Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-05-05220/USCOURTS-caDC-05-05220-0/pdf.json

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

Argued April 21, 2006 Decided August 1, 2006

No. 05-5218

ALABAMA EDUCATION ASSOCIATION, ET AL.,

APPELLEES

v.

ELAINE L. CHAO, IN HER OFFICIAL CAPACITY AS SECRETARY

OF THE UNITED STATES DEPARTMENT OF LABOR,

APPELLANT

Consolidated with

05-5220

Appeals from the United States District Court

for the District of Columbia

(No. 03cv00253)

(No. 03cv00682)

Stephanie R. Marcus, Attorney, U.S. Department of Justice,

argued the cause for appellant. With her on the briefs were

Peter D. Keisler, Assistant Attorney General, Gregory G.

Katsas, Deputy Assistant Attorney General, Kenneth L.

Wainstein, U.S. Attorney, Michael J. Singer, Attorney, and

Mark S. Flynn, Counsel, U.S. Department of Labor. Michael J.

Ryan, Oliver W. McDaniel, and R. Craig Lawrence, Assistant

U.S. Attorneys, entered appearances.

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Nathan Paul Mehrens was on the brief for amici curiae

Stop Union Political Abuse, Inc. and U.S. Union Watch, Inc. in

support of appellant at the time the brief was filed. Roger Clegg

entered an appearance.

Andrew D. Roth argued the cause for appellees Alabama

Education Association, et al. With him on the brief were

Laurence Gold, and Robert H. Chanin.

David J. Strom and Teresa J. Idris were on the brief for

appellees Delaware Federation of Teachers, et al.

Before: GINSBURG, Chief Judge, and ROGERS and

GARLAND, Circuit Judges.

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 LaborManagement 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 Resources Defense Council, 467 U.S. 837 (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

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parties, we cannot say the “Congress had an intention on the

precise question at issue,” Chevron, 467 U.S. at 843 n.9; nor can

we say the Department’s revised reading of § 3(j)(5) is not a

“permissible” one, id. at 843. 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.

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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

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preceding paragraphs [(1)-(4)] of this 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 “individual[s] 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)). Until then, the Department

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had read the final clause of § 3(j)(5) (“which includes a labor

organization engaged in an industry affecting commerce within

the meaning of [§§ 3(j)(1)-(4)]”) (hereinafter the “which

includes ...” clause), as modifying the phrase “conference,

general committee, joint or system board, or joint council.”

Under that reading, a “conference,” etc., even if “subordinate

to a national or international labor organization,” was not

subject to the LMRDA unless it represented private sector

“employees” in a manner defined in any one of the four

paragraphs at §§ 3(j)(1)-(4). In other words, any labor

organization composed solely of public employees had no

statutory “employees,” was not a “labor organization” subject

to the Act, and therefore did not have to file annual financial

reports with the Department of Labor.

In 2002, however, the Department proposed to amend the

instructions for annual reporting to state that “‘any conference,

general committee, joint or system board, or joint council’ that

is subordinate to a national or international labor organization

will be required to file an annual report.” 67 Fed. Reg. at

79,284. Underlying this change was the Department’s

proposal to read the “which includes ...” clause of § 3(j)(5) as

modifying the phrase immediately preceding it -- “subordinate

to a national or international labor organization.” That reading

of § 3(j)(5) makes a “conference” et al. with solely public

sector members subject to the LMRDA if the conference is

subordinate to a “national or international labor organization”

that is subject to the Act.

The Department explained it was amending its filing

requirements in part to adopt the holding of the Ninth Circuit

in Chao v. Bremerton Metal Trades Council, AFL-CIO, 294

F.3d 1114 (2002), a suit the Department brought under the

LMRDA on behalf of a federal employee alleging the

Bremerton Council had not followed certain election

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procedures prescribed by the Act. Although the Council had

both private and public sector members, it argued it was not a

“labor organization” under § 3(i) because it did not “bargain

with any non-federal employers.” Id. at 1117. In resolving the

issue under § 3(j)(5), the court stated: “We must decide not

whether the Bremerton Council bargains directly with any

private employers but, instead, whether the Metal Trades

Department, the organization to which the Bremerton Council

is subordinate, is engaged in an industry affecting commerce.”

