American Federation of Labor and Congress of Industrial Organizations v. NLRB ( 2023 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 14, 2021 Decided January 17, 2023
No. 20-5223
AMERICAN FEDERATION OF LABOR AND CONGRESS OF
INDUSTRIAL ORGANIZATIONS,
APPELLEE
v.
NATIONAL LABOR RELATIONS BOARD,
APPELLANT
Consolidated with 20-5226
Appeals from the United States District Court
for the District of Columbia
(No. 1:20-cv-00675)
Paul A. Thomas, Attorney, National Labor Relations
Board, and Tyler James Wiese, Attorney, argued the causes for
appellant/cross-appellee. With them on the briefs were Nancy
E. Kessler Platt, Associate General Counsel, William G.
Mascioli, Assistant General Counsel, Dawn L. Goldstein,
Deputy Assistant General Counsel, Helene D. Lerner,
Supervisory Attorney, and Molly G. Sykes, Attorney.
2
Matthew J. Ginsburg argued the cause for appellee/cross-
appellant. With him on the briefs were Leon Dayan and
Maneesh Sharma.
Before: SRINIVASAN, Chief Judge, PILLARD and RAO,
Circuit Judges.
Opinion for the Court filed by Circuit Judge PILLARD.
Opinion concurring in the judgment in part and dissenting
in part filed by Circuit Judge RAO.
PILLARD, Circuit Judge: Unique among major federal
agencies, the National Labor Relations Board (NLRB or
Board) sets almost all of its policy through adjudications rather
than rules. That makes the object of this case—a 2019 NLRB
rule—somewhat unusual. The American Federation of Labor
and Congress of Industrial Organizations (AFL-CIO)
challenges a rule governing the elections in which employees
vote on whether to be represented by a union. The Board
promulgated the 2019 Rule without notice and comment,
asserting that it falls within the Administrative Procedure Act’s
(APA) exception for “rules of agency organization, procedure,
or practice.” 5 U.S.C. § 553(b)(A).
The 2019 Rule undid a slate of changes pertaining to
representation elections that the Board in 2014 had
promulgated following notice and comment. The Board in
2019 acted without notice and comment. And it acknowledged
that the 2014 Rule had achieved its objective of significantly
reducing the time between a representation petition, an
election, and the certification of election results, and that
reversing those changes would result in longer waits for
elections and the benefits that flow from union representation.
As the Board explained, and the AFL-CIO agrees, the changes
3
introduced by the 2014 Rule did not alter the rate at which
unions win or lose elections. But the Board nonetheless
promulgated the 2019 Rule, viewing it as an advisable set of
changes to ensure fair and accurate voting, transparency and
uniformity, certainty and finality, and efficiency.
The NLRB argues that the National Labor Relations Act
(NLRA or Act), 29 U.S.C. §§ 151-69, mandates direct review
from the Board to the circuit court, see id. § 160(f), and so asks
us to treat this case arriving on its appeal from district court as
if it were before us on a petition for direct review by the AFL-
CIO challenging the 2019 Rule. The Board also asserts that,
even if the district court had jurisdiction, it erred in holding that
five challenged provisions of the Rule fall outside the APA’s
procedural exception. The Board asks us to sustain those
provisions even though they were not promulgated by notice
and comment rulemaking. The AFL-CIO cross-appeals,
arguing that the 2019 Rule as a whole is arbitrary and
capricious and that the provision concerning ballot
impoundment specifically is arbitrary and capricious and
contrary to law.
We hold that the statutory provision for direct review in
federal appellate courts of NLRB orders regarding unfair labor
practices did not divest the district court of jurisdiction over
rules that are exclusively concerned with representation
elections, as is the 2019 Rule. On the merits, we hold that the
district court erred in concluding that none of the five
challenged provisions comes within the procedural exception;
we hold that two of them do. Those two are rules of agency
procedure, so were validly promulgated without notice and
comment. We affirm the district court’s invalidation of the
rules regarding the eligible employee-voters list, the timeline
for certification of election results, and election-observer
eligibility. The AFL-CIO’s challenge to the 2019 Rule as
4
arbitrary and capricious when considered as a whole fails.
Finally, we hold that the Rule’s impoundment provision is
contrary to law, making it unnecessary to address whether it is
also arbitrary and capricious.
BACKGROUND
The NLRA covers two important topics in labor relations:
the protection of employees’ right to elect representatives of
their choice, and the prevention of unfair labor practices. See
29 U.S.C. §§ 158, 159. The Act addresses those topics in
separate sections, with section 8 prohibiting unfair labor
practices and providing for enforcement against them, see id.§ 158, and section 9 outlining the process for conducting
elections by which employees may select unions to represent
them, see id. § 159. As the Board explains in its Rule, the Act’s
provisions regarding representation “protect the exercise by
workers of full freedom of association, self-organization, and
designation of representatives of their own choosing, for the
purpose of negotiating the terms and conditions of their
employment or other mutual aid or protection.”
Representation-Case Procedures, Final Rule, 84 Fed. Reg.
69,524, 69,524 (Dec. 18, 2019) (hereinafter 2019 Rule). Union
representation, where employees choose it, is a statutorily
protected means of advancing many other employee rights and
interests, including resolving grievances and bargaining
collectively with employers.
The NLRA provides for direct review in the federal
appellate courts of at least some NLRB actions. Section 10 of
the Act, titled “Prevention of unfair labor practices,” includes
the Act’s only such grant of judicial review directly in a court
of appeal. See 29 U.S.C. § 160(f). It provides:
Any person aggrieved by a final order of the Board
granting or denying in whole or in part the relief
5
sought may obtain a review of such order in any
United States court of appeals in the circuit wherein
the unfair labor practice in question was alleged to
have been engaged in or wherein such person resides
or transacts business, or in the United States Court of
Appeals for the District of Columbia . . . .
Id. The Act thus provides for direct appellate review of “a final
order,” and places venue where “the unfair labor practice in
question” took place. Id. Nowhere does the Act specifically
address review of Board actions pertaining to representation
elections. The Act grants the NLRB general rulemaking
authority in section 6, id. § 156, and references rulemaking
specific to representation and elections in section 9, id.
§ 159(c)(1). Nothing in either section addresses judicial review
of NLRB rules as distinct from orders, whether the rules
address unfair labor practices or representation elections.
The Rule at issue here addresses the representation
election process, which the NLRA describes in some detail.
The Act outlines four basic steps for parties to follow to
organize a secret-ballot election under Board supervision to
determine whether a union will represent a group of employees.
First, an employee, union, or employer may file a petition
with the Board calling for an election among a particular group
of employees, proposing the group as an appropriate “unit” of
representation, and seeking either certification or, less
commonly, decertification of a union as the employees’
exclusive collective bargaining representative. See id.; 2019
Rule, 84 Fed. Reg. at 69,524. Most petitioned-for elections are
conducted pursuant to an election agreement reflecting the
parties’ accord on details like the date of the election and the
employees who may appropriately be included in the
bargaining unit. Both before and after the Board’s 2014 Rule
6
changes, more than ninety percent of elections were conducted
pursuant to agreements. See 2019 Rule, 84 Fed. Reg. at 69,528
n.16.
If the parties cannot reach an election agreement, the
second step is a hearing to develop the record on which a
Regional Director determines whether a “question of
representation” exists, i.e., whether the petitioner filed a proper
petition concerning a unit appropriate for collective bargaining,
so eligible for an employee vote. See 29 C.F.R. § 102.64. If
the proposed unit would not be appropriate for the purpose of
collective bargaining, the Regional Director dismisses the
petition; if it would be appropriate, the Regional Director issues
a decision and direction of election setting parameters like the
election date and the contours of the voting unit. Any party can
file a request for Board review of the Regional Director’s
decision and direction of election.
The third stage is the election itself, in which employees
vote by secret ballot for or against union representation. The
parties and the Board may also challenge the eligibility of
voters during the election, after which they may attempt to
resolve any such challenges. Challenged ballots the validity of
which remains unresolved are set aside, and the valid ballots
are counted at the conclusion of the election. See id. § 102.69.
The parties litigate the validity of challenged ballots only if
they are outcome determinative.
Fourth, after the election, the Board, either itself or
through its Regional Director, certifies the election results. See
id. § 102.69(b). If a majority of employees voted for union
representation, the union’s certification as the employees’
representative obligates the employer to bargain with it in good
faith and renders the failure to do so an unfair labor practice.
See 29 U.S.C. § 158(a)(5). The post-election stage can also
7
include party objections to the conduct of the election, which
the Regional Director investigates, potentially calling a post-
election hearing to inform the decision on those objections. See
29 C.F.R. § 102.69(c). A Regional Director’s decision on
objections is subject to review by the Board in response to a
party’s request. Id. § 102.69(c)(2).
The Board first promulgated a set of rules in 1961 setting
forth steps and standards for the Board to follow in responding
to petitions raising objections to representation elections—a
process that the Board has come to refer to as “representation
cases.” See Miscellaneous Amendments, 26 Fed. Reg. 3,885(May 4, 1961). Since then, the Board has acted to make a
variety of minor, unchallenged amendments to those rules
without prior notice or request for public comment. See
Representation—Case Procedures, Final Rule, 79 Fed. Reg.
74,308, 74,310 (Dec. 15, 2014) (hereinafter 2014 Rule). In
2011, the NLRB promulgated a final rule on representation
cases after notice and comment, but that rule was challenged
and invalidated because the Board acted without a quorum. See
Chamber of Com. v. NLRB, 879 F. Supp. 2d 18, 20-21, 30
(D.D.C. 2012). The Board regained a quorum and gave public
notice and sought comment on the 2014 Rule, which was
“almost identical” to its 2011 predecessor, AFL-CIO v. NLRB
(AFL I), 466 F. Supp. 3d 68, 76 (D.D.C. 2020), and which was
twice upheld in full, see Associated Builders & Contractors of
Tex., Inc. v. NLRB, 826 F.3d 215, 218 (5th Cir. 2016); Chamber
of Com. v. NLRB, 118 F. Supp. 3d 171, 177 (D.D.C. 2015).
That 2014 Rule is the backdrop to the rule challenged here.
The 2014 Rule made twenty-five changes to the then-
existing rules for representation cases. See 79 Fed. Reg. at
74,308-10. Two of the Board’s five members dissented. Id. at
74,430-60; see also Representation-Case Procedures, Request
for Information, 82 Fed. Reg. 58,783, 58,783 (Dec. 14, 2017)
8
(hereinafter 2017 RFI). The 2014 Rule went into effect on
April 14, 2015, after President Obama vetoed the resolution
Congress passed disapproving the Rule pursuant to the
Congressional Review Act, 5 U.S.C. § 801 et seq. See 2017
RFI, 82 Fed. Reg. at 58,783.
The Board promulgated the 2014 Rule by notice and
comment rulemaking but asserted that “none of this process
was required by law” and that “[t]he Board has never engaged
in notice and comment rulemaking on representation case
procedures, and all of the proposed changes could have been
made without notice and comment—in part by adjudication,
and in part by simply promulgating a final rule.” 79 Fed. Reg.
at 74,311. In the Board’s view, its amendments were
“primarily procedural,” any substantive changes “could have
been made by adjudication,” and the rule was therefore
“exempt from notice and comment” under the APA. See id. at
74,311 n.9.
In late 2017, the NLRB issued a request for information
concerning the operation of the 2014 Rule. See 2017 RFI, 82
Fed. Reg. at 58,783. It received nearly 7,000 submissions in
response. The AFL-CIO, the largest federation of unions in the
United States, made a submission that included an expert report
on the effects of the 2014 Rule. The report analyzed data from
a five-year period straddling the effective date of the 2014
Rule, comparing the two and a half years of Board data on
either side of the rule change. In the report, John-Paul
Ferguson, “a leading academic expert on NLRB elections,”
AFL-CIO Principal & Response Br. 6, explained that the 2014
Rule changes produced “a significant decrease in the time
between petition and election and the time between petition and
the closing of [representation] cases,” Deferred Appendix
(D.A.) 103. In contrast to the typical seventy-seven days from
petition to closing of a representation case before the 2014
9
Rule, the average time dropped to fifty-six days after the rule.
D.A. 110. Apart from shorter timelines from petition to
certification, Ferguson concluded, the 2014 Rule did not cause
“any other significant changes in case processing variables or
outcomes.” D.A. 103. He found, among other things, that the
2014 Rule did not change the rate at which unions win or lose
elections, D.A. 108-09, nor the incidence or average length of
pre- or post-election hearings, D.A. 111-12.
Two years later, at a time when one Board seat remained
unfilled following the end of former Chairman Pearce’s term
in 2018, a divided four-member Board issued the 2019 Rule.
See 84 Fed. Reg. at 69,524. The Board expressly invoked the
procedural exception in section 553(b)(A) of the APA, 84 Fed.
Reg at 69,528, and asserted that it was “not treating the
responses to the 2017 Request for Information as notice-and-
comment rulemaking,” id. at 69,528 n.12. All told, the Rule
made fifteen changes to then-current provisions, many of
which reinstated all or parts of the pre-2014 rules and a handful
of which were new. See id. at 69,524-26 (concise descriptions),
69,588-600 (amended rules). Board Member McFerran
dissented from the 2019 Rule as having arbitrarily and without
empirical support delayed employees’ enjoyment of their
NLRA rights by, among other things, slowing the process in
contested cases to the point of tripling the minimum number of
days from the filing of a petition for an election to the
certification of a union. Id. at 69,557-62.
On March 6, 2020, the AFL-CIO filed a four-count
complaint in district court, claiming that the 2019 Rule as a
whole violated the APA, and that certain provisions were also
independently invalid. The parties filed cross-motions for
summary judgment. The Board also moved to transfer the case
here from district court, arguing that subsection 10(f) of the
10
NLRA requires direct appellate review of any NLRB order or
rule.
