AL Educ Assn v. Chao, Elaine L.

455 F.3d 386, 372 U.S. App. D.C. 301, 180 L.R.R.M. (BNA) 2065, 2006 U.S. App. LEXIS 19282, 2006 WL 2128974
CourtCourt of Appeals for the D.C. Circuit
DecidedAugust 1, 2006
Docket05-5218
StatusPublished
Cited by26 cases

This text of 455 F.3d 386 (AL Educ Assn v. Chao, Elaine L.) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
AL Educ Assn v. Chao, Elaine L., 455 F.3d 386, 372 U.S. App. D.C. 301, 180 L.R.R.M. (BNA) 2065, 2006 U.S. App. LEXIS 19282, 2006 WL 2128974 (D.C. Cir. 2006).

Opinion

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge.

The Secretary of Labor appeals the decision of the district court granting summary judgment in favor of the Alabama Education Association, the Delaware Federation of Teachers, and 37 like organizations representing public sector employees, primarily public school teachers. After holding fast to one reading of § 3(j)(5) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), 29 U.S.C. § 402(j)(5), for more than 40 years, the Department reconsidered and adopted an alternative interpretation under which wholly public sector labor organizations for the first time could be subject to the financial reporting requirement of the Act.

Applying the familiar two-step analysis in Chevron, U.S.A., Inc. v. Natural Re *389 sources Defense Council, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we conclude the district court erred in holding the Department’s new interpretation was inconsistent with the Act. Because reasonable readings of § 3(j)(5) are advanced by each of the parties, we cannot say the “Congress had an intention on the precise question at issue,” Chevron, 467 U.S. at 843 n. 9, 104 S.Ct. 2778; nor can we say the Department’s revised reading of § 3(j)(5) is not a “permissible” one, id. at 843, 104 S.Ct. 2778. We order the matter remanded to the agency nonetheless because “the Department did not provide a reasoned explanation for its new policy.” AFL-CIO. v. Brock, 835 F.2d 912, 913 (D.C.Cir.1987).

I. Background

The Congress enacted the LMRDA, 29 U.S.C. § 401 et seq., in order to “eliminate or prevent improper practices on the part of labor organizations.” Id. § 401(c). To that end, the Act requires “[e]very labor organization” annually to provide the Department with information “in such detail as may be necessary accurately to disclose [its] financial condition and operations.” Id. § 431(b); see 29 C.F.R. Part 403 (describing the required annual reports).

A. “Labor Organizations” under the LMRDA

Two interrelated provisions establish the criteria upon which an entity is deemed a “labor organization” subject to the disclosure requirements of the Act. Subsection 3(i), 29 U.S.C. § 402(i), states:

“Labor organization” means a labor organization engaged in an industry affecting commerce and includes [1] any organization of any kind ... so engaged in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances [etc.] and [2] any conference, general committee, joint or system board, or joint council so engaged which is subordinate to a national or international labor organization, other than a State or local central body.

The definition and two examples set forth in § 3(i) are supplemented by § 3(j), 29 U.S.C. § 402(j), which provides:

A labor organization shall be deemed to be engaged in an industry affecting commerce if it—
(1) is the certified representative of employees under the provisions of the National Labor Relations Act ... or the Railway Labor Act ...; or
(2) although not certified, is a national or international labor organization or a local labor organization recognized or acting as the representative of employees of an employer or employers engaged in an industry affecting commerce; or
(3) has chartered a local labor organization or subsidiary body which is representing or actively seeking to represent employees of employers within the meaning of paragraph (1) or (2); or
(4) has been chartered by a labor organization representing or actively seeking to represent employees within the meaning of paragraph (1) or (2) as the local or subordinate body through which such employees may enjoy membership or become affiliated with such labor organization; or
(5) is a conference, general committee, joint or system board, or joint council, subordinate to a national or international labor organization, which includes a labor organization engaged in an industry affecting commerce within the meaning of any of the preceding paragraphs [(l)-(4)] of this *390 subsection, other than a State or local central body.

As the quoted text makes clear, the term “labor organization” is implicitly limited by the terms “employer” and “employee.” As defined in § 3(e), the term “employer” does not include “any State or political subdivision thereof.” 29 U.S.C. § 402(e). The term “employee,” as used in §§ 3(i) and (j), includes only “individually] employed by an employer,” id. § 402(f), that is, employees in the private sector. Although the terms “employer” and “employee” appear in both §§ 3(i) and (j), neither appears in the second illustrative clause of § 3(i) or in § 3(j)(5).

Since 1963 the Department has held, with respect to the first clause of § 3(i), that a “labor organization composed entirely of employees of ... governmental entities excluded by section 3(e) [is not] a labor organization for purposes of the Act.” 29 C.F.R. § 451.3(a)(4). With respect to the second clause of § 3(i), however, the Department has made clear that, “[r]egardless of whether it deals with employers [or] is composed of employees, any conference, general committee, joint or system board, or joint council engaged in an industry affecting commerce and which is subordinate to a national or international labor organization is a ‘labor organization’ for purposes of the Act.” 29 C.F.R. § 451.3(b); 28 Fed.Reg. 14,388, 14,388 (Dec. 27,1963).

B. The Rulemaking

In December 2002 the Department proposed to adopt a rule expanding the range of organizations subject to the annual reporting requirement of the LMRDA. Labor Org. Annual Fin. Reports, 67 Fed. Reg. 79,280 (Dec. 27, 2002) (notice of proposed rulemaking (NPRM)).

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455 F.3d 386, 372 U.S. App. D.C. 301, 180 L.R.R.M. (BNA) 2065, 2006 U.S. App. LEXIS 19282, 2006 WL 2128974, Counsel Stack Legal Research, https://law.counselstack.com/opinion/al-educ-assn-v-chao-elaine-l-cadc-2006.