Court Opinion

ID: 9471868
Source: CourtListenerOpinion
Date Created: 2023-08-05 03:43:03.124686+00
Date Added: 2024-06-11T17:42:37.063659
License: Public Domain

CHOY, Circuit Judge,
dissenting:
The power of the United States Court of Appeals to enforce an order of the NLRB is equitable in nature and should be exercised only when consistent with principles of equity. C-B Buick, Inc. v. NLRB, 506 F.2d 1086, 1092 (3d Cir.1974); Morrison-Knudsen Co. v. NLRB, 275 F.2d 914, 918 (2d Cir. 1960); NLRB v. Kingston Cake Co., 206 F.2d 604, 611 (3d Cir.1953). We review Board orders for consistency with the National Labor Relations Act (NLRA), and we generally give the Board’s interpretation of the Act considerable deference. Precision Striping, Inc. v. NLRB, 642 F.2d 1144, 1146 (9th Cir.1981). This case, however, does not involve administrative expertise in the construction of the NLRA; it involves equity, purely and simply, which judges are just as competent to apply. See Kingston Cake Co., 206 F.2d at 611; see also Thompson v. Clifford, 408 F.2d 154, 167 (D.C.Cir.1968). Furthermore, an administrative interpretation is entitled to no deference if it is not consistent with the congressional purpose. E.g., Morton v. Ruiz, 415 U.S. 199, 237, 94 S.Ct. 1055, 1075, 39 L.Ed.2d 270 (1974); Espinoza v. Farah Manufacturing Co., 414 U.S. 86, 94-95, 94 S.Ct. 334, 339-340, 38 L.Ed.2d 287 (1973). In this case, an employer was placed in a dilemma by a union openly defying the decision of an official acting within his lawful authority. The Board’s order would severely punish the employer and richly reward the union for its recalcitrance. Because I believe that the NLRB’s order offends principles of equity and the congressional purpose of section 3(b) of the Act, I would not enforce it. Accordingly, I dissent.
I. LEGISLATIVE HISTORY
Section 701(b) of the Labor-Management Reporting and Disclosure Act of 1959 (LMRDA), Pub.L. No. 86-257, 73 Stat. 519, 542, first authorized the Board to delegate some of its decision-making power to its regional directors. Neither the Landrum-Griffin (House) nor Taft-Hartley (Senate) versions of the act contained this section, but it was part of a compromise reached in conference about the so-called “no man’s land” title. In the Landrum-Griffin version backed by the Administration, state labor boards and courts could assume jurisdiction over and apply state law to cases declined by the Board. The Senate version would allow only state labor boards (then existing in only 12 states) to assume jurisdiction over such cases, and those boards would have to apply federal law. The conference committee adopted the House version, but it inserted provisions to ensure that the NLRB would not cut back on its jurisdictional standards and to help the NLRB expedite case processing by delegating certain of its powers to regional directors. 105 Cong.Rec. 18,705 (remarks of Sen. Goldwater) (summarizing conference action), reprinted in 2 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, at 1454 (1959), and in 105 Cong.Rec. 18,022 (remarks of Rep. Griffin); see Magnesium Casting Co. v. NLRB, 401 U.S. 137, 141, 91 S.Ct. 599, 601, 27 L.Ed.2d 735 (1971) (discussing intent of provision delegating authority); 105 Cong.Rec. 18,128 (1959) (remarks of Rep. Barden) (same), reprinted in 2 NLRB, supra, at 1714. Section 701(b) may have been modeled in *1259part on H.R. 7265, 86th Cong., 1st Sess. § 104(b)(1) (1959), which Rep. Kearns, one of the conferees, had introduced earlier. After introducing that bill, Rep. Kearns explained the intent of that provision:
The Board is authorized to delegate to its regional directors the processing of representation cases. Such cases account for more than 50 percent of the Board’s workload. During the early years of the NLRA, the Board undoubtedly needed to handle these cases itself. More than 20 years later the rules of decision are well established and nearly all of the cases are decided on established precedent. To make certain Board policy is followed by regional directors, provision is made for appeal to the Board. Action of the Director is not stayed pending the appeal, however, to avoid the taking of an appeal as a delaying technique. This change of procedure will materially decrease the time spent in processing representation cases and eliminate advantages which parties have long sought to obtain by delays.