On May 30, 2020, one day before the 2019 Rule was set to
go into effect, the district court issued an order denying the
Board’s motion to transfer and granting summary judgment to
the AFL-CIO on the ground that five challenged provisions of
the Rule did not fall within the APA’s procedural exception.
About a week later, the court issued an opinion explaining
those rulings. See AFL I, 466 F. Supp. 3d at 74. The AFL-CIO
moved for reconsideration, requesting that the district court
rule on its remaining claims. On July 1, 2020, the court issued
a supplemental memorandum opinion and order denying the
remainder of the AFL-CIO’s claims. See AFL-CIO v. NLRB
(AFL II), 471 F. Supp. 3d 228, 234 (D.D.C. 2020).
Our review of both the district court’s determination on
jurisdiction and its rulings on summary judgment is de novo.
DISCUSSION
I. Jurisdiction
The Board first argues that subsection 10(f) of the NLRA,
which all agree provides direct review in federal appellate
courts of at least some “final order[s] of the Board,” 29 U.S.C.
§ 160(f), should be read to require direct circuit-court review
of the AFL-CIO’s challenge to the 2019 Rule. The Board does
not identify any material effect of that position on our
consideration of this case: Our review is de novo in any event,
and the AFL-CIO’s filing here concededly would be timely
even were we to treat it as a petition for direct review. But
11
because it reads the statute to require direct review, the Board
urges us to exercise original rather than appellate jurisdiction.
The text of section 10(f) is seemingly limited to orders
regarding unfair labor practices, and we are reviewing a rule
unrelated to such practices. But we have held that direct-
review statutes providing for our review of “orders” authorize
us to review rules. N.Y. Republican State Comm. v. SEC
(NYRSC), 799 F.3d 1126, 1129-30, 1133 (D.C. Cir. 2015); Inv.
Co. Inst. v. Bd. of Governors of the Fed. Rsrv. Sys., 551 F.2d
1270, 1278 (D.C. Cir. 1977); see also Fla. Power & Light Co.
v. Lorion, 470 U.S. 729, 737 (1985). That approach makes
good sense here, because when Congress enacted the NLRA in
1935 “courts generally declined to engage in pre-enforcement
review of agency rules,” NYRSC, 799 F.3d at 1134, so
Congress spoke of “orders” as shorthand for final agency
action.
There is some reason to think Congress’s reference to “the
unfair labor practice in question” in its direct-review
authorization encompasses judicially reviewable Board rules
governing representation procedures. It is at least conceivable
that the direct-review provision is limited to “unfair labor
practice” orders because Congress provided for review of
representation disputes only via review of “orders of the Board
prohibiting unfair labor practices,” AFL v. NLRB, 308 U.S.
401, 409 (1940); see Nat’l Hot Rod Ass’n v. NLRB, 988 F.3d
506, 508 (D.C. Cir. 2021), not because Congress sought to treat
representation rules differently from unfair labor practice rules.
As a practical matter, it is not apparent why challenges to
representation rules should be heard first in the district court
while challenges to unfair labor practice rules come directly
here: Both are decided on the administrative record and benefit
from prompt resolution. Our precedent, moreover, takes a
generous approach to direct-review statutes: Where Congress
12
gives us mixed signals, we resolve statutory ambiguity in favor
of direct review in the courts of appeals. See Nat’l Auto.
Dealers Ass’n v. FTC, 670 F.3d 268, 270 (D.C. Cir. 2012).
That said, we are ultimately unpersuaded that any
implications from the vintage of the NLRA or policy
arguments for a common review path suffice to overcome the
textual reference to “unfair labor practice” in subsection 10(f)
and other statutory indicia that distinguish unfair labor practice
rules from those addressing representation procedures. “In this
circuit, the normal default rule is that persons seeking review
of agency action go first to district court rather than to a court
of appeals.” Id. (internal quotation marks and citations
omitted). It is the exception that “[i]nitial review of agency
decisions occurs at the appellate level”—an exception reserved
for cases as to which “a direct-review statute specifically gives
the court of appeals subject-matter jurisdiction to directly
review agency action.” Id. (internal quotation marks and
citations omitted).
Applying those principles to the text of subsection 10(f)
and the overall structure of the NLRA, we hold that the district
court correctly exercised jurisdiction over the AFL-CIO’s
challenge to the 2019 Rule. Section 10 of the NLRA,
addressing the “[p]revention of unfair labor practices,” 29
U.S.C. § 160, provides for direct review in federal courts of
appeals from some final actions of the Board, id. § 160(f).
Subsection 10(f) specifies that review may be had in this court
or “in the circuit wherein the unfair labor practice in question
was alleged to have been engaged” (or, although not relevant
here, in the circuit wherein the petitioner “resides or transacts
business”). Id. The district court correctly reasoned that
subsection 10(f)’s textual reference to unfair labor practices,
combined with the absence of any mention of determinations
governing representation or elections, “strongly suggests that
13
the provision is only triggered when some kind of unfair labor
practice is at issue.” AFL I, 466 F. Supp. 3d at 84. The
statutory phrase defining appellate-court venue options by
reference to “the unfair labor practice in question,” a specific
iteration of a broader category, implies that the overall
provision’s object is that category—unfair labor practices—
which does not include NLRA rules regarding representation
elections. 29 U.S.C. § 160(f) (emphases added).
It is undisputed that unfair labor practices—whether
specifically or in general—are not at issue in this pre-
enforcement challenge to the 2019 Rule, which concerns
exclusively elections regarding union representation. And
nowhere in subsection 10(f) or anywhere else in section 10 is
there any reference to elections or representation. Rather,
subsection 10(f) communicates “that what is being directed to
the court of appeals” for the purpose of direct review is NLRB
final orders (and, per binding precedent, rules) concerning
unfair labor practices. AFL I, 466 F. Supp. 3d at 84.
The placement of the direct-appellate-review provision
within section 10 confirms that conclusion. To start, the
section title, “Prevention of unfair labor practices,” announces
its topical focus. 29 U.S.C. § 160; see Almendarez-Torres v.
United States, 523 U.S. 224, 234 (1998). And the subsections
surrounding 10(f) make explicit their concern with unfair labor
practices. Cf. Territory of Guam v. United States, 141 S. Ct.
1608, 1613 (2021) (considering the “family” of provisions
when interpreting one specific provision). Subsection 10(a)
empowers the Board “to prevent any person from engaging in
any unfair labor practice (listed in section 158 of this title)
affecting commerce.” 29 U.S.C. § 160(a). Subsection 10(b)
describes the Board’s power to issue and pursue complaints
regarding charges of unfair labor practices. See id. § 160(b).
Subsection 10(c) states that if, after taking testimony and
14
potentially hearing argument on an unfair labor practice
charge, the Board believes that an unfair labor practice has
occurred, it shall, among other things, issue “an order
requiring such person to cease and desist from such unfair
labor practice.” Id. § 160(c). And subsection 10(e), in terms
parallel to 10(f), allows the Board to petition for enforcement
of its orders in any circuit court “wherein the unfair labor
practice in question occurred or wherein such person resides
or transacts business.” Id. § 160(e). This context suggests
that, like its sister provisions, 10(f) is concerned solely with
unfair labor practices, not representation matters.
The structure of the entire NLRA underscores Congress’s
separate treatment of unfair-labor-practice and union-
representation matters, further clarifying that subsection 10(f)
applies only to the former. As described above, Congress
addressed those two core categories of issues in separate
statutory sections: representation matters in section 9, id.
§ 159, and unfair labor practices matters in section 8, id. § 158.
That structural separation reinforces that subsection 10(f)—
with its express reference to unfair labor practices but no
mention of representation—does not extend to the
representation-case rules at issue here.
Against those textual and structural indicia, the Board’s
counterarguments fall short. First, the Board’s principal
argument attacks a strawman. The Board points out that we
have held that the term “order” in other direct-review statutes
encompasses agency rules, see NLRB Principal Br. 18-23
(citing NYRSC, 799 F.3d at 1129-30, 1133; Inv. Co. Inst., 551
F.2d at 1278), and asserts that subsection 10(f) is ambiguous as
to whether its use of the term “order” includes NLRB rules like
the one at issue here. True enough. But the obstacle is not that
subsection 10(f)’s reference to “orders” bars us from reviewing
a rule. The difficulty for the Board is the subject matter not the
15
form of the challenged agency action. As the district court
explained, subsection 10(f) is inapplicable “because the
NLRB’s action regulates representation rather than unfair labor
practices.” AFL I, 466 F. Supp. 3d at 87. In other words,
subsection 10(f) is not “ambiguous in any sense relevant,”
Nat’l Auto. Dealers Ass’n, 670 F.3d at 270 (citation omitted),
because—even accepting that “final order” also extends to
rules—the provision applies to rules concerning unfair labor
practices, not representation cases.
Second, the Board cannot dismiss subsection 10(f)’s
reference to unfair labor practices as merely a “venue
provision.” NLRB Principal Br. 29. The Board argues that, by
including that reference, Congress did nothing more than
“suppl[y] petitioners seeking review of unfair labor practice
cases with an additional convenient forum” in the place where
the unfair labor practice is alleged to have occurred. Id. The
reference to unfair labor practices qualifies only the venue
clause, the Board says, while the rest of the subsection
“remains perfectly operative” as “a very plain, general grant of
jurisdiction to circuit courts to review all ‘final orders of the
Board granting or denying in whole or in part the relief
sought’”—including final actions not involving unfair labor
practices. Id. (quoting 29 U.S.C. § 160(f)). But, as the district
court acknowledged, subsection 10(f)’s inclusion of a venue-
expanding clause does not detract from textual and structural
specifications that “the subject of a petition for review that is
filed with the court of appeals under [subsection 10(f)] must be
an NLRB action that pertains to unfair labor practices as
opposed to any other topic that the agency might have acted to
address.” AFL I, 466 F. Supp. 3d at 86 (emphasis in original).
We are somewhat puzzled by Congress’s decision to
provide for direct review in this court for unfair labor practice
cases but not for representation matters, given that both types
16
of cases are heard on agency records and would seem to benefit
equally from quick resolution in our court. But we cannot
rewrite the statute to resolve what seems a quirk. Thus,
pursuant to 28 U.S.C. § 1331, the district court had jurisdiction
over the AFL-CIO’s challenge to the 2019 Rule, and we
exercise appellate jurisdiction under 28 U.S.C. § 1291 to
review its judgment.
II. The APA’s Procedural Exception to Notice and
Comment
The Board next challenges the district court’s ruling that
the APA’s procedural exception is inapplicable. The district
court held that the Board violated the APA by promulgating
each of the five challenged provisions of the 2019 Rule without
engaging in notice and comment rulemaking. The Board
claims the five challenged provisions are exempt from the
APA’s notice and comment requirements as rules of agency
procedure under 5 U.S.C. § 553(b)(A).
In general, the APA requires agencies to publish notice of
proposed rules in the Federal Register and to accept and
consider comments on them from the public. See 5 U.S.C.
§ 553(b)-(c). Those requirements are central to the APA’s
“commitment to public notice and participation.” Batterton v.
Marshall, 648 F.2d 694, 700 (D.C. Cir. 1980). Public
participation helps to ensure that regulators are factually well
informed and have the benefit of alternative solutions that
commenters may suggest. See id. at 703-04. Rulemaking that
acknowledges and responds to expressed needs and concerns
of regulated parties and the affected public tends to be more
readily accepted by winners and losers alike. See Guardian
Fed. Sav. & Loan Ass’n v. Fed. Sav. & Loan Ins. Corp., 589
F.2d 658, 662 (D.C. Cir. 1978).
17
In keeping with the statutory commitment to public
participation in rulemaking, “the APA provides only limited
exceptions to [its notice and comment] requirements.”
Batterton, 648 F.2d at 700-01; see id. at 704. One such
exception is for “rules of agency organization, procedure, or
practice.” 5 U.S.C. § 553(b)(A). We have used the term
“procedural exception” as shorthand for that exemption, see,
e.g., Pub. Citizen v. Dep’t of State, 276 F.3d 634, 640 (D.C.
Cir. 2002) (quoting JEM Broad. Co. v. FCC, 22 F.3d 320, 328
(D.C. Cir. 1994)), and we have referred to rules promulgated
under it as “procedural rules,” see, e.g., Mendoza v. Perez, 754
F.3d 1002, 1023 (D.C. Cir. 2014). But, as the text of the APA
makes clear, not all rules that might be categorized as
procedural are exempted; the limited carveout is intended for
“internal house-keeping measures organizing agency
activities.” Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1045
(D.C. Cir. 1987) (quoting Batterton, 648 F.2d at 702). And its
purpose is “to ensure that agencies retain latitude in organizing
their internal operations.” Mendoza, 754 F.3d at 1023 (quoting
Batterton, 648 F.2d at 707); accord Bowen, 834 F.2d at 1047.
We treat rules as procedural if they are “primarily directed
toward improving the efficient and effective operations of an
agency.” Mendoza, 754 F.3d at 1023 (quoting Batterton, 648
F.2d at 702 n.34). “[T]he critical feature of a rule that satisfies
the so-called procedural exception is that it covers agency
actions that do not themselves alter the rights or interests of
parties, although it may alter the manner in which the parties
present themselves or their viewpoints to the agency.” James
V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 280 (D.C.
Cir. 2000) (internal quotation marks omitted). Where a rule
imposes “substantive burden[s],” Bowen, 834 F.2d at 1052,
“encodes a substantive value judgment,” Pub. Citizen, 276 F.3d
at 640 (quoting Bowen, 834 F.2d at 1047), “trenches on
substantial private rights [or] interests,” Mendoza, 754 F.3d at
18
1023 (quoting Batterton, 648 F.2d at 708), or otherwise
“alter[s] the rights or interests of parties,” Nat’l Min. Ass’n v.
