Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-01-01468/USCOURTS-caDC-01-01468-0/pdf.json

Parties Involved:
BPH & Company, Inc.
Petitioner
National Labor Relations Board
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

–————

No. 01–1468 September Term, 2002

Filed On: June 27, 2003

BPH & COMPANY, INC., AS SUCCESSOR TO HEPC PALMAS, INC.,

D/B/A WYNDHAM PALMAS DEL MAR RESORT AND VILLAS,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

–————

Before: EDWARDS, SENTELLE and HENDERSON, Circuit

Judges.

O R D E R

It is ORDERED by the court that the opinion filed in this

case on June 27, 2003 be amended to

1. Add to the end of the first paragraph of the

opinion text, on page 2, (following ‘‘Wyndham Palmas

del Mar Resort, 334 N.L.R.B. No. 70 (2001) [hereinafter

Order].’’) the following sentence: ‘‘The Board has filed a

cross-application for enforcement.’’; and

2. Replace the final sentence of the opinion text on,

on p. 13, with the following sentence ‘‘For the foregoing

reasons, we grant the Company’s petition for review,

deny the Board’s cross-application for enforcement and

vacate the order of the Board.’’

Per Curiam

 For the Court:

 Mark Langer

 Clerk

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 1 of 14
Notice: This opinion is subject to formal revision before publication in the

Federal Reporter or U.S.App.D.C. Reports. Users are requested to notify

the Clerk of any formal errors in order that corrections may be made

before the bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 6, 2003 Decided June 27, 2003

No. 01-1468

BPH & COMPANY, INC., AS SUCCESSOR TO HEPC PALMAS, INC.,

D/B/A WYNDHAM PALMAS DEL MAR RESORT AND VILLAS,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

On Petition for Review and Cross–Application

for Enforcement of an Order of the

National Labor Relations Board

Howard S. Linzy argued the cause for the petitioner.

Robert Lombardi was on brief for the petitioner.

Ruth E. Burdick, Attorney, National Labor Relations

Board, argued the cause for the respondent. Arthur F.

Rosenfeld, General Counsel, John H. Ferguson, Associate

General Counsel, Aileen A. Armstrong, Deputy Associate

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 2 of 14
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General Counsel, and Margaret A. Gaines, Attorney, were on

brief for the respondent.

Before: EDWARDS, SENTELLE and HENDERSON, Circuit

Judges.

Opinion for the court filed by Circuit Judge HENDERSON.

KAREN LECRAFT HENDERSON, Circuit Judge: BPH & Co.

(Company)1

 petitions this court for review of a decision and

order of the National Labor Relations Board (NLRB or

Board) holding that the Company violated section 8(a)(1) and

(5) of the National Labor Relations Act (NLRA or Act), 29

U.S.C. § 158(a)(1), (5), when it withdrew its recognition of the

Union de Trabajadores de la Industria Gastronomica de

Puerto Rico, Local 610, HEREIU, AFL–CIO (Union) as the

exclusive bargaining representative of its employees. Wyndham Palmas del Mar Resort, 334 N.L.R.B. No. 70 (2001)

[hereinafter Order]. The Board has filed a cross-application

for enforcement.

The Board maintains that the Company’s petition should be

dismissed because the Company failed to raise its objections

to the Board before seeking judicial review as required by

section 10(e) of the Act. See 29 U.S.C. § 160(e). We disagree and hold that it properly raised its objections before

the Board. On the merits, we conclude that the Board’s

decision is not based on substantial evidence and, accordingly,

grant the Company’s petition.

I.

A.

In 1996 the Company acquired property in Humacao, Puerto Rico where it operated a resort hotel and restaurant.

Shortly thereafter, in February 1997, the Company recognized the Union as the exclusive bargaining representative of

its employees and commenced collective bargaining. Approximately six weeks after it recognized the Union (on March

1 BPH & Co. is the successor to HEPC Palmas, Inc. which was

the employer at all relevant times in this proceeding. For convenience, we refer to the employer as ‘‘the Company.’’

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 3 of 14
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26),2

 the employees filed a petition to decertify the Union as

their bargaining representative pursuant to sections 7 and 9

(a) and (c) of the NLRA, 29 U.S.C. §§ 157, 159(a), (c).

