Court Opinion

ID: 4284863
Source: CourtListenerOpinion
Date Created: 2018-06-15 16:00:40.918677+00
Date Added: 2024-06-11T07:49:27.854273
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 8, 2018                 Decided June 15, 2018

                         No. 16-1338

                MARK TAMOSIUNAS, ET AL.,
                      PETITIONERS

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT

                  UNITE HERE!, LOCAL 5,
                      INTERVENOR

            On Petition for Review of an Order
           of the National Labor Relations Board

    Glenn M. Taubman argued the cause for petitioners.
With him on the briefs were Sarah E. Hartsfield and Aaron B.
Solem.

     Valerie L. Collins, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief
were Richard F. Griffin, Jr., General Counsel at the time the
brief was filed, John H. Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General Counsel, and Julie
B. Broido, Supervisory Attorney.
                               2

     Eric B. Myers argued the cause and filed the brief for
intervenor Unite Here!, Local 5.

   Before: MILLETT and WILKINS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.

    Opinion for the Court filed by Circuit Judge MILLETT.

      MILLETT, Circuit Judge: Several Hyatt Regency Hotel
employees in Hawaii objected to and formally declined full
membership in their union. Nonetheless, they received a
letter from the union requiring immediate payment of full
union dues—that is, dues owed by employees who chose to
join the union in full. The letter went on to inform the
employees that the Hyatt Regency Hotel would soon be
deducting the amounts necessary to pay full union dues from
future paychecks at the union’s behest. The Board concluded
that, in its view, the letter was an obvious mistake and no
reasonable employee reading it would have felt pressured to
pay the demanded full union membership dues. The union,
for its part, neither acknowledged that the letter was a mistake,
nor apologized for sending the dues demand to employees who
it knew had formally objected to joining the union.

     The Board’s decision is legally unsupportable on this
record. The letter demanded payment from individuals the
union knew had rejected full membership, and it
simultaneously initiated the garnishment process to collect the
full dues. That letter reasonably tended to coerce or restrain
the objecting Hyatt employees in the exercise of their statutory
right to limit their association with the union. Accordingly,
we grant the employees’ petition, vacate the Board’s decision,
and remand for further proceedings consistent with this
opinion.
                               3

                               I

                               A

     The National Labor Relations Act (“the Act”) protects an
employee’s right to “bargain collectively through
representatives of [his or her] own choosing”—a guarantee that
is commonly referred to as a worker’s “Section 7” rights. 29
U.S.C. § 157 (codifying Section 7 of the Act). Importantly,
Section 7 equally protects the inverse right: the right to
abstain from unionization. Id. To enforce that right, the Act
prohibits both employers and labor unions from engaging in
“unfair labor practices,” including any behavior designed to
“interfere with, restrain, or coerce employees in the exercise of
the rights guaranteed in” Section 7. Id. § 158(a), (b)(1)(A)
(codifying Section 8 of the Act). In other words, restraining
an employee from exercising her right to abstain from union
membership constitutes an unfair labor practice. So does
coercing an employee not to exercise that right.

     There are a few exceptions: the prohibition on unfair
labor practices does not preclude an employer from agreeing to
require union participation “as a condition of employment,”
assuming the relevant union meets certain statutory
prerequisites. 29 U.S.C. § 158(a)(3). And it does not impair
a union’s ability to prescribe its internal membership standards.
Id. § 158(b)(1).

     When an employer requires union membership as a
mandatory condition of employment, the law allows
employees to choose between becoming full members or
“core” financial members. Unlike full members, “core”
members pay a reduced annual fee (“core fee”) to cover their
fair share of the union’s representative work that aims to
benefit all employees. NLRB v. General Motors Corp., 373
                               4
U.S. 734, 742 (1963) (“‘Membership’ as a condition of
employment is whittled down to its financial core.”).

