The Volokh Conspiracy
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Judge Ketanji Brown Jackson of the U.S. Court of Appeals for the D.C. Circuit is among the jurists identified as a potential replacement for Justice Stephen Breyer on the Supreme Court. This week, she issued her first opinion in an argued case as a judge on that court, American Federation of Government Employees v. National Labor Relations Authority in which a unanimous panel threw out a Trump Administration policy limiting the sorts of workplace changes that require collective bargaining.
Here's how Judge Jackson summarizes the ruling:
By statute, certain federal employers are required to engage in collective bargaining with their employees' representatives whenever there is a management-initiated change to the "conditions of employment affecting such employees." Federal Service Labor-Management Relations Statute, 5 U.S.C. § 7103(a)(12); see also id. §§ 7102(2), 7103(a)(14). Congress has defined "conditions of employment" to include "personnel policies, practices, and matters . . . affecting working conditions," with certain enumerated exceptions. Id. § 7103(a)(14). And from the mid-1980s until the policy statement challenged here, the Federal Labor Relations Authority ("FLRA") interpreted these statutory provisions to require collective bargaining over any workplace changes that have more than a de minimis effect on such working conditions.
In September of 2020, the FLRA adopted a new threshold for when collective bargaining is required. Under the agency's new standard, the duty to bargain is triggered only if a workplace change has "a substantial impact on a condition of employment." U.S. Dep't of Educ., 71 F.L.R.A. 968, 971 (2020). The petitioners are public-sector labor unions that challenge the FLRA's decision to alter the bargaining threshold; they maintain that the FLRA's new standard is both inconsistent with the governing statute and insufficiently explained, and is therefore arbitrary, capricious, and contrary to law.
In the opinion that follows, we hold that the FLRA's decision to abandon its de minimis exception in favor of a substantial-impact threshold was not sufficiently reasoned, and thus is arbitrary and capricious in violation of section 706 of the Administrative Procedure Act ("APA"), 5 U.S.C. § 706(2)(A). We therefore grant the unions' petitions for review and vacate the FLRA's policy statement.
The bulk of the opinion involves a rather straightforward application of relevant administrative law principles. It is also a bit more concise and direct than some of Judge Jackson's trial court rulings (which may be a consequence of the need for trial courts to make more explicit factual findings). The substantive result -- a win for public sector unions and a loss for the Trump Administration -- has also received plaudits from progressive commentators. (Coincidentally, this opinion comes out the same week another contender for the Breyer seat has come under criticism for being insufficiently pro-union and too sympathetic to employers.)
The opinion's conclusion that the Trump Administration did not sufficiently explain the NLRA's policy change is not particularly surprising. Many Trump Administration policies have been invalidated on this basis. One thing I did find surprising, however, was the opinion's application of FCC v. Fox Television to the Trump Administration's policy change. That decision is generally viewed as making it relatively easy for agencies to change course. In this case, however, it forms part of the basis for invalidating the Trump NLRA's policy.
In Fox, the Supreme Court explained:
To be sure, the requirement that an agency provide reasoned explanation for its action would ordinarily demand that it display awareness that it is changing position. An agency may not, for example, depart from a prior policy sub silentio or simply disregard rules that are still on the books. . . . And of course the agency must show that there are good reasons for the new policy. But it need not demonstrate to a court's satisfaction that the reasons for the new policy are better than the reasons for the old one; it suffices that the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better, which the conscious change of course adequately indicates.
(emphasis in original).
In AFGE v. NLRA, Judge Jackson summarizes the test as follows:
while the FLRA certainly "may depart from its precedent," in so doing, it "must supply a reasoned analysis indicating that prior policies and standards are being deliberately changed." AFGE 2020, 961 F.3d at 457 (quoting Nat'l Fed'n of Fed. Emps. v. FLRA, 369 F.3d 548, 553 (D.C. Cir. 2004)). The agency must also show that "the new policy is permissible under the statute, that there are good reasons for it, and that the agency believes it to be better" than the previous policy. FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (emphasis omitted).
Left out of this formulation is the Fox court's holding that an agency's "conscious change of course adequately demonstrates" that the agency believes the new policy is better than the old one. Did this matter? Perhaps.
In AFGE v. NLRA, Judge Jackson faults the NLRA for not adequately explaining its "bald assertion" that its new standard would provide a more "meaningful and determinative" line for determining when collective bargaining is due. Citing Fox, Judge Jackson wrote that "the FLRA must at least explain why and how it has concluded that the substantial impact threshold is 'better' than the standard it was relinquishing," and that its failure to do so was one of the faults justifying setting the Trump Administration policy aside.
As this was only one of the deficiencies the court found in the NLRA's explanation, it may not have been determinative, but it does seem to represent an erroneous and unduly strict application of Fox, one more in line with Justice Breyer's dissent than Justice Scalia's opinion for the Court. For instance, in his Fox dissent, Justice Breyer wrote:
To explain a change requires more than setting forth reasons why the new policy is a good one. It also requires the agency to answer the question, "Why did you change?" And a rational answer to this question typically requires a more complete explanation than would prove satisfactory were change itself not at issue. An (imaginary) administrator explaining why he chose a policy that requires driving on the right-side, rather than the left-side, of the road might say, "Well, one side seemed as good as the other, so I flipped a coin." But even assuming the rationality of that explanation for an initial choice, that explanation is not at all rational if offered to explain why the administrator changed driving practice, from right-side to left-side, 25 years later.
(Emphasis in original).
That is a reasonable view, and one that seems to align with Judge Jackson's opinion, but it is not the approach a majority of the Court adopted in Fox. (Justice Kennedy's Fox concurrence tempered some of the Court's holding, but not on this point, and his separate opinion is not cited in Judge Jackson's opinion.)
It is possible that subsequent decisions (such as the Supreme Court's DACA decision) justify more stringent review in the presence of reliance interests or similar concern, but there is no mention of that decision nor of reliance interests in Judge Jackson's opinion. I am a bit surprised neither of the other judges on the opinion (Pillard and Tatel) flagged this shift. Perhaps this was Judge Jackson's way of honoring Justice Breyer's approach to judicial review of agency policy changes before he leaves the High Court.