Court Opinion

ID: 9478180
Source: CourtListenerOpinion
Date Created: 2023-08-05 06:42:25.748838+00
Date Added: 2024-06-11T17:46:17.270607
License: Public Domain

A. LEON HIGGINBOTHAM, Jr., Circuit Judge,
dissenting.
Gertrude Stein once remarked, “a rose is a rose is a rose." However, the definition of an employee under the National Labor Relations Act is more difficult than that of a literary conceit: one must determine the status of employees across the many forms of their work and natural lives. The statute merely tells us that “[ejmployees shall have the right to self-organization ...” and that “[i]t shall be an unfair labor practice for an employer ... to refuse to bargain collectively with the representatives of his employees ...”. National Labor Relations Act of 1935, as amended, §§ 7, 8(a)(5) (29 U.S.C. §§ 157, 158(a)(5)(l)). The Board, drawing on its extensive experience with union elections, has decided that the exigencies of defining this broad concept in this context are best served by a bright line rule, enunciated in Red Arrow. In my view, this rule is a valid exercise of the Board’s discretion to make rules in the area of its special expertise.
*939The majority questions the validity of Red Arrow and holds that in any event the Board misapplied the Red Arrow standard in holding that employees on long term disability leave remain part of the bargaining unit for the purpose of voting in a decertification election. As I see it, this situation falls squarely within the holding of Red Arrow. I therefore respectfully dissent.
The majority concedes that the Board has considered a variety of factors in determining whether contested voters remain eligible to vote in union elections. Maj. at 937. Although the Regional Director (“RD”) relied on five factors in reaching his decision, the majority insists that the following three different factors are better indicia of employment status: the removal of the name of a contested voter from the company’s “Employment Status Report,” his or her replacement with a permanent employee, and the Company’s ambiguous statement in its LTD policy that employees on LTD leave would have “top priority” in filling new positions, but that their return to work would depend on their rehabilitation and the availability of jobs. Maj. at 937.
The first of these factors relies on the subjective analysis rejected in N.L.R.B. v. Staiman Brothers, 466 F.2d 564, 566 n. 2 (3rd Cir.1972), by allowing employers to dictate, based on internal classifying procedures, whether an employee has continued employee status, with its attendant rights and privileges. The second and third factors overemphasize two among several valid indicia of termination or continued employment by treating them as entirely dispositive on the question of employee status.
As this case illustrates, however, focusing on other factors, as did the RD in his application of Red Arrow, 278 N.L.R.B. 965 (1986) is not arbitrary and capricious. Indeed, in some cases, these factors will yield more reliable, objective indicia of employment than those favored by the majority.
Before going further, I should respond to the questions the majority raises in dicta about the continued validity of the Red Arrow standard. See maj. at 936. See also id. at 935 n. 7. I believe that the Red Arrow standard is a valid exercise of the Board’s discretion to make rules in the area of its special expertise, and that the majority’s doubts about Red Arrow's validity are based on a misinterpretation of Supreme Court precedent.
The majority correctly observes that where an administrative agency has acted inconsistently, its rulings will not receive the degree of judicial deference traditionally granted to agency determinations. Maj. at 935 n. 7. What the majority fails to note is how inconsistent an agency must be before this lessened deference comes into play. The majority relies for evidence of the Board’s inconsistency on its admission in Red Arrow that “in some isolated cases the Board may have used such language [of reasonable expectation of reemployment] in cases involving employees on sick or maternity leave_” Red Arrow, 278 N.L.R.B. at 965 n. 5. Judge Breyer in NLRB v. Newly Wed Foods, 758 F.2d 4 (1st Cir.1985), has also noted that the Board has used both the rebuttable presumption of continued employment adopted by Red Arrow as the Board’s sole standard, and the reasonable expectation of continued employment in its recent eases. See id. at 8. But this type of inconsistency, remedied by the Board itself before this litigation, does not present the degree of striking inconsistency present in the cases where the Supreme Court evaluated an agency’s expert judgment with lessened deference.
