United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 17, 2021 Decided August 26, 2022 

No. 20-1411 

EVERPORT TERMINAL SERVICES, INC., 

PETITIONER

v. 

NATIONAL LABOR RELATIONS BOARD, 

RESPONDENT

INTERNATIONAL ASSOCIATION OF MACHINISTS AND 

AEROSPACE WORKERS, DISTRICT LODGE 190, LOCAL LODGE 

1546, AFL-CIO AND INTERNATIONAL ASSOCIATION OF 

MACHINISTS AND AEROSPACE WORKERS, DISTRICT LODGE 

190, LOCAL LODGE 1414, AFL-CIO, 

INTERVENORS

Consolidated with 20-1412, 20-1432 

On Petitions for Review and Cross Application 

for Enforcement of an Order of 

the National Labor Relations Board 

Ashley C. Parrish argued the cause for petitioner Everport 

Terminal Services, Inc. On the briefs were Jeffrey S. Bucholtz

and Brigham M. Cheney. 
2 

Emily M. Maglio argued the cause for petitioner 

International Longshore and Warehouse Union. With her on 

the briefs was Eleanor Morton. 

Gregoire Sauter, Attorney, National Labor Relations 

Board, argued the cause for respondent. With him on the brief 

were Ruth E. Burdick, Deputy Associate General Counsel, 

David Habenstreit, Assistant General Counsel, and Julie 

Broido, Supervisory Attorney. 

David A. Rosenfeld argued the cause and filed the brief for 

intervenors in support of respondent. 

Before: SRINIVASAN, Chief Judge, RAO, Circuit Judge, 

and EDWARDS, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge RAO. 

RAO, Circuit Judge: This case arises from a dispute over 

which union—the International Association of Machinists 

(“IAM”) or the International Longshore and Warehouse Union 

(“ILWU”)—is entitled to represent the mechanic workforce at 

the Ben Nutter Terminal in Oakland, California. For many 

years, the Terminal’s mechanics were represented by the IAM. 

In 2015, Everport Terminal Services, Inc., took over the 

Terminal’s operation and decided to hire a new workforce. As 

a member of the multi-employer Pacific Maritime Association 

(“PMA”), Everport was party to a collective bargaining 

agreement negotiated between the PMA and the ILWU. As 

Everport read that agreement, it required Everport to prioritize 

ILWU applicants in hiring its new mechanics and to recognize 

the ILWU as their representative. Everport therefore gave 

qualified ILWU applicants first choice of the available 

mechanic positions, filling the remaining vacancies with 
3 

applicants from the Terminal’s existing, IAM-represented 

workforce. 

After the IAM cried foul, the National Labor Relations 

Board (“Board”) found that Everport had unlawfully 

discriminated against the Terminal’s incumbent mechanics on 

the basis of their IAM affiliation; that it had violated its 

statutory obligation to recognize and bargain with the 

incumbent mechanics’ chosen union, the IAM; and that it had 

prematurely recognized the ILWU as the representative of the 

Terminal’s mechanics. The Board also found the ILWU had 

unlawfully demanded and accepted recognition from Everport. 

In its order, the Board did not dispute—or even engage with—

Everport’s reading of the PMA-ILWU agreement, instead 

dismissing it as a “red herring.” Because that was arbitrary, we 

grant the petitions for review and vacate the Board’s order. 

I. 

A. 

Workers at West Coast ports have historically bargained 

with their employers on a coastwide basis. In 1938, the Board 

certified the ILWU as the bargaining representative for “all the 

workers employed at longshore labor in the Pacific Coast ports 

of the United States.” Shipowners’ Ass’n of the Pac. Coast, 7 

NLRB 1002, 1022 (1938). Coastwide representation was 

necessary, the Board found, because employers were 

coordinating workers’ terms of employment on a coastwide 

basis. See id. at 1023–24; see also Cal. Cartage Co. v. NLRB, 

822 F.2d 1203, 1206 (D.C. Cir. 1987) (explaining the Board’s 

decision in Shipowners). Since 1949, West Coast port operators 

have bargained with the ILWU through the Pacific Maritime 

Association, a “multi-employer bargaining representative ... 

with the primary purpose of negotiating, executing, and 

administering collective bargaining agreements.” PMA v. 
4 

NLRB, 967 F.3d 878, 881 (D.C. Cir. 2020). ILWU members 

will work only for port operators that are in the PMA, and 

because of the Board’s decision to certify a coastwide 

bargaining unit, the ILWU represents virtually all skilled 

longshoremen on the West Coast. 

All PMA employers are bound by the terms of a collective 

bargaining agreement negotiated between the PMA and the 

ILWU, the Pacific Coast Longshore Contract Document 

(“Longshore Contract”). The Longshore Contract specifies the 

longshore jobs PMA employers must give to ILWU members. 