McCarthy, 758 F.3d 243, 250 (D.C. Cir. 2014) (quoting
Glickman, 229 F.3d at 280), it is not procedural for purposes of
the section 553 exemption. At bottom, the exception for
“internal house-keeping measures,” Bowen, 834 F.2d at 1045,
“must be narrowly construed,” Elec. Priv. Info. Ctr. v. U.S.
Dep’t of Homeland Sec. (EPIC), 653 F.3d 1, 6 (D.C. Cir. 2011).
These precedents represent this court’s current and consistent
approach. Cf. Diss Op. 1, 5.
The 2019 Rule governs how the Board supervises
representation elections that determine whether a union will
represent a group of employees. Many of the Board’s
representation-election provisions, including provisions of the
2019 Rule, govern or directly affect regulated parties—
employers, unions, and employees—and their substantive
rights in relation to one another during representation elections.
That means much of the election conduct the Board regulates
is not internal “agency action[].” Glickman, 229 F.3d at 280.
In other words, the Board’s role in supervising elections does
not convert all representation-election rules into rules of
internal agency procedure. That said, some of the
representation-election provisions do regulate how the parties
present disputes to the Board and the process for its decision.
Thus, some but not all of the Board’s rules are “primarily
directed toward improving the efficient and effective
operations of [the] agency,” Mendoza, 754 F.3d at 1023(quoting Batterton, 648 F.2d at 702 n.34), or toward “the
manner in which [regulated] parties present themselves or their
viewpoints to the agency,” Glickman, 229 F.3d at 280 (quoting
JEM Broad. Co., 22 F.3d at 326).
We hold that three of the challenged provisions—those
regarding employers’ production of voter lists, the delayed
19
certification of election results, and who may serve as election
observers—fall outside the scope of the procedural exception.
As detailed below, the voter-list provision trenches on the
union’s substantive interest in campaigning on equal footing
with the employer. The provisions delaying certification cut
back on an employer’s legal duty post-election to bargain in
good faith, effectively eliminating that duty during the
pendency of a request for review or, in the absence of such a
request, until the time for seeking Board review has passed.
And the election-observer provision establishes new
substantive criteria for selecting observers that directly affect
regulated parties’ interests in fair elections. Those provisions
all substantively “alter the rights or interests of parties,”
Glickman, 229 F.3d at 280 (quoting JEM Broad. Co., 22 F.3d
at 326), and therefore do not qualify as procedural rules for
purposes of the section 553 exemption.
However, two of the challenged provisions—those
regarding pre-election litigation of certain issues and a related
change to election scheduling—are procedural rules within the
meaning of section 553(b)(A). Both provisions are “primarily
directed toward” internal agency operations, Mendoza, 754
F.3d at 1023 (quoting Batterton, 648 F.2d at 702 n.34), insofar
as they each govern the presumptive timing of when the
Regional Director will resolve election-related disputes prior to
an election. The Board therefore permissibly issued those
provisions without notice and comment. We discuss each
provision in turn, beginning with the substantive rules.
A. Substantive Rules
1. Voter list
Once a Regional Director issues a direction of election
following a pre-election hearing, the employer must provide
both the union and the Board with a list of the names, job
20
details, and contact information for all eligible employee-
voters. See 29 C.F.R. § 102.67(l); see also 2019 Rule, 84 Fed.
Reg. at 69,531 & n.28. The Board does not seriously dispute
that the primary purpose of that voter list is to facilitate the
union’s campaign activities because, before receiving the list,
the union generally does not have the same ability as the
employer to contact employee-voters. Under the 2019 Rule, an
employer has five business days from the issuance of the
direction of election to provide the voter list. 84 Fed. Reg. at
69,596-97 (codified at 29 C.F.R. § 102.67(l)). By contrast, the
2014 Rule required an employer to provide it within two
business days. 79 Fed. Reg. at 74,486.
We conclude that the voter-list provision falls outside the
section 553 exception for “rules of agency organization,
procedure, or practice.” 5 U.S.C. § 553(b)(A). By changing
the timeline for transmission of the voter list, the provision
directly addresses the union’s ability to contact employees on
equal terms with the employer. The voter-list provision
thereby “alter[s]” regulated parties’ substantive “rights [and]
interests” in relation to each other. Glickman, 229 F.3d at 280(quoting JEM Broad. Co., 22 F.3d at 326). The Supreme Court
has acknowledged that the Board’s requirement that employers
share voter lists supports the NLRA-protected right of “fair and
free choice of bargaining representatives,” in part by “allowing
unions the right of access to employees that management
already possesses.” NLRB v. Wyman-Gordon Co., 394 U.S.
759, 767 (1969). By delaying the employer’s obligation to
share with the union the employee-voters’ contact information,
the provision “trenches on” the union’s substantive interest in
campaigning on equal footing with the employer. Mendoza,
754 F.3d at 1023 (quoting Batterton, 648 F.2d at 708). It
therefore does not qualify as procedural for purposes of the
section 553 exception. See id.21
The voter-list provision is also neither facially nor
materially directed at “internal house-keeping.” Bowen, 834
F.2d at 1045. It does not govern internal agency operations,
nor is it principally directed at the “manner in which [regulated]
parties present themselves or their viewpoints to the agency,”
Glickman, 229 F.3d at 280 (quoting JEM Broad. Co., 22 F.3d
at 326). Instead, it primarily facilitates the transmission of
information between parties, not from a party to the Board. See
Mendoza, 754 F.3d at 1024 (deeming substantive agency’s
employer-certification procedures that set terms of employer-
employee relationships). And it does so outside the context of
any agency proceeding. The voter-list provision thus bears
none of the hallmarks of a rule that would fall within the
procedural exception.
The Board does not dispute the importance of voter lists to
the union’s ability to campaign, nor the reality that the shift
from two days to five within the twenty-day default pre-
election period extends the time when the employer has
exclusive use of employee-voters’ contact information.
Instead, Board counsel argues that the voter lists also help the
Board conduct elections. The lists, for example, separately
identify the employees who are casting their votes subject to
challenge, thus making it easier for the Board to identify them.
But that seemingly slight convenience to the Board does not
obviate the rule’s substantive character. Given that the union’s
substantive interest in campaigning on equal footing with the
employer is impaired until the employer produces the voter list,
postponing that production necessarily burdens the union’s
substantive interest. See Mendoza, 754 F.3d at 1023. And,
tellingly, the Board did not even mention its asserted
convenience rationale in the rulemaking.
The Board in its reply brief tries to brush off the delay as,
in any event, “de minimis.” NLRB Response & Reply Br. 26.
22
That rationale, too, is absent from the rulemaking; indeed, to
the contrary, in support of the 2019 change the Board stressed
the significance of the added time—for employers. See 2019
Rule, 84 Fed. Reg at 69,531-32. And we are unpersuaded by
the Board’s suggestion that extension of the time to set
elections, discussed below, cancels out the delayed provision
of the voter list to a union, somehow making the voter-list delay
procedural. NLRB Principal Br. 61; 2019 Rule, 84 Fed. Reg.
at 69,532. The pre-election period is now presumptively set at
twenty days but is often shorter. And, in any event, a three-day
head start on campaigning by employers before a union can
even access employee contact information to reach potential
voters is not erased by the addition of other days both parties
might use to campaign. The asymmetry of three additional
days of employers’ exclusive access to employee-voters’
contact information substantively burdens the union’s ability to
campaign on equal footing.
Reference to pre-2014 practice likewise does nothing to
dispel the AFL-CIO’s concerns about the disparity under the
2019 Rule between unions’ and employers’ ability to
campaign. Before the 2014 Rule, an employer had to provide
the union with the voter list within seven calendar days from
the issuance of the direction of election, which is generally
equivalent to the five business days specified in the 2019 Rule.
See 2019 Rule, 84 Fed. Reg. at 69,530-31. When the Board
shortened the time to two days in the 2014 Rule, it pointed to
widespread advances in recordkeeping, retrieval, and
transmission technology since it first recognized unions’ right
to voter lists in Excelsior Underwear, Inc., 156 NLRB 1236,
1239-40 (1966), as obviating the basis for the original seven-
day period. See 2014 Rule, 79 Fed. Reg. at 74,353. The 2014
Rule preamble noted that under the prior rule—in addition to
the two out of seven days treated as “lost to the weekend”—
employers operating under Excelsior before the advent of e-
23
mail and even express delivery services were allocated “3 more
days . . . dedicated to service of the list by regular mail.” 79
Fed. Reg. at 74,353. Excelsior’s own reasoning thus suggests
that, without need to rely on the postal service, employers can
provide the lists to unions within two days. To the extent the
Board nonetheless wishes to revert to granting employers more
time than that to provide the lists to unions, it must make such
a substantive change through notice and comment procedures.
Finally, the Board and our dissenting colleague liken
delayed provision of the voter list to “changing the timeline for
filings with an agency,” NLRB Principal Br. 61; see Diss. Op.
10 (citing Lamoille Valley R.R. Co. v. Interstate Com. Comm’n,
711 F.2d 295, 328 (D.C. Cir. 1983)), as a reason to treat it as a
“rule[] of agency organization, procedure, or practice,”
5 U.S.C. § 553(b)(A). But the voter-list provision does not set
timelines for an agency’s internal processes, nor is it
principally about submissions to the agency in support of such
process. Our precedent examining “timetable[s] for asserting
substantive rights” before an agency, Lamoille, 711 F.2d at
328, is, thus, readily distinguished.
The voter-list provision’s substantive character is instead
established through the antecedent inquiry whether the Board’s
rule “alter[s],” Glickman, 229 F.3d at 280, or otherwise
“trenches on” a substantive right or interest, Mendoza, 754 F.3d
at 1023—here, the union’s interest in campaigning on equal
footing with the employer. Again, the provision primarily
facilitates the transmission of information between parties to
“allow[] unions the right of access to employees that
management already possesses.” Wyman-Gordon, 394 U.S. at
767. And it directly affects the parties’ primary interest in free
and fair bargaining-unit elections. See id. Because it impairs
a substantive interest, it is subject to the APA’s notice and
comment requirements.
24
In sum, considering the “primary benefit” of the voter list
to help the union communicate with employee-voters in the
run-up to an election, NLRB Response & Reply Br. 27, and the
lack of any significant basis to treat this provision as a rule of
agency operations, we conclude the delayed voter-list
provision determines parties’ rights or interests and is
substantive. Accordingly, it should have been subjected to
public notice and comment. See Mendoza, 754 F.3d at 1023.
Because it was not, it is hereby vacated and remanded.
2. Delayed certification
If employees favoring the union win an election and the
Board, or its Regional Director by delegation, certifies the
union as the employees’ representative, the Act then requires
the employer to bargain in good faith with the union. See 29
U.S.C. § 158(a)(5); see also 2019 Rule, 84 Fed. Reg. at 69,554.
Since the 2014 Rule went into effect, a party may file a request
for Board review of the decision and direction of election even
after the election has occurred. Parties may also file with the
Regional Director objections to the conduct of the election and,
if unsuccessful, may seek Board review of the Regional
Director’s decision on those objections. See 2019 Rule, 84
Fed. Reg. at 69,526, 69,553-54 (citing 29 C.F.R. § 102.67(c)).
Under the 2019 Rule, a Regional Director will certify
election results only after she has resolved any requests for
review concerning the decision and direction of election or
objections to the conduct of the election or, in the absence of
such filings, after the time for seeking Board review has passed.
See 84 Fed. Reg. at 69,597-99 (codified at 29 C.F.R.
§ 102.69(b), (c)); see also id. at 69,526. The 2014 Rule, in
contrast, provided that a Regional Director would certify
election results without regard to whether a request for review
25
was pending or still might be timely filed. See 79 Fed. Reg. at
74,487; see also 2019 Rule, 84 Fed. Reg. at 69,526, 69,554.
We hold that the provisions delaying certification of
election results fall outside the APA’s procedural exception
because they directly curtail the protective effect on employees
of the rights and interests that flow from the election of a
representative of their choosing. Delaying certification also
suspends the attachment of an employer’s legal duty to bargain
with a union that has won an election. Such a change “trenches
on substantial private rights and interests,” necessitating notice
and comment before it is made. Mendoza, 754 F.3d at 1023(citation omitted).
In its briefing, the AFL-CIO explains that delayed
certification prevents unions from bargaining on behalf of
employees—sometimes “for a significant period of time, even
years.” AFL-CIO Principal & Response Br. 39. For
employees who voted for a union expecting it would bargain
for better terms and conditions of employment, delayed
certification deprives them of a key benefit during that entire
period. See id. Such deprivation may also erode employees’
support for a union that seems unable to deliver promptly on its
promise. See id. At oral argument, the AFL-CIO elaborated
on those points, referencing the challenge of “bargain[ing] a
first contract,” Oral Arg. Tr. 37:3-4, and the difficulty “for a
union to maintain [its] cohesion during that period” after it has
won an election but not yet been able to bargain because
certification is delayed, id. at 39:14-15.
The AFL-CIO also emphasizes the importance of, first, the
effect of delayed certification on an employer’s duty to bargain
in good faith and, second, its effect on the duty not to make
unilateral changes in terms and conditions of employment
during the term of an existing collective bargaining agreement.
26
See id. at 37:14-38:1. The Board argues that the effects of
delay are remediable but addresses only the second of those
two effects. It points out that the obligation to refrain from
making any unilateral changes extends back to the date of the
election, not certification, meaning that, if an employer makes
unilateral changes but the union is ultimately certified, those
changes can be challenged as unfair labor practices. See NLRB
Principal Br. 63 & n.174; see also Oral Arg. Tr. 37:17-19. But
an employer’s duty to bargain in good faith to reach agreement
on terms and conditions of employment—a duty it owes even
to employees not yet covered by any collective bargaining
agreement—originates on the date of certification. See Oral
Arg. Tr. 37:19-23; see also NLRB Principal Br. 63. Thus,
unions and the employees they represent have no opportunity
to later redress delayed certification’s impairment of their new
right to bargain for terms of employment.
