FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

COLETTA KIM BENELI,

Petitioner,

v.

THE NATIONAL LABOR RELATIONS 

BOARD,

Respondent,

and

BABCOCK & WILCOX CONSTRUCTION 

CO., INC.,

Respondent-Intervenor.

No. 15-73426

NLRB No.

28-CA-022625

OPINION

On Petition for Review of an Order of the

National Labor Relations Board

Argued and Submitted May 15, 2017

San Francisco, California

Filed October 17, 2017
2 BENELI V. NLRB

Before: William A. Fletcher and Richard C. Tallman, 

Circuit Judges, and Paul C. Huck,

* District Judge.

Opinion by Judge Huck;

Concurrence by Judge W. Fletcher

SUMMARY**

National Labor Relations Board

The panel denied an employee’s petition for review, and 

held that the National Labor Relations Board (“NLRB”) 

properly applied a new standard for deferring to arbitral 

decisions only prospectively, and upheld the NLRB’s 

substantive decision to affirm an arbitral decision – denying 

the employee’s unfair labor practice complaint – under the 

previous more deferential standard.

The panel applied the five factors articulated in 

Montgomery Ward & Co. v. FTC, 691 F.2d 1322, 1333 (9th 

Cir. 1982), to review the NLRB’s decision to apply only 

prospectively the new standard for arbitral deferral. First, 

the panel held that this case was a case of “first impression,” 

and the factor weighed in favor of retroactive application of 

the new standard. Second, the panel held that the new 

standard represented an abrupt departure from wellestablished practice, and this factor strongly favored 

 * The Honorable Paul C. Huck, United States District Judge for the 

Southern District of Florida, sitting by designation.

** This summary constitutes no part of the opinion of the court. It 

has been prepared by court staff for the convenience of the reader.
BENELI V. NLRB 3

prospective application. Third, the panel held that the 

employer relied on the old standard that was in place for 

nearly 60 years, and this reliance and other equitable 

considerations supported only the prospective application of

the new standard. Fourth, the panel held that retroactive 

application would severely burden the employer, and this 

favored prospective application. Fifth, the panel held that 

the balance of statutory interests favored prospective 

application. The panel concluded that the NLRB did not 

abuse its discretion when it deferred to the arbitral decision 

under the old more deferential standard set forth in Spielberg 

Mfg. Co., 112 N.L.R.B. 1080 (1995), and Olin Corp., 

268 N.L.R.B. 573 (1984).

Judge Fletcher concurred in the result. Judge Fletcher 

dissented from the majority’s use of the factors articulated in 

Montgomery Ward & Co. to review the NLRB’s decision to 

apply only prospectively the new deference rule. Instead, 

Judge Fletcher would address the prospective-only 

application of the new rule under the NLRB v. WymanGordon, 394 U.S. 759 (1969), framework, which addresses 

concerns of informed and deliberate agency rulemaking.

COUNSEL

Myron L. Scott (argued), Law Office of Myron Scott,

Tempe, Arizona, for Petitioner.

Ruth E. Burdick (argued), Deputy Assistant General 

Counsel; Heather S. Beard, Attorney; Robert J. Engleheart, 

Supervisory Attorney; Linda Dreeben, Deputy Associate 

General Counsel; John H. Ferguson, Associate General 

Counsel; Jennifer Abruzzo, Deputy General Counsel; 
4 BENELI V. NLRB

Richard F. Griffin Jr., General Counsel; National Labor 

Relations Board, Washington, D.C.; for Respondent.

Julie A. Trout (argued), Akron, Ohio, for RespondentIntervenor.

Michael Goldberg (argued), Cherry Hill, New Jersey, for 

Amicus Curiae Association for Union Democracy.

OPINION

HUCK, District Judge:

The central issue on appeal is whether the National 

Labor Relations Board (the “NLRB” or “Board”) properly 

determined that a new standard for deferring to arbitral 

decisions, which was developed by the Board in the 

underlying case, should only be applied prospectively. As a 

result of the prospective application of the new standard, 

Petitioner Coletta Kim Beneli’s unfair labor practice 

complaint against Respondent-Intervenor Babcock & 

Wilcox Construction Co., Inc. (“B&W”) was analyzed under 

the previous standard and consequently denied. Beneli also 

challenges the Board’s substantive decision to affirm the 

arbitral decision under the previous deferral standard.

