San Antonio-based BakerRisk Engineering & Risk Consultants Inc. has filed a federal lawsuit challenging the National Labor Relation Board’s authority to carry out administrative proceedings relating to complaints about unfair labor practices. Shown is the outside of the U.S. Courthouse in San Antonio.
Josie Norris/San Antonio Express-News
A San Antonio risk-management consulting firm’s battle with an employee it says it terminated for accessing and sharing confidential payroll data has landed in federal court.
The axed employee, who has not been named but worked in San Antonio, brought an action alleging unfair labor practices against BakerRisk Engineering & Risk Consultants Inc. in 2023. Such allegations are investigated by the National Labor Relations Board.
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On May 22, the labor board issued an administrative complaint that alleged BakerRisk’s conduct in terminating the employee was unlawful because she engaged in what the federal agency deemed “protected activity ‘by discussing wages with a coworker.’”
A labor board administrative law judge is scheduled to hear the case on Jan. 20. The judge would then issue a decision with a recommended order.
BakerRisk doesn’t want the case to get that far.
Last week, the company filed a lawsuit raising a constitutional challenge to the labor board’s authority. In doing so, BakerRisk is following in the footsteps of Elon Musk’s SpaceX and other Texas companies. Those companies thus far have prevailed in similar litigation filed in response to unfair labor practices complaints against them.
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BakerRisk wants a federal court in San Antonio to put a halt to the labor board’s proceedings and declare that the agency’s structure violates the Constitution because its officials are “insulated from presidential oversight.”
Just what the labor board has to say about the lawsuit couldn’t be determined. The agency has been closed because of the government shutdown.
Robert G. Chadwick Jr., BakerRisk’s lawyer in Plano, did not respond to an email seeking comment.
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Confidential payroll data
BakerRisk is an employee-owned consulting firm that specializes in technical risk management solutions, according to its website. It’s been in business since 1984 and employs a team of scientists and engineers who consult in such fields as oil and gas, manufacturing and agriculture.
In its lawsuit, BakerRisk alleges the employee “accessed the confidential payroll data of employees other than herself and shared with a co-employee, where others could hear, the co-employee’s own confidential payroll data as well as the confidential payroll data of other employees.”
The employee admitted in “her exit interview” that she shared the information without authorization, the suit says. She was terminated June 26, 2023, for violating company policy, the suit adds.
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About six weeks later, the woman filed her action with the labor board, alleging BakerRisk violated part of the National Labor Relations Act dealing with the protection of concerted activities, which includes discussions about wages.
The woman’s charge has not been made public by the labor board, but its website mentions her allegations reference “coercive rules,” “retaliation” and “discharge.”
Timothy Watson, the labor board’s regional director in Fort Worth, issued the administrative complaint in response to the woman’s charge and set a hearing before the administrative law judge.
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That complaint says BakerRisk violated federal law by discharging an employee for engaging in “concerted activities with other employees for the purposes of mutual aid and protected by discussing wages with a coworker,” according to the lawsuit.
Presidential control
In the lawsuit, BakerRisk says the structure of the labor board’s administrative proceeding “violates Article II of the Constitution,” which vests executive power with the president.
The article requires that the president “have sufficient control over the performance” of administrative law judges, or ALJs, BakerRisk says in its suit.
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But “this constitutionality required degree of control is lacking … when the ALJs are removable only for cause, by officials who themselves are removable only for cause,” the suit adds.
Two jurists on a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans confirmed that in an August ruling in the SpaceX case.
The two judges affirmed lower courts’ preliminary injunctions halting ongoing cases against SpaceX and two other companies over alleged unfair labor practices. The labor board argued that the lower courts in Texas lacked jurisdiction to stop its proceedings and abused their discretion, but the appeals court disagreed. A third judge concurred with the majority in part but also dissented in part.
“The Employers have made their case and should not have to choose between compliance and constitutionality,” the two-judge majority said in their ruling. “When an agency’s structure violates the separation of powers, the harm is immediate — and the remedy must be, too.”
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The labor board hasn’t indicated if it intends to appeal. It’s not clear if the government shutdown is the reason.
Union motion
On Oct. 31, the Office and Professional Employees International Union filed a motion with the U.S. Supreme Court asking to intervene in the case in an effort to get the nation’s high court to review the appeals court ruling. The appeals court already denied a similar motion filed by the union.
The union said this is an opportunity for the Supreme Court to “resolve an entrenched circuit split that is wreaking havoc on lawful administrative agency proceedings within the Fifth Circuit’s jurisdiction.”
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The union noted that three other appeals courts — the 2nd, 6th and 10th — have squarely held, and three others — the 3rd, 4th and D.C. circuits — have strongly implied, that a plaintiff “must make a formable showing of harm” to prevent a lawfully appointed federal officer “from exercising their powers on the basis of an allegedly unlawful statutory provision limiting removal.”
The Supreme Court has yet to take up the union’s request. The union represents employees in nonprofit organizations, technology, credit unions, hospitals, insurance agencies, colleges and universities, hotels, administrative offices and other businesses.
BakerRisk’s case has been assigned to U.S. District Judge Orlando Garcia.
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