Case Name: UAW-LABOR EMPLOYMENT AND TRAINING CORPORATION, et al., Appellees, v. Elaine CHAO, Secretary of Labor, et al., Appellants
Court: United States Court of Appeals for the District of Columbia Circuit
Jurisdiction: District of Columbia
Decision Date: 2003-04-22
Citations: 355 U.S. App. D.C. 460
Docket Number: No. 02-5080
Parties: UAW-LABOR EMPLOYMENT AND TRAINING CORPORATION, et al., Appellees, v. Elaine CHAO, Secretary of Labor, et al., Appellants.
Judges: Before: RANDOLPH and ROGERS, Circuit Judges, and STEPHEN F. WILLIAMS, Senior Circuit Judge.
Reporter: United States Court of Appeals for the District of Columbia Circuit
Volume: 355
Pages: 460–470

Head Matter:
325 F.3d 360
UAW-LABOR EMPLOYMENT AND TRAINING CORPORATION, et al., Appellees, v. Elaine CHAO, Secretary of Labor, et al., Appellants.
No. 02-5080.
United States Court of Appeals, District of Columbia Circuit.
Argued March 7, 2003.
Decided April 22, 2003.
Gregory G. Katsas, Deputy Assistant Attorney General, U.S. Department of Justice, argued the cause for appellants. With him on the briefs were Roscoe C. Howard, Jr., U.S. Attorney, Mark B. Stern and Sharon Swingle, Attorneys, U.S. Department of Justice.
Robert M. Weinberg argued the cause for appellees. With him on the brief were Leon Dayan, Laurence Gold and Melvin S. Sehwarzwald. Robert Alexander entered an appearance.
W. James Young was on the brief for amicus curiae National Right to Work Legal Defense & Education Foundation, Inc. in support of appellants. With him on the brief was Glenn M. Taubman.
Before: RANDOLPH and ROGERS, Circuit Judges, and STEPHEN F. WILLIAMS, Senior Circuit Judge.

Opinion:
Opinion for the Court filed by Senior Circuit Judge STEPHEN F. WILLIAMS.
Dissenting opinion filed by Circuit Judge ROGERS.
STEPHEN F. WILLIAMS, Senior Circuit Judge:
On February 17, 2001, relying on his power under the Procurement Act, President Bush issued Executive Order 13201, applying to all governmént contracts involving more than $100,000. Executive Order 13201, § 2, 66 Fed.Reg. 11,221, 11,-221, 2001 WL 169257 (2001); 41 U.S.C. § 403(11) (2000). Under the order, each such contract must include a provision requiring contractors to post notices at all of their facilities informing employees of what are commonly known as General Motors and Beck rights. See Executive Order 13201, § 2, 66 Fed.Reg. at 11,221-22, 2001 WL 169257 (2001). (In addition, contractors must require subcontractors to post such a notice. Id.) These are rights under federal labor law that protect employees from being forced to join a union or to pay mandatory dues for costs unrelated to representational activities. See Communications Workers v. Beck, 487 U.S. 735, 754-63, 108 S.Ct. 2641, 2653-58, 101 L.Ed.2d 634 (1988); see also NLRB v. Gen. Motors Corp., 373 U.S. 734, 739-45, 83 S.Ct. 1453, 1457-61, 10 L.Ed.2d 670 (1963). Besides informing employees of their Beck rights, the notice is to tell them how they may contact the National Labor Relations Board ("NLRB") for additional information. 66 Fed.Reg. at 11,222, 2001 WL 169257.
Plaintiffs brought suit against the Secretary of Labor and the members of the Federal Acquisition Regulatory Council, seeking declaratory and injunctive relief. The plaintiffs are the UAW-Labor Employment and Training Corp. ("UAW") and three unions. UAW is a non-profit organization that provides job training and placement services; it is a federal contractor subject to the executive order. Accordingly it clearly has standing, and we need not consider whether the other plaintiffs do. See Mountain States Legal Found. v. Glickman, 92 F.3d 1228, 1232 (D.C.Cir.1996).
The plaintiffs claimed that the order was preempted by the National Labor Relations Act ("NLRA"), 29 U.S.C. § 151 et seq., and also that, for want of an adequate nexus to the government's interest in efficient and economical contracting, the President had no authority to issue it under the Federal Property and Administrative Services Act of 1949 (the "Procurement Act"), 40 U.S.C. § 471 et seq. (now codified as amended at 40 U.S.C. § 101 et seq.). The district court found preemption, granted declaratory relief, and issued a permanent injunction barring enforcement of the order. It didn't reach the Procurement Act question, but the plaintiffs raise it here as an alternative ground for affirmance. Finding both of plaintiffs' theories to be flawed, we reverse and remand for the district court to grant summary judgment in favor of the government.