The Board’s usual practice is to apply its new policies 

and standards in all pending cases, at whatever stage, subject 

to balancing such retroactivity against “the mischief of 

producing a result which is contrary to a statutory design or 

to legal and equitable principles.” Levitz Furniture Co. of 

the Pac., Inc., 333 N.L.R.B. 717, 729 (2001). This Court has 

adopted a five-factor analysis to balance the interests in 

considering retroactive application of a new standard. Oil, 

Chem. & Atomic Workers Int’l Union Local 1-547 v. NLRB, 
BENELI V. NLRB 5

842 F.2d 1141, 1145 (9th Cir. 1988) (citing Montgomery 

Ward & Co. v. FTC, 691 F.2d 1322, 1333 (9th Cir. 1982)). 

Balancing those factors here, the NLRB properly applied the 

new standard only prospectively. Therefore, we deny 

Beneli’s petition for review.

I. BACKGROUND

Beneli worked for B&W as a forklift and crane operator 

and served as a job steward for her union, the International 

Union of Operating Engineers (“the Union”). Beneli was 

fired from her job approximately two months after she was 

hired. According to Beneli, her firing culminated a running 

dispute over her actions as a union job steward. According 

to B&W, Beneli was fired for cause because of repeated 

safety violations and inappropriate conduct.

On the day she was fired, B&W’s project superintendent 

summoned Beneli to a meeting with two B&W safety 

representatives. One of the representatives told Beneli that 

she was being suspended for three days without pay for two 

safety policy violations. Beneli responded to the proposed 

suspension by stating, “[i]s this the fucking game you guys 

are going to play?”—a statement which she then repeated. 

The representatives told Beneli that they considered that 

language a threat and terminated her. Beneli refused to sign 

termination papers that claimed that she was fired for 

“inappropriate conduct.”

The Union, in accordance with its collective-bargaining 

agreement (“CBA”) with B&W, filed a grievance over 

Beneli’s suspension and termination, alleging that she had 

been fired for union activities and without just cause. The 

grievance moved through the CBA process to binding 

arbitration before a joint labor-management Grievance 

Review Subcommittee (the “Subcommittee”). Both Beneli 
6 BENELI V. NLRB

and B&W presented witness testimony before the 

Subcommittee supporting their respective positions. The 

Subcommittee denied the grievance and upheld Beneli’s 

discharge, finding just cause based on her “use of profanity 

and insubordination.”

After reviewing the Subcommittee decision and 

determining that it was “repugnant to the [National Labor 

Relations] Act” (the “NLRA”), the NLRB issued a 

complaint against B&W. Following a hearing before an 

administrative law judge (“ALJ”) where Beneli and B&W 

once again presented witness testimony, the ALJ issued a 

proposed order recommending that the Board defer to the 

Subcommittee decision and dismiss the complaint. In

explaining his deferral decision, the ALJ stated, in part, that 

although he credited Beneli’s version of events, the 

Subcommittee could have credited B&W’s witnesses and 

reached a different conclusion.

The ALJ’s decision to defer was based on long-standing 

NLRB precedent set forth in Spielberg Mfg. Co., 

112 N.L.R.B. 1080 (1955), and Olin Corp., 268 N.L.R.B. 

573 (1984) (“Spielberg/Olin”). Under the Spielberg/Olin

standard, deferral to arbitral decisions is appropriate when: 

(1) all parties agree to be bound by the decision; (2) the 

proceedings appear to be fair and regular; (3) the arbitrator 

adequately considers the unfair labor practice issue, which 

requires the unfair labor practice issue and the contractual 

issue to be “factually parallel” and the arbitrator to have been 

“presented generally” with the relevant facts; and (4) the 

arbitration award is not clearly repugnant to the NLRA. 

Spielberg, 112 N.L.R.B. at 1082; Olin, 268 N.L.R.B. at 574. 

The NLRB General Counsel filed exceptions to the ALJ’s 

decision on the merits. In addition, the NLRB General 

Counsel recommended that the Board revisit the standard for 
BENELI V. NLRB 7

determining when to defer to an arbitral decision. The Board 

requested briefing on whether to adhere to, modify, or 

abandon the Spielberg/Olin standard.