The Board and dissent do not contest those assertions. Nor
do they deny that an employer’s duty to bargain arises at
certification, such that delaying certification eliminates
employees’ right to have their union promptly engage in
collective bargaining on their behalf post-election. See NLRB
Principal Br. 63 (distinguishing between “the duty to bargain
in good faith” and “other duties, such as an employer’s
obligation to refrain from making unilateral changes” that
“extend back to the date of the election, not certification”); Oral
Arg. Tr. 46:6-8 (Board counsel stating that, “outside of this
specific bargaining obligation, virtually every other
meaningful right that attaches to the union representation issue
goes back to the election”); Diss. Op. 11-15.
In characterizing the delayed-certification provisions as
rules of agency procedure, the Board and dissent insist that,
“[a]s a practical matter,” delayed certification has “de minimis
impact on unions.” NLRB Principal Br. 63; see Diss. Op. 13.
27
According to the Board, its “regional offices generally have not
issued unfair labor practice complaints asserting that
employers were not bargaining pursuant to certifications that
are subject to pending requests for review.” NLRB Principal
Br. 63 (citing D.A. 217 (2019 Rule, 84 Fed. Reg. at 69,555));
see also Diss. Op. 13. In effect, the Board and our dissenting
colleague point to the Board’s own underenforcement of
employers’ duty to bargain as a reason why a rule formally
delaying certification does not affect employees’ substantive
rights or interests.
But that practice does not negate the fact that the new
provisions delaying certification shift the parties’ substantive
burdens during the post-election period. As the Board
explained in the 2019 Rule, the issuance of a certification under
the prior rule despite the pendency of a request for review
placed the risk on the employer to either refuse to bargain while
awaiting the Board’s ruling and thereby commit an unfair labor
practice if it loses on review, or to proceed to bargain while
awaiting the Board’s ruling even though a win on review could
prove bargaining to have been unnecessary. 84 Fed. Reg. at
69,554-55. Materially diminishing employers’ incentives to
bargain promptly upon certification curtails employees’
enjoyment of the legal rights that flow from a valid
certification. Thus, the delayed-certification provisions are
substantive rules that required notice and comment.
The dissent further contends that we “fail[] to distinguish”
our decisions in Lamoille, JEM Broadcasting, and Public
Citizen—which, according to our dissenting colleague, each
involved rules that altered the “timing for exercising
substantive rights.” Diss. Op. 13-14 (citing Lamoille, 711 F.2d
at 327; JEM Broad. Co., 22 F.3d at 322, 326-27; Pub. Citizen,
276 F.3d at 637). But there is a material distinction. The rules
at issue in Lamoille and JEM Broadcasting altered the
28
“timetable for asserting substantive rights” before an agency—
not the timetable for exercising a substantive right itself.
Lamoille, 711 F.2d at 328 (emphasis added). In other words,
the rules at issue in those cases were primarily directed toward
regulating the manner in which parties present their views or
otherwise submit requests to the agency, as opposed to their
exercise of substantive rights or interests outside of any
agency-facing proceeding. In Lamoille, we examined an
agency’s decision to expedite its schedule for considering
merger applications and to truncate from 90 days to 60 days the
period in which competing railroads could file responses to a
proposed merger. Id. at 326-27. And in JEM Broadcasting,
the rule at issue established a “fixed filing period” for license
applications for particular commercial FM radio channels and
set a 30-day limit on application amendments. 22 F.3d at 322,
327-28. Both those rules set deadlines for filings seeking
agency decisions.
Similarly, the rule considered in Public Citizen affected
the manner in which parties make requests to an agency,
without altering their substantive rights or interests. See 276
F.3d at 640-41. Specifically, the rule directed State
Department personnel to search only for responsive documents
that existed prior to the date of a FOIA request, thereby leaving
applicants to submit additional FOIA requests to obtain
documents created after their request was filed. See id. at 637,
640-41. Even as, broadly speaking, the certification delay
challenged here, like each of those three cases, involves some
form of “timing” change, none of the three prior cases involved
a rule that suspended a party’s entitlement to a substantive right
or interest.
The provisions delaying certification do just that: They
eliminate an employer’s legal duty to bargain with a union that
has won an election during the time it takes the Board to resolve
29
any requests for review or, in the absence of any such request,
until the time for seeking Board review has elapsed. See 2019
Rule, 84 Fed. Reg. at 69,597-99 (codified at 29 C.F.R.
§ 102.69(b), (c)); see also id. at 69,526. That direct impact on
an employer’s legal duty and its employees’ associated
substantive right is what distinguishes the provisions delaying
certification from the rules at issue in Lamoille, JEM
Broadcasting, and Public Citizen—and excludes them from the
shelter of the procedural exception. See, e.g., Glickman, 229
F.3d at 280 (“[Procedural rules] do not themselves alter the
rights or interests of parties.” (quoting JEM Broad. Co., 22
F.3d at 326)).
Finally, the parties dispute whether delayed certification
also affects a union’s right to recognitional picketing under 29
U.S.C. § 158(b)(7). Compare, e.g., NLRB Principal Br. 64
(maintaining that it “is simply wrong to assert that this rule
affects a union’s right to picket for recognition, as the 30-day
limitation on picketing contained in Section 8(b)(7) of the
NLRA is eliminated by the filing of a petition” (footnotes
omitted)), and NLRB Response & Reply Br. 29 (same), with,
e.g., AFL-CIO Principal & Response Br. 37 n.12 (maintaining
that “[s]uch picketing would be unlawful absent certification if
continued for more than 30 days”). Because the effect of the
delayed-certification provisions on the right to collective
bargaining is sufficient to bring them outside the APA’s
procedural exception, we need not resolve the uncertainty
surrounding the time limits on recognitional picketing.
3. Election observers
Election observers play “the indisputably important role”
of “representing their principals, challenging voters, generally
monitoring the election process, and assisting the Board agent
in the conduct of the election.” 2019 Rule, 84 Fed. Reg. at
30
69,553. The Board has recognized that the presence of both
employer-selected and union-selected observers at elections
“help[s] to assure the parties and the employees that the
election is being conducted fairly.” Id. at 69,552 (quoting
Browning-Ferris Indus., 327 NLRB 704, 704 (1999)). The
choice of election observers bears on the foundational interest
in electoral legitimacy—both actual and perceived.
As the Board explained in the 2019 Rule, “[t]he practice
of permitting the parties to be represented by observers at
Board-conducted elections dates to the earliest days of the
Act,” even though “the Act itself does not make any provision
for observers to be present at an election.” Id. at 69,551. In its
decisional law, the Board has long characterized the policy as
a “privilege” or “courtesy” that it affords to parties, rather than
a right or entitlement. See id. (citations omitted). But it matters
not that the Board has so characterized its policy of allowing
election observers, because “we examine how the rule affects
not only the ‘rights’ of aggrieved parties, but their ‘interests’ as
well.” Chamber of Com., 174 F.3d at 212 (citation omitted).
The rule’s effect on regulated parties’ substantive interests in
choosing their own election observers suffices to remove it
from the category of procedural rules under the APA. See
Mendoza, 754 F.3d at 1023 (explaining that “[p]rocedural rules
do not themselves alter the rights or interests of parties”
(internal quotation marks and citation omitted) (emphasis
added)); accord Glickman, 229 F.3d at 280.
The 2019 Rule provides that for manual, or in-person,
elections,
any party may be represented by observers of its own
selection; whenever possible, a party shall select a
current member of the voting unit as its observer, and
when no such individual is available, a party should
31
select a current nonsupervisory employee as its
observer. Selection of observers is also subject to
such limitations as the Regional Director may
prescribe.
84 Fed. Reg. at 69,597 (codified at 29 C.F.R. § 102.69(a)(5))
(emphases added). By comparison, the 2014 Rule stated, in
relevant part, only that, “[w]hen the election is conducted
manually, any party may be represented by observers of its own
selection, subject to such limitations as the regional director
may prescribe.” 79 Fed. Reg. at 74,486.
The AFL-CIO argues that the 2019 Rule limits unions’
ability to select as observers former employees or union staff
members who are less likely to be subject to intimidation and
often more capable of “send[ing] a message to the employees
who are voting that this is a fair election.” Oral Arg. Tr. 35:17-
36:2. The AFL-CIO further contends that the ability to select
a former employee or union staff member as an observer can
be helpful when employees are “scared to sit . . . at the table . . .
in front of the[ir] employer.” Id. at 35:17-22.
We conclude the election-observer provision falls outside
the APA’s procedural exception because it “encodes a
substantive value judgment” about the type of observers that
best serve the policy goals animating the Board’s decision to
permit non-Board observers, Pub. Citizen, 276 F.3d at 640, and
so burdens regulated parties’ interests in fair elections. The
Board has long recognized parties’ choice of observers as an
important interest bearing on participants’ confidence in the
fair conduct of the elections. The Board itself has recognized
that the standards governing who may serve as an election
observer can directly affect the fairness and outcome of
elections, because employee-voters may be “intimidate[d]” by
the presence of certain types of observers, such as employees
32
with “disciplinary power.” 2019 Rule, 84 Fed. Reg. at 69,551
n.109 (quoting United States Gypsum Co., 81 NLRB 197(1949)); see also id. at 69,552.
The Board candidly admitted that the core of the provision
in question—confining parties to select a current member of
the voting unit as their observer whenever possible—“is a new
innovation,” not a codification of any principle previously
developed in the Board’s precedent on observers. Id. at 69,553.
It therefore imposes a “new substantive burden[],” EPIC, 653
F.3d at 5 (citation omitted), on the parties by “alter[ing] the
standards imposed on” them when choosing observers,
Mendoza, 754 F.3d at 1024 (emphasis omitted). That
substantive character suffices to remove the provision from the
agency-procedure exemption from the notice and comment
requirement.
Our dissenting colleague does not dispute that the election-
observer provision “alter[s] the substantive criteria” by which
parties select observers. Glickman, 229 F.3d at 281. But she
claims the provision “does not encode a substantive value
judgment,” because “[t]he point [of the provision] is
transparency in an election procedure under the control of the
Board.” Diss. Op. 16. Transparency benefits do not negate the
provision’s substantive value judgment regarding the type of
observers best suited to achieve the Board’s policy goals. See,
e.g., 2019 Rule, 84 Fed. Reg. at 69,552. More fundamentally,
the Board’s role in supervising representation elections does
not convert every provision regarding election process into a
rule of agency procedure. Parties’ interests in choosing
representatives to observe elections and help ensure that
employees may vote free from intimidation are substantive
interests in the conduct of choosing or declining union
representation.
33
Nothing in Guardian requires us to treat the election-
observer provision here as a matter of agency procedure. Cf.
Diss. Op. 16-17 (citing Guardian, 589 F.2d at 665). The rule
at issue in Guardian concerned mandatory, annual audits of
federally insured savings and loan institutions pursuant to an
unchallenged provision that “specifie[d] in considerable detail
criteria that must be met before an audit or an auditor will be
satisfactory to” the Federal Savings & Loan Insurance
Corporation (FSLIC). 589 F.2d at 661. Guardian challenged
the part of FSLIC’s rule in which the agency “exercise[d] an
option” provided by a preexisting rule “to require that audits be
performed by accountants from the private sector,” rather than
as incidental to other examinations by FSLIC staff. Id. at 665.
We described the agency’s decision that its examiners would
no longer conduct those audits as “unquestionably one of
agency procedure.” Id. The Board’s election-observer
provision, unlike the FSLIC’s rule, is not the “necessary
consequence of,” id.—or even arguably related to—a decision
about the duties of NLRB staff. And election observers, unlike
auditors, play a role in representing unions and employers to
third parties—namely, employee-voters. See 2019 Rule, 84
Fed. Reg. at 69,553.
In short, because the election-observer provision imposes
new “substantive burden[s]” on the parties’ interests in fair
elections, employee-voters’ perceptions of both employer and
union, and voters’ ultimate confidence in the elections, it falls
outside the APA’s exception for “procedural” rules. EPIC, 653
F.3d at 5; accord Mendoza, 754 F.3d at 1023-24.
B. Procedural Rules
We turn next to the two remaining challenged provisions
of the 2019 Rule: those regarding pre-election litigation of
certain issues and a related adjustment to the default rule for
34
election scheduling. Unlike the other challenged provisions,
these two are principally “internal house-keeping” rules,
Bowen, 834 F.2d at 1045; they are both “primarily directed
toward improving the efficient and effective operations of [the]
agency,” Mendoza, 754 F.3d at 1023 (quoting Batterton, 648
F.2d at 702 n.34), and “impose[] no new substantive
obligations” or burdens upon the parties’ rights and interests,
EPIC, 653 F.3d at 6. We therefore hold that these two
provisions are procedural rules exempt from notice and
comment under section 553.
1. Pre-election litigation of voter eligibility, unit
scope, and supervisory status
As referenced above, employers and unions sometimes
disagree over which employees may be appropriately
encompassed within a bargaining unit. Such disputes affect
who is eligible to vote in an election: only votes cast by
employees who would be within the proposed unit count
toward determining the outcome of the election. For example,
parties may disagree about whether an employee is a supervisor
and accordingly excluded from the NLRA’s protections,
outside any proposed bargaining unit, and ineligible to vote. In
most cases, the parties resolve such disputes through election
agreements. But when the parties do not settle those issues
themselves, it falls to the NLRB to decide them.
Under the 2019 Rule, “[d]isputes concerning unit scope,
voter eligibility and supervisory status will normally be
litigated and resolved by the Regional Director before an
election is directed.” 84 Fed. Reg. at 69,593 (codified at 29
C.F.R. § 102.64(a)). That presumption replaced the 2014
Rule’s provision that “[d]isputes concerning individuals’
eligibility to vote or inclusion in an appropriate unit ordinarily
need not be litigated or resolved before an election is
35
conducted.” 79 Fed. Reg. at 74,482. Under the old rule,
individuals whose disputed eligibility was undecided at the
time of the election would cast their votes subject to challenge.