2 NLRB, supra, at 1749-50 (emphasis added), reprinted in 105 Cong.Rec. 8873-74.
II. BACKGROUND
Sav-On operates a chain of drug stores. The United Food and Commercial Workers (UFCW) unionized most of these stores. The UFCW was certified to represent all employees in the unionized stores, including the pharmacists and pharmacist managers.
In 1978, when the UFCW collective bargaining agreements expired, the Guild for Professional Pharmacists sought to represent the pharmacists and pharmacist managers. The Guild filed representation election petitions, but the regional director dismissed them on Sept. 26, 1978, holding that “pharmacist managers” were “supervisors” within the meaning of § 2(11) of the NLRA, and that the Guild, being dominated by supervisors, was not a “union” within the meaning of § 2(5). The Guild petitioned the Board for review on Oct. 6, but sought no stay of the dismissal.
In the meantime, the UFCW demanded that Sav-On resume negotiations for a new collective agreement. Sav-On complied and signed a new agreement with the UFCW on Nov. 8 that did not cover pharmacist managers. On the same day the Board granted the Guild’s request for review.
The Guild, however, disregarded the regional director’s dismissal. They demanded wage increases for the pharmacists and threatened to strike if their demands were not met. Two pharmacist managers, Ku-nysz and Fogel, were active in the Guild’s efforts. After three months had passed and much pressure had been put on Sav-On by the UFCW and the Guild, Sav-On fired Kunysz and Fogel because of their activities on behalf of the Guild. The Guild immediately filed unfair labor practice charges and struck Sav-On. Sav-On discharged all 59 strikers and has reinstated none of them to date.
Six months later, the Board issued its decision reversing the district director’s determinations. As a consequence of that decision, the Board found that the Guild’s strike was an unfair labor practice strike, entitling all strikers to reinstatement and a half year’s backpay. Sav-On then took the matter to this court, contending that it had the right to rely on the regional director’s determination in the absence of a stay order from the Board. We refused to enforce the Board’s order. 704 F.2d 1147 (9th Cir.1983).
III. RIGHT TO RELY ON REGIONAL DIRECTOR’S DETERMINATION
I believe that Sav-On was entitled to rely on the regional director’s determination in the absence of a stay issued by the Board. Section 3(b) of the Act states that review by the Board of a regional director’s decision “shall not, unless specifically ordered by the Board, operate as a stay of any action taken by the regional director.” 29 U.S.C. § 153(b).
The Board argues that section 3(b) applies only when the regional director orders the parties to take some affirmative action — most often, to proceed to an election — because a stay of an order or decree is *1260appropriate only when the order or decree “commands or permits some act to be done.” 4A C.J.S. Appeal & Error § 632, at 429 (1957). The Board argues that dismissal of a representation petition leaves nothing to stay. In a technical sense, the Board is correct. The regional director did not order the parties to take any affirmative action. The regional director’s power to act, however, is not limited to ordering affirmative action. Under Board regulations, the regional director is empowered
to determine the unit appropriate for the purpose of collective bargaining, to determine whether a question concerning representation exists, and to direct an election, dismiss the petition, or make other disposition of the matter.
29 C.F.R. § 102.67(a). In making some of these determinations, the regional director will neither command nor permit anything to be done directly, but collateral consequences flowing from those determinations will certainly require or permit the parties to act. Here, in dismissing the representation petition, the regional director (1) permitted the UFCW and Sav-On to excise pharmacy supervisors from coverage under the collective bargaining agreement without exposing the union to liability under section 301 of the LMRDA for breach of the duty of fair representation; (2) permitted Sav-On management to refuse to recognize the Guild as bargaining representative for the pharmacists and pharmacy supervisors; (3) required Sav-On to continue bargaining in good faith with the UFCW with respect to the pharmacists; and (4) required Sav-On at least to disclaim responsibility for Kunysz and Fogel’s Guild activities or risk exposure to an unlawful assistance charge under section 8(a)(2) of the NLRA, 29 U.S.C. § 158(a)(2).
