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Parties Involved:
International Union of Operating Engineers, Local 501, AFL-CIO
Intervenor
National Labor Relations Board
Respondent
Professional, Clerical & Miscellaneous Employees Local 995
Intervenor
Unbelievable, Inc.
Petitioner

Document Text:

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 18, 1997 Decided July 18, 1997 

No. 96-1209

UNBELIEVABLE, INC., D/B/A FRONTIER HOTEL & CASINO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

PROFESSIONAL, CLERICAL & MISCELLANEOUS EMPLOYEES

LOCAL 995 AND INTERNATIONAL UNION OF OPERATING

ENGINEERS, LOCAL 501, AFL-CIO,

INTERVENORS

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Michael A. Taylor argued the cause for petitioner, with 

whom Celeste M. Wasielewski was on the briefs.

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Daniel Michalski, Attorney, National Labor Relations 

Board, argued the cause for respondent, with whom Linda R. 

Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Frederick C. Havard,

Supervisory Attorney, were on the brief.

Adam N. Stern argued the cause and filed the joint brief 

for intervenors. Lewis N. Levy entered an appearance.

Before: WALD, GINSBURG, and ROGERS, Circuit Judges.

Opinion for the Court filed by Circuit Judge GINSBURG.

Dissenting opinion filed by Circuit Judge WALD.

GINSBURG, Circuit Judge: The National Labor Relations 

Board determined that the Frontier Hotel & Casino committed an unfair labor practice by engaging in surface bargaining 

with two unions. The Board ordered the Frontier to reimburse the unions for their negotiation costs and to pay the 

litigation costsprimarily attorney's feesincurred by both 

the unions and the NLRB General Counsel. The employer 

petitions for review, arguing that the Board erred in assessing negotiation costs, that the Board lacks the power to 

assess litigation costs, and that if the Board does have the 

power to assess litigation costs, then it erred in assessing 

them in this case. The Board cross-applies for enforcement 

of its order. We deny the petition and enforce the order with 

respect to the payment of the unions' negotiation costs, but 

grant the petition and deny enforcement with respect to the 

employer's payment of litigation costs.

I. Background

Unbelievable, Inc., purchased the Frontier Hotel & Casino, 

located on the Las Vegas Strip, in 1988. The International 

Brotherhood of Teamsters and the International Union of 

Operating Engineers each represented certain groups of employees at the Frontier. Although the contracts between the 

Unions and the Frontier's previous owner had expired in 

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1987, Unbelievable continued to implement the terms of the 

expired contracts for some time. In April 1989, however, 

Unbelievable imposed new contract terms upon the two 

groups of employees represented by the Teamsters.

In May 1990 Unbelievable hired Joel I. Keiler to negotiate 

new contracts with both Unions. Keiler has long had a 

troubled history. He was briefly suspended from the practice 

of law in the District of Columbia, see Matter of Keiler, 380 

A.2d 119 (D.C. 1977), and he has run afoul of the Board on 

several occasions. See, e.g., Pepsi-Cola Bottling Co., 315 

N.L.R.B. 882 (1994); CWI of Maryland, Inc., 321 N.L.R.B. 

No. 101, 1996 WL 395875 (1996). In March 1995 Keiler was 

suspended from practicing before the Board for one year 

because of his misconduct in representing another Las Vegas 

casino. See In re Joel I. Keiler, 316 N.L.R.B. 763. See also 

NLRB v. Unbelievable, Inc., 71 F.3d 1434 (9th Cir. 1995) 

(sanctioning Frontier and Keiler for filing frivolous appeal).

After Unbelievable hired him, Keiler asked the Federal 

Mediation and Conciliation Service to set up meetings between the Company and the Unions. Keiler and the mediator 

each left messages for Robert Fox, who represented the 

Operating Engineers, and for Richard Thomas, who represented the Teamsters, but they were unable to set up a 

meeting. Although the Company had not yet informed the 

Unions that Keiler represented it, he sent letters to both Fox 

and Thomas in late June complaining about their lack of 

response to his overtures. He enclosed with the letters 

proposed contracts and wrote that if they did not contact him 

in order to arrange a bargaining session by August 1, then 

the Frontier would implement the proposed terms unilaterally.

The proposed contracts were significantly less attractive to 

the Unions than were their previous contracts. For example, 

the Company proposed to reduce the wages of some Teamsters to $6.50 per hour from $11.92 per hour, and to cut by 

5% the wages of most employees represented by the Operating Engineers. Both proposed contracts would have made it 

difficult for an employee ever to receive holiday or vacation 

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pay, eliminated the pension plan, and substituted a new 

health plan for those of the Unions.

Keiler and the Operating Engineers held three bargaining 

sessions from July to November. At the first meeting Fox 

told Keiler that the proposals were so outlandish that no 

union would ever agree to them and Keiler (according to Fox, 

whom the Board credited) responded that the Frontier's 

General Manager did not care and would not mind if the 

proposals led to a strike. Keiler did not consider the Union's 

counter-proposal, which closely paralleled the terms of the 

standard union contract in use on the Las Vegas Strip. Little 

happened at the second meeting. At the third meeting Keiler 

declared the two sides at an impasse and told Fox that the 

Company would implement its proposal, to which Fox responded that they were not at an impasse because the 

Company had not bargained in good faith. Keiler did later 

agree to retain the union's health and welfare plan, but on 

December 1, 1990 the Company implemented the other terms 

of its proposal.

Negotiations with the Teamsters followed a similar course. 

Of the discharge language in the proposal, Keiler said (according to Thomas, whom the Board credited), "It means we 

can virtually fire anybody for anything." Again Keiler indicated that the Frontier's General Manager wanted a strike so 

that he could replace the employees and get rid of the 

Unions. Keiler did agree to some changesfor example, in 

the vacation and holiday pay proposaland the Union agreed 

to certain of the Company's minor proposals. After the union 

membership unanimously rejected the proposal in a secret 

ballot vote, Keiler told Thomas that the Frontier would 

implement its proposals unilaterally if the Teamsters did not 

accept them by November 1. Again Keiler later agreed that 

the Company would continue contributing to the Union's 

health insurance plan, and again on December 1 the Company 

implemented its other proposals.

The Unions filed unfair labor practice charges with the 

Board. After several days of hearings, an Administrative 

Law Judge issued findings and conclusions in May 1992. The 

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ALJ held that the Company violated §§ 8(a)(1), (3), and (5) of 

the National Labor Relations Act, 29 U.S.C. §§ 151 et seq., by 

failing to bargain with the Unions in good faith and by 

unlawfully discharging a union supporter. The ALJ dismissed the charges that the Company had unlawfully withheld certain information from the Unions and that it had 

unlawfully withdrawn its health plan.

The charge that the Company had not bargained in good 

faith consumed the bulk of the hearing and of the ALJ's 

recommended order. Because he found that Keiler's testimony was not credible, the ALJ relied for his factual findings 

almost entirely upon the testimony of the General Counsel's 

witnesses. The ALJ concluded that Keiler's negotiation 

strategy was to reach an impasse so that the Company would 

be able to implement its proposals unilaterally and force the 

Unions into a strike. First, Keiler submitted a proposal that 

differed substantially from the previous contract and gave the 

Union only a month to respond to it. Second, the Company 

did not promptly inform the Unions that Keiler was representing it. Third, Keiler's use of the federal mediator "seems 

to [have been] designed only for the purpose of setting the 

foundation for an argument that it was the [Frontier] which 

was operating in good faith by first contacting the mediator." 

The ALJ, finding that Keiler, at the Frontier's direction, 

never really sought to reach agreement with the Unions, 

deemed the Company's conduct "classic surface bargaining."

The Board adopted the ALJ's factual findings and conclusions of law. Further, the Board held that it would require 

the Company to pay the Unions' negotiating expenses because the Company had "engaged in egregious and deliberate 

surface bargaining" with the Unions, which "unnecessarily 

diminished their economic strength." Unbelievable, Inc., 318 

N.L.R.B. 857 (1995). The Board explained:

In cases of unusually aggravated misconduct ... where it 

may fairly be said that a respondent's substantial unfair 

labor practices have infected the core of a bargaining 

process to such an extent that their effects cannot be 

eliminated by the application of traditional remedies ... 

