The National Labor Relations Board (“NLRB” or “Board”) is the federal agency tasked with adjudicating labor disputes between collectivized workers and employers.[1] It has jurisdiction over two distinct types of cases: those concerning Unfair Labor Practices (“ULPs”) and those concerning union election petitions.[2] In Fiscal Year 2022 (October 1, 2021-September 30, 2022) the Board saw a 23% increase in cases filed overall, with ULP cases increasing by 19% and election petitions increasing by 53%.[3] A great deal of this increase has been driven by the national wave of Starbucks unionizations,[4] but with other national chains like Chipotle, Amazon, and Walgreens facing increasing unionization campaigns,[5] there are few signs that this trend will dissipate. As filings pile up they put pressure on the Board’s limited budget, which has not increased since 2014.[6] While the Board has significantly increased its processing rate to prevent a backlog, it was still left at the end of FY 2022 with a 28% increase in unresolved cases.[7] The NLRB’s General Counsel, Jennifer Abruzzo, has called on Congress to “provide increased funding” to resolve the backlog,[8] but while Congress acts, there are two things the Board can do now to alleviate some pressure: engage in Section 6 rulemaking and delegate certain enforcement provisions to states. Both of these solutions involve their own complications and downsides, but they would relieve pressure on the board in the meantime.

 

Section 6 Rulemaking

Section 6 of the National Labor Relations Act (“NLRA”) states that “[t]he Board shall have authority from time to time to make . . . in the manner prescribed by the Administrative Procedure Act . . . such rules and regulations as may be necessary to carry out the provisions of this Act,”[9] which the Supreme Court has held gives the Board the power to engage in notice and comment rulemaking.[10] The Board has used this ability only eight times in its history, all of which have taken place since 2019,[11] opting otherwise to set policy via adjudication on a case by case basis.[12] This has created a strategic incentive for General Counsels, who determine which cases come before the board, to solicit certain kinds of claims in order to reshape Board precedent.[13] To both change and then entrench these new rules the General Counsel must bring several cases to reiterate the Board’s new interpretation.[14] Adjudicatory rulemaking also encourages litigants to file substantially similar cases to ones already decided.[15]

In order to resolve its backlog, the Board could simply change its rulemaking strategy to remove the incentive to bring as many cases. Instead of rulemaking predominantly by adjudication, it could engage in notice and comment rulemaking, as most federal agencies do.[16] Rulemaking in this way, rather than by adjudication, would allow the Board to clearly articulate a standard once and deal with all challenges to the rule in the comment period rather than in a seemingly infinite number of potential cases. However, this method has two serious downsides. First, notice and comment rulemaking tends to take longer than agency adjudication.[17] With the General Counsel’s current focus on overturning unfavorable precedent set by the prior Board, the longer notice and comment process is likely to be too slow to achieve her long list of goals.[18] Second, as clear as rules promulgated through notice and comment may be, there will still be litigation at the margins that will threaten to fill the Board’s docket once again. Thus without an additional fix, the Board would likely still face a substantial backlog.

 

Delegation to State Agencies

Section 10(a) of the NLRA states that the Board is “empowered by agreement with any agency of any State or Territory to cede to such agency jurisdiction over” a number of its cases.[19] While the Board has never exercised this power, it poses an interesting opportunity for the Board to lessen its caseload immediately. For all of the industries over which the Board has jurisdiction, it has effectively exclusive jurisdiction with almost all state laws and administrative procedures preempted.[20] This means that the Board is the only place where most American labor disputes can be resolved. The Board could immediately delegate a certain percentage of its cases to state labor agencies to reduce its backlog and the strain on its resources. The California Department Industrial Relations alone has over three times the budget of the Board.[21] While any delegation would necessarily mean that the Board would be surrendering a certain portion of its command over labor policy, when paired with notice and comment rule making and strict agreements regarding subject matter and appeal, the Board could still retain a significant amount of control over case direction and resolution. The arrangements could also be time limited and subject to review periodically to ensure that the state agencies were operating in a manner that the Board still considered beneficial.

There are, however, other aspects of a delegation strategy that would limit its usefulness. First, not every state has a labor relations agency either capable or willing to assist the current General Council’s progressive agenda.[22] Delegating cases to these agencies would create an even more significant backlog in the corresponding state or, potentially worse for the General Council’s agenda, result in the summary resolution of these cases in favor of the employer. Second, 10(a) specifically prohibits the delegation of cases dealing with “mining, manufacturing, communications, [or] transportation except where predominately local in character.”[23] It is unclear what courts would allow to be delegated, but what is clear is that the scope would be litigated and any injunction issued in the meantime would render the delegation temporarily useless. Finally, no matter the expansive use of notice and comment rulemaking and the close control of case outcomes through agreement details, the Board would likely be loath to delegate its entire caseload to state agencies. It would still want to conduct its own adjudicatory rulemaking, so any delegation would only relieve pressure, not solve the underlying issue of the Board’s underfunding.