It also sets the terms of employment for those workers—the 

wages and benefits they receive, the process through which 

they are hired, and the reasons for which they may be fired. 

The Longshore Contract’s scope is broad, reaching 

“[v]irtually all longshore work at West Coast ports,” ILWU v. 

NLRB (“Kinder Morgan”), 978 F.3d 625, 630 (9th Cir. 2020), 

and the Board has upheld many of its jurisdiction setting 

provisions as consistent with the National Labor Relations Act, 

see PMA, 256 NLRB 769, 770 (1981); cf. IAM, Loc. Lodge No. 

1484 v. ILWU, Loc. 13, 781 F.2d 685, 688 n.2 (9th Cir. 1986). 

In its earliest iterations, it covered stevedore work—i.e., 

loading and unloading ships. Later, the PMA and the ILWU 

expanded the Longshore Contract to cover mechanics—the 

workers who maintain and repair the equipment used to load 

and unload ships—but agreed that PMA members who had 

employed non-ILWU mechanics before 1978 could continue 

doing so. PMA, 256 NLRB at 769–70. The parties again 

modified the Longshore Contract in 2008, making clear that 

mechanic work at “all new marine terminal facilities that 

commence operations after July 1, 2008, shall be assigned to 

the ILWU.” As before, however, they made an exception for 

terminals where non-ILWU mechanics were employed before 

2008—sites the parties designated as “red-circled.” Thus, if 
5 

non-ILWU mechanics had been employed at a terminal since 

before 1978, the Longshore Contract’s amendments permit 

PMA members to continue employing them. 

For all work that falls within its scope, the Longshore 

Contract sets out a hiring process that PMA members must 

follow. At each port on the West Coast, the ILWU maintains 

dispatch halls where ILWU jobseekers may submit 

applications. PMA members may hire only from these dispatch 

halls and must allocate work based on applicants’ 

qualifications, skills, and seniority. The PMA and the ILWU, 

however, have historically made a limited exception for

mechanics. If there are too few ILWU members seeking 

mechanic work at the relevant dispatch hall, then after offering 

jobs to all of the hall’s qualified mechanics, a PMA member 

may fill any remaining vacancies “off the street.” These nonILWU hires are onboarded through the so-called “HermanFlynn process.” Off-the-street hires are subjected to a ninetyday probationary period, after which they become “registered” 

employees that are entitled to the same benefits as ILWU 

members and are required to pay ILWU dues.

B. 

This case centers on twenty-seven mechanic positions at 

the Ben Nutter Terminal. The Terminal was “red-circled” in 

2008 because non-ILWU mechanics had been working there 

since before 1978. 

For many decades, the Terminal was operated by two 

PMA members—Marine Terminals Corporation (“Marine”) 

and its subsidiary, Miles Motor Transport System (“Miles”)—

whose stevedores were represented by the ILWU and whose 
6 

mechanics were represented by the IAM.1

 In 2002, Evergreen 

Marine Corporation acquired the right to operate the Terminal 

and then subcontracted the Terminal’s operation to Marine and 

Miles. In 2012, Evergreen entrusted the Terminal’s operation 

to its subsidiary, Everport, which again rehired Marine and 

Miles to run the Terminal. The same workforce remained at the 

Terminal—Marine and Miles continued using ILWUrepresented stevedores and IAM-represented mechanics—and 

Everport had no direct relationship with these workers. 

In 2015, dissatisfied with the state of the Terminal’s 

operations, Everport resolved to operate the Terminal itself and 

informed Marine and Miles that their contract would end on 

December 4, 2015. Everport needed to hire stevedores from the 

ILWU to run the Terminal, so it joined the PMA in June 2015. 

Everport explored subcontracting the Terminal’s mechanic 

work, but ultimately decided to employ the Terminal’s 

mechanics directly. 

The ILWU informed Everport that if it chose to employ its 

own mechanics, it would need to hire them from the local 

dispatch hall. “[T]he ‘red-circle’ waiver at the [Terminal] is 

fully based on the direct bargaining relationship between 

[Marine and Miles] and IAM,” the ILWU explained. “Upon 

termination of the subcontracting relationship with [Marine 

and Miles ], the ‘red circle’ waiver no longer applies.” After 

Marine and Miles ceased operations, the Terminal would 

become a “new marine terminal”—which the Longshore 

Contract defined to include “vacated facilities.” As such, its 

red-circle status would lapse and the Terminal’s mechanic jobs 

would come within the ILWU’s jurisdiction. Therefore, 

1

 The mechanics employed by Marine and Miles were divided into 

two separate IAM-affiliated bargaining units, but for the purposes of 

this opinion we refer to them as a single bargaining “unit.” 
7 

according to the ILWU, Everport was obligated to hire its 

mechanics from the ILWU dispatch hall and, if necessary, 

through the Herman-Flynn process. The ILWU was clear that 

“failure to comply with the full terms of the [Longshore 

Contract] will result in the Union pursuing all available 

remedies.”