The majority cites INS v. Cardoza-Fonesca, 480 U.S. 421, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987), for the proposition that inconsistent agency interpretations are not due the normal amount of deference. Maj. at 935 n. 7. The majority does not mention that the case dealt both with an agency interpretation of a statutory term “strikingly contrary to [the] plain language and legislative history [of the statute],” 107 S.Ct. at 1223 (Blackmun, J., concurring), see also id. at 1217 (noting that the standard for a well founded fear of persecution “as it has been consistently understood by those who drafted it, as well as those draft*940ing the documents adopting it” differs from the INS’s interpretation), and with an agency interpretation inconsistent with both its past and its current interpretations of the statute. The NLRB’s Red Arrow standard neither exhibits an agency’s willful indifference to the language of Congress, nor is it merely the penultimate offering in a string of inconsistent agency rulings.
Watt v. Alaska, 451 U.S. 259, 101 S.Ct. 1673, 68 L.Ed.2d 80 (1981), the Supreme Court’s other significant case addressing the effect of an agency’s inconsistent interpretations of a statute, involves the question of whether the addition of the word “minerals” to the list of revenue-producing wildlife refuge resources in a 1964 amendment to § 401(c) of the Wildlife Refuge Revenue Sharing Act, 49 Stat. 383, as amended, 16 U.S.C. § 715s (1982), directed the Department of the Interior to alter the distribution formula for revenues produced from such minerals from that laid down in the Mineral Leasing Act of 1920, 30 U.S.C. § 181 et seq. (1982), which had previously governed their distribution — for those on reserved wildlife refuge lands. The case turns in large part on a distinction between “acquired” wildlife refuge lands, that is those granted or sold to the federal government by a State or private citizen, and “reserved” ones, that is lands set aside out of those already within the public domain. Reserved lands had been handled under one formula and acquired lands under another. Watt v. Alaska, 451 U.S. at 270, 101 S.Ct. at 1680. The agency suddenly decided that the amendments mandated applying a single formula to both. As the Supreme Court pointed out, “the Department of the Interior interpreted the amendment when passed, and for 10 years thereafter, as not altering the distribution formula [for reserved lands].” Id. at 272, 101 S.Ct. at 1680. The Department’s later interpretation deserved less deference due to its inconsistency with this well established prior position. See also General Electric Co. v. Gilbert, 429 U.S. 125, 143, 97 S.Ct. 401, 411, 50 L.Ed.2d 343 (1976) (inconsistency with prior agency rulings and interpretations is one factor among several determining how persuasive an EEOC ruling is).
By contrast, in our case, the Board had deviated in the past in some instances from an overall position consistent with the one adopted by Red Arrow. It had itself corrected its inconsistency by announcing in Red Arrow, prior to this case, that it would rely in the future on a single standard. No subsequent cases returned to the prior standard. The Board’s application of Red Arrow is thus not an example of the striking degree of inconsistency that has led the Court to accord an agency’s determination lessened deference. Moreover, the change of administrations often brings with it changes in agency practice. Any doctrine that too easily reduces deference to agency decisions based on announced changes in agency policy may weigh our review too heavily in favor of the status quo. For the ballot box to have full effect in our democratic but administrative state, we must preserve some flexibility for reasonable administrative change.
Under Red Arrow, the Board presumes that employees on sick, maternity, or disability leave have not permanently severed their employment relationship and that they therefore continue to maintain an interest in the outcome of elections. Accordingly, under Red Arrow, the Board requires an affirmative showing that the employment relation has been severed by the employer or the employee and that this severance has been conveyed to the other party. See Red Arrow Freight, 278 N.L.R.B. at 965; Staiman Brothers, 466 F.2d at 566.