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an order requiring the respondent to reimburse the 

charging party for negotiation expenses is warranted 

both to make the charging party whole for the resources 

that were wasted because of the unlawful conduct, and to 

restore the economic strength that is necessary to ensure 

a return to the status quo ante at the bargaining table.

Id. at 859.

Applying this standard to the ALJ's findings, the Board 

determined that through Keiler the Frontier had engaged in 

"deliberate and egregious bad faith conduct aimed at frustrating the bargaining process." Id. at 858. In particular, the 

Board stressed (1) Keiler's pre-negotiation conduct; (2) the 

wide gap between the status quo and the Company's initial 

proposals; and (3) Keiler's conduct at the bargaining table. 

The Board concluded that because Keiler "lost no opportunity 

to goad the Unions to strike," his "conduct rendered the 

bargaining between the parties merely a charade." Id. Accordingly, the Board ordered the Frontier to pay the expenses incurred by the Unions for their fruitless negotiations 

with Keiler.

The Board also required the Frontier to pay both the 

Unions' and the General Counsel's litigation expenses: the 

Company's presentation of frivolous defenses "depleted the 

[Unions'] resources" and "needlessly wasted" those of the 

Board; and compensation was required because "even a 

bargaining order accompanied by reimbursement of the 

charging party's negotiation expenses is insufficient to restore 

a charging party's economic strength and to ensure meaningful bargaining." 318 N.L.R.B. at 857, 862. The Board explained further that its policy is to order a respondent to pay 

the charging party's litigation expenses "only where the 

defenses raised by the respondent are frivolous rather than 

debatable." Id. at 860. Constrained by the principle that 

"Board orders must be remedial rather than punitive," id.,

the Board would not order a respondent to pay the charging 

party's litigation expenses if the respondent's defense turned 

upon an issue of credibility or if the respondent raised any 

defense that was not frivolous. In the present case, however, 

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credibility was only technically at issue; Keiler's incredibility 

was so apparent that ordering the Company to pay the 

Unions' litigation expenses was consistent with the applicable 

principles, if not with the Board's precedents. Id. at 861. In 

addition, the Board noted that, although two of the charges 

filed against the Frontier were dismissedindicating that the 

Company's defenses to those charges were hardly frivolous

the charges themselves were insignificant compared to the 

charge of surface bargaining, which had been the dominant 

subject of the hearing.

Because the Company's "sole defense" to the charge of 

surface bargaining rested upon Keiler's testimony, the Board 

focused upon his part in the hearing. Keiler's testimony, 

particularly during cross-examination, was "unresponsive, aggressive, and flagrantly disrespectful." 318 N.L.R.B. at 860. 

For example, when asked whether he was getting paid for his 

time testifying, Keiler responded, "Who knows what's going 

to happen? We could all be dead tomorrow." When shown a 

document and asked "How did you arrive at the writing on 

the right-hand corner here?" Keiler responded, "By airplane." The Board concluded that Keiler's conduct as a 

witness showed "his intent to make a charade of this proceeding." Id. The Board also stated that "Keiler's flagrantly 

unlawful course of conduct as the [Company's] agent in 

negotiations with the Unions" constituted a "further basis" 

for requiring the Frontier to pay the Unions' litigation costs 

(although not those of the General Counsel). Id. at 862. 

II. Analysis

The Company does not contest the Board's conclusions that 

it violated the NLRA by failing to bargain in good faith and 

by unlawfully discharging a union supporter. Accordingly, 

we shall enforce the Board's order insofar as it relates to 

those charges. In addition, we find substantial evidence in 

the record supporting the Board's finding that the Company 

engaged in "aggravated misconduct" during its negotiations 

with the Unions and we affirm the order directing the Frontier to pay the Unions' negotiation expenses. We also hold, 

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however, that the Board lacks authority under the NLRA to 

order a respondent to pay the litigation expenses incurred by 

a charging party or by the General Counsel of the Board.

A. Negotiation expenses

The Frontier does not question the Board's authority to 

order a respondent to reimburse the charging party for 

negotiation expenses if the respondent's misconduct has been 

unusually aggravated and its unfair labor practices have 

infected "the core of the bargaining process to such an extent 

that their effects cannot be eliminated by the application of 

traditional remedies." The Company does argue, however, 

that there is not substantial evidence in the record considered 

as a whole to support the Board's findings of fact.

We uphold the Board on this point. As to credibility, we 

accept the ALJ's finding that Unbelievable lived up to its illchosen name. See Exxel/Atmos v. NLRB, 28 F.3d 1243, 1246 

(D.C. Cir. 1994) (ALJ's credibility determinations conclusive 

unless "patently unsupportable"). The testimony of the General Counsel's witnesses provides substantial evidence for the 

Board's finding that the Company did not intend to reach an 

agreement with the Unions. Keiler's statement that the 

General Manager of the Frontier wanted the Unions to strike 

so that he could replace the employees surely qualifies as 

"aggravated misconduct."

Nonetheless, the Company argues, the order should not 

stand because (1) the Company has no history of violating the 

Act; (2) it is not responsible for Keiler's behavior; and (3) the 

Unions engaged in misconduct as well. None of these challenges has any merit.

First, a respondent's labor history, good or bad, is not a 

factor that the Board need consider in determining whether 

to order the respondent to pay the charging party's negotiation expenses. The rationale for ordering a respondent to 

reimburse the charging party for its negotiation expenses is 

to restore the charging party to the status quo ante; the 

respondent's prior record of compliance with the Act is 

irrelevant to the propriety of such relief. Indeed, to consider 

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the respondent's history would strongly suggest that the 

assessment of negotiation costs is a punitive rather than a 

compensatory measure. Cf. Republic Steel Corp. v. NLRB,

311 U.S. 7, 10 (1940) (NLRA is remedial, not punitive).

Second, although the Company comes not to praise Keiler 

but to bury him, it cannot escape responsibility for the 

misconduct of its former attorney. The Frontier argues that 

the Board erred in focusing upon Keiler's conduct and not 

upon that of the Company itself in determining whether the 

employer must pay the Unions' negotiation costs. The Company's contention ignores the most basic principles of the law 

of agency. See O.W. Holmes, Jr., The Common Law 180 

(1881) (principal bound by terms of contract formed by 

agent); Local 1814, Int'l Longshoremen's Ass'n v. NLRB, 735 

F.2d 1384, 1394-95 (D.C. Cir. 1984) (upholding Board in 

decertifying union due to illegal kickback agreement between 

union officials and employer), citing Restatement (Second) of 

Agency § 228(1) at 504 (1957). A company may not hire an 

attorney to represent it in negotiations, and then by claiming 

ignorance of the attorney's tactics avoid paying the price for 

the attorney's misconduct.

Finally, the Company argues that the Board should have 

refrained from granting the Unions an extraordinary remedy 

because they have unclean hands. For one thing, the Frontier points to the violent behavior of certain members of both 

Unions while on strike over the past five years; but the 

conduct of union members after negotiations broke down is 

not relevant to whether the Company is liable for the Unions' 

pre-strike negotiation costs. If the Unions are implicated in 

misconduct by strikers, then the Company may file its own 

charges against the Unions. For another, the Frontier argues that by insisting upon the terms of the standard Las 

Vegas Strip contract the Unions were partly to blame for the 

parties' failure to reach an agreement. The Unions had little 

reason to do more, however, when Keiler presented his 

proposals as non-negotiable diktats, see NLRB v. General 

Electric Co., 418 F.2d 736, 756-59 (1969) (take-it-or-leave-it 

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er of the Company hoped the Unions would strike so he could 

hire replacements. As it was, both Unions sought additional 

meetings even when Keiler could not wait to declare the 

negotiations at an impasse. In sum, substantial evidence in 

the record shows that inflexibility on the part of the Unions 

does not explain, let alone excuse, surface bargaining by the 

Company.

B. Litigation Expenses

The Board claims that it has the authority, under § 10(c) of 

the NLRA, to order a respondent to pay the litigation costs

including principally the attorney's feesincurred by both 

the charging party and the General Counsel.* The Company 

argues that the statute is insufficiently specific to authorize a 

departure from the "American Rule" that (with few exceptions) each side must bear its own legal expenses. See 

Arcambel v. Wiseman, 3 U.S. (3 Dall.) 306 (1796).

