Associated Builders & Contractors of Tex., Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 10 June 2016
• Docket Number: No. 15–50497,15–50497
• Citation: 826 F.3d 215
• Parties: Associated Builders and Contractors of Texas, Incorporated; Associated Builders and Contractors, Incorporated Central Texas Chapter; National Federation of Independent Business/Texas, Plaintiffs–Appellants v. National Labor Relations Board, Defendant–Appellee
• Court: U.S. Court of Appeals — Fifth Circuit

826 F.3d 215

Associated Builders and Contractors of Texas, Incorporated; Associated Builders and Contractors, Incorporated Central Texas Chapter; National Federation of Independent Business/Texas, Plaintiffs–Appellants

v.National Labor Relations Board, Defendant–Appellee

No. 15–50497

United States Court of Appeals, Fifth Circuit.

Filed June 10, 2016

Maurice Baskin, Littler Mendelson, P.C., Suite 400, 815 Connecticut Avenue, NW, Washington, DC 20006, G. Mark Jodon, Littler Mendelson, P.C., Suite 1900, 1301 McKinney Street, Houston, TX 77010, for Plaintiffs–Appellants.

Nancy Kessler Platt, Deputy Associate General Counsel, Kevin Patrick Flanagan, Esq., Dawn Goldstein, Barbara A. O'Neill, Esq., Paul A. Thomas, Trial Attorney, Marissa Ann Wagner, National Labor Relations Board, Contempt, Compliance, & Special Litigation Branch, 1015 Half Street, S.E., Washington, DC 20003, for Defendant–Appellee.

Jason Edward Winford, Jenkins & Watkins, P.C., Suite 200, 2626 Cole Avenue Dallas, TX 75204, Milton L. Chappell, National Right to Work, Legal Defense Foundation, Suite 600, 8001 Braddock Road, Springfield, VA 22160, for Amici Curiae National Right to Work Legal Defense Foundation, Shannon W. Cotton, Michael A. Murphy, Jorge Gonzalez Villareal.

Anthony Barrett Byergo, Ogletree Deakins, P.C., Suite 400, 4520 Main Street, Kansas City, MO 64111, for Amicus Curiae Retail Litigation Center, Incorporated.

Before CLEMENT and HAYNES, Circuit Judges, and GARCIA MARMOLEJO, District Court.^*

EDITH BROWN CLEMENT

, Circuit Judge:

Appellants, Associated Builders and Contractors of Texas, Inc., its chapter member, the Central Texas Chapter of ABC of Texas, and the National Federal of Independent Business/Texas (collectively, the “ABC entities”), are Texas-based trade and advocacy associations that represent construction employers and small business owners. The ABC entities brought a facial challenge to enjoin enforcement of a final rule issued by the National Labor Relations Board (the “Board” or “NLRB”) that modifies procedures relating to union representation elections. Because the new rule, on its face, does not violate the National Labor Relations Act or the Administrative Procedure Act, we AFFIRM.

I.

The challenged NLRB rule amended the procedures for determining whether a majority of employees wish to be represented by a labor organization for purposes of collective bargaining.¹ See Representation—Case Procedures, 79 Fed. Reg. 74308–10 (Dec. 15, 2014)

. Intended to decrease the time preceding union elections, the rule allows for employees to take a vote on union representation as soon as eleven days after a petition for representation is filed. Among other changes, the rule defers employer challenges to voter eligibility issues until after an election is held; removes the standard twenty-five day delay that normally occurs between the time a regional director directs an election and the actual election; and requires expanded disclosure of employee contact information.

Before the rule became effective, the ABC entities filed this action, arguing that the rule exceeds the Board's statutory authority under the National Labor Relations Act (“the Act” or “NLRA”) and violates the Administrative Procedure Act (“APA”). The ABC entities, in a motion for summary judgment, requested that the district court vacate the rule changes as facially invalid and enjoin enforcement.² In response, the Board filed a combined partial motion to dismiss and cross-motion for summary judgment, contending that deference is owed to decisions of the Board and that the rule changes are reasonable and consistent with the NLRA and the APA. The district court ruled in favor of the Board, and this appeal followed.³

II.

We review de novo a district court's grant of summary judgment, “applying the same standard as the district court.” 10 Ring Precision, Inc. v. Jones , 722 F.3d 711, 717 (5th Cir. 2013)

. We analyze an agency's interpretation of its authorizing statute using the two-step procedure set forth in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). First, we ask “whether Congress has directly spoken to the precise question at issue.” Id. at 842, 104 S.Ct. 2778. If it has, “that is the end of the matter,” and we “must give effect to the unambiguously expressed intent of Congress.” Id. at 842–43, 104 S.Ct. 2778. If it has not, we defer to the agency's reasonable interpretations of the statute. See

NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706, 713, 121 S.Ct. 1861, 149 L.Ed.2d 939 (2001).

