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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

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Filed May 10, 1996

No. 95-5242

CHAMBER OF COMMERCE OF 

THE UNITED STATES, ET AL.,

APPELLANTS,

v.

ROBERT B. REICH, SECRETARY,

UNITED STATES DEPARTMENT OF LABOR,

APPELLEE

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On Suggestion for Rehearing In Banc

(No. 95cv00503)

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Before: EDWARDS, Chief Judge, WALD, SILBERMAN, BUCKLEY, WILLIAMS, GINSBURG,

SENTELLE, HENDERSON, RANDOLPH, ROGERS, and TATEL, Circuit Judges.

O R D E R

Appellee's Suggestion for Rehearing In Banc and the response thereto have been circulated

to the full court. The taking of a vote was requested. Thereafter, a majority of the judges of the

court in regular, active service did not vote in favor of the suggestion. Upon consideration of the

foregoing, it is

ORDERED, by the Court in banc, that the suggestion is denied.

Per Curiam

FOR THE COURT:

Mark J. Langer, Clerk

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BY: 

Robert A. Bonner 

Deputy Clerk 

Statements of Circuit Judges Wald and Tatel dissenting from the denial of rehearing in banc

are attached.

Statements of WALD and TATEL, Circuit Judges, dissenting from denial of petition for

rehearing in banc.

WALD, Circuit Judge: I would grant a rehearing in banc in this case. The panel's

supplemental opinion on rehearing performs a useful service by making clear the thrust of its ruling

that the NLRA bars only those government actions "directed at collective bargaining," not every

action which may "affect" bargaining. It thereby establishes some limits on its view of the reach of

NLRA Machinists preemption doctrine, which is the linchpin of the panel opinion's rejection of the

President's Executive Order. However, my concerns as to both the appropriate rubric for analyzing

this case and the result reached by the majority continue to a sufficient degree that I believe an in

banc hearing is warranted.

First, I am not convinced that preemption analysis is the appropriate analytic framework for

assessing the lawfulness of the Executive Order. Preemption doctrine, which rests on the Supremacy

Clause, isintended to ensure that state action does not "stand[ ] as an obstacle to the accomplishment

and execution of the full purposes and objectives of Congress." Hines v. Davidowitz, 312 U.S. 52,

67 (1941). Machinists preemption, the strand of NLRA preemption relied upon by the panel, applies

this basic principle to prohibit state regulation of economic self-help weapons, on the grounds that

the NLRA intendsthat employers and employees have unfettered control over these tools during the

collective bargaining process. Machinists Lodge 76 v. Wisconsin Employment Relations Comm'n,

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1The difference between the two analyses is not just academic. NLRA preemption doctrine

imposes a rigid bar against any state regulation of economic weapons; if a state statute does

regulate the use of these economic tools, it is preempted unless the state is acting in its proprietary

capacity. Federal regulation of these weapons, by contrast, is permitted if authorized by federal

statute. Although a federal agency (or the President) must convince the court that its

construction of the relevant statute is correct, restrictions on these economic tools pursuant to

statutes other than the NLRA are not presumptively impermissible. The judicial roadblock to

upholding any federal action, then, may be much lower if we look at the problem as one of two

potentially conflicting federal statutes, rather than a federal/state preemption analysis. 

427 U.S. 132 (1976). As with all preemption doctrine, the Machinists rule has consistently been

applied to state efforts to restrict the use of economic weapons in the collective bargaining process.

See, e.g., New York Telephone Co. v. New York State Dep't of Labor, 440 U.S. 519 (1979);

Metropolitan Life Ins. Co. v. Massachusetts TravelersIns. Co., 471 U.S. 724 (1985); Golden State

Transit Corp. v. City of Los Angeles, 475 U.S. 608 (1986). The panel opinion, however, applies the

same test to federal lawsthat may affect the way in which employers or employees can exercise their

bargaining weapons. See Chamber of Commerce v. Reich, 74 F.3d 1322, 1334 (D.C. Cir. 1996).

I have doubts about the appropriateness of the analogy.

In support oftheir reliance on preemption doctrine, the panel cites as primaryauthorityNLRB

v. Insurance Agents' Int'l Union, 361 U.S. 477 (1960). Insurance Agents presented the question of

whether the Board was authorized to find that a union had unlawfully refused to bargain, where it

utilized work slowdowns and other on-the-job conduct designed to interfere with an employer's

business during the course of collective bargaining negotiations. The Court ruled that the Board had

no such power, finding that the NLRA did not authorize the Board to control the substantive

outcome of collective bargaining by interfering with the parties' resort to economic weaponsthat the

Act intended to be unregulated. Id. at 490. Insurance Agents, then, turned on the scope of the

Board's authority under the NLRA, not on whether Congress could enact federalstatutes other than

the NLRA which restrict the use of economic weapons in labor disputes. That, I suspect, is a

different question altogether.1

Second, if, as I think plausible, "preemption doctrine" may not apply to other federal laws

which might affect the balance of power in the collective bargaining process, the real question for the

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2To be fair, parts of the panel opinion do appear to analyze the lawfulness of the Executive

Order in this manner. See, e.g., Chamber of Commerce, 74 F.3d at 1333 (discussing how to

construe boundaries of NLRA and Procurement Act). But the panel's holding rests squarely on

preemption doctrine, not statutory construction. 

court is where the jurisdictional line between the NLRA and the Procurement Act should be drawn.2

That is, does the Procurement Act, properly construed, permit the President to restrict the use of

permanent striker replacements by employers who choose to contract with the government, even

thoughtheNLRAgenerallyreserves controlofeconomic self-help weaponsto the bargaining parties?

