Voices for Int'l Bus. & Educ., Inc. v. Nat'l Labor Relations Bd.
Opinion of the Court
*772The National Labor Relations Act does not apply to a "political subdivision" of a state.
I.
Nowhere in the country has the charter school movement garnered a greater foothold than New Orleans. More than 90% of public-school students in Orleans Parish now attend charters. The reconstruction of the city after Hurricane Katrina was the impetus for the meteoric growth of charter schools. See Amelia A. DeGory, The Jurisdictional Difficulties of Defining Charter-School Teachers Unions Under Current Labor Law, 66 DUKE L.J. 379, 387 (2016) ; Amy Moore, Brokering Education: A Study of Charter Receipt, Renewal, and Revocation in Louisiana's Charter Schools , 11 LOY J. PUB. INT. L. 343, 343-44 (2010).
But the Louisiana law allowing charter schools predates that disaster. Enacted in 1995, the Louisiana Charter School Demonstration Programs law "authoriz[es] the creation of innovative kinds of independent public schools for pupils." La. Rev. Stat. Ann. § 17:3972(A). It allows various groups and entities, such as "ten or more citizens" or a "business or corporate entity registered to do business in Louisiana" to form a nonprofit corporation for the purpose of forming a charter school.
A group of citizens incorporated Voices for International Business and Education as a nonprofit in 2009. That same year Voices began operating the International High School of New Orleans under a Type 2
Voices' corporate bylaws vest its powers in a board of directors. The articles of *773incorporation name the original directors. The original board has to approve any new directors, officers, and committee chairs. Any board member may be removed with or without cause by a three-fourths vote of the remaining members. The state can remove a board member only if the member violates state ethics rules. La. Rev. Stat. Ann. § 17:3996(B)(20) ; La. Rev. Stat. Ann. § 42:1153(B).
A labor union, the United Teachers of New Orleans, filed a petition with the National Labor Relations Board seeking to represent Voices employees. Voices objected on the ground that the Board lacked jurisdiction because Voices is a political subdivision of Louisiana. A hearing officer rejected that argument. Over a dissent, the NLRB agreed that Voices is not a political subdivision because it "was neither created directly by the state of Louisiana so as to constitute a department or administrative arm of the government nor administered by individuals who are responsible to public officials or the general electorate." The Board also rejected Voices' request that it exercise its discretion to decline jurisdiction under
In the election that followed, the employees voted in favor of union representation. Voices refused to recognize or negotiate with the union, maintaining the view that it is exempt from NLRB jurisdiction. The union then filed a charge against Voices for refusal to bargain. The NLRB found that Voices had committed an unfair labor practice and ordered it to recognize and bargain with the union. This petition for review, which presents only the "political subdivision" question, followed.
II.
The National Labor Relations Act applies to most private employers. But its jurisdiction does not extend to the federal government or "any State or political subdivision thereof."
The Act does not define "political subdivision."
But we need not give any deference to the Board on this question.
Voices lacks that political accountability. That is by design. One of the perceived virtues, if not the virtue, of charter schools is that a lack of political oversight gives them freedom to experiment.
Louisiana charter school operators like Voices enjoy that greater freedom to innovate because they are not controlled by political actors. The corporation selected the inaugural board of directors. Those privately selected board members are the only ones who can nominate and select additional or replacement members. The self-perpetuating board can also remove a member with or without cause. Unlike traditional public schools, which are typically governed by elected school boards, there is thus no public mechanism for changing the policies in schools Voices operates. Privately selected citizens set those policies and get to decide whether they are altered. See N.L.R.B. v. Highview, Inc. ,
Voices points to one narrow way in which public officials can affect the composition of its board. The charter allows the Louisiana Ethics Adjudicatory Board to remove a Voices director for violations of laws it enforces. See La. Rev. Stat. Ann. § 42:1153(B). But this possibility of for-cause termination when a Voices board member violates state ethics laws does not give public officials policymaking authority over the corporation. In the event of a director's removal for ethics violations (something that has never happened at Voices), the corporation's board of directors would have sole authority to select any replacement. That distinguishes Louisiana's removal authority from the remove-and-replace authority the public enjoyed for corrupt commissioners of a Tennessee natural gas utility district that the Supreme Court classified as a political subdivision. See Hawkins Cty. ,
A recent NLRB ruling that a Texas charter school is a "political subdivision" illustrates the importance the Board places on whether the public has a role in selecting an entity's policymakers. LTTS Charter Sch., Inc. d/b/a Universal Acad. , 366 N.L.R.B. No. 38 (2018) ; see also The Penn. Virtual Charter Sch. ,
There is no way for the public to select the board members who set policy for Voices. We thus agree with the Board that Voices is "not administered by individuals who are responsible to public officials or to the general electorate."
