Portillo’s argues that NLRB is unconstitutional in labor board filings

Portillo’s is one of the latest companies to respond to allegations of labor law violations by arguing that the structure of the National Labor Relations Board, which enforces labor law in the U.S., is unconstitutional, according to documents the company’s attorneys filed with the labor board Monday.

Portillo’s filings come after labor board officials issued a complaint against the fast-expanding hot dog giant earlier this month, alleging it violated labor law before and after a union election at its Addison food preparation facility last year.

Workers at that facility voted 28-20 to unionize in an April 2023 election that remains contested as the company has repeatedly challenged the results.

Oak Brook-based Portillo’s is one of a number of companies that have recently raised challenges to the labor board’s constitutionality either in lawsuits, labor board filings or hearings. Other companies that have raised constitutional issues over the board’s structure include Amazon, Trader Joe’s, Starbucks and SpaceX, which has filed two lawsuits against the NLRB in federal courts in Texas.

In a complaint issued July 8, local labor board officials alleged Portillo’s violated the law by illegally threatening employees with the loss of benefits if they unionized, threatening employees with termination because of their union activities, interrogating workers about their union activities and illegally surveilling their union activities.

The complaint also alleges Portillo’s granted a floating holiday to workers not organized with the union and denied that same benefit to organized workers.

In a statement, Portillo’s denied that allegation. “The law prohibits Portillo’s from awarding new benefits to our Addison team members until the process related to that vote is resolved,” the company said. “Portillo’s has strictly adhered to the law, and any suggestions to the contrary are meritless.”

In a response to the agency’s complaint, Portillo’s raised constitutional challenges to the structure of the labor board, which is the body that enforces federal labor law in the U.S.

In its defense filed Monday, Portillo’s suggested that the structure of the NLRB violates the separation of powers because it exercises prosecutorial, adjudicatory and legislative authority within the same proceedings.The company also argued that the agency’s administrative law judges and board members are unconstitutionally protected from removal, and that the agency’s structure violates the Seventh Amendment.

“Any recovery on the Complaint, or any purported cause of action contained therein, is barred on the grounds that the NLRB’s adjudication of private rights and legal relief violates the Seventh Amendment of the United States Constitution,” the company wrote as an affirmative defense.

In a statement to the Tribune, Portillo’s said it does not plan to join any lawsuits challenging the NLRB’s authority.

“As Portillo’s continues to move forward in good faith with the NLRB, we also recognize that recent court decisions have introduced important new federal case law considerations that must be evaluated, including those related to Administrative Law Judges at regulatory agencies,” the company said in a statement.

In June, the Supreme Court ruled that people accused of fraud by the Securities and Exchange Commission have the right to a jury trial in federal court. The case could have far-reaching implications for other federal agencies.

“We owe it to our stakeholders to raise all legal defenses that are available to us, including arguments stemming from the recent federal case law,” Portillo’s said.

In a statement, the International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, with whom the Portillo’s workers organized, said the company was “ramping up its attempt to interfere with its workers’ rights to organize and bargain collectively.”

“Portillo’s is siding with a group of corporate interests that want to undermine the voice of the working class and shift the balance of power in their favor,” the union said. “This is unacceptable and unjust.”

A hearing over the complaint issued against Portillo’s is scheduled for December.

Portillo’s arguments about the removability of the agency’s administrative law judges, who rule on complaints issued by regional labor board officials, echoes arguments made by Elon Musk’s SpaceX in a federal lawsuit filed in January, though Portillo’s said it has no plans to join such a lawsuit.

In that lawsuit against the NLRB, SpaceX also argued the labor board’s judges and board members are unconstitutionally protected from removal by the president.

SpaceX, which has filed two lawsuits against the NLRB, won an order granting a preliminary injunction in one of the cases this month. The injunction prevents the NLRB and its administrative law judges from proceeding with an administrative case against SpaceX in the matter at issue in the case, according to court records.

Trader Joe’s challenged the labor board’s constitutionality at a hearing over unfair labor practices officials alleged it committed in Massachusetts and Minnesota. Amazon and Starbucks have raised constitutional issues about the structure of the labor board and its judges in their own labor board filings.

In a statement issued in March this year, Starbucks said it was “not challenging the constitutionality” of the NLRB though the company acknowledged it had “highlighted that an issue along these lines may be relevant in future review of our cases” during past administrative proceedings.

After Trader Joe’s workers filed for a union election in Chicago, the grocer’s general counsel Kathryn Cahan emphasized the company had not filed or joined a lawsuit challenging the constitutionality of the labor board. Furthermore, she said, the company did not consider its challenge to the constitutionality of the NLRB an “argument.”

“At a hearing earlier this year we offered an affirmative defense, but that was not an argument,” she said.

Kate Bronfenbrenner, director of labor education research at Cornell’s School of Industrial and Labor Relations, said employers who have raised challenges to the NLRB have been spurned by a combination of an aggressive labor board that has not shied away from enforcing labor law and the swell of new labor organizing that has taken hold over the last few years.

“Suddenly, workers started to organize these firms that had long records of keeping unions out,” Bronfenbrenner said. “Employers are feeling that they’ve got to stop this.”

Challenges to the labor board, Bronfenbrenner said, are part of a wider universe of legal threats to the administrative state as a whole. In addition to the June decision regarding the SEC, the Supreme Court also that month overturned a 40-year-old decision known as Chevron that gave federal agencies more leeway when it came to enforcing the law.

Workers at two Portillo’s food preparation facilities have voted to unionize with the Ironworkers, though both elections remain contested.

Days after the election at its Addison facility last spring, Portillo’s asked the labor board to set aside the results, claiming the union made illegal promises to workers including telling them they could qualify for green cards or citizenship if they voted yes.

Last summer, labor board officials issued a report upholding the election, which Portillo’s appealed. In December, labor board officials again sided with the union in upholding the election. Portillo’s then appealed the election results again.

Workers at a similar food preparation facility in Aurora also voted to unionize with the Ironworkers this April ; Portillo’s objected to the election on similar grounds. A hearing in the Aurora case was held earlier this month.

“In our view, conducting a new free and fair election is the right thing to do to ensure that all our team members have a voice in this process, free from unlawful influence by the union,” the company said of the Aurora election earlier this month.

In a statement, workers’ center Arise Chicago, which has helped organize with the Portillo’s workers, described Portillo’s stance in its Monday filings as a “full-scale corporate attack on all working people and their right to a voice on the job.”

“Portillo’s is obviously afraid to simply recognize their workers’ union and sit down to start negotiating,” Arise said. “Portillo’s would rather spend massive amounts of money on legal fees fighting their own workers, and now directly attacking democracy on the job and protections of all workers’ rights.”