## Facts

- The National Labor Relations Board (NLRB) adopted a rule for acute-care hospitals providing that, absent “extraordinary circumstances,” only eight defined employee bargaining units are appropriate.
- The rule standardized units (including registered nurses, physicians, technical employees, skilled maintenance employees, business office clerical employees, guards, and two residual groupings) and limited case-by-case variation.
- The American Hospital Association (AHA) challenged the rule on its face, arguing it exceeded the NLRB’s authority and conflicted with the National Labor Relations Act (NLRA).
- AHA asserted three objections: (1) NLRA § 9(b) requires the NLRB to determine an appropriate unit “in each case,” (2) legislative history of the 1974 health-care amendments warned against “undue proliferation” of units, and (3) the rule was arbitrary and capricious.
- A federal district court enjoined the rule, accepting the “undue proliferation” argument.
- The Seventh Circuit reversed and upheld the rule; the Supreme Court granted review.

## Issues

1. Whether NLRA § 9(b)’s requirement that the NLRB decide the appropriate bargaining unit “in each case” bars the NLRB from using rulemaking to establish presumptively appropriate units for acute-care hospitals.
2. Whether the rule is invalid because it conflicts with Congress’s admonition against undue proliferation of bargaining units in the health-care industry.
3. Whether the rule is facially invalid as arbitrary and capricious.

## Decision

- The Supreme Court affirmed the Seventh Circuit and upheld the rule.
- The Court held that the NLRB’s broad rulemaking authority under NLRA § 6 permits the adoption of general rules governing bargaining-unit determinations.
- The Court interpreted § 9(b)’s “in each case” language to require the NLRB to resolve unit disputes when they arise, not to forbid reliance on generally applicable rules.
- The Court held the anti-proliferation admonition in legislative history did not bar the rule, and the NLRB considered proliferation concerns in the rulemaking record.
- The Court rejected the facial arbitrary-and-capricious challenge, finding a rational basis supported by the agency’s record and experience.
- Justice Stevens delivered the opinion for a unanimous Court.

## Legal Principles

- An agency with statutory rulemaking authority may use general rules to structure and resolve issues that otherwise arise in adjudication, even when the statute contemplates decisions “in each case.”
- NLRA § 9(b)’s “in each case” requirement does not, by itself, prohibit the NLRB from establishing presumptions or default bargaining units through rulemaking.
- Legislative history urging consideration of a policy concern (such as limiting proliferation of units) does not invalidate an agency rule where the agency reasonably accounts for that concern.
- A facial arbitrary-and-capricious challenge fails where the rule has a rational basis grounded in the rulemaking record and the agency’s expertise in administering the statute.
- Where statutory text remains ambiguous after ordinary interpretive tools, courts may defer to the administering agency’s reasonable construction.

## Conclusion

The Court upheld the NLRB’s acute-care hospital bargaining-unit rule, concluding that the Board could use rulemaking to prescribe eight presumptively appropriate units, that the rule reasonably accounted for congressional concern about unit proliferation, and that the rule was not facially arbitrary or capricious.


Am. Hosp. Ass’n v. NLRB, 499 U.S. 606 (1991)