- It is true that the regional director’s dismissal of a representation petition would not necessarily bind the courts and the Board in any subsequent unfair labor practice proceeding or section 301 suit. If the regional director’s decision were allowed to become final, however, courts and possibly the Board would defer to it in the same manner as they would defer to a Board decision, see NLRB v. Magnesium Casting Co., 427 F.2d 114, 119-20 (1st Cir.1970), aff’d, 401 U.S. 137, 91 S.Ct. 599, 27 L.Ed.2d 735 (1971), and the Board would be to some extent bound by the regional director’s determination in that it could not, in reversing a regional director, declare the employer’s conduct illegal retroactively, see Transportation Enterprises v. NLRB, 630 F.2d 421, 424-27 (5th Cir.1980). Hence, even a dismissal of a representation petition would have collateral consequences permitting or mandating actions and thus would be an appropriate subject of a Board stay.
The Board attempts to blunt the force of this argument. First, it suggests that Sav-On should not have bargained with either union while the appeal of the regional director’s decision was pending. The Board’s view, however, encourages parties who lose at the regional director level to appeal and thereby delay implementation of the regional director’s order. Such an incentive to appeal runs counter to the legislative intent to avoid the taking of an appeal as a delaying technique. This case is a perfect illustration of this incentive. Under the Board’s view of the statute, the Guild’s appeal to the Board enabled it to flout the regional director’s decision with impunity. Without that appeal, the Guild’s strike would have been in derogation of the certified bargaining representative. As such, it would be an unprotected “wildcat” strike under NLRB v. Tanner Motor Livery, Ltd., 419 F.2d 216, 221 (9th Cir.1969), and NLRB v. Shop Rite Foods, Ltd., 430 F.2d 786, 789-91 (5th Cir.1970). With the appeal, however, the Guild wins both ways. If the Guild prevails on appeal, the strike is justified as an unfair labor practice strike. If the Guild loses on appeal or if the Board denies review, the Guild at least has suspended negotiations with the UFCW, and its strike is still protected conduct because a “real question concerning representation” existed due to the appeal. Brief for the National Labor Relations Board at 24 n. 14. Congress could not have intended this result.
*1261Alternatively, the Board argues that its grant of a hearing should suspend the regional director’s decision based on the limited nature of the grounds for which the Board will grant a hearing, listed in 29 C.F.R. § 102.67(c). Its contention, however, is contrary to the Board’s own regulations, which state that neither the filing of a petition for review of a regional director’s decision nor the actual grant of review will operate as a stay of the regional director’s decision. 29 C.F.R. § 102.67(b), (g). Moreover, the limited nature of the Board’s discretionary review does not aid its position. Chief Justice Taft observed in 1923 that the Supreme Court denied certiorari 80% of the time but stated that a grant of certiorari would not operate as a stay of a decision of an inferior court. Magnum Import Co. v. Coty, 262 U.S. 159, 163-64, 43 S.Ct. 531, 532-533, 67 L.Ed. 922 (1923) (dictum) (by implication).
As the Fifth Circuit observed in Transportation Enterprises v. NLRB, 630 F.2d 421, 427 (5th Cir.1980), Congress has often provided that good faith reliance by an employer on an administrative determination would insulate it from liability even if the determination is later modified, rescinded, or overruled. The court held:
The NLRB and its regional offices may not render jurisdictional decisions, overrule them retroactively and thereby transform an employer’s interim behavior, legal when pursued, into illegal unfair labor practices. An employer’s conduct after a formal declaration that he is not covered by the Act, and before a re-examination of that issue, cannot subsequently be branded an unfair labor practice subjecting the employer to liability for back-pay.
