Labor News
Here are three recent developments of interest to Cornell Review readers about labor relations:
BorgWarner Settled Strike at Lansing Plant
On Sunday, Sept. 22, the 700 assembly line workers at the BorgWarner plant next to the Airport returned to work ending a strike that began on Sept. 8. Teamsters Local 317 voted 539 to 60 to approve the deal negotiated on Wednesday, Sept. 18.
Under the agreement, workers will receive a 21% general wage increase over four years. This increase is on top of a 4% general wage increase negotiated in May 2023. The workers had voted to reject this same wage proposal a week earlier. However, on Sept. 17, BorgWarner had terminated the health insurance benefits of the striking workers. Under the new settlement, health coverage is restored retroactively to the workers. Each worker will also receive a $5,500 bonus in two payments as an incentive to ratify the agreement.
During the strike, BorgWarner’s salaried staff worked 12-hour shifts to keep the plant in operation.
Starbucks Ordered to Reopen Ithaca Stores
On Sept. 16, National Labor Relations Board (NLRB) Administrative Law Judge Geoffrey Carter ordered Starbucks to reopen two Ithaca stores – on the Commons and on Meadow Street. Carter found that Starbucks closed the stores in response to a unionization drive rather than for other business reasons. If sustained on appeal, Starbucks would have to provide the workers at the time of the store closing in 2022 with back pay for the wages lost during the closure.
Starbucks has not announced any plans to reopen its Ithaca stores.
NLRB Administrative Law Judges Declared Unconstitutional
The National Labor Relations Act gives the NLRB power to enforce its rules without taking each violator to an independent federal court. Like the Starbucks case heard by Administrative Law Judge Carter, there are hundreds of similar cases alleging unfair labor practices before the NLRB at any time. Using the Administrative Procedure Act, these judges receive testimony and reach binding decisions.
Some conservative commentators have argued that the Constitution requires a separation of powers with the Executive Branch operating under Article II and judges operating independently under Article III. Most Article II employees must be subject to removal by the President. However, NLRB administrative law judges can only be removed when the Merit System Protection Board (MSPB) finds good cause, and MSPB members may only be removed by the President for “inefficiency, neglect of duty, or malfeasance in office.”
The problem is that there are only a limited number of Article III federal judges, and if all disputes were decided by them, each case would take up to four years to reach a trial. The NLRB and other independent administrative agencies offer a decision-making path that is quicker and provides greater expertise by a non-Article III judge who specializes in a single area of the law.
The largest number of Administrative Law Judges work at the Social Security Administration deciding eligibility disputes and appeals.
In July, a Federal District Court Judge in Waco, Texas granted SpaceX an injunction against the NLRB to block administrative law judges from hearing an unfair labor practice case. The court held that because the administrative law judges at the NLRB cannot be removed by the President yet do not have full Article III judicial independence, they are unconstitutional.
Earlier, the U.S. Court of Appeals for the Fifth Circuit upheld such a constitutional challenge to the administrative law judges at the SEC in Jarkesy v. Sec. & Exch. Comm’n, 34 F.4th 446, 465–66 (5th Cir. 2022), cert. granted, 143 S. Ct. 2688 (2023), cert. denied, 143 S. Ct. 2690 (2023), aff’d and remanded, 144 S. Ct. 2117 (2024).
Since the SpaceX case, district courts in the Fifth Circuit have enjoined NLRB proceedings against two other companies: Energy Transfer LP and FindHelp.
The question is certain to head to the Supreme Court, but until a final decision is reached, a cloud hangs over decisions like Judge Carter ordering the Ithaca Starbucks to reopen.
