Afl-cio v. Allbaugh: the D.c. Circuit Limits the President's Authority to Influence Labor Relations

• Citation: Vol. 19 No. 4
• Publication year: 2010

AFL-CIO v. ALLBAUGH: The D.C. Circuit Limits the President's Authority to Influence Labor Relations

Cheralynn M. Gregoire

Introduction

Congress passed the National Labor Relations Act (NLRA) in 1935 to create a "system for unionization and collective bargaining" and to "mak[e] it illegal for employers to discipline or discharge employees because they engage in union activity and other protected concerted activities."[1] Section 8(e) of the NLRA generally prohibits, as an unfair labor practice, contracts or agreements that may act as a boycott on another employer, except for agreements "between a labor organization and an employer in the construction industry."[2] Section 8(f) of the NLRA establishes the parameters of this exception.[3] Specifically, section 8(f)(2) authorizes employers in the construction industry to enter into pre-hire agreements with labor organizations that require "as a condition of employment" membership in such labor organizations.[4]

On November 7, 2001, the U.S. District Court for the District of Columbia, in AFL-CIO v. Allbaugh,[5] permanently enjoined the enforcement of President George W. Bush's Executive Order 13,202 (Order), which prevented federal executive agencies and private contractors engaged in federally assisted construction projects from prohibiting or requiring the use of project labor agreements (PLAs).[6] The district court found that the President did not have constitutional or statutory authority to issue the Order and that the NLRA preempted it.[7] In so holding, the district court's decision in Allbaugh followed an earlier D.C. Circuit Court decision, Chamber of Commerce v. Reich.[8] In Reich, the U.S. Court of Appeals for the D.C. Circuit held that the NLRA preempted former President Bill Clinton's Executive Order 12,954, which barred the federal government from contracting with employers that hired permanent replacement workers during a lawful strike.[9] In this decision, the D.C. Circuit arguably adopted an overly broad interpretation of the Machinists preemption doctrine,[10] concluding that Congress intended to leave the issue of permanently replacing striking workers to the "free play of economic forces."[11] Relying on Reich, the D.C. District Court in Allbaugh concluded that President Bush's Order "impermissibly interfere[d] with the free play of economic forces" when construction employers and unions engage in the bargaining process.[12] These two decisions are examples of the D.C. Circuit's attempts to narrow the scope of the President's power to influence the labor market through the issuance of executive orders.

However, the Government appealed the District Court's permanent injunction against Executive Order 13,202, and the D.C. Circuit Court of Appeals reversed, holding that the Order was a constitutionally valid exercise of President Bush's proprietary authority.[13] The D.C. Circuit Court of Appeals therefore broadened the scope of the President's power to influence labor relations through executive orders, making a notable move away from its narrower view of the President's proprietary authority set out in Reich.[14]

Part I of this Comment provides a general overview of two NLRA preemption principles developed by the Supreme Court--Garmon[15] and Machinists--that the courts have used to invalidate executive orders. Part I also provides an overview of the President's power to issue executive orders, particularly to implement social and economic change in the labor market. Part II discusses AFL-CIO v. Kahn,[16] where the D.C. Circuit found that an Executive Order issued by former President Jimmy Carter did not conflict with the NLRA, as backdrop from which to analyze the Allbaugh decision. Part III reviews the Reich decision and the problems with the D.C. Circuit's expansion of the Machinists preemption to invalidate former President Clinton's Executive Order. Part IV discusses the D.C. District Court's decision in Allbaugh and the problems with that decision. Part V examines the D.C. Circuit Court of Appeals' decision in Allbaugh and attempts to define the current scope of presidential power to influence the labor market through the issuance of executive orders. This Comment concludes that the D.C. Circuit Court of Appeals correctly found that President Bush's Executive Order was a constitutionally valid exercise of his authority and was not preempted by the NLRA.

