NLRB headquarters in Washington. Credit: Diego M. Radzinschi / ALM

A Washington federal appeals court on Thursday weighed a challenge to an Obama-era labor rule that let employees speed up how quickly they hold union elections.

A panel of the U.S. Court of Appeals for the D.C. Circuit considered an appeal from UPS Ground Freight Inc. that challenges a bargaining unit certified by a regional director of the National Labor Relations Board. The labor board’s adoption of the so-called “quickie” or “ambush” election rule in 2015 drew cries from the business community.

Business advocates, who filed a friend of the court brief backing UPS, are closely following the D.C. Circuit case, which they contend is an example of a federal agency acting outside the scope of its power. The U.S. Chamber of Commerce, in its brief, urged the federal appeals judges not to give “deference” to the labor board.

The appeals court panel—Chief Judge Merrick Garland and Judges Sri Srinivasan and Raymond Randolph—are considering whether the board used appropriate discretion in applying NLRB rules during the election process for the bargaining unit in Kutztown, Pennsylvania.

Lawyers for UPS contend the labor board’s order directing the company to bargain with the new union should be deemed invalid. Kurt Larkin, a Hunton Andrews Kurth partner in Richmond representing UPS, argued that the election rule created an imbalance and an unfair process. He said the company did not have adequate time to prepare.

“The rule values speed at all costs,” Larkin said. “The only goal is to get the election done as quickly as possible—rushing through the process and denying the employer a fair shake.”

UPS freight workers, who service national retailer Advance Auto Parts, voted to unionize but the company appealed and refused to recognize it because they argued one of its local employees was a supervisor who was not eligible to join the union.

Virginia-based UPS Freight is a trucking division of package-delivery giant UPS. Freight drivers deliver to Advance Auto Parts stores in Pennsylvania, New Jersey and New York.

NLRB attorney Eric Weitz argued the union election process was not unusual, and the union gave the company plenty of time. He said the employer should carry the burden of providing witnesses and evidence at the hearing challenging the election.

“The election did occur here. Nearly all the employees wanted a union,” Weitz said. “The issue is whether the conduct would have tainted the showing of interest.”

The U.S. Chamber, represented by Covington & Burling, said the D.C. Circuit should not extend so-called “Auer deference” to decisions made by the NLRB regional director. Those rulings, the Chamber argued, “do not bind the board and therefore do not represent the views of the agency to which a court may defer.” Business groups have long complained about how much deference courts give to federal agencies, and the U.S. Supreme Court next week will hear a case that confronts the issue.

Auer harms businesses and other regulated parties by increasing uncertainty, as agencies are free to change their interpretations of regulations without input from, or notice to, affected parties,” the Covington lawyers said in their brief. “Stretching Auer to include the non-binding decision of a subordinate agency official with no meaningful review from the agency’s principal decision makers would exacerbate those problems.”

The Chamber’s lawyers warned that “such an expansive approach would permit a multitude of agency officials to determine the content and meaning of federal law, forcing businesses to comb through all sorts of agency documents, memoranda, and websites to find agency interpretations.”

 

Read more:

Supreme Court Tees Up Major Challenge to Power of Federal Regulators

Justices Thomas and Gorsuch Call for Curbs on Federal Agency Power