     The obligation to pay core fees applies to all employees,
even those opposed to union representation. That is because,
once a union becomes the collective bargaining agent for
employees in a work unit, the union is required by law to
represent the interests of all employees equally, even those that
do not support the union. Emporium Capwell Co. v. Western
Addition Cmty. Org., 420 U.S. 50, 64 (1975). That task
“entails the expenditure of considerable funds” and resources.
International Ass’n of Machinists v. Street, 367 U.S. 740, 760
(1961).     Also, the benefits obtained by the union in
negotiating with the employer—such as pay, work
opportunities, vacation and sick leave—redound to the benefit
of core members just as much as full union members. For
those reasons, requiring core members to pay their fair share of
union expenses incurred on behalf of the entire workforce best
accommodates the associational rights of all employees while
preventing freeloading by employees and providing unions
with the resources necessary to perform effectively their
representative duties to all employees. See International
Ass’n of Machinists, 367 U.S. at 750, 760–764 (“Activities of
labor organizations resulting in the procurement of employee
benefits are costly * * *. We believe that it is essentially
unfair for nonmembers to participate in the benefits of those
activities without contributing anything to the cost.”).

     In short, though full union members pay a higher rate and,
in exchange, receive the right to participate in internal union
affairs and benefit programs, “core” members still qualify as
union “members” for purposes of retaining their contractual
right to “continued employment” by paying their fair share of
union activity undertaken on behalf of all employees.
                             5

                             B

     Mark Tamosiunas, Steven Taona, Agnes Demarke, and
Wayne Young (collectively, the Objecting Employees) provide
hospitality services for the Hyatt Regency Hotel in Waikiki,
Hawaii. Since at least 2006, “Unite Here!,” Local 5, a labor
union, has represented hotel hospitality workers in Hawaii,
including those at the Hyatt Regency Hotel.

     Between July 1, 2006 and June 30, 2010, a collective
bargaining agreement governed relations between Local 5 and
the Hyatt Regency Hotel. Among many other things, this
agreement included a “union security clause,” which required
all Hyatt employees to become or remain either full or core
members of Local 5 “as a condition of continued employment.”
J.A. 11.

    From the start, the Objecting Employees have participated
in Local 5 solely as “core” members. They have consistently
objected to the payment of any additional fees for
“nonrepresentational activities.” J.A. 11.

     When the Hyatt collective bargaining agreement
terminated at the end of the day on June 30, 2010, so did the
union security clause obligating Hyatt employees to maintain
at least core membership in Local 5. That left Hyatt’s
employees—both the core and full union members—free to
continue or abandon union membership as they pleased. The
Objecting Employees waited two years and then broke rank.
Each informed Local 5 in writing that they would no longer
allow the Hyatt to remit their core fees to the union. They
added, however, that should Local 5 “secure a compulsory dues
contract” in the future, they would recommence payment of the
“required amount of dues,” which the letters defined as the
“reduced fair share amount for financial core members.” J.A.
                                 6

71–74.

     In August 2013, the union secured just such an agreement.
That contract, like the one before it, contained a union security
clause. It read as follows:

             Section 7.    UNION SECURITY

         7.01 Employees who are now members of the
         Union shall, as a condition of continued
         employment, remain members of the Union.
         All other employees and all new employees
         shall, as a condition of continued employment,
         become members of the Union no later than the
         thirty-first (31st) day following the execution of
         this Agreement or their date of employment,
         whichever is later.

         7.02 Five (5) days after receipt of written
         notice from the Union that an employee has
         failed to tender his uniform dues and initiation
         fees * * *, Hyatt shall suspend such employees
         for seven (7) days pending termination. If
         within the seven (7) day period of suspension
         the Union notifies Hyatt that the employee has
         complied with Section 7.1, the employee shall
         be immediately reinstated to work without back
         pay. If Hyatt is not so notified by the Union
         the employee shall be discharged and shall not
         have access to the grievance procedure as
         provided in Section 18 of this Agreement.

J.A. 11.

    Soon after securing this agreement, Local 5 sent letters to
                              7

each of the Objecting Employees entreating them to rejoin the
union as full members (the October 2013 letters). The letters
indicated that Local 5 was aware that the employees had
requested to pay only core fees in the past, but encouraged
them to reconsider the “benefits of full union membership” in
light of the favorable collective bargaining agreement that had
been obtained and to “make arrangements to pay the
arrearages” accrued to date.        J.A. 75–78.    The letters
concluded with a note identifying the specific amount of dues
outstanding that would need to be paid to reinstate full
membership privileges for the individual employee.