After the election, the eligibility or inclusion disputes would be
resolved as necessary, such as when the votes of the contested
individuals could affect the outcome of the election or, if the
pro-union votes prevailed in any event, to determine whether
contested individuals were appropriately treated as part of the
bargaining unit.
The AFL-CIO argues that this provision of the 2019 Rule
falls outside the APA’s procedural exception because it “vests
parties with an affirmative, substantive right, most often
exercised by the employer, to obtain a pre-election advisory
opinion regarding the status of individual employees.” AFL-
CIO Principal & Response Br. 28-29. It further contends the
provision is substantive because it builds in a source of
unjustified delay by “add[ing] the prerequisite of resolving
these individual eligibility issues before a petitioning party may
obtain a Board election.” Id. at 28. It asserts the prior practice
of deferring resolution of eligibility and scope questions until
after an election was more efficient where the margin of
election victory was sufficient to moot the ballot challenges.
The Board responds that the provision merely changes
“when those issues are presented to, and decided by, the
Board,” NLRB Principal Br. 55 (emphasis in original), and,
even then, only “in the small number of contested election
cases”—around ten percent—“that the Board hears per year,”
id. at 57. At least some of the contested election cases are too
close to moot ballot disputes. And even when a union’s win is
decisive, disputes affecting individuals’ inclusion or not in the
unit remain live. See NLRB Response & Reply Br. 19-20.
36
The provision calling on the Regional Director typically to
decide issues of voter eligibility and unit scope before rather
than after the election is procedural, not substantive. It is
directed at “agency actions that do not themselves alter the
rights or interests of parties.” Glickman, 229 F.3d at 280(quoting JEM Broad. Co., 22 F.3d at 326). And it does not
appear from the record that reversing the presumptive pre-
election timing of those decisions “substantively affects”
regulated parties to a “degree sufficient to implicate the policy
interests animating notice-and-comment rulemaking.” EPIC,
653 F.3d at 6. As the Board explained in the 2019 Rule, the
provision marks a return to the pre-2014 approach. See 84 Fed.
Reg. at 69,525.
In holding that the provision falls outside the procedural
exception, the district court expressed concern that reverting to
a process associated with delays “will hinder the employees’
prospects of mobilizing a sufficient number of peers to
unionize the workplace,” AFL I, 466 F. Supp. 3d at 91, but the
AFL-CIO itself does not so argue. Indeed, the AFL-CIO’s own
expert concluded that the 2014 Rule, successfully shortening
case times, did not affect rates of unionization. D.A. 103. The
expert similarly found that statistics regarding frequency and
length of hearings were unaffected by the shift in their
presumptive timing: “Neither the probability of a case’s
having a pre-election hearing nor the average length of those
hearings changed, over time or in the wake of the [2014] rule
change.” D.A. 111.
Contrary to the AFL-CIO’s assertion, the provision calling
on Regional Directors to decide eligibility disputes before an
election cannot fairly be said to create an “affirmative,
substantive right” in any party to insist that they do so. AFL-
CIO Principal & Response Br. 28-29. By its terms, the
provision sets only the sequence Regional Directors
37
“normally” should follow. 2019 Rule, 84 Fed. Reg. at 69,540.
It neither prevents parties from agreeing to defer resolutions
until after an election, nor prevents Regional Directors from
deciding over objection to defer decision of eligibility disputes
in appropriate cases. See id. at 69,541-42 (noting that rule
establishes only when Regional Directors “normally” will
decide, and that the new provision is “not imposing a
requirement that, absent agreement of the parties to the
contrary, all eligibility issues must be resolved prior to an
election” but preserves “the discretion of the regional director
to defer eligibility and inclusion issues”).
The record, then, does not bear out the contention that the
parties’ substantive rights or interests are affected by returning
to the pre-2014 default sequence for the Regional Director’s
resolution of issues of voter eligibility, unit scope, and
supervisory status. The change principally affects the manner
in which employers and unions present themselves and their
views to the Board and in which it decides their disputes, rather
than the parties’ substantive rights or interests. See Lamoille,
711 F.2d at 328; Glickman, 229 F.3d at 280-81; JEM Broad.
Co., 22 F.3d at 327-28; cf. Mendoza, 754 F.3d at 1023-24.
Specifically, for elections not conducted pursuant to election
agreements, the provision sets the sequence the NLRB expects
its Regional Directors ordinarily to follow in deciding disputed
questions of eligibility and scope.
We accordingly hold that the provision regarding pre-
election litigation is a procedural rule validly promulgated
without prior notice and comment.
2. Election scheduling
Following the pre-election hearing that occurs in those
cases not conducted under an election agreement, the Regional
Director either dismisses the petition calling for an election if
38
no question of representation exists or, if she identifies such a
question, issues a decision and direction of election. The
direction of election often includes details like the date of the
election.
The 2019 Rule builds in a presumptive waiting period of
twenty business days immediately following the direction of
election to allow the Board to rule on disputes between the
parties. It states that the Regional Director
shall schedule the election for the earliest date
practicable, but unless a waiver is filed, the Regional
Director will normally not schedule an election
before the 20th business day after the date of the
direction of election, to permit the Board to rule on
any request for review which may be filed.
2019 Rule, 84 Fed. Reg. at 69,595 (codified at 29 C.F.R. §
102.67(b)). By contrast, the 2014 Rule simply provided that
“[t]he regional director shall schedule the election for the
earliest date practicable.” 79 Fed. Reg. at 74,485. In the 2019
Rule, the Board acknowledged that the new provision will
generally result in about four weeks between the direction of
election and the election itself, as compared to about two weeks
under the 2014 Rule. See 84 Fed. Reg. at 69,546.
The AFL-CIO argues that the 2019 Rule’s election-
scheduling provision is substantive because it “deprives a
petitioning party of its existing right to a prompt election,”
AFL-CIO Principal & Response Br. 31, and affects “how much
time parties have to communicate with employees prior to the
election,” id. at 32 (internal quotation marks and citation
omitted). The Board responds that we have previously held
that “changes to agency timelines are procedural, not
substantive,” NLRB Principal Br. 58-59 (citing Lamoille, 711
F.2d at 328), and that the provision addresses “the internal
39
workings of the agency by, among other effects, giving the
Board more time to rule on requests for review prior to
elections,” id. at 60.
We hold that the election-scheduling provision is
procedural. Like the rule at issue in Lamoille, it comprises part
of the “timetable for [regulated entities to] assert[] substantive
rights,” 711 F.2d at 328, namely, particular employees’ right to
vote for or against a union to represent them as a defined bloc.
And, as in Lamoille, the relevant inquiry is whether the
timetable unduly constrains the rule challenger’s opportunity
to state its case. See id. Whereas in Lamoille, the “proper
question” was “whether the time allotted [was] so short as to
foreclose effective opportunity to make one’s case on the
merits,” id., here, we might in fairness reverse the question:
whether the time allotted between the direction of election and
the election itself is so long as to impede a union’s opportunity
to make its case on the merits to employee-voters. Indeed, the
longer a case drags on, the more risk that support for a union
(or other impetus to call for an election in the first place) will
dissipate. Cf. Oral Arg. Tr. 36:16-37:8, 39:10-18 (counsel for
the AFL-CIO explaining that delays in bringing a
representation case to resolution can diminish employees’
support for a union).
The time allotted by the election-scheduling provision is
not so long as to impede the union’s opportunity to make its
case to employee-voters. Like the provision regarding pre-
election litigation of certain issues, the election-scheduling
provision is a return to the pre-2014 rules for representation
cases. See 2019 Rule, 84 Fed. Reg. at 69,525. The pre-2014
rules provided for twenty-five to thirty calendar days between
the direction of election and the election itself, which is
functionally equivalent to the twenty business days specified in
the 2019 Rule. See id. at 69,545. And the evidence in the
40
record shows that this timing change did not affect the rate at
which unions or employers prevailed. See id. at 69,528; D.A.
103.
Finally, the election-scheduling provision is directed
toward improving the efficient and effective operations of the
Board, which generally indicates a procedural, rather than
substantive, rule. See Mendoza, 754 F.3d at 1023. The
provision itself specifies that the twenty-business-day period is
“to permit the Board to rule on any request for review which
may be filed,” 2019 Rule, 84 Fed. Reg. at 69,595 (codified at
29 C.F.R. § 102.67(b)), reflecting the agency’s preferred
approach to “internal house-keeping.” Bowen, 834 F.2d at
1045. As the Board elaborated in the Rule, it gives the Board
“a realistic opportunity” to “decid[e] issues prior to the election
. . . [and] contribute[s] to a more efficient resolution of the
question of representation by clearing away issues that may
otherwise linger on after the election.” 2019 Rule, 84 Fed. Reg.
at 69,546.
The precise timing of an election does not itself alter any
extant legal duty; it presumptively delays the process for
determining whether the employer’s legal duty to bargain
(among other duties) will even arise. That distinguishes the
Board’s election timing provision from the provision delaying
certification of election results. Only the latter directly alters
an employer’s legal duty and its employees’ associated
substantive right during a certain period post-election. See
supra Section II.A.2. We accordingly conclude that our
precedent places the election-timing provision on the
procedural side of the section 553 procedural/substantive
dividing line even as the delayed-certification provision is
properly treated as substantive. See Mendoza, 754 F.3d at
1023-24.
41
In sum, we hold that the Board acted permissibly in
treating the election-scheduling provision as a procedural rule
and promulgating it without notice and comment.
III. Arbitrary-and-Capricious Challenge to the 2019 Rule
as a Whole
In its cross-appeal, the AFL-CIO claims that the 2019 Rule
as a whole is arbitrary and capricious in violation of the APA.
It emphasizes the “uncontroverted evidence” that the 2014
Rule significantly reduced the overall duration of
representation cases. AFL-CIO Principal & Response Br. 44;
see also id. at 47. And it argues that the Board’s rationale that
the 2019 Rule promotes finality is insupportable given that the
Rule “extend[s] multiple deadlines, permit[s] more litigation,
and delay[s] the attachment of legal duties.” Id. at 44. The
AFL-CIO accuses the Board of ignoring data on the 2014
Rule’s effect on case timelines, id. at 47-48, and criticizes the
Board for “not even cit[ing] anecdotal evidence of problems
with the deadlines” established by the earlier rule, id. at 51.
But, as the district court explained, “the record establishes
that the Board exercised its discretion with relevant
information in hand and with eyes wide open concerning the
impact of the significant changes that it was adopting.” AFL
II, 471 F. Supp. 3d at 241 (citing Am. Hosp. Ass’n v. NLRB,
499 U.S. 606, 618-19 (1991)). Thus, the 2019 Rule as a whole
passes muster under the APA.
In the extensive preamble to the 2019 Rule, running more
than thirty pages, the Board repeatedly acknowledges that its
changes will result in longer waits before elections relative to
the 2014 Rule. See, e.g., 2019 Rule, 84 Fed. Reg. at 69,528,
69,546, 69,557. And the Board expressly notes the evidence
that the AFL-CIO says it ignored—“that the median time
between the filing of a petition and the election has been
42
significantly reduced since the 2014 amendments became
effective.” Id. at 69,528; see also id. at 69,528 n.15 (citing
statistics on case lengths). The Board nonetheless concludes
that the 2014 Rule’s “gains in speed have come at the expense
of other relevant interests,” like transparency and uniformity,
and finality and certainty, id. at 69,528-29, and, in the 2019
Rule, made “non-statistical policy choices” about how to
further those other interests, id. at 69,557.
The Board gives a rational account of how the 2019 Rule
advances interests apart from speed. For example, the Board
adequately explains that the election-scheduling provision—
which supplements the “earliest date practicable” language
with a default minimum period of twenty business days—
promotes transparency and uniformity by making the timing of
elections more predictable for parties. See id. at 69,546. It also
explains that the provision regarding pre-election litigation of
voter eligibility, unit scope, and supervisory status could
provide employee-voters with more complete information
about “who they are voting to join in collective bargaining.”
Id. at 69,541.
On finality, the district court aptly distinguished between
the different forms that interest might take, and how the Board
might value one form over another. On the one hand is the kind
of finality that “requires all disputes about the outcome of an
election to be resolved prior to certification,” which prizes the
“definitiveness” of certification. AFL II, 471 F. Supp. 3d at
242. On the other hand is “finality in terms of efficient election
results that facilitate relatively rapid certification,” but with the
potential that such a certification could be undone if the Board
ultimately granted a request for review. Id.
In the 2019 Rule, the Board makes clear its preference for
the former kind of finality. Early on, the Board asserts
43
generally that “[t]he mere fact that elections are taking place
quickly does not necessarily mean that this speed is promoting
finality or the most efficient resolution of the question of
representation.” 2019 Rule, 84 Fed. Reg. at 69,529 (emphasis
added). Later, in the context of the provision calling for pre-
election resolution of issues like unit scope, it explains that “the
Board should strive to maximize the opportunity for an election
vote to provide immediate finality, subject only to the filing of
objections to conduct allegedly affecting the results,” which
necessarily cannot be litigated before an election. Id. at 69,540.
Regardless of whether one agrees with those explanations as a
policy matter, we cannot say they are irrational.
The Board’s weighing of competing interests—including
variations on the same interest—in the 2019 Rule was
reasonable and sufficiently explained. The Rule therefore is
not arbitrary and capricious as a whole.
IV. The 2019 Rule’s Impoundment Provision
Under the 2019 Rule, if a party files a request for review
of a direction of election within ten business days of its
issuance by the Regional Director, and the Board either grants
the request or does not rule on it before the election occurs, then
“all ballots shall be impounded and remain unopened pending
such ruling or decision.” 84 Fed. Reg. at 69,595 (codified at
29 C.F.R. § 102.67(c)). The AFL-CIO claims that the
impoundment provision violates the APA in two respects.