As the issues relate solely to summary judgment, we review de novo. See Indep. Bankers Ass'n v. Farm Credit Admin., 164 F.3d 661, 666 (D.C.Cir.1999).
Federal labor law preemption falls into two categories, Garmon and Machinists preemption, named after the cases authoritatively articulating the theories — San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236, 79 S.Ct. 773, 3 L.Ed.2d 775 (1959), and Lodge 76, Int'l Ass'n of Machinists & Aerospace Workers v. Wisconsin Employment Relations Comm'n, 427 U.S. 132, 96 S.Ct. 2548, 49 L.Ed.2d 396 (1976). Garmon preemption applies to regulation (usually by states) of activities that are arguably "protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8." Garmon, 359 U.S. at 244, 79 S.Ct. at 779. Machinists preemption applies when a state attempts to regulate an activity that, although not necessarily protected or prohibited by the NLRA, is an "economic weapon" the exercise of which Congress intended to leave unrestricted. Machinists, 427 U.S. at 141, 96 S.Ct. at 2553-54. No claim is made that the posting of employees' Beck rights represents an economic weapon — certainly not one covered by Machinists preemption. Rather the plaintiffs argue and the district court found that the executive order is preempted under Garmon.
We first consider the government's suggestion that our preemption analysis should be less intrusive because the order only imposes a contract condition, and firms can choose to do business elsewhere. But at least in labor law, preemption applies to rules of the federal executive even when the government is acting as a purchaser of goods, as long as the government action is classified as regulatory rather than proprietary. See Chamber of Commerce v. Reich, 74 F.3d 1322, 1334, 1336-37 (D.C.Cir.1996); Bldg. & Constr. Trades Dep't v. Allbaugh, 295 F.3d 28, 34 (D.C.Cir.2002). A clause is likely to be found regulatory where it apparently "seeks to set a broad policy." Chamber of Commerce, 74 F.3d at 1337. Here, the government doesn't explicitly argue that its actions are proprietary, but notes occasionally that it is only inserting conditions into a contract that businesses voluntarily accept. But as the order operates on government procurement across the board, rather than being tailored to any particular setting, the order is regulatory under prevailing principles. See id. at 1336-37.
As we've said, Garmon preempts state (or here, federal executive) regulation of "activities [that] are protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8." Garmon, 359 U.S. at 244, 79 S.Ct. at 779. The district court misconceived this doctrine. It said that under Garmon "[t]he question is not whether the NLRA prohibits employers from posting Beck¡General Motors notices . but whether the NLRA prohibits requiring employers to post the notices." District Court Opinion at 14. The NLRB had ruled in Rochester Manufacturing Co., 323 N.L.R.B. 260, 1997 WL 113885 (1997), that it was not an unfair labor practice for an employer to say nothing to employees about their Beck rights, id. at 262, and the district court read Rochester Manufacturing as meeting its (misformulated) test. But the question under Garmon is whether the "activities" are protected or prohibited. 359 U.S. at 244, 79 S.Ct. at 779; see also Wisconsin Dep't of Indus. v. Gould Inc., 475 U.S. 282, 286, 106 S.Ct. 1057, 1061, 89 L.Ed.2d 223 (1986) ("States may not regulate activity that the NLRA protects, prohibits, or arguably protects or prohibits.") (emphasis added). Under the district court's approach every activity deemed by the Board not to be an unfair labor practice would be preempted, even though the Board had said no more than that the NLRA didn't speak to the matter at all.
The dissent makes a similar error when it suggests that the order is preempted because it conflicts with the "regulatory scheme" the Board has established. See Dissent at 368. This would be a sound analysis under "field" preemption, Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985), but Garmon works differently, operating only as to activities arguably protected or prohibited, not to ones simply left alone, even if left alone deliberately.