     Since the Objecting Employees’ views of the Union had
not warmed, they chose to remain only as core members.
Nevertheless, on March 31, 2014, they each received a billing
letter from Local 5, demanding payment of full membership
dues (“Dues Letter”). Aside from the names and amounts
due, the Dues Letters were identical:

       THIS IS A STATEMENT OF YOUR
       ACCOUNT AS OF THE ABOVE DATE.
       Your dues must be made current. To facilitate
       this we have billed your employer for the
       balance listed below. A deduction will be
       reflected on an upcoming pay stub. If your
       employer doesn’t deduct arrearages, you are
       responsible for paying this balance directly to
       Local 5.

       Please be advised that the International
       Constitution Rules affirmed by Local Union 5
       Bylaws must suspend any Member whose Dues
       are more than TWO Months in arrears.

       ATTENTION FOOD SERVERS:              Please note
                               8

       that if there are insufficient funds available in
       your weekly paycheck to cover dues
       deductions, then you are responsible for
       sending your union dues directly to Local 5.
       PLEASE REMIT THE BALANCE STATED.
       Your prompt payment is appreciated.

J.A. 79.

    The Dues Letter also contained an individualized chart
itemizing the amount of dues owed, along with a final line item
denoted “Total Balance due.” J.A. 79–86.

    The same day it sent those letters, Local 5 also contacted
Hyatt. In an email, Local 5 informed Hyatt that it had sent
out the Dues Letters and advised Hyatt that it would be
“submitting a billing report for March” identifying the amount
of union fees individual employees owed. J.A. 87–89.
Local 5 requested that Hyatt process this billing—that is,
garnish the unpaid fees from employees’ paychecks—in the
upcoming pay period. J.A. 89.

     Consistent with that request, on April 11, 2014, Hyatt
deducted up to the maximum amount of $62.50 from the
paychecks of the Objecting Employees and other core
members. Hyatt soon learned of the error, and it promptly
sent a letter to the Objecting Employees and other affected
workers, acknowledging the mistaken garnishment and
assuring that it would credit their upcoming paychecks for the
amount improperly remitted to the Union.

    Local 5, for its part, remained silent.

    Unsatisfied, the Objecting Employees filed a complaint
with the National Labor Relations Board on April 28, 2014,
                               9

charging Local 5 with a variety of unfair labor practices
prohibited by the National Labor Relations Act. More
specifically, the Objecting Employees alleged that the Union’s
demand for retroactive full union dues and promised
garnishment of their wages represented an effort both to
restrain them from exercising their Section 7 right not to join
the union in full and to coerce them not to exercise that right.
J.A. 59–60. The charge also claimed that Local 5 had
endeavored to apply the August 2013 union security provision
retroactively to collect dues for a period not governed by the
collective bargaining agreement.

     With charges pending, Local 5 took some action of its
own. On May 13, 2014, the Union sent a letter only to the
Objecting Employees who had filed the charges (but for some
unexplained reason, not to all of the other core employees who
had also wrongly received the Dues Letter). The Union’s
May 2014 letters “clarif[ied] the March 31, 2014 [Dues] letter,”
stating that the billing amounts contained in the letters just
identified “the amount of dues [needed] to become a member
in good standing with the Union,” not the smaller amount of
core fees needed to retain one’s employment. J.A. 136.
Local 5’s May 2014 letter stressed that the Dues Letter did “not
refer to the union security clause” or otherwise “threaten [any
employee’s] continued employment.” Id. Rather, the Letter
raised only the specter of a suspension in “Union membership.”
Id. (emphasis in original).

     An administrative law judge concluded that the Dues
Letter did not expressly or impliedly threaten the employees
beyond threatening to suspend union membership, a matter of
internal self-governance. On that basis, the administrative
law judge found no unlawful coercion of the Objecting
Employees’ Section 7 rights. The administrative law judge
did not address whether the letters also “restrained” the
                               10

employees in their exercise of Section 7 rights, framing the
issue in terms of threats and coercion alone. J.A. 149.