Contrary to the majority’s view, maj. at 935 n. 7, the Red Arrow test does not conflict with our decision in Staiman. Staiman held that it was an abuse of discretion for a regional director not to hold an hearing considering the alleged application for Social Security disability payments as evidence of the loss of employee status. Staiman, 466 F.2d at 567. N.L.R.B. v. Connecticut Foundry Co., 688 F.2d 871 (2d Cir.1982) also cited by the majority, maj. at 938, dealt with the actual receipt of Social Security payments. The outcome *941of this case would be the same were we to hold — a holding far beyond that of Stai-man — that, as a matter of law, the votes of Cruz and Persons, the two employees who are receiving Social Security disability benefits, should not have been opened and counted. Ecolab has not even alleged that either of the other two LTD employees applied for Social Security disability payments, though Hunt informed his insurance company that he had applied for some form of Social Security benefits, Joint Appendix at 83 (“Jt. App.”). Even if the majority discounted his vote, the union would still clearly win by one vote, Sturman’s, even assuming that receipt or application of Social Security were determinative, rather than, as in Staiman, merely material evidence. Staiman’s concern for the materiality of Social Security disability payments is therefore not decisive here. By misstating the holding of Staiman as the importance of “disability status,” and by suggesting that it may conflict with Red Arrow, the majority has gratuitously broadened the holding of Staiman from the materiality of Social Security disability benefits to the materiality of any form of disability.
In the context of elections, the burden of making the Red Arrow affirmative showing of termination or resignation, and thus ineligibility to vote, rests on the party challenging the vote in question. Boed, Inc., 281 N.L.R.B. -, at slip op. at 12 n. 24 (1986). The Company has not met its burden here. The fact that Ecolab has removed long term disabled employees from its employee rolls, which the majority views as dispositive, merely reflects the employer’s subjective view of the employee’s ability to return to active employment. See maj. at 938 (citing Atlanta Dairies, 283 N.L.R.B. - (1987) as “wholly distinguishable” because the employer retained disabled employees’ names on its rolls until their retirement). In my view, the majority’s emphasis on this factor ignores Stai-man Brothers’s direction that status for voting purposes should not rely too greatly on subjective characterizations such as an employee’s intent to return to work. See 466 F.2d at 566 n. 2. The employer’s expectation that the employee will not return to work, which is all that the removal of the employee from its employment rolls reflects, should be irrelevant — especially where, as here, the contrary intention had been indicated to the employee in a written statement of company LTD policy. See Jt App. at 248 (company directive entitled “Leaves of Absence” stating “one of the most important parts of the LTD program is to help you return to work.... if it is medically possible for you to go through retraining ... to learn a new skill or return to your old job, [Ecolab] wants to provide this opportunity and to give you top priority in returning to work with [Eco-lab]”) (emphasis added). Inconsistent treatment of management’s and the employee’s expectations by this Court is particularly inappropriate in the adversary context of a union election.
The dangers of relying on management’s subjective expectations are illustrated by this case. The Company has not been consistent in its opposition to the voting of employees on LTD leave. The Company did not challenge the voting of two other employees on LTD leave, M. Curry and W. Christmas. The Company also listed other employees on LTD leave on the list of potential voters provided to the Union. These employees did not vote in the election. The Company has attempted to explain away these inconsistencies by asserting that they arose through inadvertence. Reliance on internal company classification procedures encourages companies to claim that voters who vote against them in closely contested elections are terminated, whether or not management’s genuine subjective expectation is that some employees on LTD will ultimately return to employment with the company.
The most persuasive point raised by the majority, that permanent employees replaced the LTD workers in their specific jobs, is insufficient to resolve the ambiguous position of LTD recipients. LTD recipients do share certain qualities with retirees or terminated workers: they no longer appear to work, and they cannot use their seniority by “bumping” or bidding for *942new jobs. But in reality they have more in common with their shop floor colleagues. LTD recipients continue to receive health and dental insurance paid for by Ecolab, and to draw a monthly wage. LTD recipients neither resigned nor received a letter of termination. As noted above, they are encouraged by the written LTD policy to seek rehabilitation and reapply for work. While the specific jobs that they held are “bid out,” the written description of the LTD program also tells recipients that they will have “top priority” in returning work. Jt.App. at 248. Moreover, unlike terminated or retired employees, LTD recipients retain their identification cards and uniforms.1 Similarly, should Ecolab rehire LTD recipients within three years of their last day of work, they would receive their seniority rights back unimpaired, hardly the position of a terminated employee. Although the majority states that “[i]n no case ... has the Board found that a person retained employment status on facts similar to those presented here,” maj. at 937, the majority neglects to mention that in no case has the Board been presented with a case presenting facts closely analogous to these.
