D.C. Circuit Punishes NLRB for Futile Appeal

By Jeffrey Rhodes November 9, 2016
D.C. Circuit Punishes NLRB for Futile Appeal

The National Labor Relations Board (NLRB) should not have cross-appealed to enforce an order against a company when applicable federal case law showed it would lose, the U.S. Circuit Court of Appeals for the District of Columbia ruled in awarding attorney fees against the board.

Heartland Plymouth Court MI LLC is a nursing home facility whose employees are represented by a union. The union sought to bargain over the reduction of employee hours. But because Heartland believed the issue was already covered in the collective bargaining agreement (CBA), it refused to negotiate with the union over the matter. The union filed an unfair labor practice with the NLRB, and the board issued an order finding that Heartland violated its CBA by failing to bargain over the effects of reducing employee hours.

[SHRM members-only Q&A: Unfair Management Practices: What is an unfair labor practice by management?]

Heartland had the ability to seek to overturn the board's decision based on D.C. Circuit case law. This case law holds that, because the issue was covered by the CBA, the employer did not need to negotiate the matter. This law contradicts prior board decisions that have held that, unless there was a clear and unmistakable waiver of the issue by the union, it is an unfair labor practice for the employer to refuse to bargain.

Heartland appealed the decision to the D.C. Circuit. In response, the board filed a cross-petition with the D.C. Circuit to enforce its order.

The D.C. Circuit granted Heartland's appeal and overturned the board's decision. The D.C. Circuit also denied the board's cross-petition for enforcement. Because the cross-appeal was futile, Heartland filed a motion for attorney fees to have the board punished.

In response to Heartland's motion, the board filed a brief that broadly asserted that the board had the unlimited right to challenge contrary circuit court precedent. The board stated that it would be justified in refusing to apply the law of any circuit court to its cases. The board even defended its "nonacquiescence policy," which applies when no circuit court supports the board's legal position.

The D.C. Circuit recognized that the board could legitimately hold to its nonacquiescence policy when there is a split of opinion between federal circuit courts. In such a case, however, the board bears the responsibility of either seeking to have its order enforced in a circuit in which the law supports its position or promptly seeking reversal by a rehearing of a full appeals court (rather than a panel) or by appeal to the United States Supreme Court.

In this case, the board did not seek to have the case heard by the 6th U.S. Circuit Court of Appeals. The board could have transferred the case to the 6th Circuit because Heartland is in the 6th Circuit. Thus, the D.C. Circuit found that the board's nonacquiescence was in bad faith and was simply intended to force Heartland to expend attorney fees to overturn the board's order. As a result, the D.C. Circuit awarded Heartland $17,649 in attorney fees.

Heartland Plymouth Court MI LLC v. NLRB, D.C. Cir., No. 15-1034 (Sept. 30, 2016).

Professional Pointer: The NLRB has been strongly opposed to many traditional management rights in the last several years. As this decision shows, however, when the board acts in such a way that it knows will be reversed, an employer may successfully obtain attorney fees.

Jeffrey Rhodes is an attorney with Doumar Martin in Arlington, Va.

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