1. Circuit precedent and the American Rule

For the first 35 years in which the Board administered the 

NLRA, it never claimed that it had the power to order a 

respondent to pay the attorney's fees of a charging party. 

Indeed, it declared that it would be inappropriate for the 

Board to assess attorney's fees "in the light of the basic 

__________

*

In its opinion the Board states that the award of litigation costs 

is "consistent not only with the American Rule, but alternatively 

with the bad-faith exception to that rule." 318 N.L.R.B. at 864. 

Although our dissenting colleague reads this statement as indicating 

that the Board was relying in the alternative upon its inherent 

power to control its own proceedings, in its brief the Board relies 

upon § 10(c) alone for authority to make Unbelievable pay the 

Unions' attorney's fees. When questioned at oral argument, counsel for the Board explained that the Board's opinion referred to the 

bad-faith exception to the American Rule not in order to posit an 

alternative rationale should it lack the power under § 10(c) to 

assess attorney's fees but only in order to point out that the Board's 

approach is consistent with the practice of the federal courts. 

Accordingly, we have no occasion in this case to address whether 

the Board might have such inherent power notwithstanding its lack 

of punitive authority (on which, see pp. 20-21).

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principle[ ] that Board orders must be remedial not punitive 

... [T]he public interest in allowing the Charging Party to 

recover the costs of its participation in this litigation does not 

override the general and well-established principle that litigation expenses are ordinarily not recoverable." Heck's, Inc.,

191 N.L.R.B. 886, 889 (1971). Nonetheless, having been 

prompted by this court (when reviewing a different decision), 

to reconsider its policy, see Electrical Workers, IUE v. 

NLRB, 426 F.2d 1243, 1253 n.15 (1970), the Board changed its 

mind, holding in Tiidee Products, Inc., 194 N.L.R.B. 1234 

(1972), that it did have the authority to shift the burden of 

attorney's fees in certain cases. When we came to review the 

decision in Heck's, in which the Board had refused to assess 

attorney's fees against a respondent, the court took the 

occasion to pre-approve the contrary approach that the Board 

had later adopted in Tiidee. See Food Store Employees 

Union v. NLRB, 476 F.2d 546 (1973).** The court did not, 

however, analyze whether the Congress had given the Board 

the authority to order a respondent to pay attorney's fees. 

Instead, deferring even more than we would today under 

step II of the analysis in Chevron U.S.A., Inc. v. Natural 

Resources Defense Council, 467 U.S. 837, 843 (1984), the 

court simply recounted that

the Board reasoned that the Congressional objective of 

achieving industrial peace through collective bargaining 

"can only be effectuated when speedy access to uncrowd-

__________

** The Supreme Court reversed Food Store Employees on a 

different ground, 417 U.S. 1 (1974), expressly declining to "address 

the question whether the Board's broad powers under § 10(c) ... 

to fashion remedies include power to order reimbursement of 

litigation expenses and excess organizational costs." Id. at 8 n.9. 

While Food Store Employees was pending before the Supreme 

Court, however, this court had upheld the Board in Tiidee Products, 

Inc., sub nom. Electrical Workers IUE v. NLRB, 502 F.2d 349, 

(1974). The panel in the latter case considered itself bound by the 

earlier panel's decision in Food Store Employees. Accordingly, 

although Tiidee is the surviving precedent in this circuit, the 

reasoning upon which it rests appears only in Food Store Employees.

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ed Board and court dockets is available.... [I]n order 

to discourage future frivolous litigation, to effectuate the 

policies of the Act, and to serve the public interest we 

find that it would be just and proper" to order reimbursement of both the Board and the Union for their 

expenses incurred in the investigation, preparation, presentation, and conduct of the cases before it and the 

court.

Food Store Employees, 476 F.2d at 550-51, quoting Tiidee 

Products, Inc., 194 N.L.R.B. at 1236. 

Then came Alyeska Pipeline Service Co. v. Wilderness 

Society, 421 U.S. 240 (1975), which, as a leading commentator 

put it, "alter[ed] dramatically the developing law on attorney's fees." 10 Wright, Miller & Kane, Federal Practice and 

Procedure: Civil 2d § 2675 (1983). In Alyeska, the Supreme 

Court rebuffed efforts by plaintiffs and some courts alike to 

chip away at the American Rule, declaring categorically that 

"the circumstances under which attorney's fees are to be 

awarded and the range of discretion of the courts in making 

those awards are matters for Congress to determine." 421 

U.S. at 262. Nor may a court infer a congressional intent to 

override the presumption that the American Rule erects 

against the award of attorney's fees without "clear support" 

either on the face or in the legislative history of the statute. 

Rather, as the Supreme Court made clear again in Summit 

Valley Industries, Inc. v. Carpenters, 456 U.S. 717, 726 

(1982), a court may award attorney's fees only when expressly 

so authorized by the legislature. In the latter case the 

unanimous Court rejected the argument that § 303 of the 

Labor Management Relations Act, 29 U.S.C. § 187, authorizing the courts to award "damages" to an injured plaintiff, 

allowed for the award of attorney's fees as well: "In the 

absence of clear support for [that] construction in the language or legislative history of § 303 we decline to adopt such 

a broad exception to the American Rule." Id. 

Although the Court in Summit Valley dealt not with the 

NLRA but with a different part of the LMRA and therefore 

did not overrule our decision in Food Store Employees, the 

Court later indicated that a lower court must consider the 

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implication of Summit Valley for the Board's claim of authority to award litigation expenses. Specifically, when the 

Fourth Circuit became the only court to follow our holding in 

Food Store Employees, the Supreme Court granted certiorari, vacated the judgment, and remanded the case to the court 

of appeals for reconsideration in the light of Summit Valley. 

J.P. Stevens & Co., Inc. v. NLRB, 458 U.S. 1118 (1982), 

vacating 668 F.2d 767 (1982). (The case settled before the 

court of appeals had a chance to reconsider the issue.) At the 

very least, therefore, we are obliged to ask whether we should 

follow Food Store Employees in the wake of Summit Valley.

Clearly, before Summit Valley, we had held in Food Store 

Employees that the Board had the authority to assess a 

losing party for attorney's fees without finding the express 

statutory authorization that the Court would later, in Alyeska

and Summit Valley, require in order to overcome the presumption that the American Rule applies. Reference to "the 

Congressional objective of achieving industrial peace through 

collective bargaining," 476 F.2d at 550, simply does not invoke 

a clear source of statutory authority for the award of attorney's fees. Although the petitioner emphasized the standard 

of clarity required under Summit Valley in its opening brief 

the Board tried to distinguish Summit Valley with only the 

inapt observation that, in purported contrast to § 303, "the 

express terms of Section 10(c) ... do not limit the Board's 

broad authority to order appropriate remedial measures to 

effectuate the policies of the Act." At oral argument the 

Board was understandably quick, therefore, to embrace 

Judge Wald's observation that Summit Valley may not be 

controlling here because that case involved attorney's fees 

awarded by a court, whereas § 10(c) of the NLRA broadly 

authorizes an administrative agency to remedy unfair labor 

practices. We see nothing in the rationale of Summit Valley,

however, to indicate that it does not apply equally to a statute 

granting remedial power to an administrative agency.

On the contrary, the wide range of cases since Food Store 

Employees in which the Supreme Court has reaffirmed its 

adherence to the American Rule gives us reason to believe 

that the presumption against fee-shifting does apply to the 

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NLRA. See, e.g., Runyon v. McCrary, 427 U.S. 160, 183-85 

(1976) (court may not award attorney's fees under 42 U.S.C. 

§ 1981 for want of express authority; nor is implied authority 

for such award provided by generalized command of § 1988 

to furnish suitable remedies to vindicate rights conferred by 

Civil Rights Acts); Alyeska, 421 U.S. at 271 (reversing grant 

of attorney's fees to plaintiffs as private attorneys general 

because only Congress, not courts, can authorize exception to 

American Rule); F.D. Rich Co. v. Industrial Lumber Co., 417 

U.S. 116, 126 (1974) (reversing award of attorney's fees under 

Miller Act because it does not "explicitly provide for an award 

of attorneys' fees to a successful plaintiff"); cf. Smith v. 

Robinson, 468 U.S. 992 (1984) (discussed below).

