Opinion ID: 19555
Heading Depth: 3
Heading Rank: 1

Heading: Standard for Deferral

Text: 42 Where, as here, the question of whether an unfair labor practice occurred has been decided by an arbitrator, the scope of the deference given by the Board to an arbitrator's decision is described in Spielberg Manufacturing Company, 112 N.L.R.B. 1080 (1955), and its progeny. 43 Although supplemented and further articulated by subsequent NLRB cases, the three part test of Spielberg remains the core of the Board's post-arbitration deferral policy. Under the Spielberg doctrine, the Board will defer to the decision of the arbitrator if three conditions are met: (1) the proceedings are fair and regular; (2) the parties agree to be bound; (3) the decision of the arbitrator is not clearly repugnant to the purposes and policies of the Act. Id. at 1082. In addition to a consideration of the three Spielberg factors, Board deferral is further conditioned on proof of the arbitrator's adequate consideration of the relevant unfair labor practice issue. See Olin Corp., 268 N.L.R.B. 573, 574 (1984). Finally, the party seeking to prevent deferral to the findings of an arbitrator shoulders the burden of establishing that the preceding standards for deferral have not been met. Id. at 574. 44 In the case before us, the parties concede that the first two conditions of the Spielberg doctrine have been met. The arbitrator's adequate consideration of the unfair labor practice issue is similarly not in dispute. The remaining question is whether the decision of the arbitrator is clearly repugnant to the purposes and policies of the Act. 45 2) Deferral and the Clearly Repugnant Standard 46 The Board may, in its discretion, decline to defer to an arbitrator'saward if the award is clearly repugnant to the purposes of the Act. An arbitrator's award is clearly repugnant to the Act if it is palpably wrong, i.e., not susceptible to an interpretation consistent with the Act. Olin Corp., 268 N.L.R.B. 573, 574 (1984). The ALJ found that the arbitrator's decision was not inconsistent with the terms of the Act. The Board reversed. The Board has considerable discretion in deciding whether it is appropriate to defer to an arbitration award, and courts will overturn the Board's determination only where that determination is an abuse of discretion. See NLRB v. South Central Bell Tel. Co., 688 F.2d 345, 350 (5th Cir. 1982), cert. denied, 460 U.S. 1081, 76 L. Ed. 2d 342, 103 S. Ct. 1768 (1983). In particular, where the Board chooses not to defer to an arbitrator's decision, courts will not deny enforcement of the Board determination unless the Board clearly departs from its own standards on deferral. Richmond Tank Car Co. v. NLRB, 721 F.2d 499, 501 (5th Cir. 1983). 47 In cases involving allegations of employee disclosure of confidential information of an employer, the Board has adopted a balancing test to aid in determining whether or not arbitration awards upholding termination or suspension of employees are clearly repugnant to the Act. See Craig Hosp., 308 N.L.R.B. 158 (1992); Bell Fed. Savings & Loan Ass'n, 214 N.L.R.B. 75 (1974); Altoona Hosp., 270 N.L.R.B. 1179 (1984). The Board balances the employee's interests in disclosing the information with the employer's legitimate interests in its confidentiality. See Altoona Hosp., 270 N.L.R.B. 1179, 1180 (1984). The Board upholds discipline of an employee for disclosure of information when the employee's interests in disclosure fail to outweigh the employer's legitimate interests in confidentiality. Id. at 1180. The balancing test even applies when an employee discloses information for reasons arguably protected by the Act. Id. 48 The ALJ, in determining that deferral was appropriate, focused on what he perceived to be Pemberton's breach of confidentiality. In deciding whether Pemberton's conduct was protected concerted activity, the ALJ agreed that both arguments have some merit. The ALJ concluded, however, that the protected concerted nature of the remarks is not overwhelming and the arbitrator's attention to the breach of confidentiality issue as a valid motivation for the discharge is reasonable. In reaching this conclusion, the ALJ relied heavily on cases in which the Board balanced weak claims of protected activity against clearly legitimate employer interests in confidentiality, and upheld employee terminations and suspensions for breach of reasonable confidentiality requirements. See Craig Hosp., 308 N.L.R.B. 158 (1992); Bell Fed. Savings & Loan Ass'n, 214 N.L.R.B. 75 (1974). 49 In Craig, the employee, who was a member of an in-house grievance committee, breached the committee's confidentiality rules to which she and the other committee members had agreed. Craig, 308 N.L.R.B. at 163. While the breach was pursuant to her advocacy on behalf of a grievant -- arguably protected activity -- the Board concluded, in finding the conduct unprotected, that the breach did much to undermine the entire grievance process by prejudicing or perhaps intimidating potential witnesses. Id. at 165. 