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Parties Involved:
National Labor Relations Board
Petitioner
Scepter, Inc.
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Decided May 16, 2006

No. 04-1267

SCEPTER, INC.,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with

04-1362

On Petition for Review and Cross-Application for

Enforcement

of an Order of the

National Labor Relations Board

Ian K. Leavy and Ronald G. Ingham were on the brief for

petitioner Scepter, Inc.

Arthur F. Rosenfeld, General Counsel, John H. Ferguson,

Assistant General Counsel, Aileen A. Armstrong, Associate

General Counsel, Robert J. Englehart and Philip A. Hostak,

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*

 This case was considered upon the record from the National

Labor Relations Board and upon the briefs submitted by parties. See

FED. R. APP. P. 34(a)(2); D.C. CIR. RULE 34(j).

Attorneys, National Labor Relations Board, were on the brief

for respondent.

Before: GINSBURG, Chief Judge, and ROGERS and

BROWN, Circuit Judges.

Opinion for the Court filed by Chief Judge GINSBURG.

GINSBURG, Chief Judge: Scepter, Inc., petitions the court

for review of a 2004 order of the National Labor Relations

Board in which the Board held it lacked jurisdiction to modify

the 2000 order we had previously enforced against the

Company, see Scepter, Inc. v. NLRB, 280 F.3d 1053 (2002).

Because Scepter failed to raise its current objection to the

earlier order before we enforced it, we deny the Company’s

petition for review and grant the Board’s cross-application for

enforcement.*

I. Background

After failing to reach an agreement with the union that

represented its employees, Scepter unilaterally changed the

employees’ wages and benefits. Id. at 1055. More

specifically, Scepter modified the coverage provided by its

medical insurance plan and made the plan contributory,

requiring that each employee pay a monthly premium of $19

to $24. Scepter Ingot Castings, Inc., 331 N.L.R.B. 1509,

1514 (2000) (hereinafter the 2000 Order). Scepter also

increased each employee’s wages by 45 cents per hour, 15

cents of which it said was “[t]o help offset” the insurance

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premiums. Id. In the 2000 Order, the Board held Scepter

made these unilateral changes in violation of §§ 8(a)(1) and

(5) of the National Labor Relations Act, 29 U.S.C. §§

158(a)(1), (a)(5). 331 N.L.R.B. at 1509, 1516. Accordingly,

the Board ordered Scepter to bargain with the union; to

“rescind either or both of the ... unilateral changes” -- but only

“[i]f requested by the Union”; and to “[m]ake employees

whole for any expenses ensuing” from the Company’s

adoption of the new medical insurance plan. Id. at 1510,

1517. 

Scepter petitioned this court for review of the 2000

Order, raising two objections. First, Scepter argued its

unilateral actions were justified because “it possessed a

genuine, reasonable uncertainty ... whether the Union enjoyed

the support of a majority of employees.” Scepter, 280 F.3d at

1056. Second, the Company objected to the imposition of a

bargaining order. We rejected the first argument and held we

could not address the second because the Company’s

objection was not sufficiently specific to preserve the issue for

review. Id. at 1056-57, citing § 10(e) of the NLRA, 29 U.S.C.

§ 160(e) (“No objection that has not been urged before the

Board ... shall be considered by the court”).

Thereafter the union requested rescission of the change in

medical insurance plans but not of the wage increase, and a

controversy arose over the amount of back pay Scepter owed

its employees in these circumstances. The General Counsel

issued a “Compliance Specification” stating that Scepter

should be required to (1) stop charging employees for medical

insurance and (2) pay each “employee ... an amount equal to”

the premiums he or she had theretofore been charged, plus

interest. Scepter objected to the latter provision on the ground

it would give the employees a windfall because they already

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had been compensated for the premiums they paid by the

concurrent increase in the wages they received. Scepter

therefore requested an “offset” against its “make whole”

liability in the amount of the increased wages it had paid.

An Administrative Law Judge, citing § 10(e), rejected

Scepter’s request on the ground that, the court having

enforced it, the Board “ha[d] no authority to modify” the 2000

Order, which clearly required Scepter, upon the union’s

request, to “rescind either or both” of the unilateral changes.