Since the Supreme Court first made it clear that only the 

Congress and not the courts can override the American Rule, 

the Congress has in recent years expressly authorized feeshifting in a number of statutory provisions, starting with the 

Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C. 

§ 1988, which was passed in direct response to the Alyeska

decision. See Hensley v. Eckerhart, 461 U.S. 424, 429 (1983); 

see also 42 U.S.C. § 12205 (1990) (fee shifting under Americans With Disabilities Act); 29 U.S.C. §§ 216(b) and 626(b) 

(fee shifting under Age Discrimination in Employment Act).

The Supreme Court, in turn, treats congressional silence in 

a particular statute as an indication that the legislature did 

not intend to authorize fee shifting. For example, in Key 

Tronic Corp. v. United States, 511 U.S. 809 (1994), the Court 

held that § 107 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA), 

42 U.S.C. § 9607, does not authorize the award to a private 

litigant of attorney's fees associated with bringing a cost 

recovery action. Yet § 107 provides rather expansively that 

a private litigant may recover "any ... necessary costs of 

response" and even defines "response" to include "enforcement activities related thereto." The Court, noting its 

"adherence to a general practice of not awarding fees to a 

prevailing party absent explicit statutory authority," and observing that the Congress had expressly provided for the 

award of attorney's fees in certain amendments to the 

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CERCLA, at 818-19, held that § 107 does not provide for the 

award of attorney's fees "with the clarity required by Alyeska." Cf. Alyeska, 421 U.S. at 262 (that Congress expressly 

provides for award of attorney's fees in some statutes is 

evidence that it did not intend to provide for attorney's fees in 

other statutes). In Smith v. Robinson, 468 U.S. 992 (1984), 

the Supreme Court again indicated the importance to be 

attached to the absence of explicit authority for fee shifting in 

a particular statute (or its legislative history). In that case a 

student brought a successful claim under the Education for 

the Handicapped Act, which does not provide for fee shifting, 

and also under 42 U.S.C. § 1983 and a provision of the 

Rehabilitation Act, both of which do provide for fee shifting. 

Disallowing the student's claim for attorney's fees, the Court 

reasoned that where the EHA is available to a child asserting 

a right to public education, that statute provides his sole 

remedy; to allow him to proceed under provisions that allow 

for the recovery of attorney's fees would undercut the decision by the Congress not to provide for fee shifting in the 

EHA. Id. at 1012-13, 1020-21.

Moreover, the mechanics of an action to enforce the NLRA 

suggest that the requirement that the authority to award 

attorney's fees be express applies a fortiori to this statute. 

The reason is simply this: the charging party's participation 

in the litigation is strictly voluntary. The union, employee, or 

employer filing a charge with the Board need not play any 

role in the proceedings beyond serving the respondent with a 

copy of the charge. 29 C.F.R. §§ 101.2, 101.4. Although the 

charging party may, if the General Counsel issues a complaint, participate in the hearing, 29 C.F.R. § 101.10, nothing 

in the Act or in the Board's regulations requires it to do so. 

If the General Counsel calls the charging party as a witness, 

as he called certain union officials in this case, then the 

General Counsel must pay the witness a fee for his time. 29 

C.F.R. § 102.32. In short, a charging party need not incur 

any litigation expense. Of course, the charging party may 

(and often does) intervene in the proceedings before the 

Board, but it does so as a volunteer, not a party haled into 

litigation willy-nilly. We think it would be passing strange 

for the court to hold that, although a statute authorizing an 

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individual to bring a court case at his own expense will not be 

read to authorize an award of attorney's fees absent clear 

Congressional intent, a statute that provides a federal agency 

to prosecute a case on behalf of a charging party will be read 

to authorize the agency to award that partyshould it choose 

to interveneits attorney's fees based solely upon the agency's general remedial authority "to take such affirmative 

action as will effectuate the policies" of the Act. 29 U.S.C. 

§ 160(c).

In sum, since our decision in Food Store Employees the 

Supreme Court has emphasized in several contexts that a 

federal court is to apply the American Rule unless the 

Congress has explicitly said otherwise. Nothing in the 

Court's decisions suggests that the standard set for the 

courts does not apply equally to a statute giving a federal 

agency rather than an individual the right to institute proceedings. We did not apply such an exacting standard in 

Food Store Employees; in the light of Alyeska and Summit 

Valley, however, we must do so now.

2. The search for "clear support" in § 10(c)

Looking at the issue afresh, then, we find no support for 

the Board's position in the terms of the NLRA, in its legislative history, or in Supreme Court precedent interpreting the 

extent of the Board's remedial discretion. Section 10(c) of 

the NLRA provides:

If upon the preponderance of the testimony taken the 

Board shall be of the opinion that any person named in 

the complaint has engaged in or is engaging in any such 

unfair labor practice, then the Board shall state its 

findings of fact and shall issue and cause to be served on 

such person an order requiring such person to cease and 

desist from such unfair labor practice, and to take such 

affirmative action including reinstatement of employees 

with or without back pay, as will effectuate the policies of 

[the Act].

29 U.S.C. § 160(c).

In its opinion the Board acknowledges that this section, like 

the statutory provision at issue in Summit Valley, "does not 

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expressly provide for the recovery of attorney's fees." 318 

N.L.R.B. at 863. Nevertheless, the Board argues that we 

should defer to its interpretation of its authority under 

§ 10(c) of the Act. We can defer only so far as "that 

interpretation is rational and consistent with the statute." 

NLRB v. Food & Commercial Workers, 484 U.S. 112, 123 

(1987). It is not rational to interpret congressional silence in 

§ 10(c) as implicitly sanctioning fee shifting when the Supreme Court has expressly stated that fee shifting is allowed 

only when a statute provides "clear support" for such authority. According to the Board, however, because the NLRA 

"refrains from particularizing the scope of the Board's remedial powers," and because it "contemplates the exercise of 

broad discretion by the Board in fashioning a range of 

remedies suitable to remedy various unfair labor practices," 

the award of attorney's fees is not inconsistent with the 

statute. 318 N.L.R.B. at 863. The absence of a prohibition is 

not, however, equivalent to an authorization, much less "clear 

support" therefor. As the Supreme Court put the matter in 

Runyon, to determine that the Congress "intended to set 

aside this longstanding American rule of law" there must be 

more in the statute than "generalized commands" or a "broad 

[remedial] commission." 427 U.S. at 185-86.

The Board also relied upon the legislative history of the 

NLRA, but it succeeded only in showing that it does not have 

Clio on its side in this matter. The Senate Labor Committee 

considered two versions of what is now § 10(c). One version, 

S. 2926, provided a list of rather specific remedies. The 

second version, S. 1958, was more general. The Committee 

pointed out that "to substitute express language such as 

reinstatement, back pay, etc., necessarily results in narrowing 

the definition of restitution, which may include many other 

forms of action." Comparison of S. 2926 (73d Congress) and 

S. 1958 (74th Congress), Senate Comm. Print, reprinted in 1 

Leg. Hist. 1360 (1935). Incredibly, however, immediately 

after acknowledging the Committee's point, the Board asserted that, "[a]lthough the final bill in fact substituted 'reinstatement of employees with or without backpay' for 'restitution,' 

the change was made without any suggestion of an intention 

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to narrow the discretion of the Board in remedial matters." 

318 N.L.R.B. at 863. The Congress's substitution of the 

phrase "reinstatement of employees with or without backpay" 

in place of "restitution" is hardly evidence (let alone clear 

support for the proposition) that the Congress intended to 

authorize the Board to order a respondent to pay the attorney's fees of the charging party and the Board. Cf. International Union of Electrical, R. & M. Wkrs., 502 F.2d at 353 n.*

(individual opinion of J. MacKinnon) ("in all the 39 years of 

legislative history surrounding section 10(c), none of it gives 

any support for the interpretation that Congress intended to 

allow the Board to award attorney fees and litigation expenses to prevailing parties").

Because neither the plain text nor the legislative history of 

§ 10(c) provides "clear support" for the authority of the 

Board to order the payment of attorney's fees, the Board can 

argue only that the phrase "such affirmative action ... as will 

effectuate the policies of the Act" has been interpreted so 

broadly by the Supreme Court that it encompasses that 

remedy in this case. Of course, the Board's remedial power 

is not limited to the single example of affirmative action 

instanced in the statute, namely, reinstatement with or without backpay. Still, the other remedies that the Supreme 

Court has approved are closely related to the expertise of the 

Board and to its statutory mission. For example, in NLRB v. 