Following an extensive review, the Board adopted the 

ALJ’s decision, denying Beneli’s complaint. In its order, the 

Board decided to change the standard for determining 

whether to defer to an arbitration decision. Under the new 

standard, the Board will now defer to an arbitral decision if 

the party urging deferral shows that: (1) the arbitrator was 

explicitly authorized to decide the unfair labor practice issue; 

(2) the arbitrator was presented with and considered the 

statutory issue, or was prevented from doing so by the party 

opposing deferral; and (3) Board law reasonably permits the 

award. This standard shifts the burden of proof and makes 

deferral to an arbitral decision less likely. The NLRB 

applied the new deferral standard prospectively and declined 

to apply it in the present case because of its impact on settled 

expectations of employers and unions, who had bargained 

for dispute resolution mechanisms under the old NLRB 

standard. Beneli petitions for review of this retroactivity 

decision.

II. ANALYSIS

A. Standard of Review

Whether new standards should be applied retroactively 

is a question of law, which we review de novo. Oil, Chem. 

& Atomic Workers Int’l, 842 F.2d at 1144 n.2. However, 

“while the court is not bound by the Board’s views on 

retroactive application, it should defer to those views absent 

manifest injustice.” NLRB v. Best Products Co., Inc., 

765 F.2d 903, 913 (9th Cir. 1985). See also Saipan Hotel 

Corp. v. NLRB, 114 F.3d 994, 998 (9th Cir. 1997) (same); 

Garfias-Rodriguez v. Holder, 702 F.3d 504, 518–19 (9th Cir. 
8 BENELI V. NLRB

2012) (en banc) (“When an agency consciously overrules or 

otherwise alters its own rule or regulation, we presume that 

it does so as an exercise of its judgment.”). Accordingly, 

where, as here, it is clear from the Board’s decision that it 

considered the question of retroactive versus prospective 

application, and it provided a reasoned explanation for its 

choice, we are inclined to give considerable deference to the 

Board’s expertise. See Hotel, Motel & Rest. Emps. &

Bartenders Union Local No. 19 v. NLRB, 785 F.2d 796, 798 

(9th Cir. 1986).

Review of a Board decision to defer to an arbitral award 

is limited to determining whether the Board has abused its 

discretion. Garcia v. NLRB, 785 F.2d 807, 809 (9th Cir. 

1986). We “will not deny enforcement of a deferral decision 

unless the Board clearly departs from its own standards or 

the standards themselves are invalid.” Id. (citing Servair, 

Inc. v. NLRB, 726 F.2d 1435, 1439 (9th Cir. 1984)).

B. Retroactivity Analysis

The Board’s usual practice is to apply new policies and 

standards in all pending cases at whatever stage, and to 

balance “the mischief of producing a result which is contrary 

to a statutory design or to legal and equitable principles.” 

Levitz Furniture, 333 N.L.R.B. at 729. To effectuate that 

balancing, we consider:

(1) whether the particular case is one of first 

impression, (2) whether the new rule 

represents an abrupt departure from well 

established practice or merely attempts to fill 

a void in an unsettled area of law, (3) the 

extent to which the party against whom the 

new rule is applied relied on the former rule, 

(4) the degree of the burden which a 
BENELI V. NLRB 9

retroactive order imposes on a party, and 

(5) the statutory interest in applying a new 

rule despite the reliance of a party on the old 

standard.

Oil, Chem. & Atomic Workers Int’l, 842 F.2d at 1145 (citing 

Montgomery Ward, 691 F.2d at 1333). Applying those five 

factors to the present case, the balance tips in favor of 

prospective application of the new standard.

1. This case is one of first impression

The first factor—whether the issue is one of first 

impression—in this context means something different from 

what is ordinarily referred to as a “case of first impression.” 

As developed in Retail, Wholesale & Department Store 

Union v. NLRB, a case of “first impression” is a case in 

which one party successfully urged the NLRB to change its 

rule while a case of “second impression” is any subsequent 

case brought before the NLRB on the same issue. 466 F.2d 

380, 383–84, 387 (D.C. Cir. 1972). A new rule is more 

likely to be applied in a case of “first impression,” but less 

likely in a pending case of “second impression.” Id.

The new deferral standard qualifies this case as a case of 

“first impression.” The Board established a new standard to 

replace the Spielberg/Olin deferral standard that had been in 

existence for decades. Thus, this factor weighs in favor of 

retroactively applying the new standard, at least to the 

present case, as prospective application would “deny the 

benefits of a change in the law to the very parties whose 

efforts were largely responsible for bringing it about.” 