That brings us to Voices' broader complaint. It argues that the Board ignored factors that demonstrate Voices' political character even if it is not run by people the public selects. It relies on the public features of a utility district the Supreme Court identified in addressing whether it was a political subdivision. Hawkins Cty. ,
Was it error for the NLRB to look solely at whether the public created Voices or controls its administrators in deciding whether the charter is a political subdivision of Louisiana? At a minimum, caselaw recognizes that that the direct questions the Board's definition asks-(1) public creation or (2) public control-are the predominant considerations. Our first "political subdivision" case concluded that an electric power association was not exempt because it did not meet either of those NLRB criteria. Natchez Trace Elec. Power Ass'n ,
Our most recent case on this topic, which addressed the same exemption in the Occupational Safety and Health Act,
*777Jefferson Cty. Cmty. Ctr. for Developmental Disabilities v. N.L.R.B.,
We thus cannot fault the Board for basing its decision on the appointment and removal power that has been the decisive factor in every reported judicial decision addressing "political subdivision" status under the NLRA or OSHA. See StarTran ,
Voices contends that a different result is warranted because of the "unique factual context" in which roughly 90% of public school students in New Orleans attend charters. Charters essentially are the public school system in New Orleans, it argues. We do not disagree, but the prevalence of charters does not transform them into politically accountable entities. It would make little sense if a charter located in northern Louisiana but otherwise identical to Voices were subject to federal labor law but Voices were exempt solely because it is in a city with a lot of other charters. Or imagine a scenario in which a legislature decided to privatize an entire state function, prisons for example. If those prisons were not subject to public control, we do not see why they would become political subdivisions just because they held all prisoners in the state. Nothing about the ordinary meaning of political subdivision turns on the prevalence of charter schools as opposed to their public accountability.
We recognize that charters like Voices are "independent public school[s]" under Louisiana law and are treated as part of the public school system for some purposes. See La. Rev. Stat. Ann. § 17:3973(2)(a) ; Iberville Par. Sch. Bd. v. La. State Bd. of Elementary & Secondary Educ. ,
*778La. Atty. Gen. Op. No. 04-0317,
That lack of political influence over Louisiana charters was a choice the legislature made in its enabling legislation. Private control was not a bug of that law; it was a reason for it. Because Louisiana chose to insulate its charters from the political process, Voices like most other privately controlled employers is subject to the National Labor Relations Act.
* * *
Voices' petition for review is DENIED. The Board's cross-petition for enforcement is GRANTED.
A Type 2 charter is a new startup school authorized by the Louisiana Board of Elementary and Secondary Education. A Type 1 charter is a startup authorized by a local school board. Other types of charters apply to converted public schools authorized as charters by either the state board or a local school board. See La. Rev. Stat. Ann. § 17:3973(2)(b).
We thus see no disagreement with the concurring opinion on the analysis and outcome of this case: the entire panel agrees that Voices is not a political subdivision under the plain meaning of the NRLA exemption. Because resolution of this case does not turn on agency deference, be it Chevron or some other form, the majority opinion does not explore those academic questions.
Some of the "innovative school missions" of Type 2 charter schools in Louisiana are "serving military families," "providing foreign-language immersion programs," "online schooling for families who need flexibility," and "programs specifically designed to educate and remediate students with dyslexia." Locating Type 2 Public Charter Schools in Louisiana , La. Ass'n Pub. Charter Sch. (Mar. 16, 2018), https://lacharterschools.org/locating-type-2-public-charter-schools-louisiana/.