     The Board, in a divided opinion, agreed with the
administrative law judge. The Board acknowledged that the
administrative law judge had phrased his inquiry as whether
the letter amounted to a “threat or coercion,” J.A. 140 n.1
(emphasis added), while the statutory language referred to
“conduct that restrain[s] or coerce[s]” employees, 29
U.S.C. § 158(b)(1)(A) (emphasis added). But the Board
ruled that this “use of different terminology did not affect [the]
analysis.” J.A. 140 n.1.

     The Board also ruled that “the only objectively reasonable
view of the letter, in context, was that it was mistakenly
directed” to the Objecting Employees. J.A. 141. In support
of that conclusion, the Board reasoned that the letter (i) sought
full membership dues (not just core fee arrearages); (ii) relied
on internal board rules and regulations (not a union security
clause or other contractual requirement); (iii) suggested a
suspension in union membership (and not employment) would
occur if dues went unpaid; and (iv) did not incorporate or imply
any other adverse consequences in the event of non-payment.
The Board added that Local 5 had indicated in its initial
October 2013 letter that the union dues obligation fell only
upon “full” union members. Id. 140–141.

      Member McFerran dissented. In her view, the Union’s
demand of “dues from employees who did not owe them” by
itself constituted an unfair labor practice. J.A. 141. “To be
told that you are delinquent in paying a bill,” she concluded,
“and that steps to collect will be taken, obviously has a
reasonable tendency to coerce payment from you—which was
precisely the point of the [Union’s] letter, on its face.” Id.
142. Member McFerran also pointed out that the garnishment
                              11

of dues from an upcoming paycheck was itself an adverse
consequence with which the Board and judge had failed to
grapple. Finally, she concluded that the October 2013 letter,
even if relevant, did “not preclude an alternative, reasonable,
and coercive construction—all that [the Board] requires to find
a violation.” Id. 143.

                              II

                              A

     The Board has primary responsibility for applying “the
general provisions of the [National Labor Relations] Act to the
complexities of industrial life.” Pattern Makers’ League of
North America, AFL-CIO v. NLRB, 473 U.S. 95, 114 (1985)
(internal quotation marks and citations omitted). When the
Board’s construction of the Act is reasonable, it cannot be
rejected “merely because the courts might prefer another view
of the statute.” Ford Motor Co. v. NLRB, 441 U.S. 488, 497
(1979). But when the Board’s findings are not supported by
substantial evidence, the Board has acted arbitrarily, or the
Board has otherwise erred in applying established law, the
court must intervene. Weigand v. NLRB, 783 F.3d 889, 894–
895 (D.C. Cir. 2015).

     This case demands our intervention.          The Board’s
decision falls far short of the substantial evidence needed to
satisfy its own governing legal standard: that no reasonable
employee could interpret the March 2013 Dues Letter as an
effort to restrain her from exercising her right not to pay the
dues for full union membership or to coerce her into paying
such dues. See Service Employees Int’l Union, Nurses
Alliance, Local 121RN (Pomona Valley Hosp.), 355 N.L.R.B.
234, 235 (2010).
                              12

     Heavy-handed threats and sanctions will, of course, rise to
the level of coercing or restraining the exercise of Section 7
rights and so will readily qualify as unfair labor practices
prohibited by Section 8 of the National Labor Relations Act,
29 U.S.C. § 158. See NLRB. v. Allis-Chalmers Mfg. Co., 388
U.S. 175, 186 (1967) (describing the legislative purpose behind
Section 8(b) as addressing “threats of reprisal against
employees and their families”); see also International Union of
Dist. 50, UMW (Ruberoid Co.), 173 N.L.R.B. 87, 87 (1968)
(“[T]he Respondents violated Section 8(b)(1)(A) of the Act by
threatening employees with discharge or with loss of
retroactive contract benefits if they refused to sign an
authorization for checkoff of dues[.]”).