First, it argues that the provision is arbitrary and capricious, in
part because it “forc[es] the Board to automatically decide any
issue timely raised in a request for review without evaluating
whether the particular issue is likely to be rendered moot by the
election results.” AFL-CIO Principal & Response Br. 54.
Second, the AFL-CIO argues that the provision is contrary to
law, namely, section 3(b) of the Act.
44
Section 3(b) of the Act allows the Board to delegate certain
powers regarding the resolution of representation cases to
Regional Directors. As relevant here, it provides that “the
Board may review any action of a regional director delegated
to him under this paragraph, but such a review shall not, unless
specifically ordered by the Board, operate as a stay of any
action taken by the regional director.” 29 U.S.C. § 153(b).
Because we hold that the impoundment provision is contrary to
law as a prohibited stay of action by Regional Directors and
vacate it on that basis, we need not address the AFL-CIO’s
claim that it is arbitrary and capricious.
The impoundment provision “operate[s] as a stay” for
purposes of section 3(b). Id. As the Board concedes,
impoundment “postpones the count[ing]” of ballots. 2019
Rule, 84 Fed. Reg. at 69,548. And the counting of ballots is an
“action taken by the regional director” as part of her delegated
authority under section 3(b). 29 U.S.C. § 153(b). The
impoundment provision thus falls squarely within the meaning
of a “stay” under section 3(b).
The Board strains against the statute’s plain text. It argues
that section 3(b) speaks only to “a stay of any action taken by
the regional director,” NLRB Response & Reply Br. 59
(citation omitted), and that, because impounding ballots
happens “before the Regional Director issues a certification,
that is, before an action has been ‘taken,’” it is not a “stay”
within the meaning of that section, id. at 61. Alternatively, the
Board argues that, even if section 3(b) were ambiguous as to
whether impounding ballots is “a stay of any action taken”—
because “taken” might refer only to past action or both past and
future action—its interpretation of 3(b) as referring only to past
action is reasonable. See id. at 63-68.
45
The Board’s arguments miss the mark. Section 3(b) is
clear: “a stay of any action taken” applies to past, present, and
future actions taken by the Regional Director. As the AFL-
CIO explains, the word “taken” in section 3(b) is a “participial
adjective modifying the noun ‘action,’” not part of a “past tense
verb phrase.” AFL-CIO Principal & Response Br. 59. Used in
that way, the word “taken” is timeless; it refers to past, present,
and future action. See Henson v. Santander Consumer USA
Inc., 137 S. Ct. 1718, 1722 (2017); see also Diss. Op. 19 n.5.
Accordingly, impoundment “operates as a stay” under section
3(b) regardless of whether the impoundment occurs before the
Regional Director issues a certification. 29 U.S.C. § 153(b).
Even if section 3(b) were ambiguous (it is not), the Board’s
interpretation would not carry the day. In reviewing agency
action, “we look only to what the agency said at the time of the
rulemaking—not to its lawyers’ post-hoc rationalizations.”
Good Fortune Shipping SA v. Comm’r, 897 F.3d 256, 263
(D.C. Cir. 2018) (internal quotation marks and citation
omitted). The Board’s explanation in the preamble does not so
much as mention the word “taken.” See 2019 Rule, 84 Fed.
Reg. at 69,547-49. And the cursory explanation that the Board
did provide does not do the trick. In attempting to reconcile
the impoundment provision with section 3(b) of the Act, the
Board said that “impounding the ballots is not a ‘stay’ of the
regional director’s action” because “impoundment only
postpones the count.” Id. at 69,548. But insisting that
something is not a “stay” because it is actually a
“postpone[ment]” is no explanation at all. The Board’s defense
of its impoundment provision, thus, fails to persuade.
Our dissenting colleague’s alternative defense of the
Board’s impoundment provision fares similarly. She agrees
with our conclusion that the provision operates as a stay, see
Diss. Op. 18-19, but contends that “the Board has specifically
46
ordered a stay” via “rulemaking,” making it permissible under
section 3(b), id. at 20. Tellingly, the Board did not itself rely
on the “specifically ordered” clause in section 3(b) as an
affirmative argument. See NLRB Response & Reply Br. 58-
69.
The dissent’s reading of that clause is not viable. Recall
that section 3(b) provides:
[U]pon the filing of a request therefor with the Board
by any interested person, the Board may review any
action of a regional director delegated to him under
this paragraph, but such a review shall not, unless
specifically ordered by the Board, operate as a stay
of any action taken by the regional director.
29 U.S.C. § 153(b). The statutory text makes plain that
“specifically ordered by the Board” means ordered in a given
case, not ordered as a general matter by rulemaking. Id.Indeed, the phrase “unless specifically ordered by the Board”
modifies the circumstances under which “such a review shall
not . . . operate as a stay of any action taken by the regional
director.” Id. (emphasis added). “[S]uch a review” refers to
the Board’s review in a particular case; it is “a review” that
arose “upon the filing of a request therefor with the Board.” Id.In sum, section 3(b) permits the Board’s “review” in a
particular case to “operate as a stay of any action taken by the
regional director” only when “specifically ordered by the
Board” in that case. Id. Section 3(b)’s “specifically ordered”
clause does not disturb our conclusion that the impoundment
provision is contrary to law.
***
For the foregoing reasons, we affirm the district court’s
rulings that it had jurisdiction over the AFL-CIO’s challenge to
47
the 2019 Rule, and that the Rule is not arbitrary and capricious
as a whole. However, we reverse in part the district court’s
ruling on the APA’s procedural exception, leaving the court’s
vacatur in place only as to the provisions regarding an
employer’s production of voter lists, delayed certification, and
election observers. Those three provisions must remain
vacated unless and until the Board repromulgates them with
notice and comment. We also reverse the district court’s ruling
that the impoundment provision is not contrary to law and thus
vacate that provision as well.
Because we reverse in part the district court’s ruling on the
APA’s procedural exception but affirm its ruling that the Rule
is not arbitrary and capricious as a whole, we remand for the
court to consider the AFL-CIO’s remaining claims—the
undecided claims in Counts Three and Four—in the first
instance.
So ordered.
RAO, Circuit Judge, concurring in the judgment in part and
dissenting in part: The National Labor Relations Board has
adjusted the rules for representation elections more than three
dozen times without notice and comment since 1961. The 2019
Rule at issue here is the latest iteration. It reverses several 2014
changes to details of election administration. Applying an
obsolete legal standard, the majority holds for the first time that
some of the Rule’s provisions are substantive and therefore do
not fall under the Administrative Procedure Act’s (APA)
exception to notice and comment for procedural rules. See 5
U.S.C. § 553(b)(A). Under the correct standard, however, these
are classic procedural rules and notice and comment was not
necessary. In promulgating them, the Board balanced one
procedural interest (speed) against others (like finality and
transparency). I would also uphold an undisputedly procedural
provision that requires ballots to be impounded pending review
of an election by the Board because the provision is consistent
with statutory requirements and reasonably explained.
The Board has discretion to direct and manage disputes
over representation, and it has properly issued procedural rules
that do so. Because I would uphold the 2019 Rule in its entirety,
I respectfully dissent.
I.
The Board oversees the formation of collective bargaining
relationships between private companies and their employees.
National Labor Relations Act of 1935, Pub. L. No. 74-198, 49Stat. 449 (codified as amended at 29 U.S.C. §§ 151–69). When
employees seek to unionize, the Board is responsible for
directing elections and certifying the results. 29 U.S.C.
§ 159(c). As part of this responsibility, the Board has long
prescribed and regularly updated rules for election
administration. The majority summarizes this history but
glosses over two important points. First, the overwhelming and
2
previously unchallenged practice of the Board has been to issue
rules of election administration without notice and comment.
Second, these rules have consistently balanced procedural
interests, particularly the speed, finality, transparency, and
uniformity of elections. The 2019 Rule is no different.
The Board first promulgated a set of rules to govern
elections in 1961. The rules revamped the entire election
process, delegated authority to regional directors to resolve
pre-election disputes and run elections, and significantly
decreased the time it took to conduct elections. Representation-
Case Procedures, Notice of Proposed Rulemaking, 79 Fed.
Reg. 7,318, 7,320 (Feb. 6, 2014) (recounting history). The
Board nevertheless issued the rules without notice and
comment. In the following decades, the Board modified its
election rules more than three dozen times, always without
notice and comment. Representation-Case Procedures, Final
Rule, 79 Fed. Reg. 74,308, 74,310 (Dec. 15, 2014). When, in
2011 and 2014, the Board broke with this practice and used
notice and comment to modify its election rules, it emphasized
that notice and comment was unnecessary. Id. at 74,311;
Representation-Case Procedures, Final Rule, 76 Fed. Reg.
80,138, 80,148 (Dec. 22, 2011). The Board promulgated the
2019 Rule at issue here without notice and comment,
explaining that the Rule was procedural and the additional
process unnecessary. Representation–Case Procedures, Final
Rule, 84 Fed. Reg. 69,524, 69,528 (Dec. 18, 2019).
The Board has correctly classified election rules as
procedural for over 60 years.1 Adjustments to the rules have
been aimed at archetypal procedural values, such as ensuring
1
If the election rules were properly deemed substantive, a
longstanding practice of the Board would not insulate them from the
requirements of notice and comment rulemaking.
3
votes are “recorded accurately, efficiently and speedily.” See
NLRB v. A.J. Tower Co., 329 U.S. 324, 331 (1946) (describing
the Board’s goals for its election rules and regulations). The
oscillation over time can be explained by the fact that some
values compete and experience may cause the Board to strike
a different balance. For example, the Board has long worked to
speed up the election process, including in the 2014 Rule. 84
Fed. Reg. at 69,528. But the Board has also sought to improve
the transparency, uniformity, and finality of elections. Id. at
69,529.
In 2019, the Board made some modifications to promote
finality and predictability, explaining the “gains in speed” over
the years had “come at the expense of other relevant interests.”
Id. at 69,528–29. The Board acknowledged the changes might
come “at the cost of some promptness,” but concluded the
benefits outweighed the costs. Id. at 69,548. “[T]he mere fact
that an election is conducted promptly does not mean that the
question of representation has been resolved.” Id. at 69,545.
The Board has an interest in promoting finality and certainty to
employers and unions, ensuring that election challenges do not
“linger on … for weeks, months, or even years.” Id. at 69,529.
As it has for more than six decades, the Board considered and
traded off various procedural values in its latest modification
to the rules governing election administration.
II.
The AFL-CIO argues that the 2019 Rule is substantive and
thus the Board was required to follow notice and comment
procedures. When an agency promulgates a rule, usually it
must publish notice in the Federal Register and submit the rule
to the public for comment. 5 U.S.C. § 553(b)–(c). But some
rules are exempt, including “rules of agency organization,
procedure, or practice.” Id. § 553(b)(A). This case requires us
4
to distinguish “substantive” rules on the one hand, which are
subject to notice and comment, from “procedural” rules on the
other, which are not. While the line between substantive and
procedural rules is sometimes difficult to discern, following the
principles articulated by our decisions over the last few
decades, the 2019 Rule is procedural and therefore was
properly promulgated without notice and comment.
To determine whether a rule is procedural or substantive,
we ask whether it “encodes a substantive value judgment.”
Pub. Citizen v. Dep’t of State, 276 F.3d 634, 640 (D.C. Cir.
2002) (quoting Am. Hosp. Ass’n v. Bowen, 834 F.2d 1037, 1047
(D.C. Cir. 1987)). In particular, a substantive rule encodes a
value judgment about primary conduct whereas a procedural
rule governs secondary conduct. See Air Transp. Ass’n of Am.
v. Dep’t of Transp., 900 F.2d 369, 383 (D.C. Cir. 1990)
(Silberman, J., dissenting), remanded, 498 U.S. 1077 (1991),
vacated as moot, 933 F.2d 1043 (D.C. Cir. 1991); JEM Broad.
Co. v. FCC, 22 F.3d 320, 328 (D.C. Cir. 1994) (disavowing the
Air Transport majority’s reasoning and noting the majority is
no longer binding precedent); cf. Landgraf v. USI Film Prods.,
511 U.S. 244, 275 (1994) (“[R]ules of procedure regulate
secondary rather than primary conduct.”). For example,
“judgment[s] about what mechanics and processes are most
efficient” are procedural. JEM Broad., 22 F.3d at 328. A
procedural rule does not become substantive solely because the
parties prefer one type of procedure over another. “All
decisions, to the extent that they derive from reasons,
necessarily are based on the value judgment that the chosen
option is better, in some relevant way, than its alternatives.”
James V. Hurson Assocs., Inc. v. Glickman, 229 F.3d 277, 282
(D.C. Cir. 2000).
The mine run of facially procedural rules will in fact be
procedural; however, even a rule that is facially procedural may
5
be deemed substantive if the effects are so “sufficiently grave”
or create such an “extreme procedural hurdle[]” that the
substance swallows the procedure. See Lamoille Valley R.R. v.
ICC, 711 F.2d 295, 328 (D.C. Cir. 1983). Moreover, if a rule
of procedure “substantively affects the public” in some
ancillary way, it might require notice and comment because of
those impacts. Elec. Priv. Info. Ctr. v. U.S. Dep’t of Homeland
Sec., 653 F.3d 1, 6 (D.C. Cir. 2011) (“EPIC”) (recognizing the
“personal privacy” impact on the public of TSA technology
that produced “an image of the unclothed passenger”).
Instead of following these decisions, the majority in effect
applies a 1970s framework in which “substantial impact” was
the touchstone of a substantive rule. See Pickus v. U.S. Bd. of
Parole, 507 F.2d 1107, 1112 (D.C. Cir. 1974). While nodding
to our more recent cases, the majority primarily evaluates
whether the 2019 Rule has something like a “substantial
impact” on the parties. The majority begins its analysis of each
rule by looking at the degree to which “substantial” rights or
interests are impacted. This is the wrong threshold question—
at the outset we consider whether a rule regulates primary or
secondary conduct. A rule is presumed procedural when it
regulates only secondary conduct and the mere fact that such a
rule impacts legal rights does not make it a substantive rule.
