
On December 10, 2024, a significant ruling emerged from the legal battles surrounding the constitutionality of the National Labor Relations Board (NLRB) and the National Labor Relations Act (NLRA).
The District Court for the District of Columbia issued its decision in VHS Acquisition Subsidiary No. 7 v. NLRB, with important implications for the role of administrative law judges (ALJs).
In this case, the court sided with the plaintiff—a Massachusetts hospital—by declaring that the current protections ensuring job security for NLRB ALJs are unconstitutional.
The court reasoned that as executive officers, ALJs should have the ability to be removed at the NLRB’s discretion, which is the body that appoints them.
It struck down the requirement that ALJs could only be dismissed for “good cause,” a determination meant to be made by the Merit Systems Protection Board (MSPB) after a formal process.
Background
Traditionally, ALJs enjoyed strong protections against dismissal.
They could only be removed after a good cause determination by the MSPB, a process also applicable to NLRB members.
NLRB members, like those of the MSPB, could only be removed under specific conditions of misconduct defined at the federal level.
For the President to dismiss an ALJ, they had to submit a petition to the NLRB for a good-cause assessment by the MSPB.
In March 2024, the Massachusetts Nurses Association filed charges against VHS Acquisition Subsidiary Number 7 (also known as Saint Vincent Hospital), alleging several violations of the NLRA.
An ALJ was assigned to this case.
Just before the proceedings began, Saint Vincent sought a temporary restraining order from the D.C. District Court, claiming the enforcement actions were unconstitutional and would cause irreparable harm.
The court, however, denied this request.
Following that setback, Saint Vincent pursued both injunctive relief and summary judgment in its battle against the NLRB.
The court ruled it lacked the power to grant injunctive relief but proceeded to address the motion for summary judgment concerning the ALJ’s removal stipulations.
Court Ruling on ALJ Removal Protections
In a key ruling, Judge Trevor McFadden leaned on the Supreme Court’s decision in Free Enterprise Fund v. Public Company Accounting Oversight Board, determining that the dual-layer protections for NLRB ALJs—afforded by the NLRB and MSPB—are unconstitutional under Article II of the Constitution.
This ruling underscores the notion that such safeguards impede the President’s authority in determining removal and prevent accountability for ALJs’ decisions.
Judge McFadden dismissed the NLRB’s contention that ALJs should be treated as exceptions due to their adjudicative roles.
He asserted that as officers of the Executive Branch, ALJs must be subject to presidential removal at will via the NLRB.
The judge acknowledged the varied perspectives among different circuits regarding the President’s power to remove ALJs.
However, he aligned with the Fifth Circuit’s stance against dual-layered protections, critiquing the divergent viewpoints from the Ninth and Tenth Circuits for placing excessive emphasis on ALJs’ roles, and noting the Supreme Court had overturned the Sixth Circuit’s ruling on other counts.
Judge McFadden’s order declared that certain statutory provisions regarding ALJ removability are unconstitutional, thus rendering them void.
He called for a streamlined legislative approach to ALJ removal that empowers the NLRB to take action against the judges it employs.
Effects of the Ruling
This decision takes place amid ongoing discussions about the authority held by the NLRB.
In the Fifth Circuit, significant challenges to the NLRB’s constitutionality are being heard, particularly in cases like SpaceX v. NLRB and Amazon.Com Services LLC v. NLRB, which question the legitimacy of NLRB actions due to ALJ and board member removal limitations.
Additionally, other federal agencies facing scrutiny over their ALJ removal protections are feeling the impact of this ruling.
The Supreme Court’s earlier decision in Free Enterprise Fund laid the groundwork for challenging the validity of dual-layered protections, echoing similar sentiments in recent judgments across various agencies.
This ruling aligns with the broader trend of reduced deference to agencies following the Supreme Court’s Loper Bright v. Raimondo ruling.
While past D.C. District Court decisions largely affirmed NLRB authority, this latest development contributes to a movement toward stricter regulation of agency adjudicative processes.
The elimination of tenure protections for ALJs marks a potential turning point in their authority and decision-making frameworks.
Previously, decisions made by ALJs were primarily scrutinized by the NLRB and the federal courts.
Now, with diminished removal constraints, ALJs could face immediate repercussions from the NLRB.
This district court ruling is set for appeal, which could ignite further legal disputes in the D.C. Circuit and possibly generate a rift among different circuits that might attract the attention of the U.S. Supreme Court.
Justin Chuang contributed additional insights to this analysis.
Source: Natlawreview.com