The Union then filed charges against the Company, alleging that it had unlawfully refused to bargain with the Union

and had unlawfully coerced the employees to sign the decertification petition. In early June, the Union withdrew its

refusal to bargain charge and entered an informal settlement

agreement (Agreement)3

 with the Company regarding the

remaining unfair labor practice charges. Under the Agreement, the Company agreed not to assist or solicit employees

in the promotion, presentation or circulation of a petition to

decertify the Union and not to promise employees increased

wages and/or benefits in exchange for their support of a

decertification petition. It further agreed to post a 60–day

notice of the Agreement. The employee representative who

filed the decertification petition also agreed to withdraw the

petition. Significantly, the Agreement specifically includes a

nonadmission clause as follows: ‘‘By entering into this settlement agreement the Employer [the Company] does not admit

having violated the National Labor Relations Act.’’ Settlement Agreement of June 5, 1997, Joint Appendix (JA) 18.

The parties recommenced bargaining until September 5,

when employees filed a second decertification petition with

the Board. The petition contained the signatures of the

majority of employees (183 of 255) collected between July 10

2 All events occurred in 1997 unless otherwise noted.

3 The Board’s Casehandling Manual describes three kinds of

settlements: (1) a ‘‘formal’’ settlement, which ordinarily requires a

Board order followed by a court order of enforcement; (2) an

‘‘informal’’ settlement, which provides that the charged party will

take certain action to remedy ULPs and requires the Regional

Director’s approval but not a Board order or court decree; and (3) a

‘‘non-board adjustment.’’ NLRB CASEHANDLING MANUAL §§ 10140,

10146.1, 10164.1 (Nov. 2002), available at http://www.nlrb.gov/

manuals/chm/chm1–6.pdf. See Mammoth of Cal., Inc. v. NLRB,

673 F.2d 1091 (9th Cir 1982). The Agreement here effects an

informal settlement.

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 4 of 14
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and August 23. On September 15 the Company formally

withdrew recognition of the Union. The Company’s withdrawal spurred the Union to refile charges and this time the

Regional Director issued a complaint, charging that the Company had violated section 8(a)(1) and (5) of the Act by

unlawfully withdrawing recognition of the Union. Order

Consolidating Cases, Consolidated Complaint and Notice of

Hearing, at ¶ ¶ 7, 9, JA 40. The matter was submitted to the

Board on briefs and stipulated facts.

B.

Under well-settled precedent, an incumbent union enjoys a

presumption that it represents a majority of employees. Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 37

(1987). Unless it rebuts the presumption, an employer that

refuses to bargain with the union by withdrawing recognition

violates section 8(a)(1) and (5) of the Act. NLRB v. Curtin

Matheson Scientific, Inc., 494 U.S. 775, 778 (1990).4

 It can

do so by showing that at the time of the withdrawal, ‘‘either

(1) the union did not in fact enjoy majority support, or (2) the

employer had a ‘good-faith’ doubt, founded on a sufficient

objective basis, of the union’s majority support.’’5

 Id. (em4 Section 8(a)(1) and (5) make it an unfair labor practice (ULP):

(1) to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in section 157 of this title

[section 7 of the NLRA];

TTTT

(5) to refuse to bargain collectively with the representatives of

his employees, subject to the provisions of section 159(a) of this

title [section 9(a) of the NLRA].

29 U.S.C. § 158(a)(1), (5).

5 In Levitz Furniture Co. the Board eliminated the good faith

doubt alternative, requiring the employer to show ‘‘the Union has

actually lost support of the majority of the bargaining unit employees.’’ Levitz Furniture Co. 333 N.L.R.B. No. 105, 2001 WL 314139,

at *2, *11 (Mar. 29, 2001) (emphasis added); see Marion Hosp.

Corp. v. NLRB, 321 F.3d 1178, 1186–87 (D.C. Cir. 2003) (acknowlUSCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 5 of 14
5

phasis removed) (citing Station KKHI, 284 N.L.R.B. 1339

(1987), enforced, 891 F.2d 230 (9th Cir. 1989)).6

 A decertification petition signed by a majority of the bargaining unit

suffices for an employer to have a good faith doubt about the

union’s majority support. Vincent Indus. Plastics, Inc. v.

NLRB, 209 F.3d 727, 737 (D.C. Cir. 2000); Sullivan Indus. v.