Gissel Packing Co., 395 U.S. 575 (1969), the Court held that 

the Board may issue a bargaining order when (1) a union has 

shown by informal means that it enjoys majority support 

among the employees in a unit and (2) the employer's unfair 

labor practices have so tainted the atmosphere with coercion 

of the employees as to make it unlikely that the Board could 

hold a fair election. In contrast, by imposing an award of 

attorney's fees the Board moves away from its expertise in 

labor relations and exercises a discretionary power entrusted 

to a court only when specifically legislated.

The Board's primary justification for ordering the Frontier 

to pay the litigation costs of its adversariesnamely, its 

presentation of a frivolous defense to the unfair labor practice 

chargesis especially problematic for the simple reason that 

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it is not itself an unfair labor practice to present a frivolous 

defense to an unfair labor practice charge. A Gissel bargaining order responds directly to an unfair labor practice, the 

refusal to bargain. An award of attorney's fees against a 

party that has presented a frivolous defense effectuates the 

policies of the Act only indirectly. Relatedly, the Board 

strays from its area of expertise when it determines whether 

fee shifting is appropriate in a particular case. In determining whether to order an employer to bargain with a union, the 

Board addresses delicate issues of labor-management relations clearly within its delegated purview and its field of 

expertise. By contrast, in considering whether to order an 

employer to pay the attorney's fees of a union (or vice versa), 

the Board focuses not upon the dynamics of the workplace 

but upon the employer's (or union's) conduct in litigation. 

See Scheduled Airlines Traffic Offices, Inc. v. Department of 

Defense, 87 F.3d 1356, 1361 (D.C. Cir. 1996) (court does not 

defer to agency decision in matter outside of agency's expertise).

Not only is there a problem with the nature of the conduct 

at which the Board's award of attorney's fees is aimed, there 

is also a problem with the limited purpose for which the 

Board may award any remedy. The Board gives two rationales explaining why its order effectuates the policies of the 

Act, but neither of these, nor their combination, is sufficient 

to overcome the American Rule. First, the Board states that 

the company's "reliance on frivolous defenses in its litigation 

of these allegations ... depleted the Charging Parties' resources." 318 N.L.R.B. at 857. To the extent that the Board 

is relying upon the idea that a party is not made whole unless 

it recovers its attorney's fees, however, that is but a criticism 

of the American Ruleindeed, a criticism that the Supreme 

Court has heard and rejected. See Summit Valley, 456 U.S. 

at 724-25 ("Even assuming that attorney's fees are necessary 

to achieve full compensation, this justification alone is not 

sufficient to create an exception to the American Rule in the 

absence of express congressional authority"), citing F.D. 

Rich, 417 U.S. at 128-29 ("This argument merely restates one 

of the oft-repeated criticisms of the American Rule"). The 

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Board's "make whole" rationale, therefore, does not show that 

fee shifting effectuates the policies of the Act.

The Board's other reason for ordering a respondent to pay 

the attorney's fees of the charging party, to discourage 

frivolous litigation, is essentially punitive. 318 N.L.R.B. at 

860. As counsel put the matter at oral argument, the Board 

requires the power to tax a party with attorney's fees in 

order "to ensure that its processes are not abused by parties 

asserting frivolous defenses" and "to keep its docket clear." 

To the extent that the power to shift fees is justified as a 

deterrent to frivolous litigation, however, the power is punitive and therefore beyond the Board's delegated authority. 

See Hall v. Cole, 412 U.S. 1, 5 (1973) (underlying rationale of 

fee shifting in cases of bad faith is punitive).

The Supreme Court has consistently invalidated Board 

orders that are not directly related to the effectuation of the 

purposes of the Act or are punitive. In Consolidated Edison 

v. NLRB, 305 U.S. 197 (1938), the Court held that the Board 

lacks authority to invalidate a contract between a labor 

organization and a company because the "authority to order 

affirmative action does not go so far as to confer a punitive 

jurisdiction" upon the Board. Thus, the Board may not 

"inflict upon the employer any penalty it may choose because 

he is engaged in unfair labor practices, even though the 

Board be of the opinion that the policies of the Act might be 

effectuated by such an order." Id. at 235-36. Likewise, in 

Republic Steel Corp. v. NLRB, 311 U.S. 7 (1940), the Court 

invalidated a Board order requiring an employer to deduct 

from back pay the amount of money that employees had 

earned on work relief projects prior to their reinstatement 

and to pay the same amount to the government agencies that 

had employed the workers. The Court rejected the Board's 

claim to authority because neither possible rationale for the 

orderto further the programs to which the money would go 

or to punish the employeris consistent with "the spirit and 

remedial purposes of the Act." Id. at 11. Finally, in Carpenters Local 60 v. NLRB, 365 U.S. 651 (1961), the Court struck 

down as punitive a Board order that a union reimburse its 

members for all dues and fees that it had collected under an 

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unlawful closed-shop agreement. As Justice Harlan's concurrence in that case makes clear, in order to uphold a remedy, 

the Board "must show more than that the remedy will tend to 

deter unfair labor practices." Id. at 658. See also Grondorf, 

Field, Black & Co v. NLRB, 107 F.3d 882, 888 (D.C. Cir. 

1997) (Board order must be remanded if it may be punitive 

rather than remedial). Whether the Frontier's misconduct 

lay in its presentation of a frivolous defense to an unfair labor 

practice charge or in its misconduct during bargaining, or 

both, a fair reading of the Supreme Court's decisions suggests to us that the order that the employer pay its adversaries' attorney's fees is punitive and is not directly related to 

effectuating the policies of the Act.***

III. Conclusion

The American Rule is "deeply rooted in our history and in 

congressional policy." Alyeska, 421 U.S. at 271. Therefore, 

we may not lightly allow an administrative agency, any more 

than a court, to depart from the Rule; rather, there must be 

"clear support" for the agency's claim that the Congress 

authorized the agency to order one party to pay the fees of 

another party or of the agency itself. Finding no such 

support in the terms or the legislative history of § 10(c) of 

__________

*** The intervenor, but not the Board, draws our attention to 

Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983), but 

it misconstrues that case: "after Summit [Valley] Industries," it 

says, "the Supreme Court specifically recognized that the Board's 

authority under § 10(c) includes the authority to order an employer 

held to have committed an unfair labor practice to pay 'the employees['] ... attorneys' fees and other expenses.' " Intervenor's Brief 

at 8, quoting Bill Johnson's, 461 U.S. at 747. In Bill Johnson's,

however, the Supreme Court held only that if a respondent before 

the Board files a baseless lawsuit against the charging party in 

retaliation for the latter's exercise of its rights under the NLRA, 

then the prosecution of that lawsuit is itself an unfair labor practice, 

remediable by an order that the respondent cease and desist and 

pay the costs of defending against the baseless lawsuitnot the 

costs of participating in the unfair labor practice proceeding itself. 

Accordingly, Bill Johnson's is not relevant to our decision today.

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the National Labor Relations Act, we conclude that the Board 

lacks that authority. We note with interest, moreover, that 

notwithstanding the protestations of our dissenting colleague, 

neither she nor the Board can cite a single case, aside from 

our own pre-Alyeska precedent, in which a court has upheld 

any agency order shifting responsibility for attorney's fees in 

an agency proceeding.

Accordingly, we hold that although the Board may order a 

respondent to pay the negotiation costs incurred by a charging party if it properly finds, as it did here, that the respondent engaged in aggravated misconduct, the Board may not 

order a respondent to pay the litigation expenses incurred by 

the charging party or by the General Counsel in the subsequent unfair labor practice proceeding. Consistent with the 

foregoing opinion, the Company's petition and the Board's 

cross-application are each granted in part and denied in part.

So ordered.

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WALD, Circuit Judge, dissenting in part: I dissent from the 

panel's reversal of the Board's assessment of attorney's fees 

against Unbelievable, Inc., for its frivolous defense against 

the charge of bad faith bargaining before the Board.

