Appeals Court Upholds New National Mediation Board Rule

One of the defining features of union activism during the Obama years has been a heavy reliance on federal agencies and courts to do things that Congress isn’t likely to do, especially now that Republicans hold a majority in the House. Sometimes merely waiting for the right ruling can pay off. On December 16, the U.S. Circuit Court of Appeals for the District of Columbia ruled 2-1 that the National Mediation Board (NMB), an independent body overseeing labor relations in the railroad and airline industries, had the authority to issue a rule change making it easier for unions to win representation elections. The court concluded that the new regulation was consistent with the Railway Labor Act (RLA). The Air Transport Association of America (ATA), an industry group which since has renamed itself Airlines for America, had sued the board in May 2010 and lost in district court the following month.

Union Corruption Update analyzed this issue at length early last April. The House of Representatives only days earlier had voted 223-196 to reauthorize Federal Aviation Administration funding at $59.7 billion over four years. Title IX of that measure called for reversing a National Mediation Board rule change in the spring of 2010 allowing a union to win recognition as a collective bargaining agent without necessarily obtaining majority support from all company employees in a given job category. The Senate in February 2011 had voted overwhelmingly in favor of a $34.5 billion, two-year FAA reauthorization, but without this feature. No final reauthorization bill resulted. But the effort was significant all the same. The Republican-led House provision served as a rebuke to the two Democrats on the three-member board, Linda Puchala and Harry Hoglander, who not only pushed for the new rule, but also stonewalled the lone Republican, Elizabeth Dougherty, from participating in its draft. In addition, the NMB reportedly made no effort to convey information in writing about the rule change to workers.

House opponents of the board’s new regulation believed it contravened the intent of the Railway Labor Act. The act was amended in 1934 to create the National Mediation Board and again in 1936 to cover the fledgling airline industry. The NMB interpreted its mandate as requiring a union to win majority support in an election from all workers in the same job classification (“craft or class”) and not simply from workers casting ballots. Elections, moreover, would be conducted on a company-wide basis. This was an administrative decision; RLA statutes were vague on how employees choose representation. Thus, for example, if a company has 500 employees in a craft or class, a union organizing its workers must win support from at least 251 of those workers to gain certification as a bargaining agent. If subject to National Labor Relations Board jurisdiction, the bar would be easier. Under such circumstances, if only 200 of those 500 employees cast ballots (typically because many among the other 300 aren’t eligible to vote), representation would require only 101 votes.

There is logic to the requirement that NMB-certified elections apply to an entire company, in contrast to NLRB elections, under which union locals can negotiate different contracts with a single employer. Rail and airline locals have the capacity to shut down national transportation networks and inhibit employers from taking advantage of economies of scale. NMB intended its standard to prevent locals from disrupting their respective industries.

The two Democrats on the board, like the unions, opposed this standard. Then again, they have a union background. Chairperson Linda Puchala had been international president of the Association of Flight Attendants; Harry Hoglander had been vice-president of the Air Line Pilots Association. During the Obama administration, the pair developed a new rule that would adopt the NLRB election standard. On May 11, 2010 the NMB published its final rule in the Federal Register. Six days later, the Air Transport Association of America, later joined by the U.S. Chamber of Commerce and several Delta Air Lines employees, filed suit in District of Columbia federal court to enjoin the NMB from enforcing the regulation. The aviation industry lost its case that June. It appealed, but to no avail, losing in circuit court this past December.

In its decision (No. 10-5253), the circuit panel ruled that the NMB was within its authority to issue the new rule. While Congress still reserves the right to rewrite the Railway Labor Act to require the longstanding election standard, the court said, the board was well within its powers to adopt a different one. Judge David Tatel, writing for the majority, concluded:

(T)he Railway Labor Act spells out no procedures for either representation or decertification and, for that matter, makes no mention of decertification procedures, much less requires them. Absent plain statutory language or some other evidence of congressional intent to guide us one way or the other, we defer to the Board’s reasonable balance of the competing interests at stake.

