court deferred to the board’s interpretation of federal labor law long before the 1984 Chevron decision. Judicial review is critical to the way the agency functions, since it’s the only way to enforce findings against employers and, less frequently, unions.

Unlike other agencies, which adopt and enforce regulations, the NLRB at its core is a quasi-judicial body that interprets federal labor law in specific disputes between workers and employers. The Supreme Court affirmed its deference to the board at least four times between 1940 and 2000.

“Courts must defer to the requirements imposed by the Board,” provided they’re rational and consistent with the law, and the NLRB’s explanation is adequate and reasonable, the justices said in a 1998 decision.

The D.C. Circuit ruling came in response to the hospital’s appeal of a board order to bargain with a staff union over changes to pay and working conditions, and to provide back pay.

The hospital unilaterally cut pay and changed schedules in 2020 as the Covid-19 pandemic led to a drop off in patient volume. An administrative law judge later found the employer violated the law for refusing to negotiate and hand over requested information to the union.

Judge Karen LeCraft Henderson, a George H.W. Bush appointee, authored the court’s opinion. Judges Patricia Millett and Cornelia Pillard, both Obama appointees, joined the decision.

The case is Hospital de la Concepcion v. NLRB, D.C. Cir., No. 22-01272, 7/5/24.