50 Similarly, in Bell, the employee, a receptionist-switchboard operator, disclosed to a union representative information concerning the number of times the employer's president had spoken by telephone to the employer's legal counsel. See Bell, 214 N.L.R.B. at 77. In finding the employee's conduct unprotected activity, the Board noted that it seems plain that an employer has a right to rely on employees not to disclose information about his telephone calls, particularly those from his legal counsel. Id. at 78; see also Altoona Hosp., 270 N.L.R.B. 1179, 1179 (1984)(Board deferred to arbitrator's award sustaining discharge of an employee, who disclosed the name of a patient's mother to a private investigator hired by the employee to aid her prosecution of a grievance, because an employer's legitimate interest in keeping certain information confidential . . . is unquestionably true with regard to a health care employer whose patient records are especially sensitive.). 51 However, the ALJ's reliance on the aforementioned cases is misplaced. In the present case, the employer confidentiality interest scale of the Board's balancing test is empty and clearly cannot budge, much less outweigh, the employee's protected interest in concerted activity. First, Pemberton's conduct was not just arguably protected. Pemberton was undoubtedly engaged in protected concerted activity under Section 7 of the Act as explained earlier in this opinion. Furthermore, Pemberton's interest in engaging in the protected activity in the reasonable manner he used necessarily outweighs the superficial claim of a confidentiality interest by Mobil in its investigation of Thibodeaux, because Mobil itself, not Pemberton, destroyed or made that confidentiality interest legally insignificant. 52 Although the Board enjoys ample discretion in deciding whether to acquiesce in an arbitrator's award, the Board must not clearly depart from its own standards when electing not to defer. See Richmond Tank Car Co. v. NLRB, 721 F.2d 499, 501 (5th Cir. 1983). In the matter at hand, the decision of the Board has a sound basis in precedent. The Board consistently has refused to defer to arbitration awards where no valid factual basis exists for an employer's assertion that otherwise protected employee conduct is outweighed by an employer's legitimate interests. A number of prior Board decisions serve to illustrate this principle. 53 In 110 Greenwich Street Corporation, two service employees posted signs in car windows exhorting their employer to honor financial commitments to his employees. Both employees were subsequently discharged. The Board refused to defer to arbitrator's award sustaining the terminations since it determined that the display of protest signs constituted protected activity under Section 7 of the Act. Furthermore, the facts of the dispute failed to sustain any breach of the employer's alleged interests in the normal functioning of his business. See 110 Greenwich Street Corp., 319 N.L.R.B. 331, 334-35 (1995). 54 In Garland Coal & Mining Company, a union president was disciplined for his refusal to obey a supervisor's order to sign a memorandum. The Board determined that the union president was espousing an official and protected union position at the time and refused to defer to the arbitrator's award sustaining discipline against the union president. Garland Coal & Mining Co. 276 N.L.R.B. 963, 965 (1985); accord NLRB v. Owners Maintenance Corp., 581 F.2d 44, 47-50 (2d Cir. 1978) (Board did not abuse discretion in declining to defer to arbitrator's award sustaining employer's refusal to reinstate employees allegedly because their leafleting was grossly disloyal where facts showed that passing out leaflets related directly to a legitimate employee grievance). 55 In the present case, the Board appropriately refused to defer to the arbitrator's award on the grounds that the award was repugnant to the Act. The arbitrator's award is not susceptible to an interpretation that is consistent with the goals of the Act. The purpose of the NLRA would be thwarted if Pemberton's genuine and weighty interest in engaging in protected concerted activity were not held to prevail over Mobil's merely pro forma claim of confidentiality in an investigation that the company had completely disclosed to the only person whose conduct was allegedly in question. 56 Mobil argues that the arbitration award is susceptible to an interpretation consistent with the Act, and that it is not palpablywrong. As discussed above, Mobil failed to enunciate a legitimate confidentiality concern that would have justified its infringement of Pemberton's protected Section 7 rights. The ALJ deferred to the arbitrator only because he concluded that Pemberton's conduct conflicted with what he perceived to be Mobil's confidentiality interests. Because Mobil had no legitimate confidentiality interest that would justify its interference with Pemberton's exercise of his Section 7 rights, the ALJ's deferral was clearly repugnant to the Act because it was not susceptible to an interpretation consistent with the Act. In such cases, when the facts show that the employer's interests have not been breached, the Board consistently has held that it will not defer to an arbitrator's decision that fails to protect employees' rights to engage in concerted activities because of a misinterpretation or misapplication of the principles and policy of the Act. See 110 Greenwich, 319 N.L.R.B. 331 at 334-35; Garland, 276 N.L.R.B. at 965. Accordingly, the Board's refusal to defer to the arbitrator's ruling did not in the present case constitute an abuse of discretion or an error of law.