NLRB, 957 F.2d 890, 898 (D.C. Cir. 1992); Nat’l Med. Hosp.

of Orange Inc., 287 N.L.R.B. 415, 417 (1987). Nevertheless,

the employer may not withdraw recognition based on a ‘‘good

faith doubt’’ if unfair labor practices ‘‘significantly contribute

to such a loss of majority or to the factors upon which doubt

of such majority is based.’’ St. Agnes Med. Ctr. v. NLRB,

871 F.2d 137, 146–47 (D.C. Cir. 1989) (internal quotations

omitted). In that case, the ULPs ‘‘taint’’ the petition. Thus,

if ‘‘the Board determines that unremedied ULPs contributed

to the erosion of support for the union, the employer may

commit an unfair labor practice by withdrawing its recognition.’’ Vincent Indus., 209 F.3d at 737 (citations omitted);

see Olson Bodies, 206 N.L.R.B. 779, 780 (1973). To make its

determination, the Board uses the four-factor test of Master

Slack Corp., 271 N.L.R.B. 78, 84 (1984).7

 Vincent Indus., 209

F.3d at 737; Lee Lumber & Bldg. Material Corp. v. NLRB,

edging change in Board policy effected by Levitz Furniture Co.).

The change does not apply, however, to cases—as here—pending

when Levitz was decided. Levitz Furniture Co., 333 N.L.R.B. No.

105, 2001 WL 314139, at *17.

6 The presumption is irrebuttable, however, for one year following

certification. Curtin Matheson, 494 U.S. at 777–78.

7 The Master Slack test considers:

(1) [t]he length of time between the unfair labor practices and

the withdrawal of recognition; (2) the nature of the illegal acts,

including the possibility of their detrimental or lasting effect on

employees; (3) any possible tendency to cause employee disaffection from the union; and (4) the effect of the unlawful

conduct on employee morale, organizational activities, and

membership in the union.

Master Slack Corp., 271 N.LR.B at 84; see Vincent Indus., 209

F.3d at 737–38.

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 6 of 14
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117 F.3d 1454, 1458–60 (D.C. Cir. 1997) (per curiam); NLRB

v. Williams Enters., 50 F.3d 1280, 1288 (4th Cir. 1995).

The Company argued before the Board that, consistent

with this long-held precedent, it lawfully withdrew recognition

of the Union based on the September 5 decertification petition signed by a majority of its employees. It emphasized

that the Stipulation of Facts contained no facts supporting

any ULP and that the Agreement provided no basis for any

ULP finding because it contained an express nonadmission

clause. See supra at 4–5. The Board, however, concluded

that the Company had violated the Act. Order at 5. Without

finding that any ULP in fact tainted the petition, presumably

because, as it acknowledged, ‘‘there has been no finding by

the Board (or admission by the Respondent) that an unfair

labor practice was committed,’’ the Board decided that an

employer that enters into a settlement agreement under

which it agrees to remedial notice posting cannot ‘‘lawfully

challenge the Union’s majority status on the basis of [an]

antiunion petition that was signed during the 60–day posting

period.’’ Id. at 3, 5. Relying on its decision in DouglasRandall, 320 N.L.R.B. 431 (1995), and on the holding in Poole

Foundry & Machine Co. v. NLRB, 192 F.2d 740 (4th Cir.

1951), the Board defended its decision—despite the fact that

it found no ULP that caused disaffection with the Union—on

the policy ground that the Board must have the power to give

effect to the remedies included in a settlement agreement.

Order at 3 (‘‘ ‘[A] settlement agreement is not an admission or

finding or unlawful conduct,’ but TTT ‘in order to give proper

effect to such an agreement, the [decertification] petition

should be dismissed.’ ’’ (quoting Douglas-Randall, 320

N.L.R.B. at 435 n.9)). Here, it said, the employer entered

into an agreement under which it ‘‘agreed to take precisely

the sort of remedial action that the Board might have ordered

to redress a violation of the Act: to post a notice for 60 days

stating that it would not engage in unfair labor practices that

were the subject of the Union’s charge.’’ Id. at 3. If an

employer could withdraw recognition based on a petition

signed during the posting period, the Board reasoned, the

purpose of the notice-posting remedy—to cure the ‘‘lingering

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 7 of 14
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effects of the settled unfair labor practice conduct’’—would be

defeated. Id. at 4. In addition, the Board used the charged

conduct to support its conclusion that the Company caused

the employees to become disaffected with the Union, thereby

tainting the decertification petition and making the Company’s resulting withdrawal of recognition a violation of section

8(a)(1) and (5). Id. at 5. Accordingly, the Board ordered the

Company to bargain with the Union. Id. at 5–6. The

Company then petitioned this court for review.

II.