Unsure of its obligations, Everport consulted the PMA, 

which corroborated the ILWU’s reading of the Longshore 

Contract. According to the PMA, after Marine and Miles 

ceased operations at the Terminal, it would “no longer [be] a 

red-circle facility because Everport had no prior agreement 

with any union at the Terminal and the Terminal was [being] 

vacated.” Based on the PMA and the ILWU’s mutual 

understanding of their contract, Everport told the ILWU that 

“qualified [ILWU] workers will receive first consideration for 

steady mechanic jobs.” Everport indicated that if vacancies 

remained after exhausting the pool of qualified ILWU 

applicants, it would try to rehire the mechanics currently 

working for Marine and Miles.

After learning of Everport’s job postings at the ILWU 

dispatch hall, the IAM demanded that Everport recognize it as 

the rightful bargaining representative of the Terminal’s 

mechanics. In response, Everport explained its interpretation of 

the Longshore Contract and why it had to prioritize ILWU 

applicants for the Terminal’s mechanic positions after the 

Terminal’s red-circle designation lapsed.

Everport began hiring mechanics in late November. It first 

interviewed candidates who had submitted applications 

through the ILWU hiring hall; afterwards, it considered Marine 

and Miles’ employees, treating them as off-the-street, potential 

Herman-Flynn hires. Everport’s interviewers kept notes about 

which applicants were ILWU-represented and which were not. 
8 

Everport ultimately hired fifteen ILWU applicants and twelve 

applicants from Marine and Miles’ mechanic workforce. 

The Terminal reopened under Everport’s operation in 

December 2015. Pursuant to the Herman-Flynn process, 

Everport treated Marine and Miles’ former mechanics as new 

hires, which meant they lost the seniority-based benefits they 

had formerly received from Marine and Miles as IAM 

members. With minor exceptions, Everport’s mechanics did 

the same work, in the same conditions, as their predecessors. 

C. 

Soon after Everport reopened the Terminal, the IAM filed 

charges, arguing that Everport and the ILWU had colluded to 

discriminate against Marine and Miles’ mechanics—depriving 

some of them of their jobs, unilaterally changing their terms 

and conditions of employment, and violating their right to be 

represented by the union of their choice. After investigating, 

the Board’s General Counsel filed a complaint against Everport 

and the ILWU. 

The administrative law judge (“ALJ”) sided with the IAM. 

See Everport Terminal Servs., Inc., 370 NLRB No. 28, slip op. 

at 45–46 (Sept. 30, 2020). Specifically, she found that Everport 

had unlawfully discriminated against IAM-represented 

mechanics on the basis of their union affiliation, see 29 U.S.C. 

§ 158(a)(1), (3), and had prematurely recognized and bargained 

with the ILWU before it was clear that Everport’s mechanics 

would choose to be ILWU-represented, see id. § 158(a)(1)–(2). 

The ALJ also found that Everport was a “successor employer” 

of Marine and Miles under NLRB v. Burns International 

Security Services, 406 U.S. 272 (1972). Everport therefore had 

a duty to bargain with the incumbent mechanics’ chosen union, 

a duty it breached by refusing to recognize the IAM. See 29 

U.S.C. § 158(a)(1), (5). Further, the ALJ found that because 
9 

Everport’s hiring process was infused by a general “animus” 

towards the IAM, it was also a “perfectly clear” successor 

under Burns, and therefore lost the right to set its mechanics’ 

terms and conditions of employment. Everport, slip op. at 33; 

see also Karl Kallmann (“Love’s Barbeque”), 245 NLRB 78, 

82 (1979), enf’d in relevant part, 640 F.2d 1094 (9th Cir. 

1981). Everport’s unilateral imposition of the Longshore 

Contract’s terms onto the Terminal’s existing workforce was 

therefore unlawful. See 29 U.S.C. § 158(a)(1), (5). Finally, the 

ALJ found that the ILWU had demanded recognition “before 

Everport began operations and when it did not represent an 

uncoerced majority of the [Terminal’s mechanics],” and had 

unlawfully induced Everport to discriminate against the 

incumbent mechanics based on their IAM affiliation. Everport, 

slip op. at 46 (finding violations of 29 U.S.C. § 158(b)(1)(A), 

(b)(2)). 

After Everport and the ILWU appealed, a three-member 

panel of the Board adopted the ALJ’s findings and conclusions. 

