Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Trader Joe’s tried a novel defence against charges that the US grocery chain had illegally retaliated against workers who supported its nascent labour union.
Its lawyers argued to a judge that the small federal agency accusing Trader Joe’s of breaking labour laws, the National Labor Relations Board, was itself unconstitutional.
Trader Joe’s is one of four large employers now challenging the structure of the NLRB, which is responsible for enforcing US laws on collective bargaining and unfair labour practices.
With about 1,200 staff and a budget of less than $300mn, the agency has become the Joe Biden administration’s primary tool for implementing labour policies as bills designed to strengthen protections for workers have languished in Congress.
Since 2021 the NLRB has limited the ways some of the country’s largest employers can fight union organisers — and has overseen a surge in petitions for union representation elections as a result. The annual number of election petitions filed grew 26 per cent, to 2,115, between fiscal years 2019 and 2023.
Some companies are now attacking the NLRB’s authority to enforce its rules. “They’re trying to undermine not only our rights as workers but those of workers everywhere, because if [these] arguments were to prevail that would have a really far-reaching impact for workers,” said Maeg Yosef, a 20-year veteran Trader Joe’s employee who filed the charges against the grocer that led to an NLRB complaint.
Apart from Trader Joe’s, Starbucks and Amazon have accused Biden’s NLRB of colluding with the unions representing some of workers. The coffee chain and online retailer, have also opposed the agency’s authority on constitutional grounds in ongoing cases pertaining to allegations of unfair labour practices.
After the NLRB accused Elon Musk’s SpaceX of illegally firing eight employees who circulated an open letter criticising the billionaire in January, the rocket company filed a separate lawsuit against the agency in federal court.
The lawsuit said the NLRB’s enforcement system, where the agency’s own administrative law judges oversee hearings on complaints brought by NLRB lawyers, violates employers’ right to a jury trial and is the “very definition of tyranny”.
The companies’ cases come amid a broader legal push to undercut federal agencies. The US Securities and Exchange Commission, which regulates financial markets, is facing a challenge in the Supreme Court from a Texas hedge fund manager who challenged the agency’s in-house courts. In a hearing last year, the court’s conservative majority appeared receptive to his argument.
If SpaceX prevails in its lawsuit, the court would also likely bar the NLRB from using in-house judges in the future and dramatically alter the structure of the agency or eliminate it altogether, according to Kate Bronfenbrenner of Cornell University’s School of Industrial and Labor Relations.
“If this goes in favour of these companies, it is not just the NLRB,” Bronfenbrenner said. “It’s every single agency federal agency that uses administrative law judges.”
The Republican Study Committee, a legislative caucus in the US House, proposed eliminating the NLRB in its proposal for the government’s most recent budget, saying that the US labour department could enforce labour laws “without the pro-union boss bias and partisanship endemic to the National Labor Relations Board”.
President Franklin D Roosevelt enacted the NLRB in 1935 as part of a sweeping set of legislation amid a series of violent labour disputes. Other laws led to the establishment of workers’ compensation and the federal minimum wage.
The Supreme Court upheld the NLRB’s legality in 1937, so labour experts found SpaceX’s suit shocking.
“This is outside mainstream conservative legal thought,” said Matthew Bodie, a professor at the University of Minnesota Law School.
NLRB policies are always somewhat “cyclical” because the agency’s board members and general counsel are appointed by the president in office, according to Bodie, a former NLRB lawyer. But employers probably see undermining the agency as a way to contain a labour movement that is celebrating major wins for employees such as auto workers and actors, he said.
“I imagine there are some members of the management bar that think that it’s better to be more conciliatory in this new era where workers are more interested in unionisation because it is just a temporary blip,” Bodie added. “But there are others saying ‘We have to fight this. We have to be more aggressive, and now we have circuit courts and a Supreme Court that are more willing to entertain dramatic, anti-NLRB positions.’”
Trader Joe’s did not respond to a request for comment but has previously said the company “has no intention of filing or joining” a separate case such as the SpaceX lawsuit directly challenging the NLRB, aside from the defence it used in its ongoing case.
“When Biden came in, he said that he’s going to be the most pro-union president you have ever seen, and that’s the NLRB that we have seen,” said Melissa Atkins, a management-side labour attorney at Obermayer who is not involved in the cases brought by the companies. “That was not the purpose behind creating these boards. They were for transparency and not for changing with the winds of the presidency. That’s the frustration of the employers I represent.”
Read the full article here