Garfias-Rodriguez, 702 F.3d at 520 (citing Retail Union, 

466 F.2d at 390).
10 BENELI V. NLRB

However, as acknowledged at oral argument by amicus 

curiae Association for Union Democracy, the deferral 

standard was changed on the recommendation of the NLRB 

General Counsel, not Beneli. Beneli never advocated for the 

change. Therefore, Beneli’s “efforts were [not] largely 

responsible for bringing it about.” Garfias-Rodriguez, 

702 F.3d at 520. Given the facts of this case, this factor is 

entitled to lesser weight.

2. The new rule represents an abrupt 

departure from well-established practice

The Spielberg/Olin deferral standard was based on 

NLRB decisions that served as controlling law for decades—

see Spielberg, 112 N.L.R.B. 1080 (decided June 8, 1955), 

and Olin, 268 N.L.R.B. 573 (decided January 19, 1984). The 

new standard shifts the burden of proof for challenging the 

arbitration award to the party advocating deferral to the 

arbitral award and is less deferential to the arbitrator’s 

decision. The more deferential Spielberg/Olin standard 

controlled for almost 60 years, and employers and unions 

relied upon it during that time period. Courts of appeals 

throughout the country, including this one, repeatedly 

upheld that standard. Thus, the new standard represents an 

abrupt departure from well-established practice.

Even more, the shift in burden of proof reinforces the 

significance of this factor. See Oil, Chem. & Atomic 

Workers Int’l, 842 F.2d at 1145 (“The Indianapolis decision 

shifted the . . . burden of proof, 180 degrees. . . . Thus, the 

Union would bear the burden of proving the clause did not 

waive sympathy strikes, while, before, the employer needed 

to prove such waiver was intended. This burden is 

significant, as the Union might have continued to bargain for 

the express exclusion of sympathy strikes, had it known it 

would be required to prove intent.”). And altering decades 
BENELI V. NLRB 11

of precedent by formulating a new, more lenient test for 

deference similarly warrants prospective application given 

that deference is the primary question before the ALJ and the 

Board. See Levitz Furniture, 333 N.L.R.B. at 729 (applying 

new, “significantly more lenient” standard prospectively 

when the previous standard “was the law for nearly half a 

century”); cf. John Deklewa & Sons, 282 N.L.R.B. 1375, 

1389 (1987) (acknowledging that “new law [that] represents 

a sharp departure from past precedent” should be applied 

prospectively); Retail Union, 466 F.2d at 391 (“The standard 

. . . was well established and long accepted by the Board. . . . 

[T]he Board had confronted the problem before, had 

established an explicit standard of conduct, and [retroactive 

application of the new standard would] punish conformity to 

that standard under a new standard subsequently adopted.”). 

Thus, this factor strongly favors prospective application.

3. B&W relied on the Spielberg/Olin 

standard

The Spielberg/Olin standard was in place when B&W 

and the Union entered into the CBA in 1996, the parties 

amended the CBA’s grievance procedure in 2004, the 

Subcommittee heard Beneli’s grievance in 2009, and the 

ALJ issued his decision in this matter in 2012. At each of 

those steps, B&W would have relied upon the 

Spielberg/Olin standard in formulating its decisions with 

regard to negotiating the CBA with the Union, determining 

whether to oppose the Union before the Subcommittee, and 

developing and presenting its case to the Subcommittee. 

Presumably, B&W would have more explicitly argued and 

requested a decision on the unfair labor practice issue had it 

been operating under the new standard. In order to meet the 

Board’s new deferral requirement that the arbitrator must 

“identify the issue and generally explain why he or she finds 
12 BENELI V. NLRB

that the facts presented either do or do not support the unfair 

labor practice allegation—or was prevented from doing so 

by the party opposing deferral,” B&W would have changed 

its approach before the Subcommittee. However, because 

B&W was operating under the Spielberg/Olin standard that 

had been in place for nearly 60 years, it had no reason to 

ensure that the Subcommittee decision met these specific 

identification and explanation requirements.1

 Moreover, no 

party objected to that standard nor proffered the standard 

ultimately adopted by the Board. It was only after receiving 

the ALJ’s adverse determination that any party in the present 

case found fault with the Spielberg/Olin standard. These

reliances and similar equitable considerations support the 

prospective application of the new standard.

4. Retroactive application would severely 

burden B&W

The Subcommittee hearing and decision occurred in 

2009, over seven years ago. It cannot be questioned that 

beginning a new arbitration (from October 2009) or 

relitigating the original NLRB complaint (from August 

2011) would be exceedingly difficult and burdensome given 

the passage of time, the closure of B&W’s worksite, faded 

memories, and the likely dispersal of percipient witnesses. 

