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Perez v. Mortgage Bankers Association (13-1041); Nickols v. Mortgage Bankers Association

Issues

Is a federal agency required to engage in notice-and-comment rulemaking before it can alter an interpretive rule that articulates an interpretation of the agency’s regulation?

The Supreme Court will consider whether a significant change in an interpretive rule issued by the Department of Labor (“Department”) requires the Department to undergo the notice-and-comment process. The Department, Secretary of Labor Perez, and Nickols argue that the APA explicitly exempts interpretative rules from the notice-and-comment process. However, the Mortgage Bankers Association (“MBA”) argues that when an agency issues new interpretation that substantially changes a prior definitive interpretation and has the force of law, the agency has in fact engaged in substantive or legislative rulemaking and must undergo the notice-and-comment. The Supreme Court’s decision in this case may affect the extent to which agencies are held accountable for significant changes in their policy interpretations and the agencies’ power to amend rules that are ineffective or reflect an outdated view of the agency. 

Questions as Framed for the Court by the Parties

Perez v. Mortgage Bankers Assn.

The Administrative Procedure Act (APA), 5 U.S.C. 551 et seq., generally provides that “notice of proposed rule making shall be published in the Federal Register,” 5 U.S.C. 553(b), and, if such notice is required, the rulemaking agency must give interested persons an opportunity to submit written comments, 5 U.S.C. 553(c). The APA further provides that its notice-and comment requirement “does not apply * * * to interpretative rules,” unless notice is otherwise required by statute. 5 U.S.C. 553(b) (A). No other statute requires notice in this case. The question presented is:

Whether a federal agency must engage in notice-and-comment rulemaking before it can significantly alter an interpretive rule that articulates an interpretation of an agency regulation.

Nickols v. Mortgage Banker Assn.

The Administrative Procedure Act, 5 U.S.C. §§ 551-59, “established the maximum procedural requirements which Congress was willing to have the courts impose upon agencies in conducting rulemaking procedures.” Vt. Yankee Nuclear Power Corp. v. Natural Res. Def. Council, Inc., 435 U.S. 519, 524 (1978). Section 553 of the Act sets forth notice-and-comment rulemaking procedures, but exempts “interpretative rules,” among others, from the notice-and-comment requirement. 5 U.S.C. § 553(b). The D.C. Circuit, in a line of cases descending from Paralyzed Veterans of America v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir. 1997), has created a per se rule holding that although an agency may issue an initial interpretative rule without going through notice and comment, “[o]nce an agency gives its regulation an interpretation, it can only change that interpretation as it would formally modify the regulation itself: through the process of notice and comment rulemaking.” Id. at 586. In this case, the D.C. Circuit invoked the Paralyzed Veterans doctrine-which is contrary to the plain text of the Act, numerous decisions of this Court, and the opinions of the majority of circuit courts-to invalidate a Department of Labor interpretation concluding that mortgage loan officers do not qualify for the administrative exemption under the Fair Labor Standards Act.

The question presented is: 

Whether agencies subject to the Administrative Procedure Act are categorically prohibited from revising their interpretative rules unless such revisions are made through notice-and- comment rulemaking.

Under the Fair Labor Standards Act (“FLSA”), Congress established federal overtime guarantees for employees who work more than forty hours per week. See Mortgage Bankers Association v. Harris (“Harris”), 720 F.3d 966, 968 (D.C. Cir. 2013). At the same time, the FLSA exempts certain employees from its overtime requirements, including those “employed in a bona fide executive, administrative, or professional capacity[,] . . .

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Acknowledgments

The authors would like to thank Professor Cynthia Farina of Cornell Law School for her helpful insight into the issues of this case.

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Sandifer v. United States Steel Corp.

Issues

Should workers be compensated for time spent putting on and taking off safety gear, when the applicable collective bargaining agreement excludes time spent “changing clothes” from the compensable workday and that exclusion is permitted by section 203(o) of the Fair Labor Standards Act?

