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Federal Register/Vol. 76, No. 168/Tuesday, August 30, 2011/Rules and Regulations

provision, it did not include two
additional provisions that the Board
declared were necessary to prevent
‘‘unlawful encouragement of union
membership.’’ The Court disagreed,
stating

Perhaps the conditions which the Board
attaches to hiring-hall arrangements will in
time appeal to the Congress. Yet, where
Congress has adopted a selective system for
dealing with evils, the Board is confined to
that system. National Labor Relations Board
v. Drivers, etc. Local Union, 362 U.S. 274,
284–290, 80 S.Ct. 706, 712–715, 4 L.Ed.2d
710. Where, as here, Congress has aimed its
sanctions only at specific discriminatory
practices, the Board cannot go farther and
establish a broader, more pervasive
regulatory scheme.182

Congress in Section 8(a)(1) aimed its
sanctions only at employer actions that
interfere with the exercise of Section 7
rights. By this rulemaking, my
colleagues go farther and establish a
broader, more pervasive regulatory
scheme that targets employer inaction,
or silence, as unlawful interference. As
Local 357 instructs, they lack the
authority to do this.183

American Hospital Association v.
NLRB, 499 U.S. 606 (1991) (AHA), upon
which the majority heavily relies,
illustrates a valid exercise of authority
under Section 6. In AHA, the Supreme
Court unanimously upheld the Board’s
health care unit rule, finding that
Section 6’s general grant of rulemaking
authority ‘‘was unquestionably
sufficient to authorize the rule at issue
in this case unless limited by some
other provision in the Act.’’ Id. at 609–
10 (emphasis added). The Court further
found that the rule was clearly
consistent with authority under Section
9(b) to make appropriate bargaining unit
determinations. It specifically rejected
the argument that language in 9(b)
directing the Board to decide the
appropriate bargaining unit ‘‘in each
case’’ limited its authority to define
appropriate units by rulemaking.

Congress expressly authorized the
Board in Section 9(b) to determine
appropriate bargaining units and the
Board exercised its rulemaking
authority to promulgate a rule
‘‘necessary to carry out’’ Section 9(b). In
contrast, as previously stated, there is
no reasonable basis for finding that a
rule making it unlawful for employers to
fail to post and maintain a notice of
employee rights and selected illustrative

182 365 U.S. at 676.
183 My colleagues attempt to distinguish Local
357 as limited to an interpretation of Sec. 8(a)(3)
and 8(b)(2)’s prohibition of discriminatory
practices. That may have been the issue before the
Court, but I do not view the quoted rationale as so
limited.

unfair labor practices is necessary to
carry out any substantive section of the
NLRA. Nevertheless, the majority
construes AHA as an endorsement of
deference to the exercise of Section 6
rulemaking authority whenever
Congress did not expressly limit this
authority. This is patently incorrect. ‘‘To
suggest, as the [majority] effectively
does, that Chevron deference is required
any time a statute does not expressly
negate the existence of a claimed
administrative power * * *, is both
flatly unfaithful to the principles of
administrative law * * * and refuted by
precedent.’’ Railway Labor Executives’
Ass’n v. National Mediation Bd., 29
F.3d 655, 671 (D.C.Cir.1994) (citation
omitted). Were courts ‘‘to presume a
delegation of power absent an express
withholding of such power, agencies
would enjoy virtually limitless
hegemony, a result plainly out of
keeping with Chevron and quite likely
with the Constitution as well.’’ Id.

In sum, the majority’s notice rule does
not address a gap that Congress
delegated authority to the Board to fill,
whether by rulemaking or adjudication.
The Supreme Court has made clear that
‘‘[w]here Congress has in the statute
given the Board a question to answer,
the courts will give respect to that
answer; but they must be sure the
question has been asked.’’ NLRB v.
Insurance Agents’ Int’l Union, 361 U.S.
419, 432–433 (1960). The Supreme
Court also has made clear: ‘‘[Congress]
does not * * * hide elephants in
mouseholes.’’ Whitman v. American
Trucking Associations, 531 U.S. 457,
468 (2001).

My colleagues’ action here is
markedly like the Federal Trade
Commission (FTC) regulation rejected as
ultra vires by the court of appeals in
Am. Bar Ass’n v. FTC, supra. The FTC
issued a ruling that attorneys engaged in
certain practices were financial
institutions subject to the privacy
provision of the Gramm-Leach-Bliley
Act (GBLA). Upon review of the
detailed statutory scheme at issue, the
court found it ‘‘difficult to believe that
Congress, by any remaining ambiguity,
intended to undertake the regulation [of
a subject] * * * and never mentioned
[it] in the statute.’’ 430 F.3d at 469. The
court further opined that to find the
FTC’s interpretation to be ‘‘deference-
worthy, we would have to conclude that
Congress not only had hidden a rather
large elephant in a rather obscure
mousehole, but had buried the
ambiguity in which the pachyderm
lurks beneath an incredibly deep mound
of specificity, none of which bears the
footprints of the beast or any indication
that Congress even suspected its

presence.’’ Id. No such conclusion was
possible in that case. No such
conclusion is possible here. Quite
simply, the Board lacks statutory
authority to promulgate a rule that
imposes a new obligation on employers
and creates a new unfair labor practice
to enforce it.

The Rule Is Arbitrary and Capricious

Even if the Board arguably has
rulemaking authority in this area,
deference is unwarranted under
Chevron and the Administrative
Procedure Act if the rule promulgated is
‘‘arbitrary or capricious in substance, or
manifestly contrary to the statute.’’
United States v. Mead Corp., 533 U.S.
218, 227 (2001). Also see AHA, 499 U.S.
at 618–20 (applying arbitrary and
capricious standard in its consideration
of the Board’s rule on acute care
hospital bargaining units). ‘‘Normally,
an agency rule would be arbitrary and
capricious if the agency has relied on
factors which Congress has not intended
it to consider, entirely failed to consider
an important aspect of the problem,
offered an explanation for its decision
that runs counter to the evidence before
the agency, or is so implausible that it
could not be ascribed to a difference in
view or the product of agency
expertise.’’ Motor Vehicle Mfg. Ass’n of
the U.S., Inc. v. State Farm Mut. Auto.
Ins. Co., 463 U.S. 29, 43 (1983). ‘‘[T]he
agency must examine the relevant data
and articulate a satisfactory explanation
for its action including a ‘rational
connection between the facts found and
the choice made.’ ’’ Id. (quoting
Burlington Truck Lines v. United States,
371 U.S. 156, 168 (1962)). See also
Business Roundtable et al. v. S.E.C.,—
F.3d—, 2011 WL 2936808 (D.C. Cir.,
July 22, 2011) (finding SEC acted
arbitrarily and capriciously by relying
on insufficient empirical data
supporting its rule and by completely
discounting contrary studies).

In AHA, the Board’s health care
bargaining units rule was supported by
‘‘the extensive record developed during
the rulemaking proceedings, as well as
its experience in the adjudication of
health care cases during the 13-year
period between the enactment of the
health care amendments and its notice
of proposed rulemaking.’’ AHA, 499
U.S. at 618. The Supreme Court upheld
the validity of the rule finding it ‘‘based
on substantial evidence and supported
by a ‘‘reasoned analysis.’’ Id. at 619
(citing Motor Vehicle Mfrs. Ass., 463
U.S. at 57).

By contrast, the majority’s articulation
of the need to mandate that employers
violate Section 8(a)(1) unless they post
a notice of employee rights is not based

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