The United States Court of Appeals for the District of Columbia Circuit recently joined other courts in reining in the efforts of federal agencies to legislate by administrative action.  Specifically, in E.I. Du Pont De Nemours and Company v. NLRB, the D.C. Circuit held that the National Labor Relations Board overstepped its authority when it departed from prior NLRB precedent without “reasoned justification.

The underlying dispute arose when the employer, Du Pont, unilaterally implemented changes to its employee benefits program during the course of negotiating a new collective bargaining agreement.  In making these changes, Du Pont relied upon its past practice of making unilateral modifications to its benefit plans during the open-enrollment period consistent with the plan documents and the management rights clause of the expired contract.  Du Pont also relied on NLRB precedent in Courier-Journal, which allowed for the continuation of past practice in order to maintain the status quo while bargaining continued.  

Notwithstanding its own precedent, the NLRB found Du Pont’s actions to be an unfair labor practice, a decision which Du Pont appealed.  Finding against the NLRB, the D.C. Circuit remanded the case back to the NLRB with instructions to either “conform [the decision] to its precedent” or explain its decision to overturn that precedent.  In other words, although the NLRB is entitled to change its interpretation of applicable law, the D.C. Circuit admonished the NLRB to do so only with proper explanation.   

Some management representatives may see the underlying NLRB decision as evidence of a trend by the current NLRB to issue decisions that are more favorable to unions than in the past.  This D.C. Circuit decision, then, is a positive sign that while the NLRB can make interpretative shifts, it must do so in a manner that allows all parties to rely upon predictable legal outcomes in the dynamic field of labor relations.