Id. Because the Metal Trades Department was so engaged and

was a “labor organization” under the LMRDA, the court

concluded the Bremerton Council, as a subordinate body, was

also subject to the Act. Id. at 1118. 

Prefacing its revised reading of § 3(j)(5) and related

disclosure proposals in the NPRM, the Department stated: 

Labor organizations also have changed tremendously

since the enactment of the LMRDA in 1959. There are

now far fewer small, independent unions and more large

unions affiliated with a national or international body ....

In fact, many large unions today resemble modern

corporations in their structure, scope and complexity ....

Moreover, just as in the corporate sector, there have been

a number of financial failures and irregularities involving

pension funds and other member accounts maintained by

labor organizations. These failures and irregularities

result in direct financial harm to union members. If the

members of labor organizations had more complete,

understandable information about their unions’ financial

transactions, investments and solvency, they would be in

a much better position than they are today to protect their

personal financial interests and exercise their democratic

rights of self-governance.

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67 Fed. Reg. at 79,280-81. 

After issuing the NPRM, the Department alerted certain

organizations they might be newly required to file annual

reports. Among the organizations notified were the appellee

state education associations (SEAs) and state federations of

teachers (SFTs). 

By their own account, each of the SEAs now before us is

“composed entirely of individual [public] employees who hold

direct membership,” and whom the “SEA represents ... in

dealing with their employers” concerning grievances, wages,

hours, and other conditions of employment. Each SEA is

affiliated with the National Education Association (NEA),

which, because it has private as well as public sector members,

is subject to the LMRDA. 

The SFTs describe themselves as “intermediate state level

union organizations that have only public sector members.”

Like the SEAs, they “do not ‘deal with’ private sector

employers.” The SFTs, however, are affiliated with the

American Federation of Teachers, which is in turn a member

of the American Federation of Labor and Congress of

Industrial Organizations; both the AFT and the AFL-CIO are

national or international “labor organizations” subject to the

Act. Because, under the Department’s proposed interpretation

of § 3(j)(5), the SEAs and SFTs may be deemed “subordinate

to” a “labor organization” and therefore subject to the

LMRDA, each group brought an action in the district court

seeking to enjoin the Department from promulgating and

enforcing its revised reading of § 3(j)(5). 

While those suits were pending in the district court, the

Department adopted the proposed rule. See Labor Org. Annual

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Fin. Reports, 68 Fed. Reg. 58,374 (Oct. 9, 2003) (Final Rule).

In so doing the Department considered comments submitted by

the NEA, the AFL-CIO, and others. Although the Department

recognized its revised interpretation of § 3(j)(5) “represent[ed]

a departure from previous court decisions and the

Department’s prior administration of the Act,” it nonetheless

maintained its new approach, along with that taken by the court

in Bremerton, was “the correct reading of the statutory

language.” 68 Fed. Reg. at 58,384. The Department

acknowledged that the Congress intended “to exempt ‘wholly

public sector’ labor organizations from the coverage of the

Act,” see 29 C.F.R. § 451.3(a)(4), but stated: “The Bremerton

court found that an intermediate labor organization is not

‘wholly public sector’ and exempt from the Act where it is

subordinate to a parent organization that meets the definition

of a labor organization engaged in an industry affecting

commerce.” 68 Fed. Reg. at 58,384. 

Thereafter the district court consolidated the appellees’

two pending suits, granted summary judgment for the SEAs

and SFTs, and enjoined the Department from enforcing the

new rule. See Ala. Educ. Ass’n v. Chao, Nos. Civ. A. 03-0253,

03-0682, 2005 WL 736535 (D.D.C. Mar. 31, 2005). Applying

Chevron step one, the district court held the Department’s new

interpretation of § 3(j)(5) was “contrary to the plain meaning

of the statute, its legislative history, and the congressional

purpose behind the law.” Id. at *9. In addition, it held the

Department’s reliance upon Bremerton was misplaced because

that decision “was too limited in its analysis to constitute

persuasive precedent.” Id. Having rejected the Department’s

revised reading of § 3(j)(5), the district court did not reach,

among other things, what it means to be “subordinate to a

national or international labor organization” and whether the

plaintiff SEAs and SFTs were in fact so subordinate. 