     But Section 8’s protective cloak sweeps far more broadly,
proscribing any action by an employer or union that “has a
reasonable tendency” to coerce or restrain employees in the
exercise of their Section 7 rights. See Enterprise Leasing Co.
of Florida v. NLRB, 831 F.3d 534, 543 (D.C. Cir. 2016)
(interpreting Section 158(a)(1), the analogous employer
provision); see also Helton v. NLRB, 656 F.2d 883, 889 (D.C.
Cir. 1981) (concluding that any textual differences between the
provisions governing employer and union conduct were “not
intended to indicate that union conduct should be measured
against a less demanding standard than employer conduct”);
see also NLRB v. Service Employees Int’l Union, Local 254,
AFL-CIO, 535 F.2d 1335, 1337–1338 (1st Cir. 1976) (applying
the “reasonably tend to coerce” test to an allegation of union
misconduct).

     Accordingly, implied threats may run afoul of Sections 7
and 8. See Helton, 656 F.2d at 887 (holding that Section
8(b)(1)(A) “is not limited to union conduct involving threats of
violence or economic coercion”); International Bhd. of Elec.
Workers, AFL-CIO v. NLRB, 487 F.2d 1113, 1119 (D.C. Cir.
                               13

1972) (holding that the National Labor Relations Act
“prohibits indirect union restraint or coercion of an employer”
in addition to direct coercion or restraint); Pomona Valley
Hosp., 355 N.L.R.B. at 235 (same). For example, threats to
“refer claims * * * to a collection agency” or to “institute court
action” to recover unpaid union dues from objecting employees
constitute unlawful coercion. International Bhd. of Elec.
Workers, Local No. 396 (Central Tel. Co.), 229 N.L.R.B. 469,
469–470 (1977) (“[W]e view [the union’s] efforts to collect
dues from nonmembers * * * as coercive and in violation of
Section 8(b)(1)(A).”).

     The Board goes further still. Under its precedent,
whether a communication will be restraining or coercive turns
on “whether the words could reasonably be construed as
coercive,” even if that is not the “only reasonable
construction.” Pomona Valley Hosp., 355 N.L.R.B. at 235
(emphasis added). Under that standard, if any reasonable
employee could view the communication as coercive or
restraining, the union (or employer) has violated the law. 1

     Given how jealously the Board’s decisions protect
employees’ Section 7 rights, the Board’s decision in this case
makes no sense. Directly requiring the Objecting Employees
to pay full-membership dues would collide head-on with their
Section 7 rights. That much is not disputed. Yet the text of
the Dues Letter reads very much like a payment demand.
Each Objecting Employee’s letter included an individualized

1
   Because the parties do not contest this standard, we take no
position on whether the Board’s “any reasonable employee”
framework provides the proper lens through which to view a Section
8 violation. In any case, if the Board deviated from its own
standard without explanation, it has acted arbitrarily. FCC v. Fox
Television Stations, Inc., 556 U.S. 502, 515 (2009).
                                14

accounting of the amount purportedly outstanding, and then
said that the employee “must” come current with those dues.
J.A. 79–86. Each letter also said that the employee was
personally “responsible” for the overdue amounts. Id. And
each advised that the employee “please remit the balance
stated” “prompt[ly].” Id.

     If the employee retained any lingering hope of choice in
the matter, the letter disabused her of it by advising that failure
to pay would result in the garnishment of her wages. That
was no idle threat either. The Dues Letter was explicit that
Local 5 had already set the forced-collection wheels in motion
by “bill[ing] [the] employer for the balance listed” so that a
“deduction will be reflected on an upcoming pay stub.” J.A.
79 (emphasis added). And that is exactly what happened.
At the Union’s urging, Hyatt extracted dues payments from
each Objecting Employee’s next paycheck.

     The Union, in short, tried to fulfill through the back door
of employer garnishment the same direct demand for employee
payment that Section 8 forbids on the front end. The only
choice about paying full union dues that was left to the
employee was, in effect: “We can do this the easy way, or we
can do this the hard way.” Either way, the employee’s
Section 7 choice to pay only core fees evaporated. That is the
very definition of coercion and restraint. Or at least a
reasonable employee could think so.