The majority avoids the language of substantial impact, but
uses synonyms that amount to the same thing, considering
whether the Rule “direct[ly] impact[s],” “burdens,” “affects,”
“curtails,” or “trenches on” various rights and interests.
The majority’s analysis is directly at odds with this
circuit’s more recent decisions. We have repeatedly held that a
“substantial impact” or “substantial burden” does not make a
rule substantive. See Glickman, 229 F.3d at 281 (“[E]ven if the
[rule] did impose a substantial burden … that burden would not
convert the rule into a substantive one that triggers the APA’s
6
notice-and-comment requirement.”); EPIC, 653 F.3d at 5 (“[A]
rule with a ‘substantial impact’ upon the persons subject to it is
not necessarily a substantive rule under § 553(b)(3)(A).”); cf.
Cabais v. Egger, 690 F.2d 234, 237 (D.C. Cir. 1982) (noting,
in the context of interpretive rules, that just because an “agency
action has substantial impact does not mean it is subject to
notice and comment”). We retired the substantial impact or
burden test because “even unambiguously procedural measures
affect parties to some degree.” Pub. Citizen, 276 F.3d at 640
(cleaned up).
Moreover, determining whether a rule impacted, affected,
or burdened substantive rights did not track the text of the APA
or comply with the Supreme Court’s command in Vermont
Yankee to avoid extratextual procedures. See Cabais, 690 F.2d
at 237 (“Since Vermont Yankee, it is clear that a court cannot
engraft additional procedures on agency action beyond those
contemplated by the APA.”) (cleaned up). As we have
recognized, “[o]f course, procedure impacts … outcomes and
thus can virtually always be described as affecting substance,
but to pursue that line of analysis results in the obliteration of
the distinction that Congress demanded.” JEM Broad., 22 F.3d
at 326 (quoting Air Transp., 900 F.2d at 383 (Silberman, J.,
dissenting)).
If a rule is procedural on its face that will usually be the
end of the matter unless the effects of the rule are “sufficiently
grave” or create an “extreme procedural hurdle.” Lamoille
Valley, 711 F.2d at 328. In true boundary cases, our standards
recognize that the distinction between procedural and
substantive rules may collapse and that unusual or onerous
procedures may in fact be more akin to substantive rules.
Considering the edge cases of “extreme procedural hurdles”
ensures agencies are not regulating the primary conduct of
private parties without public notice and comment.
7
To summarize, for a procedural rule to fit within the
APA’s exception to notice and comment requirements, it must
regulate secondary conduct and not enshrine a substantive
value judgment. Because all procedural rules have some impact
on how rights are exercised, we no longer apply the type of
sliding scale called for by the substantial impact test, which
required courts to somehow assess the magnitude of effects on
regulated parties of a rule of agency procedure. The extent of
the impacts or burdens on primary rights does not provide the
dividing line between substantive and procedural rules,
although it may mark when a procedural rule has such extreme
effects that it is properly considered substantive.
III.
The 2019 Rule does not encode a substantive value
judgment, and it governs only secondary conduct by
establishing procedures for representation elections. The
relevant primary conduct, namely the rights protected by the
National Labor Relations Act, is employee representation for
the purpose of collective bargaining, which must be determined
in “an election by secret ballot.” See 29 U.S.C. § 159(c)(1).
These rights remain untouched by the Rule. The majority does
not contest the Rule governs secondary conduct. Rather the
majority simply applies the old standard and tries to gauge the
extent of any impacts of these procedural choices on the rights
of unions and employers.
Applying the correct standards, the critical fact for the
challenged provisions in the 2019 Rule is that they do not
change the “substantive standards” governing who wins and
who loses elections, or who is part of the bargaining unit. See
Jem Broad., 22 F.3d at 327. The majority never claims they do.
Instead, each provision changes the details of how an election
is conducted. Any substantive effect is incidental. See Bowen,
8
834 F.2d at 1047. The effects of the rule are apparently minor,
as the majority nowhere suggests that the procedures have
grave or extreme impacts. The five provisions are properly
classified as procedural, and therefore notice and comment was
not required for any of them. I address each of the rules in turn.
A.
Pre-Election Litigation Timing. Employers and unions
may disagree about which employees are part of the bargaining
unit and thus eligible to vote in any election. If such a dispute
arises, the parties may resolve it by agreement or by
adjudication in front of the Board. Under the 2014 Rule, the
election would go forward, even if a dispute were still pending.
79 Fed. Reg. at 74,482. The 2019 Rule reverses the timing:
“Disputes concerning unit scope, voter eligibility and
supervisory status will normally be litigated and resolved by
the Regional Director before an election is directed.” 84 Fed.
Reg. at 69,593. This is a classic procedural rule that favors
finality over speed and reflects no substantive value judgments.
The provision does not change whether the election will occur
or who will win, only when and how the election happens. I
agree that this is a procedural rule. Maj. Op. 37.
B.
Election Scheduling. Once a regional director orders an
election, it must be scheduled. The 2019 Rule requires that the
election be scheduled on “the earliest date practicable” but
“normally not … before the 20th business day after” an election
is directed. 84 Fed. Reg. at 69,595. The 2014 Rule, on the other
hand, required elections to be scheduled as early as practicable.
79 Fed. Reg. at 74,485. Such scheduling implicates no
substantive value judgment, but rather promotes the procedural
concern for finality, allowing the Board sufficient time to
resolve eligibility disputes in advance. As with the provision
9
concerning pre-election litigation, this provision does not
change whether the election will occur, only when. The 20-day
provision is also procedural, as the majority concludes. Maj.
Op. 41.
C.
Voter List Timing. Once an election has been directed, the
employer must provide a list of all eligible voters to the union
and the Board. This voter list contains names, job titles, and
contact information to facilitate the union’s campaign
activities. Before 2014, employers had seven days to turn over
the list. 84 Fed. Reg. at 69,527. The 2014 Rule reduced the time
to two business days. Id. The 2019 Rule provides five business
days. Id. at 69,526. The majority concludes the provision is
substantive because it “‘trenches on’ the union’s substantive
interest in campaigning on equal footing.” Maj. Op. 20. The
majority, however, applies the wrong legal standard and
therefore reaches the wrong legal conclusion.
To begin with, the rule is facially procedural because it
does not “alter the substantive criteria” by which elections are
won or lost. See Glickman, 229 F.3d at 281. Five business days
for exchanging voter lists embodies no substantive value
judgment and merely implements an established pre-election
procedure. In moving from two to five days, the Board
explained that “providing more time to produce the voter list
will reduce the potential for inaccurate lists, as well as the
litigation and additional party and Agency expenditures that
may result therefrom.”2 84 Fed. Reg. at 69,532. The rule serves
2
The majority asserts five days is unreasonable because the Board in
2014 found two days a reasonable time frame for providing the voter
lists. Maj. Op. 22. But what the Board thought reasonable at one time
cannot serve as the perennial benchmark for what is reasonable in the
future. Importantly, here the Board recognized that although
10
procedural concerns, like facilitating accurate lists, promoting
agreement, and avoiding litigation. Id. at 69,532.
When a procedural rule concerns the timeframe for
asserting substantive rights, “the proper question is whether the
time allotted is so short as to foreclose effective opportunity to
make one’s case on the merits.” Lamoille Valley, 711 F.2d at
328. An unusually short time frame could impose the type of
“extreme procedural hurdle[]” that converts a procedural rule
into a substantive one. Id. No extreme hurdle exists here.
Moving from two business days to five, in a pre-election period
that normally lasts a minimum of 20 business days, hardly
forecloses a union’s ability to campaign or imposes an extreme
procedural hurdle. Rather it is the type of “incidental
mechanical burden[] on regulated” parties that we have
classified as procedural. See Bowen, 834 F.2d at 1051.
The majority does not identify any substantive value
judgment encoded in the voter list provision. Nor does it
suggest that the rule regulates primary conduct. Instead, the
majority concludes the provision is substantive because the
union has an “interest in campaigning on equal footing” and
the voter list provision “necessarily burdens [that] interest.”
Maj. Op. 21. This analysis effectively returns to the obsolete
“substantial impacts” test, here perhaps just an “impacts” test.
See Maj. Op. 26 (expressing skepticism that three days “has de
minimis impact”) (cleaned up).
“technological changes … may permit some employers to more
quickly compile and transmit the voter list,” this was not true for all
employers and additional challenges existed for “decentralized
employers,” the “construction industry,” and “joint or multi-
employer arrangements.” 84 Fed. Reg. at 69,531–32. In light of that
finding, the Board could reasonably adjust the timeline for providing
voter lists.
11
On the majority’s reasoning, election rules will rarely be
procedural, and the Board has been acting improperly for
decades.3 The reality, of course, is that every election rule will
have some impact on the parties to an election. The majority’s
reasoning is precisely that the burden, which looks a lot like a
“substantial impact,” makes the rule substantive. This runs
contrary to this court’s repeated recognition that all procedural
rules place some burden on regulated parties and therefore that
such burden alone does not make a rule substantive. See, e.g.,
Glickman, 229 F.3d at 281 (“[A]n otherwise-procedural rule
does not become a substantive one, for notice-and-comment
purposes, simply because it imposes a burden on regulated
parties.”).
Two days is reasonable to wait for a voter list, but not
five—what about three or four days? Judicial parsing of an
agency’s procedural choices has never been the standard for
drawing a line between substantive and procedural rules. Under
our precedents, in the absence of some showing that the five-
day timeline effectively forecloses the union’s rights, simply
stating that the rule imposes some burdens does not make it a
substantive rule.
D.
Certification Timing. The regional directors “shall certify
the results” of representation elections. 29 U.S.C. § 159(c)(1);
3
The majority also emphasizes the voter list “facilitates the
transmission of information between parties,” not just between one
party and the Board. Maj. Op. 23. But a procedure governing conduct
between parties with respect to an election supervised by the Board
can be a procedural rule under section 553(b)(A), and I am aware of
no case in which we have held that a rule of procedure becomes
“substantive” simply because it governed the procedure between
parties to an agency proceeding.
12
see also id. § 153(b). Under the 2014 Rule, certification
proceeded regardless of whether a request for review of the
election was pending before the Board. 79 Fed. Reg. at 74,487.
Under the 2019 Rule, a regional director may certify election
results only after Board review is complete. 84 Fed. Reg. at
69,526. Like the other provisions, the timing for certification
governs the procedures of elections. It does not affect who wins
or loses an election, and it does not change the substantive
criteria for representation. See Glickman, 229 F.3d at 281.
Delaying certification until Board review is complete may
affect the right to bargain because certification is the moment
from which substantive legal rights attach. See 29 U.S.C.
§ 158(a)(5). The majority considers this “effect … on the right
to collective bargaining” sufficient to make the certification
timing a substantive rule. Maj. Op. 29 (discussing the Rule’s
“direct impact”). This again misstates the relevant standards,
because we do not consider the “effect” or “direct impact” of
procedural requirements to gauge whether they are a
substantive regulation. Choosing to delay certification does not
reflect a substantive value judgment. When the “timetable for
asserting substantive rights” is at issue, “the proper question is
whether the time allotted is so short as to foreclose effective
opportunity to make one’s case on the merits.” Lamoille Valley,
711 F.2d at 328. Or put another way, agencies are allowed to
“establish a terminal point” in procedural rules, even if the
timing of substantive rights are affected. See JEM Broad., 22
F.3d at 326. Only when a procedural timeline is “sufficiently
grave” does it become a substantive rule.
The certification timing rule simply requires the regional
director to wait for Board review before certifying the results
of an election. The rule does not change whether certification
will occur or whether employees will be represented. Instead,
it sequences the Board and regional director’s actions to
13
promote certainty and finality and avoid unnecessary litigation.
The majority does not suggest the timeline here would have any
grave impacts, perhaps because in practice the additional delay
from the 2019 Rule ranges from minimal to nonexistent. To
challenge an election in court, the employer must “refuse to
bargain with the union certified by the Board” and wait for “an
unfair labor practice complaint” to be filed. Physicians Nat’l
House Staff Ass’n v. Fanning, 642 F.2d 492, 495 (D.C. Cir.
1980) (en banc). Yet, if the election is complete, the employer
has a legal obligation to bargain. To mitigate this catch-22,
regional directors “generally hold refusal-to-bargain charges in
abeyance” pending an employer’s challenge to the election.4 84
Fed. Reg. at 69,555. As a practical matter, this means the legal
rights flowing from certification, namely rights to collective
bargaining, are usually stayed, which for all intents and
purposes is the same as staying certification. The 2019 Rule
delays certification until after Board review, which has the
same results as the 2014 Rule, but without “needless
litigation.” Id.
Numerous decisions of this circuit have recognized that
rules adjusting the timing for exercising substantive rights are
procedural. For instance, in Public Citizen, we addressed a
State Department policy against searching for any FOIA
documents produced after the date of the request. 276 F.3d at
637. The FOIA policy affected what documents would be
produced. See id. We nonetheless found the so-called “cut-off
policy” encoded “no substantive value judgment” because it
applied equally to all FOIA requests. Id. at 641 (cleaned up).
Therefore, we concluded the policy was a “prototypical
4
The majority labels the practice of staying refusal-to-bargain
charges as “underenforcement.” Maj. Op. 27. But a stay is not
underenforcement, just delayed enforcement, which is why this
provision is procedural.
14
procedural rule properly promulgated without notice and
comment.” Id. Similarly, in Lamoille Valley, a rule shortened
the timeline for railroads to respond to a proposed merger from
90 days to 60 days. 711 F.2d at 327. Because it was a
procedural schedule that did not foreclose the effective
opportunity to win on the merits, we upheld it as a procedural
rule. Id. at 328. Finally, in JEM Broadcasting, we found a rule
establishing a “fixed filing period” of 30 days for FM station
license applications, with no opportunity to correct, was a
“straightforward” procedural rule. 22 F.3d at 322, 326.