See id. at 1–2. With respect to the conclusion that Everport had 

unlawfully imposed the Longshore Contract on the Terminal’s 

mechanics, the panel split as to the ALJ’s reasoning. Two of 

the Board members agreed with the ALJ that because Everport 

had “used a general discriminatory hiring plan applicable to all

applicants from the predecessor workforce,” it was not only a 

Burns successor, but had also forfeited the right to set its 

mechanics’ initial terms and conditions of employment.2 Id. at 

1 n.4. In the alternative, however, all three Board members 

agreed that even if Everport had retained the right to set its 

mechanics’ initial terms of employment, its recognition of the 

2

 Member Emanuel would have found that Everport retained the right 

to set its mechanics’ terms of employment. In his view, it was not 

clear that but for Everport’s discrimination, all or substantially all of 

the Terminal’s incumbent mechanics would have retained their jobs. 
10 

ILWU as its mechanics’ representative was still premature, and 

so its imposition of the Longshore Contract onto those 

mechanics was unlawful.

The Board ordered Everport to revoke its recognition of 

the ILWU, cease applying the Longshore Contract to its 

mechanics, recognize and bargain with the IAM, and offer to 

rehire any IAM mechanics who had lost their jobs. It also 

ordered Everport and the ILWU to make whole any workers 

who were financially harmed by the unfair labor practices. 

Everport and the ILWU each timely petitioned for review, 

challenging the Board’s conclusions as arbitrary and capricious 

in violation of the Administrative Procedure Act. 5 U.S.C. 

§ 706(2)(A). The Board filed a cross application, asking this 

court to enforce its order, and the IAM intervened on the 

Board’s behalf. We have jurisdiction under 29 U.S.C. § 160(e), 

(f). 

II. 

We begin with the Board’s finding that Everport was a 

successor employer to Marine and Miles’ mechanics and that 

it unlawfully refused to recognize their chosen union, the IAM. 

It is an “unfair labor practice for an employer ... to refuse 

to bargain collectively with the representatives of his 

employees.” Id. § 158(a)(5). When a business with unionized 

employees changes hands, the new owner ordinarily has no 

duty to recognize the union that represented the predecessors’ 

employees: unless rehired, they are not “his employees.” Id.

(emphasis added); see Burns, 406 U.S. at 280 n.5; cf. Howard 

Johnson Co. v. Detroit Loc. Joint Exec. Bd., 417 U.S. 249, 261 

(1974) (“[N]othing in the federal labor laws requires that an 

employer who purchases the assets of a business ... hire all of 

the employees of the predecessor.”) (cleaned up). But “[i]f the 
11 

new employer makes a conscious decision to maintain 

generally the same business and to hire a majority of its 

employees from the predecessor,” the employer also inherits 

his predecessor’s duty to bargain with the incumbent union. 

Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 41 

(1987). 

A new business owner inherits its predecessor’s duty to 

bargain, in other words, if (1) its employees continue to 

perform substantially the same work after the handover; (2) the 

existing bargaining unit remains appropriate; and (3) “the 

majority of its employees were employed by its predecessor.” 

Id.; see also Trident Seafoods, Inc. v. NLRB, 101 F.3d 111, 114 

(D.C. Cir. 1996). The third requirement can also be satisfied 

even where the predecessor’s employees do not constitute a 

majority of the successor’s employees. If the Board finds that 

antiunion animus distorted its hiring process, “the Board 

presumes that but for such discrimination, the successor would 

have hired a majority of incumbent employees.” NLRB v. CNN 

Am., Inc., 865 F.3d 740, 752 (D.C. Cir. 2017) (cleaned up). By 

contrast, if the employer relies on “valid business reason[s]” in 

hiring its new workforce, it does not inherit any bargaining 

obligation. Love’s Barbeque, 245 NLRB at 81. 

Here, the Board found that (1) the Terminal’s mechanics 

continued to do substantially the same work after Everport 

began directing the Terminal’s operations; (2) a mechanicspecific bargaining unit remained appropriate; and (3) 

Everport’s hiring process was marred by animus towards the 

IAM. Everport therefore had a duty to bargain with the 

incumbent union, and its refusal to do so was unlawful. 

Everport and the ILWU do not contest the Board’s first finding, 

but argue that the second and third were arbitrary and 

capricious. We agree. 
12 

A. 

In holding that a mechanic-specific bargaining unit 

remained appropriate after Everport took over the Terminal’s 

operation, the Board arbitrarily ignored its precedents and the 

language of the Longshore Contract. 

Before any unionization vote can take place, the Board 

must determine “the unit appropriate for the purposes of 

collective bargaining.” 29 U.S.C. § 159(b). Unitappropriateness determinations are fact specific, so we 

generally defer to the “broad discretion” of the Board. United 

Food & Com. Workers v. NLRB, 519 F.3d 490, 494 (D.C. Cir. 

