On September 8, the National Federation of Independent Business (NFIB) filed a federal court complaint in Dallas, seeking to strike down what has become known as the U.S. Occupational Safety and Health Administration’s (OSHA) “union walk around rule.” The lawsuit seeks a declaratory judgment that OSHA acted “arbitrarily and capriciously” in issuing the rule and did not afford the public an opportunity to comment on the rule before its promulgation. The NFIB also seeks to enjoin OSHA from enforcing the rule.

As we wrote back in 2013, on February 21, 2013, OSHA issued a letter, dubbed a “letter of interpretation,” stating that nonunion employees could select anyone—including outside, nonemployee union representatives—to accompany OSHA compliance officers during safety and health inspections of an employer’s work site. The letter contradicted OSHA’s longstanding position and still-on-the-books regulation mandating that any employee representative must be an employee of the employer, and has come to be known as the “union walk about rule.”

One year later, the Service Employees International Union (SEIU) used OSHA’s new “union walk around rule” in a high-stakes battle with the largest nonunion janitor service company in Houston, Professional Janitorial Service (PJS). SEIU officials filed four complaints against PJS with OSHA. These were the first complaints OSHA received about PJS in 26 years. SIEU representatives then accompanied OSHA compliance officers along on their subsequent inspections to various PJS worksites. PJS claimed none of its employees had selected SEIU personnel to represent them and that the complaints were the latest skirmish in the union’s efforts to malign the company. PJS filed a defamation lawsuit against SEIU and a jury found in PJS’s favor on September 6, 2016, awarding the company $5.3 million in damages.

The lawsuit filed by the NFIB mentions how the SEIU effectively used OSHA and its “union walk around rule” in an unsuccessful effort to intimidate PJS into unionizing. The lawsuit alleges that OSHA’s 2013 letter violates the Administrative Procedures Act (APA) because the letter of interpretation is actually a legislative or substantive rule with the force and effect of law, and therefore is subject to the act’s notice-and-comment provisions. The lawsuit also claims a violation of the Occupational Safety and Health Act of 1970, asserting that the law “contains no express authorization for a nonemployee to accompany the compliance officer.” The case is styled National Federation of Independent Business v. Dougherty, et al., 3:16-cv-025688 (September 8, 2016) and was filed in the United States District Court for the Northern District of Texas. The matter is assigned to District Judge Sidney Fitzwater.

The lawsuit will turn on an esoteric APA battle over whether OSHA’s 2013 letter is a legislative or substantive rule, which requires notice to and comment by the public, or—as OSHA will undoubtedly argue—is merely an interpretative rule that does not require notice and comment. The fact that OSHA labels the “union walk around rule” a letter of “interpretation” will not carry the day. In APA litigation, substance, not form, counts. Federal agencies, when eager to avoid the burdens or delays caused by APA rulemaking, have been known to dress up substantive rules as wolves in sheep’s clothing and proclaim them “guidance” or “interpretation.”

The line between legislative/substantive rules and interpretive rules seems bright, at least in theory: Legislative and substantive rules, generally speaking, alter the rights or interests of parties; interpretive rules, on the other hand, clarify or explain existing laws or regulations. The question becomes, essentially, what is the legal effect of the rule? But, in practice, the line can get fuzzy. Determining the legal effect of an agency pronouncement can be a difficult exercise.

If the NFIB prevails, the SEIU will have to find another way to gain access to nonunion worksites. If OSHA prevails, the ruling may embolden other unions to use the 2013 letter as a device to organize nonunion companies. However the district court rules, the decision is unlikely to become the final word on the matter. The losing party will almost certainly appeal the decision to the Fifth Circuit Court of Appeals.