There is justifiable concern for the T.E.I. employees who will not receive back-pay because of this decision. It may be suggested that the regional director’s 1972 declination of jurisdiction was a “deplorable” mistake, and the wrongdoing employer, rather than the wronged employees, should bear the consequences. Although the human heart sympathizes with the employees who would have been entitled to be returned to their economic status quo if they had struck at a later date ..., T.E.I.’s actions were not “wrongful” [then], and T.E.I. may not be penalized by the imposition of a back-pay award.
Id. at 424, 427 (footnote omitted). In Transportation Enterprises, the regional director’s determination admittedly was allowed to become final and was overruled only in a subsequent unfair labor practice proceeding. The Fifth Circuit’s comments are still relevant, however, because in both cases the employer relied on an administrative determination and its actions in reliance were subsequently branded unlawful unfair labor practices.
Policy reasons also favor allowing employers to rely on regional director determinations even if a petition for review has been filed with or has been granted by the Board. First, the regional director’s decision provides a standard of conduct to which all parties can adhere until the Board changes this standard, either by modifying or overruling the regional director or by entering a temporary stay restoring the status quo. This result is, I submit, more consistent with the Congressional policy to “materially decrease the time spent in processing representation cases and eliminate advantages which parties have long sought to obtain by delays,” 2 NLRB, supra p. 2, at 1750, reprinted in 105 Cong.Rec. 8874 (1959), than is the Board’s alternative of putting the employer, the union, and the employees in limbo from the time a petition for Board' review is filed until the Board’s decision. This result also sends a clear message to unions and other parties who lose at the regional director level that if they flout the regional director’s determination they do so at their own peril. Finally, as stated earlier, such a result will provide no incentive for using a Board appeal as a delaying tactic to avoid the effects of the regional director’s determination.
Finally, the Board argues that Sav-On had no right to rely upon the regional di*1262rector’s decision pending appeal, saying that litigants generally rely at their own peril on a decision in which an appeal is pending. The filing of a notice of appeal without more, however, does not relieve either litigant of the duty to comply with a judgment or injunction issued by a lower court. See Fed.R.Civ.P. 62(a), (c); Fong v. United States, 300 F.2d 400, 410 (9th Cir.) (pendency of an appeal does not of itself supersede a lower court’s judgment), cert. denied, 370 U.S. 938, 82 S.Ct. 1584, 8 L.Ed.2d 807 (1962).
The Board attempts to support its argument with the recent case of W.R. Grace & Co. v. Local Union 759, — U.S. —, 103 S.Ct. 2177, 76 L.Ed.2d 298 (1983). I believe that case is distinguishable. In W.R. Grace, an employer, facing a Title VII charge because of seniority provisions in its existing collective bargaining agreement, entered into a conciliation agreement with the Equal Employment Opportunity Commission that was in derogation of the collective bargaining agreement. The employer then obtained a judgment from the district court declaring that the conciliation agreement superseded the collective agreement. Employees who were discharged under the new policy obtained an arbitral award against W.R. Grace for violation of the collective agreement. The employer sued to enjoin enforcement of the award and the Court held that the injunction should be denied, saying that the employer could not complain because the dilemma it faced — conflicting agreements with the union and the EEOC — was a product of its own actions. 103 S.Ct. at 2184-85. In this case, Sav-On Drugs took no actions that were similarly culpable. The Guild caused Sav-On’s dilemma because, rather than seeking a stay of an authoritative determination that it had no legal right to make demands on behalf of its members, it flouted that determination and made its demands anyway.
IV. CONCLUSION
I am unsure of whether Sav-On acted properly in discharging all of the strikers and in consistently refusing to rehire them. Even under the regional director’s decision, pharmacists, as opposed to pharmacy managers, were still employees within the meaning of § 2(3) of the Act. I am sure, however, that the Board overstepped its bounds in ordering reinstatement and back-pay for everyone who participated in a strike that, after all, came about through outright defiance of a regional director acting within the authority given him under § 3(b) of the Act and 29 C.F.R. § 102.67(a). I therefore would not enforce the Board’s order but would remand this case to the Board for it to determine whether and on what terms the pharmacists could be discharged.