Yet in her dissent, Judge Karen Henderson observed that the National Mediation Board throughout its history has interpreted union certification as requiring a majority of all employees in a craft or class, not just of employees who vote. The relevant clause, section 2, Fourth of the Railway Labor Act, states: “The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class.” While that statement appears open-ended, Henderson argued that it referred to something very specific:

Having considered the backdrop against which section 2, Fourth was enacted as well as the lone Supreme Court decision (Virginian Railway v. Railway Employees) construing it, I am convinced as I would have been had I not considered the background and Virginian Railway overlay, that section 2, Fourth unambiguously requires that the majority of the craft/class must participate in any representation election. Section 2, Fourth grants the majority of a craft/class the collective right to determine the representative; it does not grant each employee an individual right to vote in an election as is the case with popular elections. While we all agree that every eligible employee is entitled to vote, the issue is who determines the representative: the majority of those who vote for a representative with majority participation of the majority of those who vote for a representative without majority participation? Section 2, Fourth declares loud and clear that the majority – which collectively possesses the right – necessarily must participate in determining the representative.

Union officials, not sharing this view, are more than satisfied with the ruling. “This decision confirms that the National Mediation Board has full and absolute authority to bring democracy to union elections in their jurisdiction,” said the Association of Flight Attendants/Communications Workers of America (CWA) in a prepared statement following the decision. CWA Communications Director Candice Johnson similarly noted that the ruling “demolishes the argument that the NMB overstepped its bounds in ensuring that NMB elections count only the ballots of those who actually vote.”

The Air Transport Association of America/Airlines for America remains adamant that the rule change is unjustifiable. “We continue to believe, as 75 years of labor law has consistently held, that the majority of those to be represented should have a voice in the union election process, and we will work cooperatively with the NMB to address our concerns,” declared the association. “We are hopeful that Congress can now move forward with a much-needed, long-term FAA reauthorization bill.”

Congress hasn’t been the best place to look for consensus on this issue. Since 2007, lawmakers have been unable to come to an agreement on long-term reauthorization for FAA. They have kept the agency going during the time with no fewer than 23 emergency extensions. This past January 26 marked the most recent extension, the previous one having been set to expire on January 31. The lack of predictability of funding can have workforce consequences. Last summer, during a funding lapse, the FAA had to furlough about 3,700 employees for two weeks. The current extension ends on February 17. A long-term agreement is actually in the cards, but that said, the unionization election issue has been the main stumbling block these past years.

This time, however, there is strong hope for a multiyear reauthorization. On Friday, January 20, House and Senate leaders reached a compromise that applies, if narrowly, to the RLA. Under the deal, a public hearing would be required prior to NMB rulings in the future.  Moreover, union elections without a clear winner would be contested in a different manner.  A runoff election no longer would be between the top two union vote-getters, but between the top two options, one of which could include no union representation at all. Finally, the bar for receiving approval for holding a representation election would rise from 35 percent to 50 percent. The decertification bar would remain at 50 percent.

The unions, meanwhile, have discovered a powerful organizing weapon in the new National Mediation Board regulation. The Communications Workers of America won collective bargaining rights on behalf of baggage handlers at Piedmont Airlines, while the International Association of Machinists won an election to represent nearly 3,000 workers at budget carrier AirTran Airways. In each case, only a minority of employees in the craft or class actually voted. And while flight attendants lost in their bid to organize at Delta Air Lines, it was a close loss. And what made the election close was the heavy turnout among employees at the heavily unionized Northwest Airlines, which the mostly nonunion Delta in October 2008 had acquired. Whether or not Airlines for America appeals its case to the Supreme Court, unions will continue to enjoy a 2-1 advantage at the NMB as long as Barack Obama or some other Democrat remains in the White House. Solidarity through regulation has become an implicit union credo.