2008). But a “bargaining unit determination will not stand if 

arbitrary.” Cleveland Constr., Inc. v. NLRB, 44 F.3d 1010, 

1014 (D.C. Cir. 1995). 

In successorship cases, the Board presumes that a “change 

in ownership should not uproot bargaining units that have 

enjoyed a history of collective bargaining unless the units no 

longer conform reasonably well to other standards of 

appropriateness.” Cadillac Asphalt Paving Co., 349 NLRB 6, 

9 (2007) (cleaned up). To rebut that presumption, the new 

owner must identify “compelling circumstances sufficient to 

overcome the significance of bargaining history,” Cmty. Hosps. 

of Cent. Cal. v. NLRB, 335 F.3d 1079, 1085 (D.C. Cir. 2003) 

(cleaned up)—for instance, that the existing unit has become 

“repugnant to Board policy,” Trident Seafoods, 101 F.3d at 118 

(cleaned up). 

In this case, Everport told the Board that, as a PMA 

member, it was bound by the Longshore Contract’s terms, and 

that because the Terminal’s red-circle status had lapsed, it was 

obligated to recognize the ILWU as the bargaining 

representative of all its employees at the Terminal, mechanics 

included. Under Everport’s reading of the Longshore Contract, 
13 

in other words, a mechanic-specific bargaining unit was 

“inappropriate as a matter of law.” 

If Everport’s interpretation of the Longshore Contract 

were correct, the only unit appropriate for the Terminal’s 

mechanic workforce was the coastwide one created in 

Shipowners and reinforced in subsequent Board decisions. In 

Shipowners, the Board determined that a coastwide unit was 

appropriate for all longshoremen on the West Coast. See 7 

NLRB at 1022–25. As a result of that decision, all PMA 

members’ employees who come within the Longshore 

Contract’s scope can be represented only by the ILWU. 

Furthermore, in PMA, the Board found that, subject to narrow 

exceptions, the Longshore Contract’s “clear” terms assign all 

mechanic work at PMA-operated terminals to the ILWU. 256 

NLRB at 770; cf. Kinder Morgan, 978 F.3d at 642 (concluding 

that “the plain language of the [Longshore Contract] 

unambiguously assigns to the [ILWU] all [mechanic] work, on 

all present and future stevedore cargo handling equipment ... 

for all PMA members, at all West Coast ports,” subject to the 

exceptions inserted in 1978 and 2008). On Everport’s 

understanding that the Terminal’s red-circle status had lapsed, 

if Everport had recognized a mechanic-specific unit and 

continued to bargain with the IAM, it would have violated its 

duty under the Longshore Contract to bargain only with the 

ILWU’s coastwide unit. 

Nevertheless, the Board found that a mechanic-specific 

bargaining unit remained appropriate after Everport took over 

Terminal operations. To explain this decision, it was necessary 

for the Board to answer the objections of Everport and the 

ILWU on the merits, particularly as the Board gives 

“controlling weight” to the parties’ interpretation of their 

collective bargaining agreement. Mining Specialists, Inc., 314 

NLRB 268, 268 (1994). The Board, however, refused to 
14 

engage Everport’s reading of the Longshore Contract, 

dismissing the question of whether the Terminal remained redcircled as a “red herring.” Everport, slip op. at 43. Before this 

court, the Board again represented that Everport’s obligations 

as a PMA member were “irrelevant” to the successorship 

question. The Board gave two reasons for this position, but 

neither is persuasive.

First, the Board argued that Everport’s PMA membership 

was irrelevant because the IAM was “not a party to the PMAILWU Agreement, so it did not agree to [the red-circle] 

provisions.” Id. But while the Board ordinarily seeks to keep 

intact long-established bargaining units, its precedents require 

it to ensure that any established unit “remains appropriate for 

the successor employer.” Walden Sec., Inc., 366 NLRB No. 44, 

slip op. at 11 (Mar. 23, 2018) (emphasis added). To determine 

whether a mechanic-specific unit was appropriate for Everport, 

the Board had to analyze whether bargaining with such a unit 

would have been consistent with Everport’s obligations under 

the Longshore Contract. The Board cannot simply label a 

substantial contractual argument a “red herring” in order to 

avoid addressing it. Everport, slip op. at 43. 

Second, the Board intimated in its order that the Longshore 

Contract actually permitted Everport to bargain with a 

mechanic-specific unit, irrespective of whether the Terminal 

remained red-circled. For instance, it claimed that “[t]he redcircle language ... recognizes that a number of [mechanic] 

units were not historically represented by ILWU.” Id. at 41. But 

the fact that a number of units were not historically represented 

by the ILWU does not support the conclusion that Everport 

could bargain with a mechanic-specific unit even if the 

Terminal’s red-circle status lapsed. The Longshore Contract 

clearly covers mechanics unless a relevant exception applies. 