These indicia of employment are particularly important if one looks beyond the narrow circumstances of this case. Absent individualized determinations, LTD recipients will usually include at least a few individuals who may be capable of returning to work after further medical treatment or rehabilitation. Indeed, Ecolab itself had admitted that one employee who had been on long term disability leave had returned to work and that two others sought to return. Maj. at 933. L. Goines, who returned after three years of LTD leave, had been on leave considerably longer than all but one of the contested voters had been at the time of the election. Since his original job as a shipping clerk had been filed, Goines assumed new responsibilities as a fork truck operator. Jt.app. at 127-28. To my mind, this evidence of the versatility of a returning worker and his or her ability and desire to reassume work responsibilities after an extended illness underscores the difficulty that exists in the review of these cases, and the error of the majority’s view. The record contains no evidence that Eugene Haberman and Ed Klemas, the two LTD employees who sought to return to work in 1979, were not simply denied reemployment because no positions were available. Id. at 175 (letter from counsel for Ecolab noting only that two employees had been “denied reemployment when they attempted to return to work from long term disability status”). At other companies with different patterns of occupational illness and injury, significant proportions of the LTD population may be potential returnees. The Red Arrow rebuttable presumption of continued employee status protects these individuals from premature disenfranchisement.
There is no way to be certain whether a disabled employee will return to active work status. The majority prefers a presumption that the ill do not recover and that the disabled remain that way forever. That assumption is inconsistent with the realities of life, even as we experience them as judges. Thousands of cases have arisen in our federal court in the past few years because the Social Security Administration believed that the ill or the disabled who had received disability awards had recovered and should no longer receive benefits. In some of these cases, we agreed with the Administration. Like the rest of humanity, the employees of Ecolab will sometimes *943recover from serious illnesses or disabilities. The policies that we encourage regarding their status should not be infused with the presumption that they will not. Companies that wish to resolve the position of their long term disabled employees, so as to protect themselves in a potential union election, may always do so by clearly conveying to those employees what Ecolab asserts is their de facto status: terminated.
Given the ambiguities noted above, the RD’s decision that the LTD recipients retained employment status did not, despite the majority’s assertion, transform the Red Arrow standard into an irrebuttable presumption. The RD’s decision merely resolved an ambiguous situation in one principled way and so constituted a reasonable exercise of discretion. The parties agreed, in their original consent election agreement, that the RD’s determination would be final. Jt. app. at 43 (“Agreement for Consent Election”). We should therefore respect the parties’ wishes and only set aside a RD’s determination when it is arbitrary and capricious. The burden of proof was on Ecolab to demonstrate the RD’s capriciousness. Ecolab has not met this burden, but merely put forward evidence showing that the RD could reasonably have decided the other way. The majority has accepted this limited evidence and overruled the Board. In my view, this Court is not equipped to second guess the Board in its difficult choices of labor policy. Accordingly, I would hold that the Board’s order to Ecolab to bargain with the Union should be enforced, and, therefore, I respectfully dissent.

. The majority states that disabled employees retain their uniforms and I.D.'s because Ecolab has no way of knowing at the time the employee first goes on disability leave that he or she will not return to work. However, it is the essence of the majority’s argument that LTD is a form of termination. See maj. at 938 n. 15 (holding that the RD’s reliance on the employees' expressed intention of returning to their jobs as misplaced, since "[wjhile this evidence may be relevant to determine whether the employees had resigned from employment, it does not determine whether they had been terminated"). If so, Ecolab could require employees, perhaps as a condition of continued receipt of LTD payments, to return their uniforms and I.D. cards, much as Ecolab required that LTD recipients apply for all governmental disability programs to whose payments they may be entitled, or suffer pro rata reduction of their LTD payments by the amounts by which they might otherwise have received.