The Board first asserts that we lack jurisdiction to consider

the Company’s petition because it did not raise before the

Board, as required by section 10(e) of the Act, the issues it

now presses before us. Section 10(e) of the Act mandates

that ‘‘No objection that has not been urged before the Board,

its member, agent, or agency, shall be considered by the

court, unless the failure or neglect to urge such objection

shall be excused because of extraordinary circumstances.’’ 29

U.S.C. § 160(e). The Board maintains that the Company’s

failure to challenge the ‘‘rule’’ established in the Board’s

decision ousts us of jurisdiction to review it. Objections to a

new Board ‘‘rule’’—here, the application of the Master Slack

analysis to conduct that is simply charged—are preserved for

judicial review, it emphasizes, only if they are first raised in a

motion to reconsider before the Board. See Int’l Ladies’

Garment Workers v. Quality Mfg. Co., 420 U.S. 276, 281 n.3

(1975) (petitioner’s objection that Board’s application of new

theory of liability violated its due process rights required to

be raised first in post-decision motion); see also Woelke &

Romero Framing, Inc. v. NLRB, 456 U.S. 645, 666 (1982)

(parties’ failure to raise issue on reconsideration before Board

prevented judicial review); Corson & Gruman Co. v. NLRB,

899 F.2d 47, 49–50 (D.C. Cir. 1990) (per curiam) (section 10(e)

barred objection to retroactive application of new Board rule

because objection not first raised in motion to reconsider).

The critical inquiry under section 10(e), however, is ‘‘whether the Board received adequate notice of the basis for the

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 8 of 14
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objection.’’ Alwin Mfg. Co., Inc. v. NLRB, 192 F.3d 133, 143

(D.C. Cir. 1999); see Marshall Field & Co. v. NLRB, 318 U.S.

253, 255 (1943) (per curiam) (objections sufficient to ‘‘apprise

the Board that [the party] intend[s] to press the question’’ on

appeal); Parsippany Hotel Mgt. Co. v. NLRB, 99 F.3d 413,

417 (D.C. Cir. 1996) (ground for exception must be evident if

not explicit); see also Local 900, Int’l Union of Elec. v.

NLRB, 727 F.2d 1184, 1192 (D.C. Cir. 1984) (notice of objection sufficient to preserve issue not discussed by Board).

Here, despite the Board’s first-time application of Master

Slack to alleged, as opposed to established, conduct and

despite the fact that the Company’s attack on the Board’s

new application is made for the first time before us, the

Board was sufficiently apprised, for the purpose of section

10(e), of the critical issue—whether the Board’s ULP findings

are supported by substantial evidence.

Indeed, in the Company’s brief to the Board, it argued that

it did not violate the Act because it properly relied on the

second decertification petition to withdraw recognition of the

Union. It asserted that the decertification petition was not

tainted because neither the Stipulation of Facts nor the

allegations set forth in the Agreement constituted sufficient

evidence upon which the Board could find it had caused

employee disaffection with the Union, declaring:

There is no evidence in the Stipulation of Facts of

management coercion or of employer involvement in the

gathering of signatures. And it cannot be argued that

the March 1997 charges taint the validity of [the petition]. The parties amicably settled those disputes, and

the settlement expressly disavowed any wrongdoing by

[the Company]. Neither the Settlement Agreement nor

the posted notices call into question the objectivity or

validity of the signatures in [the petition].

Brief of Respondent at 6–7, JA 108–09. The Company further emphasized:

A stipulated set of facts eliminates any fact dispute, and

the stipulations firmly establish the requisite elements of

a lawful withdrawal of recognition by [the Company]: (1)

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 9 of 14
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a written petition; (2) signed by a substantial majority of

employees; (3) in the absence of any unfair labor practices; and (4) presented to [the Company’s] General

Manager. [The Company] properly acted on its doubt

about the Union’s majority status.

Id. at 7.

We believe the Company adequately apprised the Board of

its insufficiency-of-evidence argument to comply with section

10(e). The Board in fact acknowledged the Company’s insufficiency argument: ‘‘The Respondent asserts that the petition

was not tainted, because there is no evidence of management

coercion or involvement in the collection of signatures.’’ Order at 2. Accordingly, we conclude that the Board was

sufficiently apprised of the Company’s substantial evidence

objection, notwithstanding its not being addressed expressly

to the conduct alleged in the Agreement, to allow us to review

the Company’s petition.

If the Board orders an employer to bargain with a union

notwithstanding the existence of a facially valid decertification

petition, we have consistently required the Board to support

with substantial evidence its finding that the employer’s

ULP(s) ‘‘tended to undermine a union’s majority support.’’

