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The Supreme Court sends a warning shot to the NLRB
The Supreme Court sends a warning shot to the NLRB

Only one of the Supreme Court’s cases this term directly involved the National Labor Relations Board (NLRB), but several addressed the broader question of how much authority executive agencies like it have. And what the Court said in case after case is that federal agencies must obey the will of the courts.

That’s bad news for the NLRB, a quasi-judicial agency that oversees unions and seeks to expand its authority through novel interpretations of federal law. The justices have dismissed only one specific NLRB challenge, but the broader implications of several other rulings put many of the panel’s recent actions at risk.

The case in which the NLRB was directly involved was Starbucks Corp. v. McKinneyAn 8-1 majority of justices rejected the NLRB’s attempt to get courts to accept the lower standard of proof it applied in injunctions against employers. Companies can now appeal to outside courts that may view the panel’s orders more skeptically.

The following week, the judges decided 6:3 Securities and Exchange Commission (SEC) v. Jarksey that the executive branch cannot deny a defendant a jury trial despite its own judicial powers. The NLRB, like the SEC, has judicial powers that include administrative law judges who are accountable to the Board.

More importantly, the judges decided 6-3 Loper Bright Pursue against Raimondo that courts are not bound by the interpretation of laws by federal agencies. This overturned a 1984 precedent that Chevron which has long been used to justify extensive rule-making by authorities. The ruling was a particular shock to the legal community. “The administrative state just died,” tweeted Harvard law professor Laurence Tribe after the ruling was announced.

Union leaders saw Chevron The end of the ruling was a major blow to the NLRB. “This ruling paves the way for companies to challenge the actions of the Occupational Safety and Health Administration, the National Labor Relations Board and other agencies that have a duty to protect the lives and rights of workers,” said AFL-CIO President Liz Shuler.

For example, consider the NLRB’s 2023 “Joint Employer” rule, which significantly expanded the legal liability of companies. The “Joint Employer” rule would allow one company to be held liable for violations of another company’s labor rules. The previous rule required that a company have “direct control” over the other company, such as a company using a subsidiary. A 2023 rule issued by the NLRB changed this to “indirect control,” a technical term with no clear definition. Under Chevronoutside courts would have been more likely to accept the NLRB’s claim that one company indirectly controls another. That is no longer the case, as a district court ruling struck down the new rule earlier this year. The NLRB was reportedly considering a challenge. Without Chevronthey stand on much shakier ground.

Likewise, the current NLRB has tried to label virtually any statement by management that does not support unionization as an unfair practice. It ruled that Amazon CEO Andy Jassy violated the rights of his employees when he told CNBC that “people are better off when they have direct lines to their bosses.” The NLRB must now convince outside courts that this is a reasonable interpretation of the National Labor Relations Act.

Tipping over Chevron could also affect NLRB decisions made after President Biden fired Trump-appointed General Counsel Peter Robb. Robb’s firing was likely unconstitutional, a point raised by an NLRB defendant in a case challenging the authority of Robb’s successor, then-acting General Counsel Peter Sung Ohr. A court dismissed the challenge to Ohr’s authority, ruling that Cheagainstron prevented any review of the NLRB’s actions.

“This … is an opportunity for the executive branch to review its role in relation to Congress and return lawmaking to the elected representatives of the people,” Senator Bill Cassidy (R-LA), ranking Republican on the Health, Education, Labor and Pensions Committee, said in a letter to NLRB Chair Lauren McFerran last week.

By Aurora