Labor Rule Challengers Add Congressional Resolutions to Arsenal

A law allowing Congress to pass resolutions disapproving federal regulations is providing ammunition to business groups challenging recent labor rules in court.

Lawmakers recently have introduced various resolutions of disapproval under the Congressional Review Act targeting a US Department of Labor rule on environmental, social, and governance considerations in retirement investing and the National Labor Relations Board’s joint employer rule.

These measures aren’t expected to become law because any such effort would be vetoed by President Joe Biden. But Republicans and business lobbyists say the resolutions’ introduction could bolster legal arguments that a federal agency lacked authority to issue a regulation by showing that Congress never intended to grant that power.

This game plan already has unfolded over the NLRB’s joint employment rule, which would expand instances where companies could be found jointly liable for franchisees’ and subcontractors’ obligations under federal labor law.

Business groups filed a lawsuit challenging the joint employer rule the same day that Senators Joe Manchin (D-W.Va.) and Bill Cassidy (R-La.), filed a CRA resolution of disapproval against it.

“The overall strategy atmospherically is to demonstrate in as powerful a way can, that there is a bipartisan majority of the US Congress that believes that this definition of joint employment goes much too far and has significant consequences on the franchise model and other forms of business business relationships,” said Matt Haller, president and CEO of the International Franchise Association, one of the business groups that sued over the NLRB’s joint employer rule.

The approach comes amid federal courts’ growing skepticism over agencies’ authority to issue broad regulations. A CRA measure, for example, was mentioned at least once by conservative US Supreme Court justices in a case challenging a DOL vaccine mandate.

Roger King, senior counsel at the HR Policy Association, said the answer to the question of whether a CRA resolution could affect a judge’s decision regarding an agency’s authority to issue a regulation “is clearly yes.”

“I think this is a growing trend,” King said. ”This agency power trip that some agencies have been on for literally decades, it’s about to come to an end.”

However, the resolutions’ persuasiveness in court is undercut by their partisan nature and the amount of time between their passage and Congress’ original delegation of authority to an agency.

“CRA resolutions are important for a number of reasons. And certainly we encourage Congress to use that tool when it’s appropriate,” said Glenn Spencer, senior vice president of the employment policy division at the US Chamber of Commerce, which is leading the lawsuit against the NLRB’s joint employer rule and says it supports the CRA.

But “it’s unlikely a court would look at that as determinative of whether an agency has overstepped its authority,” he said.

‘Carry Some Weight’

Under the CRA, lawmakers have a 60-day period after a rule is published to pass a resolution disapproving and nullifying it. The law also provides for an expedited procedure in the Senate that allows the resolution to be placed on the Senate calendar if 30 Senators petition for it, which essentially forces a vote.

Because CRA resolutions must be passed by both chambers of Congress and signed by the president, these measures typically only become law when there is a change in parties in the White House and that same party controls Congress.

But putting members of Congress on the record about federal regulations could provide evidence of lawmakers’ intent—a key factor in courts’ consideration of allegations of agency overreach.

In addition to the NLRB joint employer rule, the CRA-plus-lawsuit approach also is playing out with a DOL regulation changing how the agency calculates “prevailing wages” under the Davis-Bacon Act that are required to be paid to workers on federal construction projects.

Earlier this month, Republicans introduced a resolution of disapproval to nullify the rule.

Just two weeks prior, the Associated Builders and Contractors filed a lawsuit against the rule, arguing in part that the rule “improperly departs from authoritative judicial interpretations of the Davis-Bacon Act and seeks unlawfully to expand the Act’s coverage and enforcement provisions.”

While a CRA resolution of disapproval may not be a silver bullet in a legal challenge, it may have some weight depending on the specific type of rulemaking.

“It couldn’t hurt. Whether it would actually help will really depend on each judges’ and potentially each justices’ view of how current legislative opinion bears on the notion of legislative intent and separation of powers,” said Paul DeCamp, a former DOL Wage and Hour administrator under President George W. Bush.

It may “carry some weight” in court if Congress reaches a bipartisan consensus against a rule, he said.

The Supreme Court in recent years has shot down agency interpretations of their own authority to issue regulations.

In West Virginia v. EPA, the justices last year reaffirmed the “major questions” legal doctrine, clarifying that agencies can’t issue rules with significant economic or political implications unless Congress explicitly gives them the power to do so.

And when overturning the Occupational Safety and Health Administration’s vaccine-or-test mandate in January 2022, Justice Neil Gorsuch—joined by Justices Samuel Alito and Clarence Thomas—wrote in a concurring opinion that “Congress has chosen not to afford OSHA—or any federal agency—the authority to issue a vaccine mandate.”

Gorsuch mentioned that a majority of the Senate disapproved the regulation through a CRA measure.

Too Partisan?

But DeCamp, now a management-side attorney with Epstein Becker & Green PC, was skeptical as to whether a recently-passed CRA resolution would be relevant to an analysis of what Congress intended at the time it granted an agency the authority to regulate in that space decades ago.

“What Congress today thinks isn’t really germane to that analysis,” said DeCamp.

The partisan nature of current CRA resolutions, with a slim chance of actually passing, would likely make them irrelevant in a court of law, some legal scholars said.

“Not only would it not have beneficial effect, it would really have a counterproductive effect from the lawyers’ perspective,” said Richard Pierce, a law professor at at George Washington University.

“If you were to put in a resolution for disapproval and then elicited exactly what is easy to predict—that the Republicans voted for it and all the Democrats voted against it, and so it fails —you would have identified it as an extremely partisan issue that the court does not want to deal with,” Pierce said.

And the court’s analysis of whether Congress granted an agency the authority to issue a rule under a previously passed law is “not assisted by something that would make it 100% clear that today’s Congress considers an extraordinarily divisive, purely partisan matter,” he said.

While a CRA resolution can be helpful in educating members of Congress about regulatory issues that may not be on their radar, it’s not as likely to influence a judge, the Chamber’s Spencer said.

“In that case, courts are just going to look at the original statute itself and take their interpretation from that,” he said.