Although the rule could be “described as affecting substance”
and might even be “harsh” in some cases, it did not change the
“substantive standards by which the FCC evaluate[d] license
applications.” Id. at 326–27 (cleaned up). This was fatal to the
claim that the rule was substantive. The court concluded that
establishing a cut-off date was part of a necessary and
reasonable procedural rule. Id. at 327.
The majority fails to distinguish these cases. It makes a
puzzling suggestion that there is a material difference between
“asserting” and “exercising” substantive rights, such that the
timing for asserting rights is procedural, but the timing for
exercising rights is substantive. Maj. Op. 27–28. Yet the
assertion and exercise of rights is invariably linked, and so it is
unsurprising that the majority’s distinction finds no support in
the APA and has been rejected by our caselaw.
The majority’s approach—labeling some rights
substantive and important and others less so—will result in
uncertainty and produces contradictory results even in this
case. Delayed certification is supposedly substantive because it
“directly alters an employer’s legal duty and its employees’
associated substantive right.” Maj. Op. 40. On this reasoning,
the rule that postpones an election for some 20 days would also
be substantive because it necessarily postpones certification
15
and the attachment of the employer’s legal duty. Yet the
majority properly classifies the 20-day rule as procedural.
Because both rules have some effects or impacts on the parties’
rights, the majority’s different treatment amounts to finding
one provision has more substantial effects than the other, in
contravention of our caselaw.
Most timelines for regulatory procedure have some impact
on substantive rights, but without a showing that the timeline
egregiously undermines those rights, we have accepted them as
an ordinary and essential aspect of agency procedures. Like the
20-day rule, the certification timing provision is a reasonable
procedural choice and notice and comment was not necessary.
E.
Election Observer Qualifications. From its earliest days,
the Board has allowed parties to have observers at elections as
a “courtesy” or “privilege.” 84 Fed. Reg. at 69,551. The Board
has held it is not an abuse of discretion to revoke this courtesy.
Id. Although the Board generally lets the parties select their
own observers, that practice is subject to limitations imposed
by the regional directors or the Board. To make this process
more transparent and efficient, the 2019 Rule provides that
“whenever possible, a party shall select a current member of
the voting unit as its observer, and when no such individual is
available, a party should select a current nonsupervisory
employee as its observer.” Id. at 69,552.
This is a typical procedural rule. It streamlines a
discretionary process the Board has created to improve the
administration of elections. A rule is properly classified as
procedural if it addresses secondary conduct. The procedural
exception “covers agency actions that do not themselves alter
the rights or interests of parties, although it may alter the
manner in which the parties present themselves.” See JEM
16
Broad., 22 F.3d at 326 (quoting Batterton v. Marshall, 648 F.2d
694, 707 (D.C. Cir. 1980)). The “rights or interests of parties”
in this context means primary rights and interests, not an
interest in a particular kind of procedure. See id. at 328.
Because the election observer provision does not alter the
scope of representation, it does not impose a new “substantive
burden.” Maj. Op. 33 (cleaned up).
The majority cannot label the election observer rule as
substantive because the rule does not encode a substantive
value judgment. The Board’s judgment, to allow non-Board
observers, is a procedural one. The wholly discretionary
practice of allowing election observers helps “assure the parties
and the employees that the election is being conducted fairly”
and avoids the appearance of “partiality on the part of the
Board.” 84 Fed. Reg. at 69,551. The point is transparency in an
election procedure under the control of the Board. This is not a
“substantive value judgment” within the meaning of our cases.
All actions are necessarily “based on the value judgment that
the chosen option is better, in some relevant way.” Glickman,
229 F.3d at 282. When that value judgment goes to procedural
values, like ensuring agency operations are accurate,
transparent, and efficient, the rule is properly procedural. See
JEM Broad., 22 F.3d at 328.
The majority also misidentifies the relevant substantive
interest. The parties have no interest in election observers for
their own sake. Observation is just one procedure that helps
protect the right to collective bargaining. See 29 U.S.C.
§ 159(a). Such procedures are ordinarily not substantive, even
though they may impact substantive rights. For instance, we
have held that a rule requiring audits be performed by
nonagency accountants was procedural because the substantive
requirement of an audit was unchanged—the rule affected only
the question of how to “satisfy the audit requirement.”
17
Guardian Fed. Sav. & Loan Ass’n v. Fed. Sav. & Loan Ins.
Corp., 589 F.2d 658, 665 (D.C. Cir. 1978) (cleaned up). Here,
an election observer is like an auditor. A party might want a
particular observer, but only because the observer helps it
assert a substantive interest, not because the choice of observer
changes that substantive interest.
The majority does not identify what effects the election
observer rule will have on the outcome of elections. In fact, it
is hard to imagine it will have any. The mere fact that the rule
may have some impact on elections does not suffice to turn a
facially procedural rule into a substantive one. Nor does the
majority find, as it must, that the effects here are “sufficiently
grave.” See Lamoille Valley 711 F.2d at 328. The election
observer rule is procedural and should be upheld.
* * *
The 2019 Rule does not change the scope of collective
bargaining or the standards by which those rights are reviewed;
rather, it adjusts schedules, timelines, and monitoring
mechanisms. Like all procedural rules, the challenged
provisions may affect how parties exercise their rights, but
nothing here imposes the type of extreme procedural hurdle
that converts a facially procedural rule into a substantive one.
Under this circuit’s precedents, each of the provisions is
properly classified as a procedural rule and therefore was
permissibly promulgated without notice and comment.
IV.
Before 2014, when a party sought review within 14 days
of the direction of an election, all ballots were impounded and
remained unopened pending review. 84 Fed. Reg. at 69,547.
The 2014 Rule eliminated the impoundment provision. The
2019 Rule charts a middle course. Now if a party files for
18
review within ten days of the direction of an election, disputed
ballots are segregated and impounded pending a decision of the
Board. A request for review may be filed later than ten days,
but ballots are not impounded. Id. at 69,526.
The parties agree the impoundment provision is
procedural. The AFL-CIO argues it should be set aside on two
grounds: (1) The provision is arbitrary and capricious because
ballots are automatically impounded, even when review might
be rendered moot by the election results; and (2) the provision
is contrary to 29 U.S.C. § 153(b). The majority vacates the
provision as contrary to law, but I would uphold it as consistent
with the statute and reasonably explained.
A.
Section 153(b) allows the Board to delegate its power to
direct and certify elections, except that “the Board may review
any action of a regional director.” 29 U.S.C. § 153(b). But
“such a review shall not, unless specifically ordered by the
Board, operate as a stay of any action taken by the regional
director.” Id. (emphasis added). To determine whether the
impoundment provision is consistent with section 153(b)
requires a two-part inquiry. First, is impoundment a stay? If
not, there is no section 153(b) violation. Second, if
impoundment is a stay, was it specifically ordered by the
Board? If it was so ordered, there is no section 153(b) violation.
The impoundment provision is clearly a stay, as the
majority agrees. “Stay” is defined as the “[t]he postponement
or halting of a proceeding, judgment, or the like.” BLACK’S
LAW DICTIONARY 1639 (10th ed. 2014). Impoundment, the
Board admits, “postpones” the tallying of ballots. 84 Fed. Reg.
at 69,548. Counting ballots is an “action” a regional director
may take as part of his delegated authority to “direct an
election” and “certify the results thereof.” 29 U.S.C. § 153(b).
19
Therefore, counting is a statutory “action” of the director, and
impoundment stays that action.5
The plain language of the statute is reinforced by the
impoundment provision in the 2019 Rule:
The filing of such a request shall not, unless
otherwise ordered by the Board, operate as a stay
of the election …, except that if a request for
review of a decision and direction of election is
filed within 10 business days …, ballots whose
validity might be affected by the Board’s ruling
… shall be impounded and remain unopened
pending such ruling or decision.
29 C.F.R. § 102.67(c) (emphasis added); see also id.§ 102.67(h) (“The grant of a request for review shall not,
outside [29 C.F.R. § 102.67(c)], stay the Regional Director’s
action.”) (emphasis added). Because impoundment is an
exception to the rule that review does not operate as a stay, the
Rule clearly specifies that impoundment will act as a stay.
Next, we must consider whether the impoundment
provision in the 2019 Rule was “specifically ordered by the
5
The Board argues that “taken” can mean actions in the past, present,
or future because “taken” is a participial adjective modifying the
noun “action.” In isolation, a past participle has no temporal
limitation and may refer, as the Board suggests, to past, present, or
future action. When, however, a participle is postpositive, i.e.,
appearing after the noun, it is timeless. In section 153(b), context and
placement of the participle clarify its temporal reach. The participle
“taken” appears after the noun it modifies: “any action taken by the
regional director.” That means it applies to past, present, and future
actions. Because impoundment is an “action taken” by the director,
it fits within section 153(b).
20
Board.” 29 U.S.C. § 153(b). By promulgating a rule that
provides conditions for when the impoundment will occur, the
Board has specifically ordered a stay. The Board has discretion
to delegate its power to direct and certify elections, and it
retains the authority to review or withdraw that delegated
power. While section 153(b) ensures that review by the Board
will not operate as an implicit stay, the Board may stay the
actions of a regional director at will. Nothing in the statute
forecloses the Board from enacting a rule that establishes
prospective criteria for when the actions will be stayed. Indeed,
such rulemaking has the advantage of providing notice and
predictability to parties. The impoundment provision was a
specific order to issue stays in certain conditions.
The majority maintains that a stay may be ordered only “in
a particular case.” Maj. Op. 46. Of course, the Board may order
a stay in a particular case, but nothing in section 153(b)
precludes the Board from ordering a stay through rulemaking.
Section 153(b) simply states: “such a review shall not, unless
specifically ordered by the Board, operate as a stay.” The
clause “unless specifically ordered by the Board” is not
explicitly limited to reviews in a particular case, and so the
Board may order a stay in a particular case, or it may issue an
order through prospective rules. Section 153(b) does not
constrain the Board’s choice.
The impoundment provision of the 2019 Rule is a stay
specifically ordered by the Board and therefore is consistent
with section 153(b).
B.
As I conclude the impoundment provision is consistent
with the statute, I must address the AFL-CIO’s argument that
the provision is arbitrary and capricious because it creates
uncertainty in the time between election and certification and
21
forces the Board to decide issues that may be moot. Under
arbitrary and capricious review we consider whether the
agency’s decision is “reasonable and reasonably explained.”
FCC v. Prometheus Radio Project, 141 S. Ct. 1150, 1158
(2021). The court should not substitute its policy judgments for
that of the agency. Instead, we ask whether the agency has
“considered the relevant issues” and adequately “explained the
decision.” Id. Here, we must recognize that “control of the
election proceeding, and the determination of the steps
necessary to conduct that election fairly were matters which
Congress entrusted to the Board alone.” NLRB v. Waterman
S.S. Corp., 309 U.S. 206, 226 (1940).
In the 2019 Rule, the Board explained the impoundment
provision will promote finality and certainty by preventing an
immediate tally of the ballots from being invalidated after
Board review. 84 Fed. Reg. at 69,548. It also noted a general
rule will promote transparency and uniformity because all
requests for review within ten days will stay the election
pending review. Id. Finally, the Board noted that impoundment
promotes ballot secrecy by hiding the sentiments of employees
whose votes might be nullified upon future review. Id. These
reasons comport with the Board’s responsibility for ensuring
the efficient administration of fair elections and were
reasonably explained.
The AFL-CIO’s concern—that the Board will conduct
reviews that will be rendered moot by the election—was
addressed by the Board. The Board recognized that
impoundment comes with some cost to “promptness and
efficiency,” but concluded such concerns were outweighed by
the gains in finality, transparency, uniformity, and secrecy. 84
Fed. Reg. at 69,548. It was reasonable to conclude these gains
also outweighed any concerns that employers would be unsure
how to act after an election, but before results are tallied. With
22
the 2014 Rule, that uncertainty simply existed at a different
time: after certification, but before the end of the review
process. Id. at 69,555 (“[W]here a certification issues
notwithstanding the (potential) pendency of a request for
review that may nullify the certification, the possibility for
confusion is greatly amplified.”).
The AFL-CIO may prefer a different procedure, but that
does not render the Board’s judgment unreasonable. These
procedural judgments are well within the Board’s statutory
authority to manage elections. Therefore, the impoundment
provision is not arbitrary or capricious.
* * *
I concur in the judgment with respect to our jurisdiction
and the holding that the Board’s 2019 Rule is not arbitrary and
capricious. I part ways with the majority because I would hold
the Rule’s impoundment provision is consistent with law and
reasonably explained and that all five challenged provisions of
the 2019 Rule are procedural.
The administrative law distinctions relevant to
determining whether the Rule survives challenge are
admittedly in the weeds. The APA requires notice and
comment for substantive rules, but explicitly exempts
procedural rules from these requirements. Drawing the proper
line between procedural and substantive rules has important
consequences, both to ensure that courts do not layer additional
requirements on an agency’s procedural rules and also to
ensure that agencies follow the requirements of notice and
comment when imposing substantive value judgments against
regulated parties. The majority distinguishes substantive from
procedural rules by analyzing the extent of the burden on
regulated parties—but such weighing of impacts is not what the
APA requires and has been decisively rejected by this court.
23
The majority emphasizes the importance of the Board’s
election procedures to collective bargaining rights. It is true
that agency procedures are often consequential and impact
parties’ rights. Nonetheless, our cases maintain that only rules
regulating primary conduct or those with particularly grave
effects are substantive, and the rules here are neither.
Applying our circuit’s precedents, the 2019 Rule is
procedural and therefore no notice and comment was
necessary. Because I would uphold the 2019 Rule in full, I
respectfully dissent in part.