In the passage from Gould quoted above, the Court said (as indeed it had in Garmon, 359 U.S. at 245, 79 S.Ct. at 779-80) that Garmon preemption applies even to activities that are only "arguably" protected or prohibited by the NLRA. Plaintiffs note that in Rochester Manufacturing the General Counsel in fact argued that not posting Beck rights was an unfair labor practice. Assuming that a ruling accepting the General Counsel's position would survive deferential judicial review, it must follow, they say, that non-posting is "arguably" prohibited. (They make no claim that posting is arguably an unfair practice.) But International Longshoremen's Association v. Davis, 476 U.S. 380, 394-98, 106 S.Ct. 1904, 1914-16, 90 L.Ed.2d 389 (1986), indicates that the Board's actual decision controls; even if "there is an arguable case for preemption," the court "must defer to the Board, and only if the Board decides that the conduct is not protected or prohibited," is the regulation preemption-free. Id. at 397, 106 S.Ct. at 1916. See also id. at 395, 106 S.Ct. at 1914 (saying that the party claiming pre-emption must "advance an interpretation of the Act that is not plainly contrary to its language and that has not been 'authoritatively rejected' by the courts or the Board") (emphasis added); Hanna Mining Co. v. Dist. 2, Marine Eng'rs Beneficial Ass'n, 382 U.S. 181, 190, 86 S.Ct. 327, 332, 15 L.Ed.2d 254 (1965) ("We hold that the Board's statement [that the engineers were supervisors and thus not subject to the NLRA] does resolve the question with the clarity necessary to avoid preemption.") (emphasis added). Here the Board has decided that the activity is not prohibited. Of course a consequence may be that a reversal of position by the Board (if permissible) will entail a reversal of this outcome on preemption, but that is a consequence plainly contemplated in the Court's conclusion in Davis that a Board decision can resolve what is "arguable" for Garmon purposes. As a result, there is little basis for the dissent's concern that the Executive Order "would shift these decisions away from the Board." See Dissent at 368.
Garmon preempts not only regulation of activities arguably prohibited by the NLRA, but also regulation of ones arguably protected. Plaintiffs and our dissenting colleague argue that precisely such an activity is in question here — the employer's right to speak, protected by § 8(c) of the Act:
The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this sub-chapter, if such expression contains no threat of reprisal or force or promise of benefit.
29 U.S.C. § 158(c). We consider this speech argument only in the context of preemption; plaintiff raises no free-standing First Amendment claim.
Of course Garmon's own expression of its scope limits its preemption to activities that are arguably "protected by § 7 of the National Labor Relations Act, or constitute an unfair labor practice under § 8." 359 U.S. at 244, 79 S.Ct. at 779. Fitting a Gannon claim under the language of § 8(c) is awkward. That provision is expressly aimed at a special problem — the risk that a party's advocacy ("views, argument, or opinion") might be burdened (considered "evidence of an unfair labor practice") even though it contained "no threat of reprisal or force or promise of benefit." 29 U.S.C. § 158(c). Thus § 8(c) works to negate an unfair labor practice claim against an employer posting a notice. But that gives it only a peripheral link to the subject of Garmon. Even if we delete Garmon's references to specific sections, the activities described in § 8(c) do not "constitute an unfair labor practice," except by negation, and are not "protected by" the NLRA, except from the NLRA itself.
Nonetheless, because the Supreme Court has rather ambiguously invoked § 8(c) in determining whether state libel laws were subject to Garmon preemption (and finding that they were in some circumstances), Linn v. United Plant Guard Workers, 383 U.S. 53, 58 n. 3, 62-63, 86 S.Ct. 657, 661 n. 3, 662-63, 15 L.Ed.2d 582 (1966), we simply assume arguendo that § 8(c) rights could be a basis for preemption.
Section 8(c) "implements the First Amendment" in the labor relations area. NLRB v. Gissel Packing Co., 395 U.S. 575, 617, 89 S.Ct. 1918, 1941, 23 L.Ed.2d 547 (1969). And the First Amendment includes not only the right to speak, but also the right not to speak. See Riley v. Nat'l Fed'n of the Blind, 487 U.S. 781, 796-97, 108 S.Ct. 2667, 2677-78, 101 L.Ed.2d 669 (1988). But this is as far as plaintiffs' arguments can take them; even assuming that the § 8(c) right includes the right not to speak, an employer's right to silence is sharply constrained in the labor context, and leaves it subject to a variety of burdens to post notices of rights and risks. See, e.g., Nat'l Elec. Mfrs. Ass'n v. Sorrell, 272 F.3d 104, 113-16 (2d Cir.2001) (hazard labeling law); Lake Butler Apparel Co. v. Sec'y of Labor, 519 F.2d 84, 89 (5th Cir.1975) (posting of OSHA notice). Thus the dissent understandably offers no argument that employers' silence as to Beck rights is in fact protected (or even arguably protected). Its suggestion that the Board somehow acknowledged or created such a right in Rochester, see Dissent at 368, is perplexing, as the Board found only that it was not an unfair labor practice for the employer to not post the rights, see Rochester, 323 N.L.R.B. at 262, not that there was a right to silence or any § 8(c) protection. Thus the plaintiffs have pointed to no specific right covered by the order that is "arguably protected by the NLRA."