Petitioner Clifton Sandifer and a group of former and current steelworkers sued Respondent U.S. Steel for violating the Fair Labor Standards Act ("FLSA"). The steelworkers are represented by United Steelworkers, a labor union which has had a collective bargaining agreement in place with U.S. Steel since 1947. These collective bargaining agreements have stipulated that workers will not be paid for the time it takes to put on their safety gear before they start working or for the time it takes to remove their safety gear after they stop working. FLSA requires employers to pay workers for these activities, but section 203(o) allows exceptions to payment for time spent “changing clothes” when labor unions and management specify otherwise in collective bargaining agreements. The steelworkers in this case argue that putting on safety gear is not encompassed by the phrase “changing clothes,” which they contend only refers to changing from street clothes into work clothes. U.S. Steel argues that safety gear is included within that language and has been appropriately bargained over with the labor union. The decision in this case will clarify what activities are covered by section 203(o) and in doing so will provide clarity to management and labor unions when they collectively bargain over these issues. Specifically, the outcome of the case will determine whether unions may bargain away a statutory right of employees to be paid for time spent putting on and removing required safety gear for work.

Questions as Framed for the Court by the Parties

Under the Fair Labor Standards Act, the period of time during which a covered employee must be paid begins when the worker engages in a principal activity. Donning and doffing safety gear (including protective clothing) required by the employer is a principal activity when it is an integral and indispensable part of the activities for which the worker is employed. Such requirements are common in manufacturing firms. However, under section 203(o) of the Act an employer need not compensate a worker for time spent in "changing clothes" (even if it is a principal activity) if that time is expressly excluded from compensable time under a bona fide collective bargaining agreement applicable to that worker. 

The interrelated questions presented are: 

  1. What constitutes "changing clothes" within the meaning of section 203(o)? 
  2. If a worker's actions are a principal activity but fall within the scope of the section 203(o) exemption, do those actions nonetheless commence the period of time during which (aside from the clothes-changing time) the worker must be compensated? 
  3. If a worker engages in a principal activity which is not exempted by section 203(o), but which involves only a de minimis amount of time, does the activity nonetheless commence the period of time during which the worker must be compensated?

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Facts

The steelworkers involved in this collective action lawsuit are approximately 800 current or former employees of United States Steel Corporation (“U.S. Steel”), primarily from the company’s Gary, Indianaplant.

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Starbucks Corp. v. McKinney

Issues

Should courts grant preliminary injunctions against companies for labor disputes based on the traditional four-factor test or on a different standard of whether the injunction is “just and proper” when there is reasonable cause to believe the unfair labor practices occurred?

This case presents to the Supreme Court the issue of whether district courts should defer to the National Labor Relations Board’s (NLRB) preliminary investigations and legal judgments when deciding on preliminary injunctions under Section 10(j) of the National Labor Relations Act (NLRA) during unfair labor practice investigations. The Petitioner, Starbucks Corp., argues that the Sixth Circuit improperly weighted the scales in favor of the NLRB by deferring too much to the Board's initial assessment of the case and its labor-law expertise, thus undermining judicial independence and overstepping established boundaries of agency deference. The Respondent, the NLRB, maintains that such deference is warranted given its role, expertise in labor relations, and the comprehensive investigatory and adjudicative processes it undertakes before seeking injunctive relief under Section 10(j). The Court's determination will crucially affect the balance of power between administrative agencies and the judiciary and will have significant implications for labor practices and the enforcement of labor rights in the United States.

Questions as Framed for the Court by the Parties

Whether courts must evaluate the National Labor Relations Board’s requests for injunctions under Section 10(j) of the National Labor Relations Act using the traditional, stringent, four-factor test for preliminary injunctions or some other more lenient standard.

In January 2022, a shift supervisor, Nikki Taylor, at the Memphis Starbucks location decided she was interested in unionizing the Memphis store. McKinney v.

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The Ohio Adjutant General’s Department v. Federal Labor Relations Authority

Issues

Can the Federal Labor Relations Authority regulate the labor practices of state militias?

The Supreme Court in this case will determine whether the Federal Labor Relations Authority (“FLRA”) has jurisdiction to regulate state militia labor practices. The Ohio Adjutant General, Ohio Adjutant General’s Department, and the Ohio National Guard contend that the Ohio National Guard is under state control and that Congress has not expressly included state militias in the Federal Service Labor-Management Relations Statute, and thus the state militias are not subject to the FLRA’s jurisdiction. In contrast, the FLRA maintains that the Guard is subject to the FLRA’s jurisdiction because the statute memorialized various federal regulations providing collective bargaining rights to dual status technicians, and the FLRA’s jurisdiction is necessary to such rights. This case has significant implications for federal military power, labor relations for state militias, and the balance of power between state and federal governments.

