Court-emboldened capital puts labor on front lines
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Gabriel Rubin
WASHINGTON, Aug 9 (Reuters Breakingviews) -The long shadow cast by a recent U.S. Supreme Court ruling is creeping over workers first. Coffee chain Starbucks SBUX.O, rocket-maker SpaceX and e-commerce giant Amazon.com AMZN.O are among the employers testing the scope of a decision against in-house tribunals used by securities regulators to see if it extends to an independent federal agency that enforces labor laws. If the companies win, it threatens to be the start of something bigger.
Corporate America has long bristled at an advantage government authorities wield over them: the ability to put certain cases in front of their own administrative law judges. The June 27 ruling in U.S. Securities and Exchange Commission vs. Jarkesy provides a weighty new precedent to challenge such processes. The high court said the agency can no longer try fraud cases, saying they belong in federal courts instead. The SEC typically had about a 90% success rate with its in-house judges compared to roughly 70% in courtrooms.
The Jarkesy verdict in some ways poses little threat to the National Labor Relations Board, whose judges are granted specific powers by Congress. But the agency also has tested the boundaries of its authority by imposing remedies that only a federal court can provide, such as more punitive damages for labor law violations beyond just restoring backpay and benefits. Those powers are what’s most at risk in the pending litigation. Retailer Macy’s M.N, for example, is contesting the constitutionality of the NLRB’s decision that it unlawfully locked out some building engineers following a strike over stalled contract negotiations and forced it to post notices informing employees of their rights.
Squashing some of the NLRB’s enforcement authority would be a setback for organized workers freshly emboldened under President Joe Biden. His administration has been an important ally in his quest to be “the most pro-labor president in history.” Indeed, unions have secured many notable victories in a tight labor market, including new contracts at automakers, airlines and beyond that provide significant wage hikes and new job protections.
The Supreme Court did not put a stop to administrative tribunals everywhere, but it might wind up having that effect. In her dissent, Supreme Court Justice Sonia Sotomayor specifically warned that the NLRB could be one of dozens of agencies jeopardized. If she’s right, companies will just keep working their way down the list.
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CONTEXT NEWS
A U.S. appeals court on July 29 asked lawyers in a case involving Macy’s to explain how a recent U.S. Supreme Court ruling against in-house tribunals at the Securities and Exchange Commission might affect the retailer’s lawsuit against the National Labor Relations Board over alleged labor law violations.
Macy’s is appealing an NLRB decision that said the company unlawfully locked out a group of building engineers in 2020 after they ended a strike over stalled union contract negotiations and required it to post notices informing workers of their rights. The case is being heard by the San Francisco-based U.S. Court of Appeals for the Ninth Circuit.
The U.S. Supreme Court ruled on June 27 that the SEC’s practice of using in-house tribunals to impose monetary penalties for financial fraud violates a defendant's constitutional right to a jury trial.
Editing by Jeffrey Goldfarb and Sharon Lam
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