Uaw-Labor Employment and Training Corp. v. Chao

• Citation: 325 F.3d 360
• Decision Date: 22 April 2003
• Docket Number: No. 02-5080.,02-5080.
• Parties: UAW-LABOR EMPLOYMENT AND TRAINING CORPORATION, et al., Appellees, v. Elaine CHAO, Secretary of Labor, et al., Appellants.
• Court: United States Courts of Appeals. United States Court of Appeals (District of Columbia)

325 F.3d 360

UAW-LABOR EMPLOYMENT AND TRAINING CORPORATION, et al., Appellees, v. Elaine CHAO, Secretary of Labor, et al., Appellants.

No. 02-5080.

United States Court of Appeals, District of Columbia Circuit.

Argued March 7, 2003.

Decided April 22, 2003.

Appeal from the United States District Court for the District of Columbia (No. 01cv00950).

Gregory G. Katsas, Deputy Assistant Attorney General, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Roscoe C. Howard, Jr., U.S. Attorney, Mark B. Stern and Sharon Swingle, Attorneys, U.S. Department of Justice.

Robert M. Weinberg argued the cause for appellees. With him on the brief were Leon Dayan, Laurence Gold and Melvin S. Schwarzwald. Robert Alexander entered an appearance.

W. James Young was on the brief for amicus curiae National Right to Work Legal Defense & Education Foundation, Inc. in support of appellants. With him on the brief was Glenn M. Taubman.

Before: RANDOLPH and ROGERS, Circuit Judges, and STEPHEN F. WILLIAMS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge STEPHEN F. WILLIAMS.

Dissenting opinion filed by Circuit Judge ROGERS.

STEPHEN F. WILLIAMS, Senior Circuit Judge:

On February 17, 2001, relying on his power under the Procurement Act, President Bush issued Executive Order 13201, applying to all government contracts involving more than $100,000. Executive Order 13201, § 2, 66 Fed.Reg. 11,221, 11,221, 2001 WL 169257 (2001); 41 U.S.C. § 403(11) (2000). Under the order, each such contract must include a provision requiring contractors to post notices at all of their facilities informing employees of what are commonly known as General Motors and Beck rights. See Executive Order 13201, § 2, 66 Fed.Reg. at 11,221-22, 2001 WL 169257 (2001). (In addition, contractors must require subcontractors to post such a notice. Id.) These are rights under federal labor law that protect employees from being forced to join a union or to pay mandatory dues for costs unrelated to representational activities. See Communications Workers v. Beck, 487 U.S. 735, 754-63, 108 S.Ct. 2641, 2653-58, 101 L.Ed.2d 634 (1988); see also NLRB v. Gen. Motors Corp., 373 U.S. 734, 739-45, 83 S.Ct. 1453, 1457-61, 10 L.Ed.2d 670 (1963). Besides informing employees of their Beck rights, the notice is to tell them how they may contact the National Labor Relations Board ("NLRB") for additional information. 66 Fed.Reg. at 11,222, 2001 WL 169257.

Plaintiffs brought suit against the Secretary of Labor and the members of the Federal Acquisition Regulatory Council, seeking declaratory and injunctive relief. The plaintiffs are the UAW-Labor Employment and Training Corp. ("UAW") and three unions. UAW is a non-profit organization that provides job training and placement services; it is a federal contractor subject to the executive order. Accordingly it clearly has standing, and we need not consider whether the other plaintiffs do. See Mountain States Legal Found. v. Glickman, 92 F.3d 1228, 1232 (D.C.Cir. 1996).

The plaintiffs claimed that the order was preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., and also that, for want of an adequate nexus to the government's interest in efficient and economical contracting, the President had no authority to issue it under the Federal Property and Administrative Services Act of 1949 (the "Procurement Act"), 40 U.S.C. § 471 et seq. (now codified as amended at 40 U.S.C. § 101 et seq.). The district court found preemption, granted declaratory relief, and issued a permanent injunction barring enforcement of the order. It didn't reach the Procurement Act question, but the plaintiffs raise it here as an alternative ground for affirmance. Finding both of plaintiffs' theories to be flawed, we reverse and remand for the district court to grant summary judgment in favor of the government.

As the issues relate solely to summary judgment, we review de novo. See Indep. Bankers Ass'n v. Farm Credit Admin., 164 F.3d 661, 666 (D.C.Cir.1999).

