Congress, States, Could Get New Opportunity to Revisit Labor Law

Legal challenges to the National Labor Relations Board could bring big changes in labor law and freedom for workers.

Companies such as Amazon, Trader Joe’s and SpaceX have filed lawsuits that allege the board is unconstitutional. They have prevailed in many cases, which are now before federal appeals courts. Favorable rulings by the appeals courts could present an opportunity for the most meaningful reform to labor law since the 1940s.

Private sector labor law is almost exclusively governed by the National Labor Relations Act. The National Labor Relations Board administers the law, and states have little ability to regulate private sector workers through their own laws.

The president does not have the authority to remove members of the NLRB at will, which its challengers say makes the agency unconstitutional. Under the U.S. Constitution, the chief executive — the president — may rely on lower officials to execute the law. Absent special circumstances, the president can freely remove them for any reason.

An exception to this rule allows multimember, expert agencies to be exempt from the president’s removal power, barring special circumstances. But the NLRB is not an expert body, the Mackinac Center recently argued in an amicus brief to the 5th Circuit Court of Appeals. It conducts no scientific or economic research and is an expert only with respect to its own rules. That is not the type of expertise that exempts an administrative agency from the president’s removal power.

If the courts rule that the National Labor Relations Board is unconstitutional, it would mean a sea change in labor policy. Lawmakers would once again be forced to examine the nation’s premier labor law, opening the door for meaningful pro-worker change. Should federal lawmakers be unable to come to an agreement, it would be up to the states to regulate the private sector, which makes it possible for states to adopt pro- worker reforms that were previously unavailable.

We will continue to monitor the progress of these cases, and we look forward to sharing our expertise in labor policy with the courts. Stay tuned!