Nursing Home’s Constitutional Attack on NLRB Falters at 2d Cir.

A federal appeals court in Manhattan appeared ready to reject a nursing home operator’s bid to halt a long-running National Labor Relations Board case based on alleged constitutional defects with the agency’s in-house judges.

Care One LLC’s need to have the unfair labor practice case stopped seems to be obviated by the proceedings being before the board rather than an administrative law judge, a US Court of Appeals for the Second Circuit judge said during oral argument Tuesday.

“So when you say you need a preliminary injunction to stop your case from proceeding before an improperly constituted tribunal, I’m not sure what you’re talking about,” Judge Reena Raggi said to the company’s lawyer. “The NLRB is properly constituted.”

The dispute comes as employers are more frequently turning to constitutional lawsuits as a response to unfair labor practice cases they face in administrative proceedings at the NLRB.

Care One’s constitutional challenge predates the current crop of lawsuits from companies like Amazon.com Inc. and SpaceX. The nursing home operator sued the NLRB in June 2023 to block a case that dates back to 2012, when agency lawyers accused it of unlawfully locking employees out and refusing to reinstate them after a lawful strike. That case has been delayed by a bankruptcy proceeding, the Covid pandemic, and other issues.

Like several other businesses, Care One asserted that the NLRB’s in-house judges are unconstitutionally shielded from removal by the president. The company also contested the appointment of ALJ Kenneth Chu based on board member appointment issues that the US Supreme Court ruled on in 2014’s NLRB v. Noel Canning.

Harm Debated

Care One needs a preliminary injunction “because the entire proceeding, including the proceeding that’s before the board now is tainted,” said the company’s lawyer, Daniel Benson of Kasowitz Benson Torres LLP.

Raggi, a George W. Bush appointee to the Second Circuit, pushed Benson about what type of irreparable harm the company would suffer if the NLRB case moves forward—a necessary showing for a preliminary injunction. The case is before the board, which can correct the ALJ, and even if the proceedings are tainted, a reviewing federal court could invalidate the decision, she said.

“So why are you irreparably harmed?” Raggi asked. “You can still appeal the NLRB ruling.”

Benson replied that just being subjected to the proceeding is irreparable harm.

“I guess I’m not following your answer to that question,” said Judge Maria Araújo Kahn, a Biden appointee. “If it can be fixed on appeal, how is it irreparable?”

“Because you’re being subjected to it, and as you’re being subjected to it, it’s irreparable harm,” Benson answered.

Judge Myrna Pérez, a Biden appointee, confirmed with the NLRB lawyer that the ALJ in the underlying case retired. She then asked whether that should affect the court’s view of the case.

The administrative law judge’s retirement further undercuts Care One’s irreparable harm argument as it relates to the ALJ’s allegedly unconstitutional appointment, because there’s no chance the case could return to him, agency lawyer Michael Dale said.

The case is Care One, LLC v. NLRB, 2d Cir., No. 23-7475, oral argument held 11/12/24.