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II. Analysis

On appeal the Department contends its revised reading of

the LMRDA is entitled to deference under Chevron because §

3(j)(5) is, at the very least, ambiguous and its current

interpretation of that provision is supported by a reasoned

analysis. The SEAs argue Chevron is inapplicable because the

Department has no authority under the Act to “interpret” any

subsection of § 3, and both the SEAs and the SFTs disagree

with the Department on the merits of its new interpretation of

§ 3(j)(5). 

Under the two-step analysis of Chevron, we determine

first “whether Congress has directly spoken to the precise

question at issue,” 467 U.S. at 842 -- here whether an

organization that does not represent statutory “employees” or

deal with statutory “employers” may be subject to the

LMRDA. “[I]f the statute is silent or ambiguous” on that

question, then we must defer to the agency’s interpretation --

here the Department’s reading of § 3(j)(5) -- so long as it is

“based on a permissible construction of the statute.” Chevron,

467 U.S. at 843. When an agency adopts a materially changed

interpretation of a statute, it must in addition provide a

“reasoned analysis” supporting its decision to revise its

interpretation. Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 57 (1983). 

 

Not every agency interpretation of a statute is

appropriately analyzed under Chevron. That analysis is

applicable only “when it appears that Congress delegated

authority to the agency generally to make rules carrying the

force of law, and that the agency interpretation claiming

deference was promulgated in the exercise of that authority.”

United States v. Mead Corp., 533 U.S. 218, 226-27 (2001). 

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A. Applicability of Chevron

Although the SEAs and SFTs prevailed when the district

court reviewed the Department’s rulemaking under Chevron,

on appeal the SEAs (alone) argue the Department had no

authority to “interpret” § 3(j)(5) because the “Congress

definitively established the scope of the LMRDA’s coverage

by expressly defining the term ‘labor organization’ as used in

the Act.” Therefore, the SEAs urge, the Department’s

rulemaking was “beyond the Chevron pale,” Mead, 533 U.S.

at 234, and hence entitled only to “respect proportional to its

‘power to persuade,’” id. at 235 (quoting Skidmore v. Swift &

Co., 323 U.S. 134, 140 (1944)). 

The Department maintains the Congress expressly

delegated to it authority to resolve ambiguities in the Act,

including any in § 3. Specifically, the Department adverts to

§ 208 of the LMRDA, 29 U.S.C. § 438, which provides: 

The Secretary shall have authority to issue, amend, and

rescind rules and regulations prescribing the form and

publication of reports required to be filed under this

subchapter and such other reasonable rules and regulations

... as he may find necessary to prevent the circumvention

or evasion of such reporting requirements. 

According to the Department, it is authorized to delineate the

boundaries of the phrase “labor organization ... engaged in an

industry affecting commerce” in § 3(j)(5) precisely because

doing so is “necessary to prevent the circumvention ... of [the]

reporting requirements” of the Act. The Department also

maintains that because the Congress authorized it to bring civil

actions “as may be appropriate” to enforce the Act, 29 U.S.C.

§ 440, the Department may interpret § 3(j)(5) and other

provisions relevant to determining whether to bring a civil

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action. Relatedly, the Department contends Mead is inapposite

because “the Secretary has the knowledge, judgment and

expertise necessary ... to resolve ambiguities and fill in gaps in

the statute.” Cf. Gonzales v. Oregon, 126 S.Ct. 904, 914-16

(2006) (no delegation of authority to Secretary of Health and

Human Services in Controlled Substances Act to make

decisions requiring medical expertise); Am. Bar Ass’n v. FTC,

430 F.3d 457, 471 (D.C. Cir. 2005) (no delegation of authority

to FTC in Gramm-Leach-Bliley Act to regulate the legal

profession). 

We agree with the Department that its interpretation of §

3(j)(5) is reviewable under Chevron. That interpretation

clarifies the meaning of “labor organization ... engaged in an

industry affecting commerce” and therefore comes within its

express authority in § 208 to promulgate rules “prevent[ing]

the circumvention or evasion of [the statutory] reporting

requirements.” If the new reading reaches a “labor

organization engaged in an industry affecting commerce” that

until now had avoided disclosure under the LMRDA, that only

underscores the validity of the Department’s claim of authority

to issue its interpretive regulation. See AFL-CIO v. Chao, 409

F.3d 377, 385-86 (D.C. Cir. 2005) (upholding reporting

regulation issued per § 208 because, in construing § 201(b),

“Secretary could reasonably conclude that ‘[p]roviding

additional detail ... is necessary to give union members an

accurate picture of their labor organization’s financial

condition and operations’”). 