Finally, both the district court and the plaintiffs invoke language from our decision in Chamber of Commerce. There we struck down an executive order barring employers who contracted with the government from hiring permanent replacements, finding it preempted under Machinists because hiring permanent replacements was among the "economic weapons" that Congress intended the NLRA would leave in the hands of unions or management, as the case might be. 74 F.3d at 1334. In fact, Machinists mentioned hiring of permanent replacements as just such a weapon. 427 U.S. at 153, 96 S.Ct. at 2559. Here of course no one suggests that Machinists applies at all. In a paragraph at the end of Chamber of Commerce, however, the court said that "it appear[ed]" that the regulations also ran afoul of Garmon. 74 F.3d at 1338-39. We explained that the regulations would produce "a direct conflict with the NLRA," namely, by requiring some employers to bargain with a labor union that had lost majority support. Id. No such conflict exists here, so that aspect of Chamber of Commerce has no application.
Plaintiffs also point to a footnote in Chamber of Commerce, where we said:
We are also dubious that President Bush's Executive Order 12,800, which required government contractors to post notices informing their employees that they could not be required to join or remain a member of a union, was legal. It may well have run afoul of Garmon preemption which reserves to NLRB jurisdiction arguably protected or prohibited conduct.
74 F.3d at 1337 n. 10 (emphasis added). This of course refers to the Beck order issued by the first President Bush, which no one claims is materially different (for present purposes) from that of the current President. But we decided Chamber of Commerce before Rochester Manufacturing, where the Board rejected the claim that an employer committed an unfair labor practice by failing to post a Beck notice. 323 N.L.R.B. at 262. Until Rochester Manufacturing, therefore, under the framework set by Davis, that position was "arguable" and thus likely subject to Garmon preemption. We also note that the footnote is attached to an extensive discussion about whether the disputed executive order was regulatory or proprietary, and thus appears mainly to suggest that the court would also have classified the Beck order as regulatory; we agree.
* '!• *
As an alternative ground for affirmance the plaintiffs argue that the order is not within the President's authority under the Procurement Act. That act authorizes him to "prescribe such policies and directives, not inconsistent with the provisions of this Act, as he shall deem necessary to effectuate the provisions of said Act." 40 U.S.C. § 486(a) (2000) (now codified as amended at 40 U.S.C. § 121). In AFL-CIO v. Kahn, 618 F.2d 784 (D.C.Cir.1979), we read this as requiring that the executive order have a "sufficiently close nexus" to the values of providing the government an " 'economical and efficient system for . procurement and supply.' " Id. at 788, 792 (quoting 40 U.S.C. § 471 (now codified as amended at 40 U.S.C. § 101)). We emphasized the necessary flexibility and "broad-ranging authority" that we understood the Act to give the President. Id. at 789. And in fact we found the nexus test satisfied. Although the order required the government to prefer a high bid to a low one, where the low bidder was not in compliance with the government's price and wage guidelines, we accepted the proposition that the order would induce companies to comply, thereby slowing inflation, so that "the Government will face lower costs in the future." 618 F.2d at 792-93.
Here the executive order sought to connect its requirements to economy and efficiency as follows:
When workers are better informed of their rights, including their rights under the Federal labor laws, their productivity is enhanced. The availability of such a workforce from which the United States may draw facilitates the efficient and economical completion of its procurement contracts.
Executive Order 13201, § 1(a), 66 Fed. Reg. at 11,221, 2001 WL 169257. The link may seem attenuated (especially since unions already have a duty to inform employees of these rights), and indeed one can with a straight face advance an argument claiming opposite effects or no effects at all. But in Kahn, too, there was a rather obvious case that the order might in fact increase procurement costs (as it plainly did in the short run); under Kahn's lenient standards, there is enough of a nexus.
We reverse the district court's grant of summary judgment for the plaintiffs. As they asserted only the Garmon and Procurement Act claims against the lawfulness of the order, the district court on remand should grant summary judgment in favor of the government.
Reversed and remanded.
. The Court's opinion is unclear whether Garmon preemption applied because the speech in question was an activity arguably prohibited by the NLRA, so that § 8(c) simply limited the scope of, but was not a source of, preemption; or whether the speech in question was arguably "protected" by the NLRA.