I amnot confident ofthe answer, but I believe the question important enough to be addressed directly

by our court. The issue has heretofore arisen in only a few other contexts, none of which provide

clear guidance. For example, courts have had to draw proper boundaries between the NLRA and

federal antitrust laws, as well as between the Act and bankruptcystatutes. See PATRICKHARDIN,THE

DEVELOPINGLABORLAW 1729-71 (1992); see also Brown v. Pro Football, Inc., 50 F.3d 1041 (D.C.

Cir.), cert. granted, 116 S. Ct. 593 (1995). Similar cases have arisen involving conflicts between

RICO and the NLRA. See, e.g., United States v. Boffa, 688 F.2d 919 (3d Cir. 1982), cert. denied,

465 U.S. 1066 (1984); cf. Hubbard v. United Airlines, 927 F.2d 1094 (9th Cir. 1991) (examining

conflicts between Railway Labor Act and RICO). In resolving this issue, courts have considered a

range of factors, including legislative intent and the overarching policy goals of the relevant

regulatory schemes.

In only a very few cases have the courts attempted to reconcile the potential conflicts between

the NLRA and the Procurement Act. In AFL-CIO v. Kahn, this courtnot citing preemption

doctrine at allruled that the NLRA constrained the President's procurement authority only if its

exercise "subvert[s] the integrity of [the collective bargaining] process." 618 F.2d 784, 796 (D.C.

Cir.) (in banc), cert. denied, 443 U.S. 915 (1979). The Third Circuit's decision in Contractors

Association of Eastern Pennsylvania v. Secretary of Labor goes even further, holding that "[n]othing

in the National Labor Relations Act purports to place any limitation upon the contracting power of

the federal government." 442 F.2d 159, 174 (3d Cir.), cert. denied, 404 U.S. 854 (1971). Other

theories have been advanced by the parties as to where the line between the NLRA and the

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Procurement Act lies. In its brief here, the government claimed that the NLRA places no restrictions

on the President's authority when he is acting in a proprietary capacity, suggesting that any

inconsistencies in the two statutes must be resolved in favor of the Procurement Act, since it was

enacted later in time than the NLRA; the panel, in retort, dismissed this argument as violating the rule

against "repeals by implication." Appellants, on the other hand, argued that the NLRA completely

insulates the process of collective bargaining, even from government action pursuant to another

federal statute; they distinguish Kahn on the ground that the government may act to influence only

the substantive terms of a collective bargaining agreement, not the process. The panel offered yet

another theory, finding that the NLRA may allow the President to adopt procurement policies which

incidentally affect the terms of bargaining if those actions are aimed at all government contractors,

rather than intended to alter the bargaining process itself by shifting the balance of power between

labor and management.

To be candid, I am not prepared to say with confidence which of these constructions, if any,

is the right one. But I do know the issue merits close scrutinyI believe by the entire court. The

panel's decision to invalidate the Executive Order at stake here hassignificant implicationsfor federal

procurement policy and to my mind, cannot be easily reconciled with this court's in banc holding in

Kahn. The ruling also affects the lives and jobs of the millions of American workers employed by the

federal governmentby the majority's calculations, over one-fifth of the nation's labor force. To

ensure that we have given adequate attention to an issue with such potentially far-reaching

consequences and to clarify our circuit precedent, I would grant the suggestion for rehearing in banc.

TATEL, Circuit Judge: While the result the panel reaches may well be correct, I share Judge

Wald's view that this case raises questions ofexceptionalimportanceworthyofin banc consideration:

Should we use the preemptiondoctrine to determinewhether anExecutive Ordersetting procurement

policy violates the National Labor Relations Act, an approach we did not employ in AFL-CIO v.

Kahn, 618 F.2d 784 (D.C. Cir.) (in banc), cert. denied, 443 U.S. 915 (1979); and, if preemption

analysis is appropriate, how in light of Building & Construction Trades Council v. Associated

Builders & Contractors of Massachusetts/Rhode Island, 507 U.S. 218 (1993), do we determine

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whether the government has crossed the line from acting as a "proprietor" purchasing goods and

services to acting as a "regulator" of activities preempted by the NLRA? The answers to these

questions implicate not only the President's power to set federal procurement policywhich, as the

panel points out, directly affects 6.5% of our gross domestic product and a substantial portion of the

nation's workforcebut also the President's ability to act in other fields without running afoul of the

NLRA.

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