Opinion ID: 684065
Heading Depth: 2
Heading Rank: 2

Heading: The Board's Duty-of-Fair-Representation Holding

Text: 17 It is well established that, as the exclusive bargaining representative of all employees in a bargaining unit, see 29 U.S.C. Sec. 159(a) (1988), a union has a statutory duty fairly to represent all of those employees, Vaca v. Sipes, 386 U.S. 171, 177, 87 S.Ct. 903, 909, 17 L.Ed.2d 842 (1967). The principle underlying the judicially created duty of fair representation is that the exclusive agent's statutory authority to represent all members of a designated unit includes a statutory obligation to serve the interests of all members without hostility or discrimination toward any, to exercise its discretion with complete good faith and honesty, and to avoid arbitrary conduct. Id. The duty of fair representation is analogous to a fiduciary duty and applies to all aspects of a union's representation of employees. See Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65, 74-75, 111 S.Ct. 1127, 1133-34, 113 L.Ed.2d 51 (1991). 18 In Vaca, the Supreme Court assumed, without deciding, that a breach of the duty of fair representation constitutes an unfair labor practice under section 8(b)(1)(A), but rejected the claim that the Board had exclusive jurisdiction over such cases. 386 U.S. at 176-88, 87 S.Ct. at 909-916. Although the Board has continued to enforce the duty of fair representation under the NLRA, the parameters of this duty remain confusing and unclear. John C. Truesdale, The NLRB and the Duty, in THE CHANGING LAW OF FAIR REPRESENTATION 208, 208 (Jean T. McKelvey ed., 1985). At bottom, however, it is generally agreed that a breach of the duty of fair representation occurs only when a union's conduct toward a member of the collective bargaining unit is arbitrary, discriminatory, or in bad faith. Vaca, 386 U.S. at 190, 87 S.Ct. at 916. 19 The Board's theory in this case is straightforward. The Board found that a union-security agreement requiring unit employees to become and remain members of the Union in good standing is ambiguous because, although the clause is capable of a lawful construction, it can be interpreted as requiring more from ... unit employees than is imposed by statute. NLRB Decision, 311 N.L.R.B. at 1037. Indeed, the Board stated, it is likely that employees unversed in the intricacies of Section 8(a)(3) and interpretative decisions will literally interpret the clause as requiring full membership and all attendant financial obligations.... At a minimum, they will be confused about their obligations. Id. Thus, the Board held that, by maintaining and giving effect to such an agreement without apprising employees that they need only tender to the Union uniform initiation fees and dues, the Union had acted in bad faith in violation of its duty of fair representation. The Board based its holding solely on the bad faith prong of the duty of fair representation doctrine; its ruling had no other statutory unfair labor practice component under section 8(b)(1)(A) or any other provision of the NLRA. 20 IUE contends that there was no evidentiary basis for the Board's finding of bad faith as that term has been defined under the duty of fair representation. We agree. A bad-faith violation of the duty of fair representation requires a showing of fraud, or deceitful or dishonest action. Mock v. T.G. & Y. Stores Co., 971 F.2d 522, 531 (10th Cir.1992). Courts have applied a demanding standard for finding bad faith under the duty of fair representation, Swatts v. United Steelworkers, 808 F.2d 1221, 1225 (7th Cir.1986), requiring a union's actions toward unit employees to be sufficiently egregious or so intentionally misleading [as] to be invidious, O'Neill v. Air Line Pilots Ass'n, Int'l, 939 F.2d 1199, 1203 (5th Cir.1991) (internal quotations omitted); see also Alicea v. Suffield Poultry, Inc., 902 F.2d 125, 130 (1st Cir.1990) (requiring for bad-faith violation of duty of fair representation serious misrepresentations that lack rational justification or are improperly motivated). 21 There is not one iota of evidence indicating egregious, invidious, or improperly motivated conduct on the part of IUE in this case. Since its Keystone Coat decision in 1958, the Board has accepted as permissible union-security agreements identical to the one at issue in this case. The Board always has held that, so long as a union does not attempt to enforce the agreement beyond its lawful requirement that employees pay only uniform initiation fees and dues, such agreements are perfectly lawful under section 8(a)(3). The record evidence in this case shows only that IUE maintained a union-security agreement that was in conformity with long-standing Board precedent. There is no evidence that the Union advised employees unlawfully with respect to the agreement--indeed, counsel for petitioner Ferriso conceded at oral argument the complete lack of such evidence. Nor is there any evidence that IUE ever attempted to enforce the agreement unlawfully by requesting the discharge or discipline of any employee for failure to pay more than was lawfully required under the provision. Thus, the record is devoid of evidence to support the Board's determination that the Union acted in bad faith. 22 The Board contends that its duty-of-fair-representation ruling in this case was merely the result of a retroactive application of a new NLRB policy, announced in an adjudication, regarding the rights and responsibilities of employees and unions under union-security agreements. This new policy, the Board argues, is a reasonable reinterpretation of section 8(a)(3)'s union-security requirements in light of the Supreme Court's decision in Beck, which limited the financial contributions unions may lawfully demand from unit employees pursuant to union-security agreements. Thus, the Board claims, its new interpretation of section 8(a)(3) is entitled to deference from this court. 23 Because there is no factual basis for the Board's finding that IUE breached its duty of fair representation, however, we need not decide the reasonableness of the Board's reinterpretation of section 8(a)(3). We in no way mean to suggest that the Board is not free to reconsider its Keystone Coat policy in light of evolving Supreme Court precedent and to conclude that, in the future, unions will be found guilty of a duty-of-fair-representation violation if they adopt ambiguous union-security provisions of the sort at issue here without apprising employees of their rights under such provisions. And, as the Supreme Court held in NLRB v. Bell Aerospace Co., 416 U.S. 267, 294, 94 S.Ct. 1757, 1771, 40 L.Ed.2d 134 (1974), while there may be situations where the Board's reliance on adjudication would amount to an abuse of discretion, the Board is not precluded from announcing new principles in an adjudicative proceeding. With few exceptions, the Board has utilized its historical case-by-case approach, based on stare decisis, for prospective application of its holdings. 2 THE DEVELOPING LABOR LAW 1631-32 (Charles J. Morris ed., 2d ed. 1983). Notwithstanding the Board's power to revisit Keystone Coat (and adopt a new policy for prospective application), however, the facts in this case do not make out a breach of the duty of fair representation, for there is simply no basis in the record to support the Board's predicate finding that the Union engaged in bad faith conduct.