B. Chevron Step One 

At Chevron step one, the Department contends § 3(j)(5) is

“ambiguous on itsface” because the “which includes ...” clause

can be read to modify either the first or the second phrase of

paragraph (5). Further, the Department claims its new reading

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of the statute is the more consistent with applicable rules of

grammar and relevant interpretive canons. 

The Department invokes the “grammatical ‘rule ofthe last

antecedent,’ according to which a limiting clause or phrase ...

should be read as modifying only the noun or phrase that it

immediately follows.” Jama v. Immigration & Customs

Enforcement, 543 U.S. 335, 343 (2005) (quoting Barnhart v.

Thomas, 540 U.S. 20, 26 (2003)); see also 2A N. Singer,

Sutherland on Statutory Construction § 47.33, p. 369 (6th rev.

ed. 2000) (“Referential and qualifying words and phrases,

where no contrary intention appears, refer solely to the last

antecedent”). The last antecedent before the “which includes

...” clause is, of course, “national or international labor

organization.”

The SEAs and SFTs insist § 3(j)(5) is unambiguous and

fully consistent only with the Department’s prior

interpretation. They contend first that the “rule of the last

antecedent ... applies only to a limiting clause or phrase that

immediately follows a noun or phrase without any off-setting

punctuation.” See 2A N. Singer, Sutherland on Statutory

Construction § 47.33, p. 373 & n.5 (6th rev. ed. 2000). Here,

of course, the “which includes ...” clause is set off from the

preceding phrase by a comma. 

They also maintain that “each of the two clauses set off by

commas [must] be treated as stating an independent defining

characteristic of [the] Second Clause of § 3(i) [that is,]

‘conference, general committee, joint or system board, or joint

council.’” For this they rely upon United States v. Ron Pair

Enterprises, Inc., 489 U.S. 235 (1989), in which the Supreme

Court determined that the second clause in the last part of §

506(b) of the Bankruptcy Code, 11 U.S.C. § 506(b), is

independent because, among other things, it “is set aside by

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*Both sides invoke the legislative history of the LMRDA. The

Department relies upon Senator Goldwater’s statement regarding the

importance of ensuring intermediate labor bodies are covered under

the LMRDA in order to prevent “corrupt and racket infested unions

[from] continu[ing] to prey upon honest and decent dues-paying union

members.” 105 Cong. 6516, 86th Cong. 1st Sess. (Apr. 23, 1959).

The SEAs and SFTs also look to Senator Goldwater, as well as several

other senators, in support of their position that the Congress

manifestly intended to exclude from the ambit of the Act labor

organizations having solely public sector members. In protest of the

initial version of the bill, Senator Goldwater co-authored with Senator

commas.” 489 U.S. at 241. Section 506(b) states in part:

“[T]here shall be allowed to the holder of [a secured] claim,

interest on such claim, and any reasonable fees, costs, or

charges provided for under the agreement under which such

claim arose.” Because “interest on [a secured] claim” is an

independent clause, the Supreme Court held a secured creditor

is entitled to “interest” even if interest is not provided “under

the [security] agreement.” Ron Pair, 489 U.S. at 241-42. In

this case, the SEAs and SFTs reason that for an entity to

become subject to the LMRDA by means of § 3(j)(5),

regardless whether it is “subordinate to” another organization,

it must itself be deemed engaged in commerce under one of the

preceding paragraphs, §§ 3(j)(1)-(4).

The Department counters that “the placement of commas”

in § 3(j)(5) is of no moment. Indeed, the Department contends

that in Ron Pair itself “[t]he position ofthe commas was ... less

significant to the Court’s interpretation than the separation of

the phrase “‘interest on such claim’ ... from the reference to

fees, costs, and charges by the conjunctive words ‘and any.’”