The National Labor Relations Board ("NLRB" or "Board") 

first ordered a respondent to reimburse litigation costs, including attorney's fees, in proceedings before it 25 years ago, 

citing its statutory authority to effectuate the policies of the 

National Labor Relations Act ("NLRA" or "Act"). In Tiidee 

Products, Inc., 194 N.L.R.B. 1234, 1236-37 (1972) (supplemental decision), the respondent had engaged in "patently 

frivolous" litigation and "[t]he policy of the Act to insure 

industrial peace through collective bargaining can only be 

effectuated when speedy access to uncrowded Board and 

court dockets is available." Id.1 We approved the action of 

the Board in awarding litigation costs for its proceedings 

under such circumstances in Food Store Employees Union v. 

NLRB, 476 F.2d 546 (D.C. Cir. 1973), rev'd in part on other 

grounds, 417 U.S. 1 (1974) ("Food Store").

Soon thereafter, in International Union of Elec., Radio 

and Mach. Workers v. NLRB, we reaffirmed the Board's 

authority to award attorney's fees in similar circumstances. 

International Union of Elec., Radio and Mach. Workers v. 

NLRB, 502 F.2d 349 (D.C. Cir. 1974) (enforcing Tiidee Products, Inc., 194 N.L.R.B. 1234 and Tiidee Products, Inc., 196 

N.L.R.B. 158 (1972)), cert. denied, 421 U.S. 991 (1975). 

Judge MacKinnon, writing for the court at that time, acknowledged that "Food Store in large measure controls our 

disposition of the issue in this case," id. at 352-54, and said in 

a separate statement that Food Store foreclosed debate on 

whether the Board has authority to award litigation costs. 

Id. at 352 n.*. Indeed, it is still the rule 23 years later that 

panels of this court are bound by controlling circuit precedenteven if the panel does not agree with it, see United 

__________

1 The Board indicated that litigation costs and expenses include: 

reasonable counsel fees, salaries, witness fees, transcript and record 

costs, printing costs, travel expenses and per diem, and other 

reasonable costs and expenses.

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States v. Kolter, 71 F.3d 425, 431 (D.C. Cir. 1995) (Ginsburg, 

J.)and a panel decision may be overruled only by the full 

court, sitting in banc, or the Supreme Court. See, e.g., 

LaShawn A. v. Barry, 87 F.3d 1389, 1395 (D.C. Cir. 1996).

The majority contends nonetheless that Alyeska Pipeline 

Service Co. v. Wilderness Society, 421 U.S. 240 (1975), and 

Summit Valley Indus., Inc. v. Carpenters Local 112, 456 U.S. 

717 (1982), release us from the obligation to follow precedent 

upholding the NLRB's authority under section 10(c) of the 

NLRA to award litigation expenses for frivolous positions 

because those intervening Supreme Court rulings require an 

express statutory authorization for fee-shifting that cannot be 

found in section 10(c). In my view, these cases do not 

overrule Food Store, and I would again uphold the Board's 

assessment of attorney's fees here.

In Alyeska, the Supreme Court held that a successful 

plaintiff acting as a "private attorney general" in bringing suit 

to bar construction of the trans-Alaska pipeline under the 

Mineral Leasing Act, 30 U.S.C. § 185, and the National 

Environmental Policy Act, 42 U.S.C. § 4321 et seq., is not 

entitled to attorney's fees even though the litigation may have 

implemented important public policy goals. Alyeska, 421 

U.S. at 263-64. The Court explained that "it would be 

difficult ... for the courts, without legislative guidance, to 

consider some statutes important and others unimportant and 

to allow attorney's fees only in connection with the former," 

id. at 264, a much narrower rule than the majority suggests. 

Critically, the Court explicitly left intact the equitable power 

to award attorney's fees under pre-existing common-law exceptions to the American Rule against fee-shifting. Id. at 

257-58; see, e.g., Central Railroad & Banking Co. v. Pettus,

113 U.S. 116 (1885) (common fund); Toledo Scale Co. v. 

Computing Scale Co., 261 U.S. 399, 426-28 (1923) (willful 

disobedience of a court order); Vaughan v. Atkinson, 369 

U.S. 527 (1962) (bad faith).2

__________

2 The majority's observation that, subsequent to Alyeska, Congress enacted a number of fee-shifting provisions in civil rights 

statutes, Majority opinion ("Maj. op.") at 14, proves only that 

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In Summit Valley, the Supreme Court did decide that 

section 303 of the Labor Management Relations Act 

("LMRA"), 29 U.S.C. § 187, does not authorize a court to 

award attorney's fees incurred during prior proceedings before the Board as a remedy in a private damages action. The 

remedial scheme contemplated by Congress in enacting section 10(c) of the NLRA, however, is dramatically different 

__________

Congress wished to actively encourage private attorneys general to 

enforce those statutes. See S. REP. NO. 94-1011, 94th Cong., 2d 

Sess. 1, 2, 6 (1976), reprinted in 1976 U.S.C.C.A.N. 5909, 5910, 5913. 

No one has suggested that Congress thought Alyeska had eliminated or affected in any way traditional exceptions to the American 

Rule.

To bolster its contention that attorney's fees may never be 

awarded under the NLRA in the absence of express statutory 

authorization, the majority cites several cases in which the Supreme 

Court found no authorization for fee-shifting. Each one states only 

the obvious: the American Rule restricts fee-shifting unless there is 

express statutory authority or an exception applies. As in Alyeska,

the Runyon v. McCrary, 427 U.S. 160 (1976), Court reasoned that, 

"but for a few well-recognized exceptions not present in these 

cases," there must be explicit authorization for the recovery of 

attorney's fees as a cost of litigation. Runyon, 427 U.S. at 185. In 

F.D. Rich Co. v. Industrial Lumber Co., 417 U.S. 116 (1974), see

Maj. op. at 14, the lower court construed the Miller Act to permit an 

attorney's fees award when the "public policy" of the state in which 

the lawsuit was brought "allows for the award of fees in similar 

contexts." Id. at 126. The Supreme Court reversed on the ground 

that there was no evidence of congressional intent to incorporate 

state law into Miller Act litigation and permitting such incorporation would upset the reasonable expectations of litigants and lead 

to disparate remedies for different litigants. Finally, the Court 

explained that although the Miller Act term "sums justly due" does 

not encompass attorney's fees, the American Rule permits "several 

exceptions to the general principle that each party should bear the 

costs of its own legal representation." Id. at 129. Thus, I disagree 

with the majority's suggestion that cases such as Runyon and F.D. 

Rich rule out fee-shifting by the Board under the NLRA in the case 

of bad faith defenses by charged companies. See Maj. op. at 13-14.

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than section 303 of the LMRA. Section 303 contains an 

explicit damages provision that entitles an employer who has 

been injured "in his business or property" by a union's unfair 

labor practice to "recover the damages by him sustained and 

the cost of the suit." 29 U.S.C. § 187. Starting with the 

premise that, under the American Rule, the ordinary meaning 

of "damages" does not include attorney's fees, the Supreme 

Court examined the legislative history of section 303(b) and 

found a Senate floor exchange persuasively indicating that 

the term "damages" was not intended to include attorney's 

fees in this section either. As the Sixth, Seventh and Ninth 

Circuits have recognized, Summit Valley "rested ... on 

factors peculiar to section 303(b) [of the LMRA], which ... 

expressly states its remedies and was not intended to encompass attorney's fees, according to the 'persuasive evidence' of 

congressional intent." Bennett v. Local Union No. 66, Glass, 

Molders, Pottery, Plastics and Allied Workers Int'l Union, 

AFL-CIO, 958 F.2d 1429, 1440 n.9 (7th Cir. 1992); see Wilson 

v. International Brotherhood of Teamsters, Chauffeurs, 

Warehousemen, and Helpers of America, AFL-CIO, 83 F.3d 

747, 754 (6th Cir.), cert. denied, 117 S. Ct. 610 (1996); Zuniga 

v. United Can Co., 812 F.2d 443, 454-55 (9th Cir. 1987). In 

short, none of the intervening cases relate to the Board's 

authority under the NLRA to award litigation expenses as a 

remedy and as a deterrent to prevent bad faith abuse of its 

processes.