Such a heavy burden on B&W favors prospective 

application. See Retail Union, 466 F.2d at 392 (“Unless the 

burden of imposing the new standard is de minimis, or the 

newly discovered statutory design compels its retroactive 

application, the principles which underlie the very notion of 

an ordered society, in which authoritatively established rules 

 1 The Union also relied on, and proceeded in accordance with, the 

CBA’s grievance procedure that was negotiated under Spielberg/Olin

when the Union prosecuted Beneli’s grievance.
BENELI V. NLRB 13

of conduct may fairly be relied upon, must preclude its 

retroactive effect . . .”). 

5. The balance of statutory interests favors 

prospective application

Congress has established that labor arbitration agreed 

upon by a union and an employer is “the desirable method 

for settlement of grievance disputes arising over the 

application or interpretation of an existing collectivebargaining agreement.” 29 U.S.C. § 173(d). In fact, the 

NLRA is “‘primarily designed to promote industrial peace 

and stability by encouraging the practice and procedure of 

collective bargaining.’” Carey v. Westinghouse Elec. Corp., 

375 U.S. 261, 271 (1964) (quoting Int’l Harvester Co., 

138 N.L.R.B. 923, 925–26 (1962)).

One of the Board’s primary functions is to foster stability 

in labor relations, to encourage good-faith negotiation, and 

to give effect to the parties’ agreements. See, e.g., ColgatePalmolive-Peet Co. v. NLRB, 338 U.S. 355, 362 (1949) (“To 

achieve stability of labor relations was the primary objective 

of Congress in enacting the National Labor Relations Act.”). 

Arbitration plays a central role in achieving this goal. United

Steelworkers of Am. v. Warrior & Gulf Navigation Co.,

363 U.S. 574, 578 (1960) (“[A]rbitration is the substitute for 

industrial strife.”). As the Board noted below, this stability 

is undermined when the Board adopts policies that detract 

from final and binding arbitration procedures to which 

employers and unions have previously agreed.

Because the Subcommittee’s decision did not include the 

explicit findings required under the new standard, retroactive 

application would necessitate new analysis by the 

Subcommittee and an ALJ. Such a requirement would 

undermine the binding arbitration to which the Union, 
14 BENELI V. NLRB

Beneli, and B&W agreed and would impair the “stability of 

labor relations [that] was the primary objective of Congress 

in enacting the National Labor Relations Act.” ColgatePalmolive-Peet, 338 U.S. at 362. Therefore, the primary 

purpose of the NLRA favors prospective application.

C. Substantive Review under Spielberg/Olin

The Board is afforded broad discretion in its 

determination whether to defer to an arbitration panel’s 

decision. The Board did not abuse its discretion when it 

deferred to the Subcommittee decision under the 

Spielberg/Olin standard.

In her appeal, Beneli challenges the Board’s deferral 

decision only under the fourth prong of the Spielberg/Olin

standard, i.e., that the arbitration award is “clearly 

repugnant” to the Act. Spielberg, 112 N.L.R.B. at 1082; 

Olin, 268 N.L.R.B. at 574. An arbitrator’s decision is 

“clearly repugnant” to the NLRA if the decision is “palpably 

wrong, i.e., unless the arbitrator’s decision is not susceptible 

to an interpretation consistent with the Act.” Olin, 

268 N.L.R.B. at 574 (internal quotation marks and footnote 

omitted). Thus, “[i]f the reasoning behind an award is 

susceptible of two interpretations, one permissible and one 

impermissible, it is simply not true that the award is ‘clearly 

repugnant’ to the Act.” Douglas Aircraft Co. v. NLRB, 

609 F.2d 353, 354–55 (9th Cir. 1979).

Beneli was cited for multiple safety violations prior to 

her termination, including two safety violations the day of 

her termination. Additionally, Beneli used profanity toward 

her superiors when she was presented with a three-day 

suspension for safety violations. The Union presented 

testimony to the Subcommittee that included evidence 

concerning Beneli’s union activities. B&W presented 
BENELI V. NLRB 15

evidence that it was Beneli’s safety violations and use of 

profanity, not her union activities, that served as the 

motivation for her termination. Finding B&W’s evidence 

credible, the Subcommittee determined that Beneli’s 

profanity and insubordinate conduct were the impetus for 

Beneli’s termination and upheld her discharge. Thus, the 

arbitration decision that Beneli was discharged for cause was 

susceptible to an interpretation consistent with the Act. See

id. Therefore, the Board did not abuse its discretion in 

deferring to the Subcommittee decision.