Ron Pair, 489 U.S. at 241. The “which includes ...” clause in

§ 3(j)(5) has no conjunctive or other term indicating which of

the two preceding phrases it modifies. Therein, says the

Department, lies the inherent ambiguity of the provision.*

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Dirksen a Minority Report that stated: “As the bill now reads labor

unions whose membership consists of Government employees and

whose employers are governmental bodies or agencies of any kind ...

are subject to all requirements, restrictions, and limitations of the bill.”

S. Rep. No. 187, reprinted in U.S. Dept. of Labor, Legislative History

of the Labor-Management Reporting and Disclosure Act of 1959, at

199 (1959). The bill was then amended to include the first clause of

§ 3(i). The SEAs and SFTs argue the purpose of the amendment was

to ensure that no wholly public sector organization would be covered

by the Act. The Department argues that had the Congress truly

intended such a result, it would have omitted or altered the second

clause of § 3(i), which, as noted above, makes no mention of statutory

“employers” or “employees.” We find the parties’ references to

legislative history unpersuasive. If anything, the inconsistent

statements above merely confirm the inherent ambiguity of the statute.

In our view, nothing in § 3, including the definition of

“labor organization” in § 3(i), forecloses the possibility that a

body without private sector members may be subject to the

LMRDA if it is subordinate to or part of a larger organization

that does have private sector members. As noted above,

neither “employer” nor “employee” appear in the second part

of § 3(i) or in § 3(j)(5). With respect to § 3(j)(5), each side

advances a permissible interpretation. We find in the plain text

of that provision and the relevant subparts of § 3 no guidance

as to which of the first two phrases of § 3(j)(5) the Congress

intended the “which includes ...” clause to modify. Although

the Department is correct that the Supreme Court’s decisions

in Jama and Barnhart support application of the “rule of the

last antecedent,” the SEAs and SFTs are also correct that the

reading they advance is consistent with the Supreme Court’s

approach in Ron Pair. In sum, if the “Congress had an

intention on the precise question at issue,” Chevron, 467 U.S.

at 843 n.9, then we would not find such a patent ambiguity on

the face of § 3(j)(5). Accordingly, we proceed to

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C. Chevron Step Two 

 

Having arrived at Chevron step two, the Department

argues its revised interpretation is “permissible” and supported

by a “reasoned analysis.” In both the NPRM and the Final

Rule the Department stated that it was adopting the Ninth

Circuit’s reading of § 3(j)(5) in Bremerton “because that

interpretation gives full meaning to the plain language of the

statute.” 67 Fed. Reg. at 79,284. That is, the Department

believes Bremerton is consistent with the notion that the Act

does not extend to “wholly public” organizations: If an

intermediate body is subordinate to a “labor organization,” as

defined by the Act to mean an organization that represents

private sector employees, then that intermediate body is itself

not “wholly public.” See 68 Fed. Reg. at 58,384. 

Second, insofar as its revised interpretation may draw the

SEAs and SFTs into the ambit of the LMRDA, the Department

sees that as good policy: “Given the growing complexity of

union finances, as documented in the rule-making record,” the

idea that § 3(j)(5) “covers these types of intermediate labor

bodies is particularly well-founded.” As further evidence that

it acted upon the basis of a “reasoned analysis,” the

Department points to the notice-and-comment rulemaking, in

which it claims to have addressed fully the objections lodged

by the NEA, the AFT, the AFL-CIO, and the “one individual

union member” who supported their position. See 68 Fed.

Reg. at 58,383-84.

The SEAs and SFTs, which reject the foregoing arguments

in their entirety, contend the Department’s reliance upon

Bremerton is misplaced. In particular, the SEAs and SFTs

argue “theBremerton court’s conclusion that the [Council] was

covered by the LMRDA solely by virtue of its subordination to

an LMRDA-covered national organization was not at all

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necessary to the correct disposition of that case, much less a

considered resolution of the issue.” Because the Ninth Circuit

acknowledged the Bremerton Council had private sector

members, which was alone sufficient to bring the Council

within the definition of a “labor organization” under § 3(i), the

SEAs and SFTs contend the passage in Bremerton upon which

the Department purportedly based its rulemaking was a dictum.

They imply the Department’s reliance upon that decision was

particularly ill-considered because “[l]ong-standing case law

also supports the conclusion that wholly public sector unions

are not covered by the LMRDA.” See, e.g., Thompson v.