Quazite v. NLRB, 87 F.3d 493, 496 (D.C. Cir. 1996); Avecor

Inc. v. NLRB, 931 F.2d 924, 934 (D.C. Cir. 1991), cert. denied,

502 U.S. 1048 (1992) (substantial evidence must support finding that ULP tended to undermine majority strength).

Although the Board does not dispute that in adjudicated

cases it may not find that an employer unlawfully withdrew

recognition based on a decertification petition without also

finding—based on substantial evidence—that the employer’s

ULP(s) caused disaffection with the union,8

 it nonetheless

asserts that it may find that the employer violated section

8 The Board acknowledges as much: ‘‘[U]nlike Master Slack, the

Union’s unfair labor practice charge was resolved by an informal

Board settlement agreement; there has been no finding by the

Board (or admission by the Respondent) that an unfair labor

practice was committed.’’ Order at 3.

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 10 of 14
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8(a)(1) and (5) because ‘‘regardless whether [the Company]

admitted or denied engaging in unlawful conduct, [it] agreed

to a remedy.’’ Id. at 4.

The Board uses the Fourth Circuit’s decision in Poole

Foundry & Machine Co. v. NLRB, 192 F.2d at 743–44, as

authority for its conclusion.9

 In Poole the court upheld the

Board’s bargaining order, concluding that the employer’s

withdrawal of recognition of the union based on a decertification petition signed by sixty-four of sixty-six employees within

four months of the employer’s settlement agreement with the

union violated section 8(a)(1) and (5) of the Act. Id. The

court acknowledged that ‘‘[w]hile not an admission of past

liability, a settlement agreement does constitute a basis for

future liability and the parties recognize a status thereby

fixed.’’ Id. at 743. It explained,

An entire structure or course of future labor relationships may well be bottomed upon the binding effect of a

status fixed by the terms of a settlement agreementTTTT

Otherwise, settlement agreements might indeed have

little practical effect as an amicable and judicious means

to expeditious disposal of disputes arising under the

terms of the Act.

Id.

The Board reads this language to empower it to fashion a

rule that, even without a ULP finding, ensures that the

remedy contained in a settlement agreement achieves its

purpose. Just as the Board in Poole required that an employer that agreed to bargain with the union agreed to do so

for a reasonable time, thereby furthering the purpose of that

remedy, so too can the Board adopt a rule designed to ensure

that the purpose of the notice-posting provision is accom9 The Board also relies on its decision in Douglas-Randall, in

which it affirmed the Regional Director’s dismissal of a decertification petition after the employer settled section 8(a)(5) charges. The

Douglas-Randall decision was not judicially reviewed and its rationale is expressly derived from Poole. Douglas-Randall, 320

N.L.R.B. at 432–33.

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plished, namely: ‘‘ ‘to provide sufficient time to dispel the

harmful effects of the [allegedly unlawful] conduct’ and to

ensure that employees are fully informed of their statutory

rights.’’ Order at 4 (quoting Chet Monez Ford, 241 N.L.R.B.

349, 351 (1979) (alterations in original)).

We believe the Board missed the point of Poole. In approving the Board’s ‘‘reasonable time’’ requirement, the Fourth

Circuit upheld the Board’s holding that an agreement to

bargain with the union necessarily implies an agreement to

bargain for a reasonable time—otherwise the agreement

would be meaningless. Poole, 192 F.2d at 743–44. By withdrawing recognition less than four months later, the employer

violated section 8(a)(1) and (5) because the employer had gone

back on its agreement to bargain: ‘‘It follows that Poole, after

having solemnly agreed to bargain with the Union, should not

be permitted, within three and one-half months after the

agreement, to refuse so to bargain, even if as here, the Union

clearly did not represent a majority of the employees.’’ Id.