In a case like this one, where an employer has flagrantly 

refused to collectively bargain in good faith, a union is 

compelled to vindicate its statutory rights in proceedings 

before the Board. As the Board itself has recognized, "[a]n 

aggrieved party's outlay of legal ... expenses is likely to be a 

prime ingredient in or motivation behind, a refusal to bargain 

for which there is no arguably meritorious justification. Logic suggests little reason for such a refusal other than the 

belief that to do so may create an economic imbalance beneficial to the party undertaking the refusal." Wellman Industries, Inc., 248 N.L.R.B. 325, 326 (1980); see Seattle-First 

National Bank v. NLRB, 638 F.2d 1221, 1227 n.9 (9th Cir. 

1981) (surface bargaining by employer involves use of ecoUSCA Case #96-1209 Document #285224 Filed: 07/18/1997 Page 26 of 34
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nomic power to "talk a union to death"). Wasting the union's 

time and depleting its resources through presentation of a 

frivolous defense at a Board proceeding is a tactical maneuver 

designed to deepen the economic wound already caused by 

the surface bargaining. Koval Press, Inc., 241 N.L.R.B. 

1261, 1263 (1979) ("The only logical inference to be drawn 

from [presentation of a frivolous defense is that Respondent] 

seeks to delay the proper effectuation of the policies of the 

Act by its unlawful refusal to bargain...."). It is merely 

continuation of the same bad faith recalcitrance employed at 

the bargaining table in a new forum. A diehard respondent 

can go up the chain of decisionmaking causing greater economic burdens to the union at each stage by employing 

dilatory tactics during the administrative adjudication by the 

Administrative Law Judge ("ALJ"), the Board's review of the 

ALJ's recommendation, and, finally, appeal of the Board's 

order to a United States Court of Appeals. The whole 

process can take years. In addition to exhausting the charging party's legal war chest, the delay often leads to employee 

frustration and eventual loss of employee support due to 

attrition or loss of confidence in a seemingly ineffectual union, 

and it often permits continued employer anti-union activity. 

Cf. Ex-Cell-O Corp., 185 N.L.R.B. 107, 108 (1970). Ironically, by the purposeful presentation of an entirely frivolous 

defense, an employer turns the Board's processes into an 

instrument of its own unlawful conduct. Even though the 

union wins the usual remedy for surface bargainingan 

order to bargain in good faiththe impact of an employer's 

persistent and pervasive bad faith over years of administrative proceedings may effectively dissipate the impact of the 

order.

The majority readily admits the force of the evidence that 

led the Board to conclude that Unbelievable, Inc., "engaged in 

egregious and deliberate surface bargaining" in order to 

diminish the charging parties' economic strength and relied 

on "frivolous defenses in its litigation" in order to "further 

deplete[ ] the Charging Parties' resources and needlessly 

waste[ ] the resources of [the NLRB]." The Board characterized Unbelievable's surface bargaining as "flagrant, aggraUSCA Case #96-1209 Document #285224 Filed: 07/18/1997 Page 27 of 34
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vated, persistent, and pervasive" misconduct, and described 

the deliberate adherence to frivolous defenses as "egregious 

bad faith." While relying on section 10(c) of the NLRA as its 

principal authority for awarding attorney's fees against Unbelievable, Inc., the Board expressly noted such a remedy 

paralleled the bad faith exception to the American Rule as 

well.3 Such a remedy is undoubtedly "rational and consistent 

with the statute." NLRB v. Food & Comm'l Workers Union,

484 U.S. 112, 123 (1987).

Section 10(c) directs the Board, upon finding that a respondent has engaged in unfair labor practices, to issue an order 

requiring the respondent to cease and desist from the unfair 

labor practices and authorizes it further "to take such affirmative action including the reinstatement of employees, with 

or without back pay, as will effectuate the policies of this 

__________

3 The majority insists that we cannot consider the relevance of 

the bad faith exception to the American Rule because counsel for 

the Board at oral argument stated that the Board relied solely on 

section 10(c) of the NLRA. Whatever the scope or intent of Board 

counsel's admission, the post hoc rationalization rule works to 

prevent counsel from adding to or subtracting from an agency's 

stated rationale. Ashland Oil, Inc. v. FTC, 548 F.2d 977 (D.C. Cir. 

1976). The Board's opinion clearly states that it "find[s] ample 

support for [its] conclusion that [its] Order is fully consistent not 

only with the American Rule, but alternatively with the bad faith 

exception to that rule."

Ironically, the majority and I may have no real dispute over the 

Board's ultimate authority to render its ruling in this case. The 

majority says that it does not rule out the possibility that the Board 

has the authority to sanction a party that has acted in bad faith. 

Maj. op. at 10 n*. The Board, however, has only asserted its 

authority to assess fees in a frivolous defense case and has never 

attempted to broaden its authority beyond such circumstances. 

Thus, the majority's reversal means that, although the Board may 

well be justified in assessing attorney's fees in this case and, 

although it specifically cited the bad faith exception to the American 

Rule as consistent with its ruling, because it relied on its broad 

authority under section 10(c) to effectuate the purposes of the 

NLRA as the main support for its action, its action must be 

nullified. This makes no sense to me.

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Act...." 29 U.S.C. § 160(c). The Act's policies include 

"encouraging the practice and procedure of collective bargaining and ... protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives ... for the purpose of negotiating the terms and 

conditions of their employment...." 29 U.S.C. § 151.

While section 10(c) does not specifically list reimbursement 

of litigation expenses before the Board as a remedy for unfair 

labor practices, Congress deliberately drafted section 10(c) to 

include all reasonable remedies consistent with the Act's 

purposes. Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 188-

94 (1941) (Congress left to the NLRB the "adaption of means 

to end" because Congress was unable "to define the whole 

gamut of remedies to effectuate [the] policies [of the 

Act]...."). The final version of section 10(c), authorizing 

"such affirmative actions ... as will effectuate the policies of 

[the NLRA]" replaced earlier provisions that had enumerated 

specific types of remedies available to the Board.4 The 

broader language was intended to "delegate to the Board the 

primary responsibility for making remedial decisions that 

best effectuate the policies of the [NLRA]." ABF Freight 

System, Inc. v. NLRB, 510 U.S. 317, 323-24 (1994). See 

Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900-01 (1984); Golden State Bottling Co., Inc. v. NLRB, 414 U.S. 168 (1973); 

__________

4 The majority's suggestion that the substitution of "reinstatement of employees, with or without back pay" as an example of an 

affirmative action in the final bill for the term "restitution," which 

had appeared in earlier versions, evinced an intent to narrow the 

discretion of the Board in remedial matters, Maj. op. at 17-18, is 

wrong. Both "reinstatement" and "restitution" were used only as 

illustrations of "affirmative actions," in no way intended to confine 

Board power. Actually, restitution restores to a party property or 

money of which the party has been deprived, see BALLENTINE'S LAW 

DICTIONARY 1107 (3d ed. 1969), and is thus a backward-looking 

remedy. Reinstatement with back pay returns a person to a 

formerly held position and is thus both backward and forwardlooking. So, if it signifies anything, the substitution of "reinstatement" signified a broadening of section 10(c) power in the illustration.

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NLRB v. Strong, 393 U.S. 357, 359 (1969); NLRB v. SevenUp Bottling Co., 344 U.S. 344, 346 (1953). The Board's choice 

of remedy "should stand unless it can be shown that the order 

is a patent attempt to achieve ends other than those which 

can fairly be said to effectuate the policies of the Act." 

Virginia Electric & Power Co. v. NLRB, 319 U.S. 533, 540 

(1943). And, "[the court is] obliged to defer heavily to the 

Board's remedial decisions." Local 32B-32J, Service Employees Int'l Union, AFL-CIO v. NLRB, 68 F.3d 490, 496 

(D.C. Cir. 1995) (citing NLRB v. Gissel Packing Co., 395 U.S. 

575, 610-15 (1969); Fibreboard Paper Products Corp. v. 

NLRB, 379 U.S. 203, 214-17 (1964); Teamsters Local 115 v. 

NLRB, 640 F.2d 392 (D.C. Cir. 1981)); Phelps Dodge, 313 

U.S. at 188 (attainment of the national policies manifested in 

the NLRA requires "expert administration in collaboration 

with limited judicial review ... [that is not] confined within 

narrow canons for equitable relief deemed suitable by chancellors in ordinary private controversies.").