     The Board concluded that no sensible employee would
have read the Dues Letter as compelling or coercing a payment
of full union dues. The Board found it relevant that the Letter
(1) only sought arrearages for unpaid full union dues, not core
representational fees; (2) relied solely on internal membership
rules as authority for collection; (3) referenced suspension in
union membership; (4) threatened no other adverse
                               15

consequence of non-payment; and (5) the October 2013 letter
makes clear that union knew the protesting employees were
core members with no obligation to pay full union dues.

     The Board is, of course, right that the factors it identified
provided good reason to believe that Local 5 aimed to extract
“full” membership dues, but hardly anything tipped off core
employees that the Union did so by mistake and that the
demanded payment and promised garnishment were not to be
taken seriously. That is where the Board’s rationale comes up
woefully short. Indeed, the Dues Letter’s terms make it just
as (if not more) likely that Local 5 hoped to obtain—by
garnishment or a pressured voluntary payment—the very dues
it sought: full membership dues.

     In addition, the fact that, just five months earlier in
October 2013, Local 5 had solicited these same employees to
switch from core to full membership undermines rather than
supports the Board’s decision.          Because the Objecting
Employees knew the Union’s records fully documented their
core status, it was eminently sensible for them to take the Dues
Letter at face value as an effort to wring full membership dues
out of them notwithstanding that the Union well knew their
core-only status.

     The proof is seemingly in the pudding in that Local 5 has
never claimed that its letter was a mistake or apologized for it.
Perhaps that is why the Board contorted itself to conclude that
no reasonable employee would view the letter as anything but
a mistake, while withholding judgment on whether the letter
was, in actuality, sent by mistake. Surely it is reasonable for
the Objecting Employees to have been as confused about the
Letter’s intent as the Board seemed to be.

    Finally, the Board is wrong that the Dues Letter did not
                             16

warn of any adverse consequence beyond suspension. The
Letter included a substantial second threat—actually, a
promise—of garnishment that the Letter advised was already
underway. And that garnishment actually happened. So
whether coercion or restraint is measured from the vantage
point of the employee receiving the Dues Letter or the
employee receiving a smaller paycheck because the
forewarned garnishment materialized two weeks later, the
Objecting Employees’ exercise of their right not to pay full
dues was forcibly restrained by the Dues Letter and the
garnishment it expressly set in motion.

     The Board’s effort to backhand the impact of the Dues
Letter’s garnishment threat ignores the significant practical
consequences that docking a paycheck could inflict on the
many wage earners who rely on their weekly income to make
ends meet. In fact, the Board acknowledged at oral argument
that the actual garnishment could be “a separate violation of
the Act.” Oral Arg. 21:05–21:16. Given that, the Board
was obligated to factor the promise of forthcoming
garnishment and the Letter’s role in setting the actual
garnishment process into motion in its analysis of coercion or
restraint.

     As for the Union, it argues that even a theft by union
officials would fall outside the Act unless accompanied by a
threat of termination. Oral Arg. 21:05–21:16. Thankfully,
that is not the law.

                          *****

     The Board has provided no rational basis for concluding
that the Dues Letter’s garnishment threat and the garnishment
process it triggered did not “reasonably tend[] to restrain or
coerce employees” in the exercise of their Section 7 right not
                                17

to pay full union membership dues. Pomona Valley Hosp.,
355 N.L.R.B. at 235; Enterprise Leasing Co. of Florida, 831
F.3d at 543. Nor could the Board plausibly conclude that no
reasonable employee could construe the Dues Letter’s multiple
demands for an illegitimate payment, combined with a promise
of forced withholding, as coercive. Pomona Valley Hosp.,
355 N.L.R.B. at 235. 2

     Accordingly, we grant the Objecting Employees’ petition
for review, vacate the Board’s decision, and remand for further
proceedings on the charge that the Local 5 engaged in unfair
labor practices.

                                                       So ordered.

2
  The Board did not reach the question of proper remediation for
Local 5’s overreach, so that issue is not before us. It remains open
for the Board to address on remand.