Questions as Framed for the Court by the Parties

Whether the Civil Service Reform Act of 1978, which empowers the Federal Labor Relations Authority to regulate the labor practices of federal agencies only, empower it to regulate the labor practices of state militias.

In 2011, the Ohio National Guard (“the Guard”) signed a Collective Bargaining Agreement (“CBA”) with the American Federation of Government Employees (“the Union”), the union that represents the Guard’s technicians. The Ohio Adjutant General’s Dept., et al v.

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Unite Here Local 355 v. Mulhall

Issues

Does an agreement stipulating that an employer will remain neutral and give access to employee information in exchange for a union’s support of an employer-friendly ballot initiative, constitute a “thing of value” in violation § 302 of the Labor-Management Relations Act; or, must a thing of value be monetary for purposes of § 302?

In 2004, UNITE HERE Local 355 (“Local 355”) entered into an agreement with Hollywood Greyhound Track, Inc. (“Mardi Gras”), the employer of Martin Mulhall. Mardi Gras agreed to help Local 355 unionize Mardi Gras’s employees by remaining neutral in the process and giving Local 355 access to its facilities and employee information. If the unionization effort was successful, Mardi Gras would recognize Local 355 as the exclusive bargaining agent for its employees. In exchange, Local 355 promised to support a Florida ballot initiative that would allow casinos to operate slot machines in Broward and Miami-Dade Counties. Mulhall opposed the unionization effort and sought to block the agreement under § 302 of the Labor-Management Relations Act. Mulhall argues that under § 302 Mardi Gras’s promises are “things of value” and thus constitute an illegal payment from an employer to a union. Local 355 disagrees and contends that cooperative employer-union agreements have long been considered lawful. The Eleventh Circuit held that an employer’s promises in union-organizing agreements may constitute “things of value,” implicating § 302. The Supreme Court’s decision will impact the future of cooperative employer-union agreements and the way that employees and unions try to unionize. 

Questions as Framed for the Court by the Parties

Whether an employer and union may violate § 302 of the Labor-Management Relations Act by entering into an agreement under which the employer promises to remain neutral to union organizing, grants union representatives access to the employer’s property and employers in exchange for the union’s promise to forego its right to picket, boycott, or otherwise pressure the employer's business?

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Facts

On August 23, 2004, Petitioner UNITE HERE Local 355 (“Local 355”), entered into an agreement with Respondent Hollywood Greyhound Track, Inc. (“Mardi Gras”), the employer of Co-Respondent Martin Mulhall. See Mulhall v. Unite Here Local 355, 667 F.3d 1211, 1213 (11th Cir.

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Young v. United Parcel Service, Inc.

Issues

Does the Pregnancy Discrimination Act require employers who accommodate certain non-pregnant workers with work limitations to similarly accommodate pregnant workers?

The Supreme Court will have the opportunity to decide whether the Pregnancy Discrimination Act (“PDA”) requires employers who accommodate certain working limitations of non-pregnant workers to similarly accommodate pregnant workers. Young contends the PDA mandates that an employer must provide pregnant employees with the same accommodations that non-pregnant employees receive when non-pregnant employees are disabled or injured on-the-job. UPS, however, argues that the PDA requires no such accommodations. Additionally, while Young argues that UPS’s actions still constitute pregnancy discrimination under the McDonnell Douglas burden-shifting analysis, UPS maintains that its actions do not constitute pregnancy discrimination under the McDonnell Douglas test. The Supreme Court’s decision will likely impact the safeguards provided to women in the workplace and the efficiency of American businesses in providing such safeguards. 

Questions as Framed for the Court by the Parties

Whether, and in what circumstances, the Pregnancy Discrimination Act, 42 U.S.C. § 2000e(k), requires an employer that provides work accommodations to non-pregnant employees with work limitations to provide work accommodations to pregnant employees who are “similar in their ability or inability to work.”

In 1999, Respondent United Parcel Service, Inc. (“UPS”) hired Petitioner Peggy Sue Young. Young v. United Parcel Service, Inc., 707 F.3d 437, 440. In 2002, Young started driving UPS’s delivery trucks.

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