First Challenge to NLRB’s New Election Rules Dismissed –Rules Held Constitutional

One of two lawsuits challenging the National Labor Relations Board’s authority to issue the expedited election rules that took effect on April 14, 2015, has now been dismissed by Judge Robert L. Pitman of the United States District Court for the Western District of Texas in Austin.  In his 27 page decision, Judge Pitman that the plaintiffs, including Associated Builders and Contractors of Texas and the National Federation of Independent Businessmen, could not establish that the NLRB’s December 14, 2014 rule “Representation – Case Procedures; Final Rule,” (the “New Rule”) should be declared by the Court to be invalid under the Administrative Procedures Act, that the New Rule violated employers’ rights under the National Labor Relations Act (the “Act”) by compelling them to provide unions with employees’ names and information before an election is directed or agreed to, by denying employers of their rights to a hearing prior to an election and by interfering with employers’ rights to free speech as provided for in Section 8(c) of the Act.

Rather than attacking the application of the New Rule in any particular case or circumstances, the plaintiffs argued that the changes cumulatively were such that the New Rule violated the Act and the rights of employers and employees under the Act and thus the New Rule should be found to be invalid in its entirety and in all circumstances.   The decision methodically addressed and rejected each of these claims and granted the Board’s Motion to Dismiss and for Summary Judgment. While the Court rejected the Board’s argument that the claims asserted in the challenge should be dismissed because they were not ripe, noting that the filing and processing of more than 141 Representation Petitions (as noted yesterday that number was up to 280 within 30 days) under the New Rule, the Court explained that because the lawsuit challenged the very existence and adoption of the New Rule and not the way that it had been applied by the NLRB in any particular circumstances, the challenge  was one that needed to be analyzed as a “facial challenge,” not an “as-applied challenge.”  This meant that the plaintiffs has the burden, in their purely legal attack, of establishing that the New Rule “could never be applied in a constitutional manner.”

With respect to the plaintiffs’ claim that in almost every case an employer would be denied a hearing in circumstances in which they would have been afforded the right to one,  the Court explained, to succeed the plaintiffs were obligated “to establish there is ‘no set of circumstances exists’ (sic) under which the New Rule would be valid,” and that “even if the New Rule ordinarily limits the scope and timing of the pre-election process, the deference granted a Regional Director to extend and expand” on the limits concerning the content and scheduling of representation hearings “renders Plaintiffs’ challenge unavailing.”

While the District Court’s decision is disheartening for employers hoping for a quick end to the Ambush Election rules, as we have reported another challenge to the New Rule remains pending before the District Court for the District of Columbia. Moreover, an appeal from the Associated Builders and Contractors of Texas decision to the 5^th Circuit is all but inevitable.  Meanwhile, the New Rule continues in effect with a steady flow of new petitions.  As these cases proceed, we can expect that in addition to the early cases challenging the New Rule on its face, cases will emerge challenging the actual application in the real world presenting examples of the actual impact on the rights of employers and employees that the plaintiffs in the facial challenges anticipated.