Therefore, only if the Terminal remained red-circled could 
15 

Everport bargain with a mechanic-specific unit, but that was 

the question the Board refused to answer. 

The Board also sought to rely on the fact that Everport 

considered hiring a subcontractor that could retain Marine and 

Miles’ mechanics, claiming that such actions were 

“contradictory to Everport’s position that the red circle 

language no longer applied” after it joined the PMA. Id. at 39.

Everport’s behavior, however, was entirely consistent with its 

reading of the Longshore Contract. If Everport had found a 

subcontractor to oversee mechanic work at the Terminal, and 

if that subcontractor was not a PMA member, then the 

subcontractor could potentially have rehired Marine and Miles’ 

workers and recognized the IAM as their representative. Here 

again, the Board’s reason for ignoring Everport’s contractual 

obligations was unfounded. 

Finally, although PMA held the Longshore Contract 

clearly assigns all mechanic work at PMA-operated terminals 

to the ILWU, so long as no exception applies, the Board argued 

that PMA was not controlling because that case “had no 

successorship issues.” Everport, slip op. at 41. The Board 

cannot evade its precedents so easily. That the Longshore 

Contract’s “clear” terms require PMA members to hire their 

mechanics from the ILWU, absent an applicable exception, 

was central to the Board’s conclusion in PMA. 256 NLRB at 

770. The Board also deflected by arguing that the version of 

the Longshore Contract at issue in PMA was “superseded in 

2008 with [the] red circle language.” Everport, slip op. at 41.

That is true, but it does not excuse the Board’s failure to assess 

whether the Terminal in fact remained red-circled. If the redcircle status had lapsed before Everport began operations, 

Everport would have had a “clear” duty to bargain with the 

coastwide ILWU unit. PMA, 256 NLRB at 770. In other words, 

without showing why Everport’s reading of the Longshore 
16 

Contract was in error, the Board could not square its unitappropriateness finding with PMA. 

In “certify[ing] appropriate bargaining units ... the Board 

cannot ignore its own relevant precedent but must explain why 

it is not controlling.” LeMoyne-Owen Coll. v. NLRB, 357 F.3d 

55, 60 (D.C. Cir. 2004) (cleaned up). Here, both Shipowners 

and PMA required Everport to recognize the ILWU as the sole 

representative of all employees that came within the Longshore 

Contract’s scope. The Board could not find that a mechanicspecific unit was appropriate, therefore, without determining 

whether the Terminal’s mechanics were covered by the 

Longshore Contract. Because the Board “entirely failed to 

consider [that] important aspect of the problem,” its selection 

of a mechanic-specific bargaining unit was unreasonable.

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. 

Auto. Ins. Co., 463 U.S. 29, 43 (1983).

B. 

The Board also concluded that Everport’s hiring process 

was distorted by animus towards the IAM. That too was 

arbitrary. 

As explained above, the third prong of the Burns

successorship test is satisfied if the Board finds that a new 

employer’s hiring decisions were motivated by antiunion 

animus. Love’s Barbeque, 245 NLRB at 82; Cap. Cleaning 

Contractors, Inc. v. NLRB, 147 F.3d 999, 1005 (D.C. Cir. 

1998). In other words, a new business owner cannot evade the 

duty to bargain by refusing to hire its predecessors’ employees 

because of their union affiliation. To establish whether a new 

employer’s refusal to hire its predecessor’s employees was 

driven by antiunion animus, the Board relies on the test set out 

in Wright Line, 251 NLRB 1083 (1980). Under Wright Line, 

“the General Counsel must [first] make a prima facie showing 
17 

sufficient to support the inference that protected [union] 

conduct was a motivating factor behind the [employer’s 

action].” Wendt Corp. v. NLRB, 26 F.4th 1002, 1010 (D.C. Cir. 

2022) (cleaned up). “Once a prima facie case has been 

established, the burden shifts to the company to show that it 

would have taken the same action in the absence of the 

unlawful motive.” Ozburn-Hessey Logistics, LLC v. NLRB, 

833 F.3d 210, 218 (D.C. Cir. 2016) (cleaned up). If the 

employer’s reasons are pretextual, they do not rebut the prima 

facie showing of animus. See id. at 219–20. 

