On Tuesday, December 10, 2024, a federal judge agreed with a Massachusetts hospital that challenged National Labor Board Administrative Law Judges’ job protections, holding that the “tenure protections” are unconstitutional. The hospital argued that the ALJs enjoyed “multiple levels of protection from presidential removal,” an argument that clearly persuaded the court. The court wrote that “this byzantine process eviscerates the President’s ability to control NLRB ALJs.”
In VHS Acquisition Subsidiary No. 7 v. NLRB, St. Vincent Hospital was accused by the Massachusetts Nurses Association of several unfair labor practices, which led to a formal complaint being issued by the NLRB’s Regional Director. The case was assigned to one of the Board’s ALJs.
Before that proceeding could begin, St. Vincent filed for a temporary restraining order in the United States District Court for the District of Columbia. The TRO was denied by the court, after which the hospital moved for injunctive relief and summary judgment. While the court reasoned it lacked jurisdiction over the hospital’s claims for injunctive relief, the court did take up the hospital’s motion for summary judgment on the ALJ removal restrictions.
The hospital argued that NLRB ALJs are “unconstitutionally tenured,” in that they enjoy two levels of protection insulating them from presidential oversight. ALJs are only removable by the NLRB “for good cause established and determined by the Merit Systems Protection Board [(‘MSPB’)] on the record after opportunity for hearing before the [MSPB].” 5 3 U.S.C. § 7521(a). The MSPB officers may be dismissed by the President only for “inefficiency, neglect of duty, or malfeasance in office.” 5 U.S.C. § 1202(d). NLRB Members, in turn, may only be dismissed “for neglect of duty or malfeasance in office, but for no other cause.” 29 U.S.C. § 153(a). The hospital argued that this process violates the Supreme Court’s charge that “dual for-cause limitations” on the removal of inferior officers “contravene the Constitution’s separation of powers.” See also Free Enterprise Fund v. Public Co. Accounting Oversight Board, 561 U.S. 477, 492 (2010).
The district court agreed. The court engaged in a historical analysis of the removal power of the President and found that the Supreme Court has recognized two carve-outs: “First, Congress can limit the President’s ability to remove inferior officers with circumscribed duties and no policymaking authority. And second, Congress can grant tenure protection to bipartisan, multimember boards who perform legislative- or judicial-like functions.” Relying on the Supreme Court’s directive in Free Enterprise Fund, the district court reasoned that the structure of the NLRB “not only protects [ALJs] from removal except for good cause, but withdraws from the President any decision on whether that good cause exists. That decision is vested instead in other tenured officers . . . none of whom is subject to the President’s direct control.” Accordingly, the district court found that the removal protections of the ALJs are unconstitutional.
What is the remedy then? According to the court, “the sounder solution is to recognize that ALJs are removable at will by the NLRB, the agency that appoints them,” pursuant to the first provision of 5 USC § 7521(a). That section provides that an action may be taken against an ALJ “by the agency in which the [ALJ] is employed.” See 5 USC § 7521(a). The remaining language of that subsection—“only for good cause established and determined by the Merit Systems Protection Board on the record after opportunity for hearing before the Board”—was ordered struck by the court and inoperative as to the NLRB ALJs. Thus, the ALJs are accountable only to the Board and may be removed at will, separated from presidential oversight by only one level.
This is just the latest in what has seen numerous legal challenges to the NLRB’s constitutionality. In fact, several federal courts have addressed this specific issue, with federal district courts in Michigan and Illinois rejecting the argument that the excessive protections were unconstitutional, while several federal courts in Texas have issued injunctions in individual proceedings on the basis that the protections were likely unconstitutional. Indeed, the DC district court identified a growing split in authority on the issue, noting that the Fifth Circuit Court of Appeals has found the ALJ protections to be unconstitutional, and the Sixth, Ninth, and Tenth Circuit Courts of Appeals upholding the protections. Jackson Kelly wrote about these other challenges earlier this year. The impact of this decision may be felt sooner rather than later, as the nation prepares for the changing of the administration, one which will surely have very different priorities in labor law.
The Jackson Kelly Labor and Employment Team continues to monitor what is sure to be a swiftly-shifting legal landscape in the months ahead. Please contact a member today if you have any questions about this development or labor law in general.