I. The Tension Between NLRA Preemption Principles and Executive Orders that Influence Labor Relations

A. The Supreme Court's Development of the Garmon and Machinists Preemption Principles

When Congress enacted the NLRA, it preempted most state regulation of labor relations.[17] However, since the NLRA's inception, the U.S. Supreme Court has also established two separate NLRA preemption doctrines.[18]

In San Diego Building Trades Council v. Garmon,[19] the Supreme Court developed Garmon preemption. In Garmon, union co-partners of an employer's lumber business picketed the employer when it refused to execute a contract that required it to employ only union workers.[20] The employer brought suit against the union, and the San Diego County Superior Court enjoined the union from picketing until a collective bargaining agent was designated.[21] The Supreme Court granted certiorari to resolve the issue of whether the California Supreme Court could award damages stemming from the union activity.[22] The Court concluded that California could not provide a damages remedy because the union's activity was "arguably" protected by sections 7 and 8 of the NLRA.[23] The Court reasoned, "to allow States to control activities that are potentially subject to federal regulation involves too great a danger of conflict with national labor policy."[24] Therefore, Garmon preemption prohibits state regulation of labor activities that are "arguably within the compass" of the NLRA.[25]

In International Association of Machinists & Aerospace Workers v. Wisconsin Employment Relations Commission,[26] the Supreme Court developed a second NLRA preemption doctrine.[27] The Supreme Court granted certiorari in this case to decide whether the NLRA preempted "the authority of a state labor relations board to grant an employer . . . an order enjoining a union" from refusing to work overtime.[28] The Court held that Wisconsin's labor relations board did not have the authority to enjoin the union, relying on a line of preemption cases in which the Court concluded that "Congress meant to leave some activities unregulated and to be controlled by the free play of economic forces."[29] The majority in Machinists reasoned that the forum in which these claims are brought should not determine what types of "economic weapons" would be available to the parties.[30] The Court found that to hold otherwise would be "inconsistent" with federal law that "leaves the parties free to" choose.[31]

In his dissent, Justice Stevens, joined by Justices Stewart and Rehnquist, noted that Congress had evidenced no intent to legislate on the partial strike activity at issue.[32] Justice Stevens stressed that the Court's holding, which overruled established precedent, was "particularly inappropriate" because it "purport[ed] to implement the intent of Congress with respect to an issue that Congress ha[d] yet to address."[33]

B. The President's Power to Issue Executive Orders

Throughout our nation's history, presidents have issued Executive Orders--"orders directed at subordinates within the executive branch"--for various purposes, including responding to emergency situations such as World War I, World War II, and the Great Depression.[34] According to one commentator, since the time of former President Theodore Roosevelt, "[t]he use of executive orders to reshape national policy is simply the kind of thing that presidents routinely do now, from the very beginning of their terms and throughout their years in office."[35]

Additionally, a President's authority to issue executive orders, while broad, must be derived from the Constitution or from statutory delegations.[36] However, this "authority to issue directives may be express, implied, or inherent in the substantive power granted to the President."[37] In the seminal case of Youngstown Sheet & Tube v. Sawyer,[38] the Supreme Court invalidated an executive order issued by former President Harold Truman.[39] In that case, the Supreme Court found that former President Truman had exceeded the scope of his authority to issue an executive order, pursuant to his constitutionally delegated war powers, which directed the federal government's seizure and operations of the nation's privately owned steel mills.[40] In his famous concurring opinion, Justice Jackson established a framework for determining whether a President's executive order is valid:[41]

When the President acts pursuant to an express or implied authorization of Congress, his authority is at its maximum . . . .

. . . .

When the President acts in absence of either congressional grant or denial of authority, he can only rely upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which the distribution is uncertain.

. . . .

When the President takes measures incompatible with the express or implied will of Congress, his power is at its lowest ebb . . . .[42]

Thus, a court may invalidate an executive order that it deems is issued without statutory or constitutional authorization.[43]

C. Presidential Use of the Executive Order to Implement Social and Economic Changes in the Labor Market

Presidents have long used executive orders to implement national policy contrary to congressional sentiment.[44] Beginning with World War II through the mid-sixties, executive orders have been used to implement the federal government's policy of prohibiting race discrimination and promoting affirmative action in the workplace.[45] One commentator researched 113 executive orders issued since...