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The Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo has significantly altered the landscape of administrative law – but the decision’s impact on the National Labor Relations Board’s authority may be less sweeping than many initially feared.
In our article, Beyond Loper Bright: Iterative Construction at the National Labor Relations Board, Fred Jacob and I review the Supreme Court’s decision in the Loper Bright case to understand its effect on judicial review of the National Labor Relations Board’s (NLRB or Board) interpretation of the National Labor Relations Act (NLRA). The NLRA guarantees the right of most private-sector employees in the United States to organize unions, engage in collective bargaining, and carry out strikes and other forms of collective action.
Loper Bright overturned Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., which required courts to defer to administrative agencies’ interpretations of the statutes they administer. For example, Congress tasked the U.S. Department of Labor’s Wage & Hour Division with administering the Fair Labor Standards Act, so Chevron required courts to defer to the department’s interpretations of ambiguous words and phrases in that law, as long as those interpretations were reasonable. After Loper Bright, the deference requirement is gone, in many cases but not all, so that courts can substitute their own interpretations for those of regulatory agencies.
The Court based its ruling in Loper Bright primarily on separation–of–powers grounds, asserting that the Constitution assigns the power to interpret laws to the judiciary rather than executive agencies. As Chief Justice John Marshall famously wrote in Marbury v. Madison, “[i]t is emphatically the province and duty of the judicial department to say what the law is.” Chevron turns that dictum on its head, said its critics, by delegating the Article III constitutional authority to say what ambiguous statutory texts mean to Article II executive agencies. But Loper Bright left some room for deference when Congress explicitly delegates interpretive powers to a regulatory agency. Then, the courts’ role is limited to “recognizing constitutional delegations, ‘fix[ing] the boundaries of [the] delegated authority’ . . . and ensuring the agency has engaged in ‘reasoned decisionmaking’ within those boundaries.”
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In the wake of the Loper Bright decision, some have expressed concern that the end of Chevron deference could limit the NLRB’s ability to interpret and enforce labor laws in ways that protect workers’ fundamental rights. The concern is that when courts rather than labor experts have the final say on what labor laws mean, interpretations may favor employers over workers, potentially undermining collective bargaining power and workplace protections. However, our study of the legal history of the NLRB suggests that the Board’s authority need not be dramatically curtailed even after Loper Bright. The unique role Congress designed for the Board, rooted in iterative construction through case-by-case adjudication, provides a strong foundation for continued judicial deference in many crucial areas of labor law.
We analyzed the history, purpose, and interpretation of the NLRA to determine how Loper Bright should apply to the NLRB’s interpretations. We conclude that Congress created the NLRB, an independent executive agency, to interpret the NLRA in the first instance with limited judicial review. In other words, the NLRA includes one of those explicit delegations of interpretive authority that require courts to defer. The Board, comprised of experts with experience in labor relations and hands-on experience working with the NLRA, would resolve labor disputes between management, on the one hand, and unions or employees, on the other. From these case-by-case decisions, the law can develop incrementally. That was Congress’ design.
We call this congressionally designed process “iterative construction.” This process is iterative because the Board, through repetition of individual instances, would learn the types of reoccurring disputes and, over time, the best resolution for those types of disputes. As we explain: “the Board executes its responsibility ‘to effectuate national labor policy’ like a common law court. The Board relies on experience accumulated through intertemporal [i.e., over time] evaluation of industrial disputes and reasonable inferences drawn over time. It analyzes history. It considers public policy, as set forth in the Act and other federal laws.” Moreover, the process is a “construction” of the NLRA’s language as applied, not in the abstract, but in specific contexts most readily discernible by experts in industrial and labor relations. It gives the NLRA “legal effect.”
We do not discuss whether this analysis would thoroughly apply to rulemaking by the NLRB. Producing regulations is not iterative. It involves making policy by creating regulations in the abstract (albeit based on experience with historical instances) that are then applied to specific instances in the future. Courts would review lawsuits challenging NLRB regulations in response to a facial challenge (i.e., a challenge to the whole regulation regardless of how it is applied) or as applied to a particular employer or union. However, rulemaking, like adjudication, can be an exercise in construction rather than an interpretative process. Interpretation is the linguistic exercise of giving statutory language meaning that would apply consistently in numerous contexts—a process that is squarely within the court’s expertise and domain. Iterative construction, by contrast, “turns on policy and factfinding and rarely on the semantic meaning of unclear statutory language.” The Board, in future cases, uses past constructions to refine further or evaluate the rules’ efficacy, whether or not that rule originates via rulemaking or adjudication.
Congress enacted the NLRA in response to judicial overreach. During the nineteenth and early twentieth centuries, courts frequently abused their power by prohibiting workers from engaging in peaceful strikes and protests calling for improved wages, hours, and working conditions. The result was the repression of union activity. These judicial acts repressed workers’ freedom of association and resulted in obstacles to interstate commerce.
In reaction, Congress minimized the courts’ role in resolving labor disputes and building labor law. To do so, Congress drew upon the Anglo-American common law tradition in designing the NLRA “to resolve disputes on a case-by-case basis and construct a labor law precedent based on cumulative factfinding and institutional expertise, all with limited judicial review.” Congress also zeroed in on the early-twentieth-century success of labor arbitration and the rise of an industrial common law of the shop that arose out of interpretations of collective bargaining agreements. Congress purposefully created a statutory model that allows for collective bargaining with grievance arbitration to resolve disputes, thereby avoiding industrial strife. “Three significant federal experiments” in regulating union organizing, collective action, and collective bargaining that pre-dated the NLRA—the World War I War Labor Board, the New Deal’s National Labor Board, and its successor, the “Old” National Labor Relations Board—also used common law decision-making. These historical examples further support our conclusion that Congress intentionally created the NLRB to be an expert agency designed to adjudicate.
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Our argument does not challenge the fundamental authority of courts to interpret laws. It recognizes the courts’ supervisory role in delineating the boundaries between interpretation and construction when interpreting ambiguous statutory language. But it also allows for the Board to animate the NLRA by “fill[ing] up the details,” a task Congress delegated to it and which the Administrative Procedures Act, our nation’s principal federal administrative law, expressly recognizes.
Critics of our view will point out two potential weaknesses in our argument—one legal and one policy-driven. First, it is arguable that the Court eliminated the interpretation-construction distinction when reaffirming its supremacy over statutory interpretation. That argument fails for now. As we show, the Court did not overrule any pre-Chevron NLRB cases, many of which, such as NLRB v. Hearst Publications, Inc. and Beth Israel Hospital v. NLRB, deferred to the Board’s construction of the NLRB. I say “for now” because in a subsequent case, the Court could overturn these decisions.
But the Court should not overturn these decisions that carve out the Board’s power to construct—and this leads to the second potential criticism: why save the Board’s construction power? This question presents a value judgment as to which branch of government is better positioned to implement the provisions of the NLRA to prevent and ameliorate industrial conflict. My bet is on the administrative construction of experts who are more politically sensitive than generalists with lifetime appointments whose primary experience with labor law may very well be serving as nonunion employees. Congress’s belief that sound labor policy will emerge from an expert agency’s iterative statutory construction has remained steadfast since the New Deal; Loper Bright offers no reason to set that consensus aside.
N.B. The views expressed in this blog post are solely those of Professor Lofaso and do not reflect the opinions of Professor Jacob or the NLRB.
