United States: D.C. District Affirms The NMB's Decertification Rule

Seyfarth Synopsis: The National Mediation Board's new decertification rule survived the first round of legal challenge. In 2019, the NMB issued a final rule providing a direct decertification process under the Railway Labor Act and a two-year period of repose under which the NMB cannot conduct an election following a decertification. The Transportation Trades Department, AFL-CIO and its member unions challenged the rule through a lawsuit against the NMB in the United States District Court for the District of Columbia, alleging that the rule violated the RLA and the Administrative Procedures Act. The Court granted summary judgment for the NMB and against the TTD on March 31, 2021.

Unlike the National Labor Relations Act, the RLA does not contain an express decertification provision. Section 2, Ninth of the RLA merely establishes the NMB and enables the agency to hold elections and resolve election disputes. 45 U.S.C. § 152, Ninth ("If any dispute shall arise among a carrier's employees as to who are the representatives of such employees designated and authorized . . . it shall be the duty of the Mediation board, upon request of either party to the dispute, to investigate such dispute and to certify [the representatives] . . . .  In such an investigation, the Mediation Board shall be authorized to take a secret ballot of the employees involved . . . ."). The Supreme Court, however, has interpreted Section 2, Ninth to give employees the right to decertify. See, e.g., Brotherhood of Ry. & S.S. Clerks, Freighthandlers, Express & Station Employees v. Association for the Benefit of Non-Contract Employees, 380 U.S. 650, 670 (1965) (Railroad employees have the "right to determine who shall be the representative of the group or, indeed, whether they shall have any representation at all.").

Before 2019, employees who wanted to decertify their union needed to follow a confusing "straw man" process. An individual employee seeking to decertify the union would need to file an election application, win an election, be certified as the representative, and then disavow representation. The ballot included three options in this scenario: (1) for the existing representative; (2) for the straw man; or (3) for "no union." The straw man would need to choose whether the straw man would direct employees to vote for the straw man or for "no union" (to ensure the vote was not split between the straw man and "no union"), communicate that choice and instruction to employees, and then ensure that choice won a majority of votes in order to achieve decertification. One can imagine how confusing this process was for employees.

The NMB sought to change this through formal rulemaking. In 2019, the agency finalized formal, notice-and-comment rulemaking under the APA. The final rule enables the NMB to accept a direct decertification application from employees and to run a decertification election.  The rule further extended the period of repose to two years, prohibiting elections absent "unusual or extraordinary circumstances" following a decertification for two years. 84 Fed. Reg. 35,987; 29 C.F.R. § 1206.4.

The TTD and its member unions filed suit on October 16, 2019 (Case No. 1:19-cv-03107 (CJN) (D.D.C.)), alleging that the final rule violated Section 2, Twelfth of the RLA and was arbitrary and capricious under the APA. Plaintiffs claimed that Section 2, Twelfth allows the NMB to conduct elections only to certify a representative. See  45 U.S.C. § 152, Twelfth ("The Mediation Board, upon receipt of an application requesting that an organization or individual be certified as the representative of any craft or class of employees, shall not direct an election . . . unless the Mediation Board determines that the application is supported by a showing of interest from not less than 50 percent of the employees in the craft or class.") (emphasis added).

The Court disagreed, first concluding that the NMB's interpretation of Section 2, Ninth and Section 2, Twelfth was entitled to Chevron deference because the agency had engaged in formal rulemaking subject to extensive notice and comment procedures and because Section 2, Ninth and Section 2, Twelfth is silent on decertification and does not "unambiguously preclude the direct decertification method adopted in the Final Rule." Slip Opinion at 8. The Court went on to hold that the NMB had adequately explained as part of the rulemaking process why it interpreted Section 2, Ninth and Section 2, Twelfth to allow for decertification elections. The Court concluded that the agency's interpretation of these two statutory provisions was entitled to deference.

In reaching this holding, the Court reasoned that Section 2, Ninth grants the NMB the power to hold elections—not Section 2, Twelfth—and "the Board enjoys exceptional latitude when acting within its proper sphere of Section 2, Ninth power." Railway Labor Execs. Ass'n v. National Mediation Bd., 29 F.3d 655, 662 (D.C. Cir. 1994). The Court stated that Section 2, Twelfth provides only a carveout within the NMB's authority under Section 2, Ninth, namely that the agency cannot hold an election unless the application is supported by at least half of the employees in the applicable craft or class. Slip Opinion at 7-8.

The TTD further argued that there was no rational basis for the NMB to extend the one-year period of repose following a decertification to a two-year period of repose. The Court also disagreed with this argument, ruling that the NMB had adequately explained its rationale for extending the election bar: the two years matches the period of repose following certifications so that employees can have time to "judge the advantages and disadvantages of their decision without the turmoil of an immediate organizing campaign." 84 Fed. Reg. 35,986.

Ultimately, the Court entered summary judgment for the NMB in full and denied the unions' cross-motion for summary judgment in its entirety. It remains to be seen whether the unions will appeal or whether a Biden Administration majority NMB—when one is seated—will undo the rule. For the time being, however, the rule remains in effect, and railroad, air carrier, and derivative carrier employees have a direct decertification process under the RLA.

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