Scepter Ingot Castings, Inc., 341 N.L.R.B. No. 134, 2004 WL

1174585, at *9 (May 24, 2004) (hereinafter the 2004 Order).

The Board affirmed, id., at *2, Scepter petitioned for review,

and the Board cross-applied for enforcement. We will uphold

the Board’s legal conclusions if they are “reasonably

defensible,” Wackenhut Corp. v. NLRB, 178 F.3d 543, 553

(D.C. Cir. 1999).

II. Analysis

In support of its claim that the Board had jurisdiction in

2004 to modify the 2000 Order, Scepter first argues the Board

has an obligation to ensure the remedy enforced at the

compliance stage of a proceeding is appropriate, regardless

whether the order imposing that remedy has been enforced by

the court of appeals. Scepter next contends its request for an

offset was timely because the 2000 Order was ambiguous

with respect to the precise remedy being imposed;

consequently, at the compliance stage of these proceedings it

sought only clarification of its obligations under, and not a

modification of, the 2000 Order.

Scepter argues the Board had jurisdiction to allow the

requested offset because “[d]etermining and calculating the

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appropriate and exact remedy amount” are typically “deferred

to the compliance or back pay proceeding of a dispute.”

Citing our decision in Grondorf, Field, Black & Co. v. NLRB,

107 F.3d 882 (1997), Scepter maintains that when “so

directed by a U.S. Court of Appeals, the Board has the

responsibility to allow an employer to demonstrate ... any

necessary remedy [must] be offset or reduced to avoid an

improper windfall to employees.” The Board responds that it

has no authority to modify the remedy specified in a courtenforced order unless it had in that order reserved for later

consideration a specific question pertaining to that remedy.

The Board is correct. Section 10(e) of the NLRA

provides: “Upon the filing of the record with it the

jurisdiction of the court shall be exclusive and its judgment

and decree shall be final.” 29 U.S.C. § 160(e). The Board

obviously cannot modify an order over which the court has

“exclusive” jurisdiction or that the court has enforced in a

final judgment. Grondorf is not, as Scepter suggests, to the

contrary: The employer there challenged the remedy as a

windfall in its petition for judicial review of the order

imposing the remedy, not in an objection to a postenforcement Compliance Specification. 107 F.3d at 883, 888.

Although Scepter is surely correct that a court can order

the Board to modify an unlawful remedy, the court can

provide such relief only to a petitioner that timely seeks it.

The first and only opportunity for doing so is ordinarily in a

petition for review of the Board order imposing the remedy

but, if the Board reserves the issue for later consideration, that

opportunity will necessarily be deferred until the Board

resolves the issue in a subsequent order. See Cobb Mech.

Contractors, Inc. v. NLRB, 295 F.3d 1370, 1377 n.4 (D.C. Cir.

2002); Manhattan Eye Ear & Throat Hosp. v. NLRB, 942 F.2d

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151, 156 (2d Cir. 1991) (where Board “left open the precise

remedy to be imposed in the ordered backpay proceeding,”

court’s enforcement of order did not constitute “law of the

case” as to that issue).

Scepter seeks to avoid foreclosure under § 10(e) on the

additional ground it is not “attempting to modify the Board’s

original Order” but rather “trying to clarify what the Board

and this Court intended in the original ‘make whole’ remedy.”

Relying upon NLRB v. Katz’s Delicatessen of Houston Street,

Inc., 80 F.3d 755, 771 (2d Cir. 1996), Scepter argues the court

“surely would have found ... premature” any challenge to the

remedy provided in the 2000 Order if the Company had raised

such a challenge in its petition for review of that order.

The Board denies there is any ambiguity in the 2000

Order, which it maintains clearly “imposed two distinct

affirmative requirements on the Company”: (1) to “make

employees whole for any expenses” they incurred, and (2) to

“rescind” the wage increase “[i]f [so] requested by the

Union.” The Board argues, therefore, the 2000 Order put

Scepter fully “on notice” of the alleged windfall it now

protests.