 

[1] See 29 U.S.C. §§ 153, 157 (1982).

[2] See id. §§ 158–60.

[3] Nat’l Lab. Rels. Bd., Election Petitions Up 53%, Board Continues to Reduce Case Processing Time in FY22 (2022), https://www.nlrb.gov/news-outreach/news-story/election-petitions-up-53-board-continues-to-reduce-case-processing-time-in.

[4] Scott Horton, Why Are Union Elections Increasing in 2022?, JDSUPRA, (Jul. 29, 2022), https://www.jdsupra.com/legalnews/why-are-union-elections-increasing-in-7324089/.

[5] See Alexia Fernandez Campbell, Low-paid workers are unionizing. Corporations are spending a ton to stop them., Center for Public Integrity, (Sept. 30, 2022), https://publicintegrity.org/labor/low-paid-workers-are-unionizing/.

[6] Daniel Wiessner, U.S. Labor Board Warns Of Furloughs Without Budget Increase, Reuters (2022).

[7] Nat’l Lab. Rels. Bd. supra note 3.

[8] Id.

[9] 29 U.S.C. § 156 (1982).

[10] See N.L.R.B. v. Wyman-Gordon Co., 394 U.S. 759, 764 (1969).

[11] National Labor Relations Board Rulemaking, Nat’l Lab. Rels. Bd. (Nov. 25, 2022), nlrb.gov/about-nlrb/what-we-do/national-labor-relations-board-rulemaking; Emily Baver, Comment, Setting Labor Policy Prospectively: Rulemaking, Adjudicating, and What the NLRB Can Learn from the NMB’s Representation Election Procedure Rule, 63 Admin. L. Rev. 853, 854 (2011).

[12] See Catherine L. Fisk & Deborah C. Malamud, The NLRB in Administrative Law Exile: Problems with Its Structure and Function and Suggestions for Reform, 58 Duke L.J. 2013, 2016 (2009).

[13] See Samuel Estreicher, Policy Oscillation at the Labor Board: A Plea for Rulemaking, 37 Admin. L. Rev. 163, 177 (1985).

[14] See id.

[15] See Shell Oil Co. v. FERC, 47 F.3d 1186, 1200 (D.C. Cir. 1995). The Administrative Procedure Act, which governs Board hearings, requires that parties who were not present in a precedent setting case be allowed to challenge Board precedents they did not have a chance to challenge in the first instance, so parties facing disfavorable Board precedent may wish to bring a repeat case once the Board’s composition shifts in their favor.

[16] See Aaron L. Nielson, In Defense of Formal Rulemaking, 75 Ohio St. L.J. 237, 238 (2014).

[17] Compare Stuart Shapiro, Does The Amount of Participation Matter? Public Comments, Agency Responses and The Time to Finalize a Regulation, Policy Scis. 33, 39 (2008) (rules promulgated via notice and comment take between 20 months and 5 years to reach final status) with Jeffrey M. Hirsch, Defending the NLRB: Improving the Agency’s Success in the Federal Courts of Appeals, 5 Fiu L. Rev. 437, 459 (2010) (NLRB case adjudication typically lasts just over 16 months and rarely takes longer than 2.5 years).

[18] Nat’l Lab. Rels. Bd., No. 21-04, Mandatory Submissions to Advice (2021).

[19] 29 U.S.C. § 160(a) (1982).

[20] See David B. Schwartz, NLRB Jurisdiction over Charter Schools, 39 Hofstra Lab. & Emp. L. J. 133, 156 (2021) (citing Guss v. Utah Lab. Rel.’s Bd., 353 U.S. 1, 10 (1956)). The Board has occasionally interpreted the NLRA narrowly to avoid state preemption, but the absolute field preemption identified in Guss remains a serious barrier to state action. Id at 157 n.175.

[21] See California Director of Industrial Relations, Ballotpedia (Nov. 25, 2022), https://ballotpedia.org/California_Director_of_Industrial_Relations; Wiessner, supra note 6.

[22] See, e.g., H. Fiscal Div., Appropriations And Budget Fiscal Summary, Okla. H.R. 57, 2d Sess., at 135 (2021) (appropriating approximately $3.5 million to the state department of labor).

[23] 29 U.S.C. § 160(a).