The APA also authorizes us to set aside agency actions if “arbitrary, capricious, an abuse of discretion” or otherwise “not in accordance with law, or unsupported by substantial evidence on the record taken as a whole.” Tex. Clinical Labs, Inc. v. Sebelius , 612 F.3d 771, 775 (5th Cir. 2010)

; see 5 U.S.C. § 706(2). Our task is to determine whether the agency examined the pertinent evidence, considered the relevant factors, and articulated a “reasonable explanation for how it reached its decision.”

Tex. Office of Pub. Util. Counsel v. FCC , 183 F.3d 393, 410 (5th Cir. 1999)

; see

Motor Vehicle Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co. , 463 U.S. 29, 43, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983). This standard is highly deferential; we apply a presumption of validity. Tex. Clinical Labs, Inc. , 612 F.3d at 775. We may not substitute our judgment for that of the agency. See

FCC v. Fox Television Stations, Inc. , 556 U.S. 502, 513, 129 S.Ct. 1800, 173 L.Ed.2d 738 (2009).

Because the ABC entities bring a facial challenge, they “must establish that no set of circumstances exists under which the [Rule] would be valid.” Center for Individual Freedom v. Carmouche , 449 F.3d 655, 662 (5th Cir. 2006)

(quoting United States v. Salerno , 481 U.S. 739, 745, 107 S.Ct. 2095, 95 L.Ed.2d 697 (1987) ); see

Sherley v. Sebelius , 644 F.3d 388, 397 (D.C. Cir. 2011) (applying the “no set of circumstances” test to a facial statutory challenge); Scherer v. U.S. Forest Service , 653 F.3d 1241, 1243 (10th Cir. 2011) (“To prevail in this and any facial challenge to an agency's regulation, the plaintiffs must show that there is ‘no set of circumstances' in which the challenged regulation might be applied consistent with the agency's statutory authority.” (quoting Reno v. Flores , 507 U.S. 292, 301, 113 S.Ct. 1439, 123 L.Ed.2d 1 (1993) )).

III.

The NLRA grants employees the right “to bargain collectively through representatives of their own choosing ... and to ... refrain from ... such activities.” 29 U.S.C. § 157

. Section 9 of the Act gives the Board authority to resolve questions of representation, and sets forth the basic steps for that process. When a petition for representation is filed, the Board is required to investigate the petition and “provide for an appropriate hearing upon due notice” before the election is held. Id. § 159(c)(1). The hearing “may be conducted by an officer or employee of the regional office, who shall not make any recommendation with respect thereto.” Id. A union may represent employees in collective bargaining if the union is “designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes.” Id. § 159(a). In each case, “the Board shall decide” the “unit appropriate for the purposes of collective bargaining” in order to “assure to employees the fullest freedom in exercising the rights guaranteed by [the Act].” Id. § 159(b).

Aside from these general requirements, the statute says little about specific procedures for processing election petitions. The Board has authority to proscribe rules for processing such petitions, 29 U.S.C. §§ 156

, 159(c)(1), and has repeatedly amended these procedures, usually without notice and comment. 79 Fed. Reg. 74310. Here, the final rule followed an extensive comment period, totaling 141 days and four days of hearings. Id. at 74,311. Overall, the Board implemented twenty-five amendments to the procedures for processing representation petitions. 79 Fed. Reg. 74,308 –10. For purposes of this appeal, the provisions challenged by the ABC entities fall into three categories: (1) rule changes that limit the scope of the pre-election hearing, particularly the deferral of individual voter eligibility issues; (2) rule changes that require employers to disclose to unions personal-employee information; and (3) rule changes that cumulatively shorten the time period between petition and election to less than thirty days.

A.

The ABC entities contend that the rule exceeds the Board's authority under Section 9 of the Act by allowing regional directors to preclude employers from contesting voter eligibility issues in pre-election hearings. The Board argues that the Act's requirement that the Board hold an “appropriate hearing” on questions of representation does not demand pre-election litigation of all voter-eligibility issues. The Board has the better argument.

Section 9 of the NLRA states that “[t]he Board shall decide in each case ... the unit appropriate for the purposes of collective bargaining.” 29 U.S.C. § 159(b)

. The Act mandates that the Board investigate representation petitions “and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice.” Id. § 159(c)(1).

Prior versions of the regulations neither expressly stated the purpose of the hearing nor specifically limited the evidence that could be introduced. See 29 C.F.R. § 102.66(a)

(replaced effective April 14, 2015); 79 Fed Reg. at 74,309 (stating that prior rules “required ... litigation of any voter eligibility issues that any party wished to litigate, even if the regional director was not going to be deciding that question, and even if the particular voter eligibility question was not necessary to resolving the existence of a question of representation”). In the...