As prima facie evidence of animus against the IAM, the 

Board pointed to two sets of facts. First, it found Everport had 

intentionally prioritized job applicants from the ILWU over 

those from the IAM in various ways—telling the ILWU about 

its vacant mechanic positions before the IAM; interviewing the 

ILWU’s candidates before the IAM’s; hiring less experienced 

ILWU applicants instead of better qualified IAM ones; and, on 

at least one occasion, telling an IAM applicant he could not be 

hired because of his union affiliation. Second, the Board found 

that Everport had used a secret hiring quota. Based on the 

testimony of three IAM-represented applicants, the Board 

determined Everport had resolved to give fifty-one percent of 

the available mechanic positions to ILWU-represented 

applicants and forty-nine percent to Marine and Miles’ 

employees, so that a majority of its mechanics would be 

ILWU-represented. Everport and the ILWU do not contest 

these findings.

In response, Everport argued its hiring process was not 

discriminatory when properly viewed in light of the Longshore 

Contract. In staffing the Terminal, Everport’s “only duty” was 

to hire its employees on “a basis other than hostility to a union,” 

Sierra Realty Corp. v. NLRB, 82 F.3d 494, 496 (D.C. Cir. 

1996), and it must be the case that the requirements of a Board-
18 

sanctioned collective bargaining agreement can furnish a nondiscriminatory rationale for a company’s hiring decisions. The 

Board did not find, and does not argue, that Everport’s initial 

decision to join the PMA was motivated by animus against the 

IAM. And as a general matter, the Board conceded that 

Everport’s hiring process was “consistent” with the one 

required by the Longshore Contract. Everport, slip op. at 18. 

Therefore, if Everport’s interpretation of the Longshore 

Contract were correct—if the Terminal’s red-circle status had 

lapsed, requiring Everport to prioritize mechanic applicants 

from the ILWU and fill remaining vacancies through the 

Herman-Flynn process—it had a valid business reason for 

preferring ILWU applicants over IAM-represented ones. 

Nevertheless, the Board explicitly declined to engage with 

Everport’s reading of the Longshore Contract. The Board 

claimed Everport’s invocation of its contract obligations was 

“pretextual,” since it “did not remain neutral” and its “actions 

were pro-ILWU.” Id. at 36–37. As evidence of Everport’s bias, 

however, the Board pointed to the fact that it followed the 

hiring process required by the Longshore Contract. The 

Board’s circular conclusion, in other words, was that 

Everport’s asserted reason for prioritizing ILWU-represented 

job applicants could not be credited because Everport had 

prioritized ILWU-represented job applicants. That is not 

reasoned decisionmaking. 

That leaves the Board’s finding that Everport secretly 

employed a hiring quota. Since the Longshore Contract does 

not require quota-based hiring, Everport could not justify its 

decision to use one by pointing to its PMA membership.3

 The 

3

 The Longshore Contract does not require quotas for hiring 

mechanics. Rather, as explained above, it simply obligates PMA 
19 

Board, however, failed to explain why a finding of animus 

towards the IAM necessarily followed from its finding that 

Everport used a quota. When viewed in context, it is possible 

that Everport adopted the quota in order to discriminate against 

the IAM’s applicants. But the opposite conclusion is plausible 

too. 

The record indicates that Everport more than once 

declined to hire qualified ILWU applicants, instead hiring 

better-qualified IAM ones.4 The record also shows that 

“Everport’s internal documentation [indicated] a preference for 

keeping the mechanic units as they existed” before the 

handover. Id. at 37. In light of these facts, it is at least possible 

that Everport used the hiring quota to hire more of the 

Terminal’s incumbent mechanics than the Longshore 

Contract’s terms allowed, but not so many as to trigger a clash 

for recognition between the ILWU and the IAM. If that were 

so, then Everport adopted the quota not from animus towards 

the IAM, but to favor IAM applicants in the hiring process. 

The Board was required to set out “a rational connection 

between the facts found and the choice made.” State Farm, 463 

U.S. at 43 (cleaned up). Here, it failed to reasonably explain 

why Everport’s quota, viewed in light of the Longshore 

Contract, supported an inference of animus against the IAM. 

Instead, without explanation, it chose to ignore the substantial 

evidence that undercut its conclusion. Cf. Lakeland Bus Lines, 

Inc. v. NLRB, 347 F.3d 955, 963 (D.C. Cir. 2003) (holding that 

members to exhaust all qualified ILWU applicants before offering 

vacancies to any non-ILWU applicant. 

4

 Although the issue is not before us, we note the ILWU could have 

raised a claim that Everport violated the Longshore Contract by 

rejecting qualified ILWU applicants in order to hire Marine and 

Miles’ former mechanics. 
20 

the Board’s “clipped view of the record” did not support its 

finding that the employer had committed unfair labor 

practices). We therefore conclude that “the process by which 

the agency reached its judgment was neither logical nor 

rational.” Fox v. Clinton, 684 F.3d 67, 80 (D.C. Cir. 2012) 

(cleaned up); see also Allentown Mack Sales & Serv., Inc. v. 