The Board’s power to act in that case was not based on the

fact that the employer ‘‘agreed to a remedy’’ but instead on

the fact that the employer violated the settlement agreement.10

10 We also note that Poole has been limited to cases in which

section 8(a)(5) refusal-to-bargain charges are made and the employer agrees to bargain with the union. As the Seventh Circuit

explained:

Underlying [the Poole] rationale are the competing interests of

employee free choice versus stable bargaining relationships and

industrial peace. The Board has implicitly made the determination that employee free choice may be temporarily sacrificed (in

that an employer may be forced to bargain with a union that no

longer has the support of a majority of the employees) for a

‘‘reasonable time’’ so as to give the bargaining relationship an

opportunity to succeed and thereby promote industrial stabilityTTTT It appears to us, however, that the primary justification for this infringement on employee free choice is to restore

with some force a bargaining relationship that was interrupted

as a result of the employer’s refusal to bargain. That justification is absent here [because] [i]n the present case, unlike in any

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We well recognize that the Board bears the ‘‘primary

responsibility for developing and applying national labor policy,’’ Curtin Matheson, 494 U.S. at 786, and ‘‘necessarily must

have the authority to formulate rules to fill the interstices of

the broad statutory provisions.’’ Beth Israel Hosp. v. NLRB,

437 U.S. 483, 500–01 (1978). In addition, we will ‘‘uphold a

Board rule as long as it is rational and consistent with the

Act, even if we would have formulated a different rule.’’

Curtin Matheson, 494 U.S. at 787 (citation omitted). But

such deference is not afforded if the Board’s rule is inconsistent with the Act. NLRB v. United Food & Comm. Workers

Union, Local 23, 484 U.S. 112, 123–24 (1987). Here the

Board’s rule contravenes the Act because it allows the Board

to routinely find a violation of the Act in the absence of

substantial evidence. The only evidence on which the Board

based its finding that the Company’s ULPs caused the loss of

support for the Union is the Agreement—an Agreement that

specifically provides that the Company admitted no wrongdoing. This falls far short of satisfying the substantial evidence

standard.

The Board maintains that our rejection of its new rule will

undercut Board-supervised settlement agreements because,

for example, ‘‘an employer could commit serious unfair labor

practices, sign a settlement agreement with a nonadmission

clause, and then avoid its duty to bargain by relying on the

other case in which the Board has ordered the employer to

bargain for a reasonable time on the basis of a settlement

agreement, the employer was not even alleged to have refused

to bargain prior to the settlement.

NLRB v. Key Motors Corp., 579 F.2d 1388, 1390–91 (7th Cir. 1978);

see also NLRB v. Vantran Elec. Corp., 580 F.2d 921, 925 (7th Cir.

1978) (where it was unclear settlement agreement required employer to bargain for a reasonable time, ‘‘Board exceeded its remedial

powers by ordering the employer to bargain for an extended

certification year on the basis of this TTT settlement’’).

Poole, then, does not support the Board’s decision here for the

additional reason that section 8(a)(5) charges were not the subject

of the settlement agreement—they were withdrawn—and the Company did not agree to bargain with the Union.

USCA Case #01-1468 Document #756542 Filed: 06/27/2003 Page 13 of 14
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union’s loss of majority support attributable to the employer’s

own unremedied conduct.’’ Order at 4. The Board’s argument rests on two fallacious assumptions: first, that a settling

party is necessarily guilty of the conduct with which it has

been charged; and, second, that the Board will have no way

of protecting against parties who seek to use a nonadmission

clause in a settlement agreement to avoid sanctions for ULPs.

The Board’s first assumption is counterfactual; the second

is specious. A charged party cannot compel the Board or its

agents to enter into a settlement agreement. If, in a case

such as this one, the Regional Director is convinced that the

employer is guilty of unfair labor practices, he can either

decline to approve an informal settlement agreement and

insist that the unfair labor practices be adjudicated or require

an admission of liability from the employer as a condition of

settlement. In fact, current Board policy advises that ‘‘[n]onadmission clauses should not be routinely incorporated in

settlement agreements,’’ NLRB CASEHANDLING MANUAL

§ 10130.8, so that Board agents have reason to understand

they can reject such clauses in egregious cases. If, however,

the Regional Director elects to approve a settlement in which

the parties specifically agree that the charged party ‘‘does not

admit having violated the National Labor Relations Act,’’ as

here, then, plainly, the employer has not agreed to remedy

unfair labor practices. Rather, the employer has agreed to

take certain actions to secure a dismissal of the pending

unfair labor practice charges—nothing more and nothing less.

And in any event, if a party fails to comply fully with a

settlement agreement, the Regional Director can revoke approval of the agreement and issue or reissue the complaint.

NLRB CASEHANDLING MANUAL § 10152. In short, the Board

is in no way thwarted if it is bound by the terms of a

settlement agreement which includes a nonadmission clause.

For the foregoing reasons, we grant the Company’s petition

for review, deny the Board’s cross-application for enforcement and vacate the order of the Board.

So ordered.

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