III. CONCLUSION

Although Beneli’s case was one of first impression 

before the Board, the other four factors of the retroactivity 

test substantially outweigh that one factor. The new deferral 

standard represents an abrupt departure from the more 

deferential Spielberg/Olin standard that had been followed 

in labor disputes for almost 60 years. The reliance interests 

of the parties combined with the primary purpose of the 

NLRA strongly favor prospective application of the new 

standard. Retroactive application of the newly-devised 

standard would result in “work[ing] hardship upon [B&W] 

altogether out of proportion to the public ends to be 

accomplished.” NLRB v. Guy F. Atkinson, 195 F.2d 141, 

149 (9th Cir. 1952). Therefore, the new standard should be 

prospectively applied. Finally, because the Subcommittee 

decision could be interpreted in a manner that is not clearly 

repugnant to the NLRA, the Board did not abuse its 

discretion in deferring to the arbitral decision.

Each party shall bear its own costs of this appeal.

PETITION FOR REVIEW DENIED.
16 BENELI V. NLRB

W. FLETCHER, Circuit Judge, concurring in the result:

I concur in the result. However, I respectfully dissent 

from the majority’s use of the factors articulated in 

Montgomery Ward & Co. v. FTC, 691 F.2d 1322, 1333 (9th 

Cir. 1982) (relying on Retail, Wholesale and Department 

Store Union v. NLRB, 466 F.2d 380, 390–93 (D.C. Cir. 

1972)), to review a decision of the National Labor Relations 

Board to apply only prospectively a new rule declared in an

adjudicative proceeding.

Prior to its decision in this case, the Board reviewed 

arbitral decisions under a highly deferential standard. 

During the administrative appeal in this case, the Board 

changed its standard so that it now reviews arbitral decisions 

less deferentially. However, the Board declined to apply its 

new standard to the case before it. Appellant, who lost the 

arbitration, and who lost before the Board when it applied its 

highly deferential standard, asks us to hold that the Board 

erred in refusing to apply its new standard to her case.

Citing Oil, Chemical & Atomic Workers Int’l Local 1-

547 v. NLRB, 842 F.2d 1141, 1145 n.2 (9th Cir. 1988), the 

majority reviews de novo the Board’s decision to apply its 

new standard only prospectively. In Oil, Chemical, we used 

the factors articulated in Montgomery Ward in reviewing the 

Board’s decision to apply its new rule retroactively. Id. at 

1145. Consistent with Oil, Chemical, we have applied the 

Montgomery Ward factors to review agency decisions to 

apply retroactively new rules developed in agency 

adjudication. See, e.g., Garfias-Rodriguez v. Holder, 

702 F.3d 504, 520–23 (9th Cir. 2012) (en banc). The 

majority applies these factors in its review today.

However, we have never applied the Montgomery Ward

factors to review an agency’s decision to apply only 
BENELI V. NLRB 17

prospectively a new rule developed in adjudication. 

Retroactive application of a new rule in an adjudicative 

proceeding raises obvious concerns of fairness, which we 

explicitly invoked in Oil, Chemical:

[I]t is inappropriate to apply retroactively 

the new . . . standard to interpret the 

collective bargaining agreement in this case, 

since the new placement of the presumption 

[under the new standard] could not have been 

anticipated by the parties and thus could not 

have been their intent.

Id. at 1144. Prospective application of a new rule developed 

in adjudication does not raise these concerns. If a rule is 

new, the parties could not have relied on it when they 

engaged in the conduct that later became the subject of the 

adjudicative proceeding.

Prospective-only application of a new rule declared in 

agency adjudication raises different concerns. The 

Administrative Procedure Act allows an agency to declare 

interpretive rules in adjudication, but requires notice-andcomment procedure for the promulgation of legislative rules. 

An agency does not have the authority to declare 

prospective-only legislative rules through adjudication, for 

such rules avoid the required notice-and-comment 

rulemaking procedure. See NLRB v. Wyman-Gordon, 

394 U.S. 759 (1969) (holding invalid a legislative rule 

developed in agency adjudication). I would not analyze the 

prospective-only application of the NLRB’s new rule under 

the Montgomery Ward framework, which addresses 

concerns of fairness arising out of retroactive application. I 

would, instead, address the prospective-only application of 

the new rule under the Wyman-Gordon framework, which 
18 BENELI V. NLRB

addresses concerns of informed and deliberate agency 

rulemaking.