We agree with the Board that the 2000 Order was clear

and that it follows Scepter should have challenged the remedy

in its petition for review of that order. Scepter could hardly

have failed to notice the Board both (1) expressly added to the

remedy proposed by the ALJ a provision requiring Scepter to

“[m]ake employees whole for any expenses ensuing from the

Respondent’s unilateral changes in medical insurance

coverage and contributions ... with interest,” 331 N.L.R.B. at

1510, and (2) adopted the ALJ’s proposal that the wage

increase be rescinded only “on request by the Union.” Id. at

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1511. The Board thus left no ambiguity about remedies in the

2000 Order. Nor, therefore, did it err in the 2004 Order, as

Scepter claims, by relying upon cases in which, as here, the

Board held it did not have jurisdiction to “clarif[y]” a courtenforced order that was not ambiguous. See, e.g., Grinnell

Fire Prot. Sys. Co., 337 N.L.R.B. 141, 141 (2001).

On the contrary, it is Scepter’s reliance upon Katz’s

Delicatessen that is misplaced. In the present case, the Board

imposed a remedy that, if objectionable at all, was

objectionable on its face. In Katz’s Delicatessen, on the other

hand, the Second Circuit concluded the employer’s challenge

to an order was premature because the Board had “yet to

determine how Katz’s [retroactive payments to union welfare

and pension funds] should be structured” so as to be remedial

for the employees and not a windfall for the union -- a matter

upon which, under Manhattan Eye, 942 F.2d at 159-60, the

validity of the remedy depended. See Katz’s Delicatessen, 80

F.3d at 771.

Scepter argues nonetheless that “[b]ecause the employers

in Grondorf, Manhattan Eye, and Katz’s Delicatessen were

allowed to demonstrate the alternative benefits provided to

employees and obtain offsets, [it] could not have anticipated

that the Board would not similarly calculate the appropriate

offset in calculating its remedy to prevent a double recovery

windfall.” As we have seen, however, those decisions are

inapposite; in each case the employer raised its objection at

the first opportunity. Scepter, in contrast, failed to object

until the 2000 Order had been enforced by this court and the

Board was powerless to amend it.

As the Board points out, the 2000 Order is akin to the

order enforced by the Seventh Circuit in NLRB v. Keystone

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Steel & Wire, Division of Keystone Consolidated Industries,

Inc., 653 F.2d 304, 306 (7th Cir. 1981), requiring the

employer both to restore the benefits employees would have

received under an unlawfully-revoked medical insurance plan

and to continue offering the benefits they newly received

under the plan the employer had unilaterally substituted. The

court “endorse[d] the Board’s policy” of “order[ing] a return

to the status quo ante with regard to the unfavorable changes,

but ... not penaliz[ing] employees by ordering revocation of

the favorable changes.” Id. at 308. In this case the Board

applied the same policy when, in the 2000 Order, it allowed

Scepter’s employees to keep the wage increase the Company

had unilaterally instituted without losing the benefit of the

non-contributory insurance plan the Company had unilaterally

terminated. Scepter had fair warning, both from the face of

the 2000 Order and from Board precedent, of the “heads they

win, tails you lose” nature of the remedy the Board was

imposing upon it.

III. Conclusion

Because Scepter did not in its petition for review of the

2000 Order challenge the remedy clearly imposed in that

order, it could not do so at the compliance stage of the

proceeding. The Board therefore correctly held in the 2004

Order that it lacked jurisdiction to grant Scepter’s postenforcement request for relief from the 2000 Order. Indeed, §

10 of the NLRA requires a party to file a timely exception to

an order of the Board precisely in order to “insure[] against

repetitive appeals to the courts,” Local 900, Int’l Union of

Elec., Radio and Mach. Workers, AFL-CIO v. NLRB, 727

F.2d 1184, 1191 (D.C. Cir. 1984), such as this one.

For the foregoing reasons, we deny Scepter’s petition for

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review and grant the Board’s cross-application for

enforcement.

So ordered.

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