Louisiana law sets some eligibility criteria for a charter's directors. For example, school employees may not serve and no more than 20% of the directors can be from the same immediate family. La. Rev. Stat. Ann. § 17:3991(A)(1)(c)(i)-(ii). And Voices' charter requires that the board consist of at least seven members with diverse skill sets and that at least 60% live in the parish where the school is located. Although these conflict-of-interest and geographic constraints limit who can serve on the board, they do not mean that those who are selected are accountable to the public for their policy choices. See, e.g. , Ky. River Cmty. Care, Inc. v. N.L.R.B. ,
We are not presented with and thus do not decide the question whether Texas charter schools are political subdivisions. We cite LTTS Charter School to show the emphasis the NLRB places on public involvement in selection and removal of policymakers.
Voices has never contended that it satisfies the Board's first definition that treats entities created by the State as political subdivisions. An amicus makes that argument, but we do not consider arguments raised by an amicus that the party it is supporting never made. World Wide St. Preachers Fellowship v. Town of Columbia ,
We consider caselaw applying both exemptions because the statutory language is the same. StarTran ,
We also note that not all of the additional factors point in favor of Voices being a political subdivision. Unlike the utility district in Hawkins County , Voices does not have eminent domain power.
Concurring Opinion
I agree with the National Labor Relations Board that the charter school operated by Voices for International Business and Education is subject to collective bargaining under the National Labor Relations Act.
Voices contends that its charter school is a "political subdivision" and thus exempt from the Act. But it seems obvious that charter schools are not "political subdivisions," but private organizations-owned and operated by private citizens, not political officials. Indeed, charter schools are appealing to many parents and students precisely because they are not political subdivisions. As the majority nicely puts it: "Private control was not a bug of [the Louisiana charter school law]; it was a reason for it." After all, one of the primary benefits of charter schools is the ability to harness private sector innovation and offer alternative educational opportunities unconstrained by politics. The parties seemed to acknowledge as much during oral argument. Oral Argument at 3:45-4:05 (appellant); 16:45-17:04 (appellee). Accordingly, I agree that the charter school operated by Voices is not a political subdivision, and I am pleased to join the majority opinion for that reason.
I nevertheless write separately to make clear that, although I agree with the Board's ultimate conclusion in this case, I disagree with its reasoning. For the Board does not merely argue that it is faithfully following Congress's directive. Rather, it asserts that we must defer to the Board's decision. See , e.g. , Br. of Appellee at 14 ("The Board's interpretation of the Act must be upheld if reasonably defensible. ... This deferential standard of review applies to every interpretation of the Act by the Board."); Oral Argument at 25:15-20 (claiming Board discretion to determine which entities are subject to the Act).
Charter schools are unambiguously private organizations, not political subdivisions. So I disagree with the Board's request for deference to the extent that it claims the power to reach the opposite result in another charter school case-for example, as the majority points out, the Board subjects Voices to collective bargaining, even as it attempts to exempt other charter schools from the Act. I therefore write separately to make clear that, by affirming the Board's decision today, I do not bless the Board's discretion to take the opposite view tomorrow. See , e.g. , Nat'l Cable & Telecomms. Ass'n v. Brand X Internet Servs. ,
Even in the age of Chevron , deference is not a blind commandment. Federal agencies *779must enforce the law as written by Congress. I concur.
I.
The Board claims it has the discretion to decide who is and is not a political subdivision-and thus which workers may or may not engage in collective bargaining-and that this Court must defer to its determination. This is the natural implication of the Board's invocation of Chevron .
But under Chevron , we owe deference only to agency interpretations of ambiguous statutes. As Chevron sets forth, courts must generally construe ambiguity in statutory text as an implicit delegation of rulemaking authority to the agency. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc. ,
Absent statutory ambiguity, however, agencies do not have the authority to decide what the law shall be. So when an agency invokes Chevron deference where it does not belong (because the relevant statutory text is not ambiguous), it is not deferring to Congress's exercise of legislative authority, but rather doing exactly the opposite-here, claiming for itself the power to grant or deny collective bargaining rights at particular workplaces.
