Labor Board Loses Edge in Court Review as Judges Avoid Precedent

Several appellate courts ignored US Supreme Court precedent privileging the NLRB’s takes on federal labor law in their decisions discussing a landmark ruling that ended deference to agencies’ interpretations of vague laws.

Five circuit courts have considered how Loper Bright Enterprises v. Raimondo affects their assessment of the National Labor Relations Board’s legal interpretations since the high court handed down that decision a year ago, according to a Bloomberg Law review of cases.

Just one of those circuit courts—the US Court of Appeals for the Third Circuit—acknowledged Supreme Court case law that predates the now-defunct Chevron doctrine, such as the high court’s 1979 decision holding that the NLRB’s interpretation of federal labor law should be enforced as long as it’s “reasonably defensible.”

But the Sixth, Fourth, Fifth, and Tenth circuits didn’t mention precedent on NLRB-specific deference, instead saying that they don’t yield to the board’s view of the law.

Overall, courts have continued to acknowledge that the NLRB gets deference on its fact finding, its application of law to facts, and its fashioning of remedies, which are dispositive in most board decisions, labor law scholars said.

But appellate courts rejecting that the NLRB’s read of the National Labor Relations Act has special privilege could make the board’s precedents, which set legal standards applied in other cases, more vulnerable to legal challenge.

“What Loper Bright is limited to is the bigger cases, when the board is interpreting the Act,” said Jeffrey Hirsch, a labor law professor at the University of North Carolina.

‘More Judicial Intrusion’

Nevertheless, Hirsch and other labor law scholars questioned how much Loper Bright will ultimately change court review of NLRB legal interpretations.

“The NLRB doesn’t get a lot of respect from the courts,” said Hirsch, a former NLRB appellate attorney. “Most circuit court judges don’t understand the NLRB, and certainly their clerks don’t. Loper Bright won’t make a huge difference.”

Courts’ willingness to defer to the NLRB’s reading of the law has always been on a continuum, said William Gould, board chairman during the Clinton administration. The Supreme Court has decided cases going back to the 1940s based simply on “the board knows best,” but in other cases, the justices haven’t hesitated to second guess its interpretation of the NLRA, he said.

So far, the circuit court decisions discussing Loper Bright’s impact on review of NLRB cases suggest “a nudge towards more judicial intrusion,” said Gould, a law professor emeritus at Stanford University.

But none of those seven rulings from five different courts were decided by an application of Loper Bright, said Michael Fischl, a labor law professor at the University of Connecticut.

The board won five of those cases outright, while the other two were split decisions, Fischl noted.

“When the rubber met the road, you couldn’t see Loper Bright operating,” he said. “It’s really hard to tell yet how much of a difference it’s going to make in a case where it would actually make a difference.”

Rejecting Deference

The NLRB has argued that Loper Bright didn’t change the standard of review for its legal rulings.

The Supreme Court reaffirmed in that ruling that Congress can grant discretionary authority to expert agencies to fill in the details of a statutory scheme, which is what lawmakers gave the board with its assignment to develop national labor policy, the board said.

The Sixth Circuit was the first to weigh in on the impact of Loper Bright in an August 2024 decision saying it doesn’t defer to the NLRB’s interpretations of the NLRA.

The Fourth Circuit took the same basic approach, using straightforward language about not yielding to the board’s view of federal labor law.

The Fifth and the Tenth circuits also rejected any need to defer to the board on legal interpretations, although they recognized some of the caveats from Loper Bright.

Both circuit courts said that Loper Bright doesn’t undermine prior decisions that relied on the Chevron framework. The Fifth Circuit also mentioned that Congress can delegate discretionary authority to agencies.

In a second ruling, the Fifth Circuit determined that the board acted within its delegated power when it allowed an acting general counsel to withdraw a complaint against a union. The court reached this decision in part by considering a Supreme Court holding on NLRB discretion that was decided under Chevron.

Wrestling With Precedent

Only the Third Circuit specifically cited circuit and Supreme Court precedent calling for non-Chevron deference to the NLRB’s reasonable interpretations of the NLRA. The Third Circuit also pointed to Loper Bright’s recognition that the high court has deferred to the board separately from applying Chevron.

Nevertheless, the Third Circuit said it need not decide whether deference to the NLRB’s designation of mandatory bargaining subjects under the NLRB survives the end of Chevron.

Some of the circuit courts that have yet to opine on Loper Bright’s impact on NLRB review will likely make good-faith attempts to wrestle with the Supreme Court precedent on board-specific deference, said Anne Lofaso, a labor law professor at the University of Cincinnati and former NLRB attorney.

Still, she said she’s not surprised that some of the courts have skipped over that case law en route to saying Loper Bright eliminated deference to the board’s legal interpretations.

The same judges who are focused on retaking power to interpret laws from agencies also don’t like the New Deal, which birthed the NLRB and other parts of the administrative state, said Lofaso, who authored a law review article on Loper Bright and NLRB review.

“But it would be better if they didn’t pretend the cases didn’t exist,” she said.