McCombe, 99 F.3d 352, 353 (9th Cir. 1996) (“A labor

organization composed entirely of public sector employees is

not a labor organization for purposes of the LMRDA”).

The Department replies that it properly relied upon

Bremerton because, “[i]n holding that the [Council] was

covered under the LMRDA, the Ninth Circuit ... relied solely

on the fact that the [Council] was subordinate to a parent

organization that met the LMRDA definition of ‘labor

organization.’” As for the “[l]ongstanding case law” to which

the SEAs and SFTs refer, the Department correctly points out

that those decisions either construe only the first clause of §

3(i) or merely defer to the Department’s prior interpretation of

the LMRDA. 

We think the SEAs and the SFTs well may have the better

reading of the statute -- but that is a close question and one we

need not decide. For we are obliged “to accept the agency’s

construction of the statute, even if the agency’s reading differs

from what the court believes is the best statutory

interpretation.” Nat’l Cable & Telecomms. Ass’n v. Brand X

Internet Servs., 125 S. Ct. 2688, 2699 (2005). As we noted

above, the Department’s position that the “which includes ...”

clause modifies the phrase immediately preceding it is, from a

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purely grammatical standpoint, by no means an impermissible

one. And we have made clear that “[a]n agency’s

interpretation of a statute is entitled to no less deference ...

simply because it has changed over time.” Nat’l Home Equity

Mortgage Ass’n v. Office of Thrift Supervision, 373 F.3d 1355,

1360 (D.C. Cir. 2004). Rather, the question raised by the

change is whether the Department has supported its new

reading of § 3(j)(5) with a “reasoned analysis” sufficient to

command our deference under Chevron. 

This the Department has failed to do. In the NPRM the

Department reported that much has changed during the last 40

years in terms of the size, financing, and structure of labor

organizations. Although the Department noted that “[t]here are

now far fewer small, independent unions and more large

unions affiliated with a national or international body,” some

of which experienced “financial failures and irregularities,” 67

Fed. Reg. at 79,280, the Department never linked these facts to

the purported concern with the transparency necessary to deter

circumvention of reporting requirements. Nor did the

Department offer examples, or even hypotheticals, to show

that its prior interpretation was deficient. Cf. AFL-CIO, 409

F.3d at 387-88 (proposed rule “illustrated the need for

additional reporting ... by pointing to examples in which union

members could not obtain detailed, reliable information on

[the] financial operations” of labor-related trust funds). 

In responding to comments submitted by the NEA and the

AFL-CIO, the Department relied upon the Ninth Circuit’s

decision in Bremerton, but did not acknowledge or seem to

realize that the court there did not face the question at issue

here, that is, whether a body that does not represent statutory

“employees” or deal with statutory “employers” may be

subject nonetheless to the LMRDA. For the Department to

claim it revised its reading of § 3(j)(5) in order to “adopt the ...

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*We do not reach the remaining question whether the plaintiff SEAs

and SFTs were “subordinate to a national or international labor

organization” under 29 U.S.C. § 405(j)(5). See supra p. 9. Nor do we

reach the question, raised by the plaintiff SEAs, whether “associations

of individual employees rather than associations of labor unions ... are

‘conference[s], general committee[s], joint or system board[s], or joint

council[s]’” under 29 U.S.C. § 402(i). Any interim relief that may be

necessary while those issues are pending, or while this case is on

remand to the Department of Labor for further explanation in

accordance with this opinion, is left to the district court in the first

instance.

“holding” of Bremerton, 67 Fed. Reg. at 79,284, therefore,

does not contribute anything toward the reasoned analysis

required of it. In sum, we cannot say the Department’s

interpretation of § 3(j)(5) is impermissible, but neither can we

say its decision to revise its reading of the Act is supported by

a reasoned analysis. 

III. Conclusion 

Although the Department’s revised reading of the

LMRDA is otherwise entitled to Chevron deference, the

Department has failed to supply a reasoned analysis supporting

its change of position. Accordingly, we vacate the order of the

district court permanently enjoining enforcement of the Final

Rule but “remand [the rule] to the Department ... for a reasoned

explanation of that change.” Brock, 835 F.2d 920; see id. at

913 n.2.*

So ordered.

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