* * *

Federal labor law preemption falls into two categories, Garmon and Machinists preemption, named after the cases authoritatively articulating the theories — San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), and Lodge 76, Int'l Ass'n of Machinists & Aerospace Workers v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976). Garmon preemption applies to regulation (usually by states) of activities that are arguably "protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8." Garmon, 359 U.S. at 244, 79 S.Ct. at 779. Machinists preemption applies when a state attempts to regulate an activity that, although not necessarily protected or prohibited by the NLRA, is an "economic weapon" the exercise of which Congress intended to leave unrestricted. Machinists, 427 U.S. at 141, 96 S.Ct. at 2553-54. No claim is made that the posting of employees' Beck rights represents an economic weapon — certainly not one covered by Machinists preemption. Rather the plaintiffs argue and the district court found that the executive order is preempted under Garmon.

We first consider the government's suggestion that our preemption analysis should be less intrusive because the order only imposes a contract condition, and firms can choose to do business elsewhere. But at least in labor law, preemption applies to rules of the federal executive even when the government is acting as a purchaser of goods, as long as the government action is classified as regulatory rather than proprietary. See Chamber of Commerce v. Reich, 74 F.3d 1322, 1334, 1336-37 (D.C.Cir.1996); Bldg. & Constr. Trades Dep't v. Allbaugh, 295 F.3d 28, 34 (D.C.Cir.2002). A clause is likely to be found regulatory where it apparently "seeks to set a broad policy." Chamber of Commerce, 74 F.3d at 1337. Here, the government doesn't explicitly argue that its actions are proprietary, but notes occasionally that it is only inserting conditions into a contract that businesses voluntarily accept. But as the order operates on government procurement across the board, rather than being tailored to any particular setting, the order is regulatory under prevailing principles. See id. at 1336-37.

As we've said, Garmon preempts state (or here, federal executive) regulation of "activities [that] are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8." Garmon, 359 U.S. at 244, 79 S.Ct. at 779. The district court misconceived this doctrine. It said that under Garmon "[t]he question is not whether the NLRA prohibits employers from posting Beck/General Motors notices ... but whether the NLRA prohibits requiring employers to post the notices." District Court Opinion at 14. The NLRB had ruled in Rochester Manufacturing Co., 323 N.L.R.B. 260, 1997 WL 113885 (1997), that it was not an unfair labor practice for an employer to say nothing to employees about their Beck rights, id. at 262, and the district court read Rochester Manufacturing as meeting its (misformulated) test. But the question under Garmon is whether the "activities" are protected or prohibited. 359 U.S. at 244, 79 S.Ct. at 779; see also Wisconsin Dep't of Indus. v. Gould Inc., 475 U.S. 282, 286, 106 S.Ct. 1057, 1061, 89 L.Ed.2d 223 (1986) ("States may not regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.") (emphasis added). Under the district court's approach every activity deemed by the Board not to be an unfair labor practice would be preempted, even though the Board had said no more than that the NLRA didn't speak to the matter at all.

The dissent makes a similar error when it suggests that the order is preempted because it conflicts with the "regulatory scheme" the Board has established. See Dissent at 368. This would be a sound analysis under "field" preemption, Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985), but Garmon works differently, operating only as to activities arguably protected or prohibited, not to ones simply left alone, even if left alone deliberately.

In the passage from Gould quoted above, the Court said (as indeed it had in Garmon, 359 U.S. at 245, 79 S.Ct. at 779-80) that Garmon preemption applies even to activities that are only "arguably" protected or prohibited by the NLRA. Plaintiffs note that in Rochester Manufacturing the General Counsel in fact argued that not posting Beck rights was an unfair labor practice. Assuming that a ruling accepting the General Counsel's position would survive deferential judicial review, it must follow, they say, that non-posting is "arguably" prohibited. (They make no claim that posting is arguably an unfair practice.) But International Longshoremen's Association v. Davis, 476 U.S. 380, 394-98, 106 S.Ct. 1904, 1914-16, 90 L.Ed.2d 389 (1986), indicates that the Board's actual decision controls; even if "there is an arguable case for preemption," the court "must defer to the Board, and only if the Board decides that the conduct is not protected or prohibited," is the regulation preemption-free. Id. at 397, 106 S.Ct. at 1916. See also id. at 395, 106 S.Ct. at 1914 (saying that the party claiming pre-emption must "advance an interpretation of the Act that is not plainly contrary to its language and that has not been `authoritatively rejected' by the courts or the Board") (emphasis added); Hanna Mining Co. v. Dist. 2, Marine Eng'rs Beneficial Ass'n, 382 U.S. 181, 190, 86 S.Ct. 327, 332, 15 L.Ed.2d 254 (1965) ("We hold that the Board's statement [that the engineers were supervisors and thus not subject to the NLRA] does resolve the question with the clarity necessary to avoid preemption.") (emphasis added). Here the Board has decided that the activity is not prohibited. Of course a consequence may be that...