NLRB, 522 U.S. 359, 374 (1998) (“Not only must an agency’s 

decreed result be within the scope of its lawful authority, but 

the process by which it reaches that result must be logical and 

rational.”).5

* * * 

The Board did not reasonably explain its conclusion that 

Everport was a Burns successor with a duty to bargain with the 

IAM. Therefore, its finding that Everport unlawfully refused to 

bargain with the IAM was arbitrary and must be vacated. 

III. 

We next address the Board’s finding that Everport 

prematurely recognized the ILWU as its mechanics’ 

representative and that the ILWU unlawfully accepted its 

recognition. 

In most cases, an employer who recognizes a union before 

it employs a “substantial and representative complement of its 

projected work force” and is “engaged in normal business 

operations” commits an unfair labor practice. Elmhurst Care 

Ctr., 345 NLRB 1176, 1177 (2005); see generally Int’l Ladies 

Garment Workers’ Union v. NLRB, 366 U.S. 731, 737–40 

(1961). Here, the Board found that Everport recognized the 

5

 For the reasons given in this subsection, the Board’s conclusions 

that Everport discriminated against the IAM, and that the ILWU 

encouraged it to do so, must also be set aside. 
21 

ILWU repeatedly throughout the summer and fall of 2015, 

before it “employ[ed] any mechanics at the Terminal” or was 

“engaged in normal business operations.” Everport, slip op. at 

39. Therefore, the Board found that Everport’s recognition of 

the ILWU as its mechanics’ representative was premature. 

Given the unique bargaining landscape in which Everport 

was operating, however, the Board needed to explain its 

decision to apply a rigid version of the premature recognition 

test to Everport and the ILWU. The Board has long permitted 

groups of employers to negotiate with their employees 

collectively through multiemployer bargaining units. See

Arbor Constr. Pers., Inc., 343 NLRB 257, 257–58 (2004); cf. 

Brown v. Pro Football, Inc., 518 U.S. 231, 240 (1996) 

(“Multiemployer bargaining ... is a well-established, 

important, pervasive method of collective bargaining.”). The 

Board has recognized the PMA as the “multiemployer 

bargaining association” responsible for negotiating with the 

ILWU. ILWU Loc. 19, 266 NLRB 193, 194 (1983). It is 

undisputed that because of the Board’s decision in Shipowners, 

it is not feasible to operate a West Coast port without joining 

the PMA. Finally, all PMA members are required to recognize 

the ILWU as their employees’ bargaining representative. See 

PMA, 256 NLRB at 770 (“[E]mployers who join the PMA after 

the execution of the bargaining agreement are subject to its 

terms.”). 

If the Board’s rigid view of the premature recognition test 

applied in this context, then every employer who joins the 

PMA—thereby committing to hire its longshoremen from the 

ILWU and to recognize the ILWU as their representative—

commits an unfair labor practice the moment it joins. But that 

would make the system of collective bargaining the Board 

sanctioned in Shipowners nonsensical and unworkable: a port 

operator could not lawfully join the PMA before hiring its 
22 

workforce and it could not hire a workforce before joining the 

PMA. The Board neither acknowledged nor explained this 

apparent Catch-22, which is a telltale sign of arbitrary and 

capricious agency action. See Advanced Life Sys. Inc. v. NLRB, 

898 F.3d 38, 49 (D.C. Cir. 2018) (vacating a Board order that 

left the employer “in a Catch-22”).

IV. 

Finally, the Board found that Everport committed an unfair 

labor practice when it imposed the Longshore Contract’s terms 

on the Terminal’s mechanics. For the reasons given above, 

neither of the Board’s justifications for this conclusion was 

reasonable. First, the Board claimed that Everport lost the right 

to set its mechanics’ initial terms and conditions of 

employment because it “used a general discriminatory hiring 

plan, applicable to all applicants from the predecessor 

workforce,” which made it a “perfectly clear” Burns successor. 

Everport, slip op. 1 n.4. The Board’s successorship finding was 

not reasonably supported, see supra Part II, so its ancillary 

finding that Everport was a perfectly clear successor was 

arbitrary a fortiori. Alternatively, the Board claimed that the 

terms and conditions imposed on the Terminal’s mechanics 

were unlawful because they stemmed from Everport’s 

premature recognition of the ILWU. Because the Board’s 

purported application of the premature recognition test was 

unfounded and left Everport in an untenable Catch-22, the 

Board’s alternative basis for its decision does not pass muster. 

See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 

(2009) (holding that agencies may not change their policies 

“sub silentio”).
23 

* * * 

For the foregoing reasons we grant the petitions for 

review, deny the Board’s cross application for enforcement, 

and vacate the Board’s order. 

So ordered.