This is no hypothetical concern. In this case, the Board asserts that Louisiana charter schools are subject to collective bargaining, but that Texas charter schools are not. See generally LTTS Charter Sch., Inc. d/b/a Universal Acad. & Kimberly Free ,
There is no ambiguity here. Charter schools that are privately opened and privately operated by privately chosen board members are unambiguously private entities, not political subdivisions. Accordingly, Congress has directed that those workplaces shall be subject to collective bargaining under the Act. Chevron affords the Board no authority to alter this determination. Under Chevron , only Congress has that power.
II.
Because the Board's claim of deference is wrong under Chevron , its demand for *780judicial deference raises constitutional concerns as well.
Congress has the power to make laws, and courts have the power to interpret them. And the separation of these respective powers from one another, and from the Executive, is an essential principle of our Founding vision. See , e.g. , Bond v. United States ,
Indeed, it is the consolidation of legislative and judicial power in executive agencies that has caused Chevron to be called into question by various Justices. See , e.g. , Pereira v. Sessions , --- U.S. ----,
As Justice Alito has recently reminded, of course, Chevron remains binding Supreme Court precedent. See Pereira ,
Threshold questions like ambiguity under Chevron are not just perfunctory speedbumps. They are the means by which we are asked to apportion interpretive power between the judicial and executive branches, as well as legislative power between the legislative and executive branches. See Michigan ,
Finding ambiguity where it does not exist-granting deference where it is not warranted-does not simply result in a nominal misallocation of power between different branches of government. It means that policymaking is no longer undertaken where it is most accountable to the people. And it means that government action is no longer undertaken in the manner that is most amenable to robust judicial review.
* * *
Our Founders did not separate power for its own sake, but to preserve liberty. Because the only way to preserve liberty is to constrain the exercise of power. So we separate power to limit power. By diffusing power across the three rival branches of government, we make it difficult for *781government to gang up on the citizen. For the Founders well understood that " '[t]here can be no liberty where the legislative and executive powers are united in the same person, or body of magistrates,' or, 'if the power of judging be not separated from the legislative and executive powers.' " THE FEDERALIST NO. 47 (James Madison) (quoting Baron de Montesquieu).
Accordingly, the Constitution divides power among the three branches, and requires government to run the gauntlet in order to exercise the coercive power of the sovereign. First, lawmaking is located where it is most politically accountable, as it should be-in the hands of legislators elected by the people. Second, law enforcement is separated from lawmaking, to avoid mob rule-in a separate branch of government under the authority of executive officials accountable to the President. Third, we subject government action to review for legality by a judiciary that is independent of the other two branches.
Misuse of the Chevron doctrine means collapsing these three separated government functions into a single entity. So too with Chevron , to be sure. But the misuse of Chevron in this case abrogates separation of powers without even the fig leaf of Congressional authorization.
Under its vision, the Board exercises lawmaking power by deciding who shall and shall not be subject to collective bargaining. It exercises executive power by issuing orders requiring compliance by private parties. And it demands that the judiciary defer to its actions. In sum, the Board consolidates power into a single entity that is both unaccountable to the people via Congressional election and immune from robust judicial review. That is not how the Constitution is supposed to work-and when it comes to unambiguous laws, it is not how Chevron is supposed to work.
Congress has spoken clearly here. Charter schools are unambiguously private organizations, not political subdivisions. Accordingly, the Board's claim of deference fails to comply with Chevron , never mind the Constitution. Only Congress can make law. So if law is to be made or changed, it must be done as the Constitution commands-through Article I, Section 7, not Article II, Section 2. I concur.
Reference
- Full Case Name
- VOICES FOR INTERNATIONAL BUSINESS AND EDUCATION, INCORPORATED, Doing Business as International High School of New Orleans, Petitioner Cross-Respondent v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner
- Cited By
- 10 cases
- Status
- Published