PLF wins important first step in “union walkaround” lawsuit

Late Friday, the United States District Court for the Northern District of Texas denied (in part) OSHA’s motion to dismiss our lawsuit challenging the agency’s “union walkaround” rule. Filed back in September, our lawsuit challenges the so-called “Fairfax Memo,” issued by OSHA in 2013. The Fairfax Memo grants union operatives the ability to accompany OSHA inspectors when they undertake worksite inspections, even if the employees are non-unionized. In effect, the Fairfax Memo gives union recruiters a free pass to proselytize to non-union workers under the guise of “contributing positively” to a worksite inspection. PLF represents the National Federation of Independent Business, whose members had been forced to allow union operatives onto their property under the authority granted by the Fairfax memo.

While Friday’s ruling only denied OSHA’s motion to dismiss, the decision effectively holds that OSHA’s walkaround rule is illegal.  I’ll explain why after the jump.

Representing NFIB, PLF argued the Fairfax Memo was illegal for two reasons. First, the rule was adopted without going through the proper rulemaking procedures. In other words, because the Fairfax Memo substantively changes the rights and obligations of the regulated public, OSHA was required to provide notice and solicit comments from the regulated public before issuing it. Second, the Fairfax Memo is inconsistent with the text of the OSH Act, and is therefore unlawful.

After the filing, OSHA asked the court to dismiss the lawsuit. OSHA unloaded the kitchen sink of reasons why the court should refuse to hear the lawsuit. To wit: (1) NFIB was not injured by the rule; (2) even if it was injured, the injury was not caused by OSHA; (3) the Fairfax Memo is not final agency action; (4) the lawsuit is not ripe; (5) the OSH Act precludes review; and (6) NFIB had alternative legal remedies.  The Court rejected each of these defenses.

In rejecting each of these defenses, the Court held that the Fairfax Memo was final agency action and that it affects the rights and obligations of NFIB and its members. Accordingly, the Court essentially agreed with PLF that the Fairfax Memo is illegal because it was not adopted through formal agency rulemaking.  According to the Court, “The [Fairfax Memo] flatly contradicts a prior legislative rule.” The Court did, however, hold that the Fairfax Memo was not inconsistent with the text of the OSH Act, and therefore dismissed that claim.

Nevertheless, the ruling is huge win for PLF and NFIB. On the surface the Court’s decision only means that the lawsuit is not dismissed. But the reality is, that by rejecting each of OSHA’s procedural defenses, and by holding that the Fairfax Memo is final agency action, the Court essentially announced that the rule is illegal. PLF will soon move for judgment on that claim, and it is unlikely that OSHA has any remaining, untried defenses.