There can be scant doubt that awarding attorney's fees to a 

charging party who has been subjected to surface bargaining 

and bad faith, frivolous litigation effectuates the policies of 

the NLRA by directly remedying the economic injury incurred by the party. In this regard, reimbursement for 

expenses of litigation is no different from compensation for 

the costs of bad faith negotiation, which the majority approves in this very case.5 Using baseless, sham litigation to 

retaliate against or interfere in an employee's exercise of 

protected rights under the NLRA has been condemned by 

the Supreme Court as a violation of the NLRA and the Court 

has approved the Board's using its section 10(c) authority to 

__________

5 The majority contends that an award of litigation expenses as a 

remedy for bad faith conduct is not closely related to the Board's 

area of expertise or its statutory mission, but where the award of 

attorney's fees is targeted at a respondent's attempt to misuse the 

Board's processes in order to thwart a charging party's ability to 

bargain, the Board's expertise is very relevant. The impact that 

bad faith conduct has on a charging party is directly in the domain 

of the Board, which deals daily with the dynamics of employerunion relationships.

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order "the employer to reimburse the employees whom he 

had wrongfully sued for their attorney's fees and other expenses ... [and] order any other proper relief that would 

effectuate the policies of the [NLRA]." Bill Johnson's Restaurants, Inc. v. NLRB, 461 U.S. 731, 747 (1983). The Court 

further noted in Bill Johnson's that the Board needed such 

power despite the availability of state-court malicious prosecution remedies because the Federal Government has its own 

strong interest in enforcing the federal labor laws. Id. at 747 

n.14. As the Seventh Circuit recently recognized in a case 

enforcing the Board's grant of attorney's fees for a frivolous 

state court suit:

Whether a union is subject to frivolous litigation as a 

part of the underlying unfair labor practice or during the 

adjudication of another unfair labor practice allegation, 

there can be a similar impact on the rights of the 

workers under the Act.

* * * * *

A baseless and retaliatory lawsuit against a union can be 

a powerful weapon in the hands of an unprincipled 

employer. Such an employer need not win its lawsuit 

against a union to thwart the Union's attempts to organize workers; rather, the employer need only impose 

substantial costs and delays upon the Union.

Geske & Sons, Inc. v. NLRB, 103 F.3d 1366, 1378-79 (7th Cir. 

1997). The tactic is the same whether the litigant is before 

the Board or in court; only the forum differs.6It would be an 

__________

6 Although a charging party is not legally required to litigate its 

case before the Board, the Board's rules and regulations assume 

that the charging party is a fully participating party in the litigation. Enforcement of the NLRA relies solely on the initiation of 

charges by the charging party. NLRB v. Food and Comm'l 

Workers Union, 484 U.S. at 118. The term "party" as used in the 

Board's regulations includes "without limitation, any person filing a 

charge or petition under the [NLRA]...." 29 C.F.R. § 102.8. 

Thus, a charging party need not take any action in order to 

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anomalous result indeed if bad faith negotiation can be 

remedied by a grant of attorney's fees, and bad faith court 

proceedings as well, but bad faith Board proceedings merit no 

comparable remedy.

Fee-shifting power has been exercised by the Board only 

in cases that fall within the confines of the bad faith exception to the American Rule. In the few cases in which the 

Board has exercised it, the offending parties have acted outrageously in flaunting the Act's directives and abusing the 

Board's processes. See, e.g., Texas Super Foods, 303 

N.L.R.B. 209 (1991); Autoprod, Inc., 265 N.L.R.B. No. 42 

__________

participate fully in Board proceedings. "Any person desiring to 

intervene in any proceeding," on the other hand, must explicitly 

move for permission to intervene. Id. § 102.29.

The charging party plays an integral role in the entire NLRA 

proceedings. The initial obligation to identify and serve an unfair 

labor practice charge falls upon the charging party. Id. § 102.14. 

In addition, "[i]f, after the charge has been filed, the regional 

director [of the NLRB] declines to issue a complaint ... [or 

withdraws a complaint, the charging party] may obtain a review of 

such action by filing an appeal with the general counsel." Id.

§ 102.19. If the Regional Director of the NLRB and the respondent agree to a settlement, the charging party has a right to object 

to the regional director, the General Counsel and in certain cases 

the Board. Id. § 101.9.

Once formal proceedings have begun, a charging party is treated 

just like any other party. It may take depositions in connection 

with Board proceedings, id. § 102.30, and may subpoena witnesses 

and documents, id. § 102.31, just like the General Counsel and the 

respondent. Charging parties have the right to appear at the 

hearing and to examine and cross examine witnesses. Id. § 102.38. 

It may file briefs and files exceptions to the administrative law 

judge's findings. Id. §§ 102.42, 102.46.

These rules demonstrate that a charging party is expected to be a 

principal participant in the litigation of the charged unfair labor 

practice. The prosecution of an unfair labor practice is designed 

primarily to remedy the victim. Victims of unfair labor practices 

have no other remedy but to invoke the Board's authority. They 

cannot turn initially to civil courts. They must rely on and actually 

assist the Board's counsel in making their case.

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(1982); Wellman Industries, Inc., 248 N.L.R.B. 325; Koval 

Press, Inc., 241 N.L.R.B. 1261. Paradoxically, the majority 

uses the Board's reimbursement of expenses for its own 

proceedings to argue that it has exercised its power for 

punitive rather than remedial reasons, a power not included 

within its authority to effectuate the policies of the NLRA. 

See Republic Steel Corp. v. NLRB, 311 U.S. 7 (1940). This 

sounds like doublespeak to me. When Congress determined 

that an aggrieved party must present unfair labor practices 

to the NLRB rather than to a court, surely it did not intend 

for the NLRB to become a dupe, exploitable at will by 

employers to intensify the harm stemming from their original 

violation of the labor laws. Inherent in any agency's authority to carry out its designated functions is the power to 

ensure the fairness, efficiency and integrity of its processes 

and the appropriateness of the conduct of the parties appearing before it. See Checkovsky v. SEC, 23 F.3d 452, 455 (D.C. 

Cir. 1994) (Silberman, J., concurring); Touche Ross & Co. v. 

SEC, 609 F.2d 570 (2d Cir. 1979). Moreover, decisions of the 

NLRB are reviewed and enforced by the courts and conduct 

that dishonors and undermines the Board's processes dishonors and undermines the review process as well. Cf. ABF 

Freight System, Inc. v. NLRB, 510 U.S. at 326 (Scalia, J., 

concurring). An agency's power to protect the integrity of 

its processes has not been held to be limited to the sanctions 

specifically provided by the statute that defines the agency's 

power to remedy violations of law. See, e.g., NLRB v. C.H. 

Sprague & Son Co., 428 F.2d 938 (1st Cir. 1970); NLRB v. 

American Art Indus., Inc., 415 F.2d 1223 (5th Cir.1969); 

Uniroyal v. Marshall, 482 F. Supp. 364 (D.D.C. 1979); see 

also Checkovsky, 23 F.3d at 455-56 (agencies have inherent 

power to discipline officials appearing before the agency 

because it protects the administrative process and thus is 

reasonably related to the purposes of the laws that the 

agency is entrusted to enforce) (Silberman, J., concurring); 

Touche Ross & Co., 609 F.2d at 582 (agency disciplinary 

rules authorized despite the absence of express statutory 

authority in order to protect the integrity of agency's own 

processes); Gonzalez v. Freeman, 334 F.2d 570, 576-77 (D.C. 

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Cir. 1964) (Commodity Credit Corporation may debar irresponsible, defaulting or dishonest contractor despite the absence of explicit congressional authorization because such 

action is a necessary means for accomplishing congressional 

purpose of developing foreign markets for agricultural commodities). The imposition of attorney's fees on a party who 

grossly abuses the Board's processes is a defensive measure, 

equally justifiable as these other examples when invoked to 

protect the agency's integrity and to deter future abuses and 

distortion of its resources from more worthy cases.

In sum, I can find no convincing reason why the Board 

should not be allowed to construe its remedial mandate in 

section 10(c) so as to include an award of attorney's fees in a 

proceeding where a party has presented a frivolous defense to 

a serious unfair labor practice charge and in so doing has 

depleted the union's treasury, time and effectiveness, and 

misused the Board's process. We affirmed the Board's authority to do just that 24 years ago and I can find nothing in 

intervening Supreme Court cases that conflicts with such an 

interpretation by the Board of its authority. I respectfully 

dissent from that portion of the majority opinion holding to 

the contrary.

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