Court Opinion

ID: 3199114
Source: CourtListenerOpinion
Date Created: 2016-04-29 15:01:15.73977+00
Date Added: 2024-06-11T14:50:25.550495
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 9, 2015               Decided April 29, 2016

                        No. 14-1167

 HOSPITAL OF BARSTOW, INC., DOING BUSINESS AS BARSTOW
                COMMUNITY HOSPITAL,
                     PETITIONER

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT

                 Consolidated with 14-1195

       On Petition for Review and Cross-Application
              for Enforcement of an Order of
           the National Labor Relations Board

     Kaitlin Ann Kaseta argued the cause for petitioner. On
the briefs was Bryan T. Carmody.

    Barbara A. Sheehy, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief
were Richard F. Griffin, Jr., General Counsel, John H.
Ferguson, Associate General Counsel, Linda Dreeben,
Deputy Associate General Counsel, and Jill A. Griffin,
Supervisory Attorney.
                              2
    Before: TATEL, KAVANAUGH and SRINIVASAN, Circuit
Judges.

    Opinion for the Court filed by Circuit Judge SRINIVASAN.

     SRINIVASAN, Circuit Judge:         The National Labor
Relations Board ordinarily consists of five members. But
when the terms of three Board members expired between
August 2010 and January 3, 2012, the seats remained unfilled
for a period of time because the Senate did not confirm the
President’s nominees. On January 4, 2012, the President
sought to fill the vacant seats through recess appointments.
The Supreme Court, however, held those appointments
invalid. NLRB v. Noel Canning, 134 S. Ct. 2550 (2014). In
August 2013, the Senate confirmed new nominees to the
seats. In the intervening period, the Board lacked authority to
act because its membership had fallen below the statutorily
mandated quorum of three. 29 U.S.C. § 153(b).

     Although the Board itself could take no action during the
time it had only two validly appointed members, the Board
had long delegated its authority to direct representation
elections to its Regional Directors. In two recent decisions,
our court concluded that Regional Directors, during the period
the Board had no quorum, retained their delegated power to
direct representation elections in the circumstances of those
cases. UC Health v. NLRB, 803 F.3d 669 (D.C. Cir. 2015);
SSC Mystic Operating Co. v. NLRB, 801 F.3d 302 (D.C. Cir.
2015). We held that “we must defer to the Board’s reasonable
interpretation that the lack of a quorum at the Board does not
prevent Regional Directors from continuing to exercise
delegated authority that is not final because it is subject to
eventual review by the Board.” SSC Mystic, 801 F.3d at 308.
                              3
    This case raises a further permutation of the issue we
addressed in those cases about the authority of Regional
Directors to exercise delegated authority during the time that
the Board’s membership fell below the statutory quorum.
Namely, even if Regional Directors could continue to direct
representation elections when their actions were “subject to
eventual review by the Board,” id., did they also retain
authority to direct representation elections when, as in this
case, the parties agreed that a Regional Director’s actions
would be final?

     In UC Health and SSC Mystic, we deferred to the Board’s
interpretation of the statutory quorum provision in upholding
the Regional Director’s authority to act in the absence of a
Board quorum. Here, by contrast, the Board gave no such
interpretation to which we might defer. Rather, the Board,
concluding that the challenge to the Regional Director’s
authority had been waived, did not reach the merits of the
issue. We remand to enable the Board to render an
interpretation as to whether, under the quorum statute,
Regional Directors retained power over representation
elections notwithstanding the lapse of a Board quorum in the
circumstances presented by this case.

                             I.

     Petitioner Hospital of Barstow is a corporation operating
an acute-care hospital in Barstow, California. In early 2012,
the California Nurses Association/National Nurses
Organizing Committee sought to represent nurses at the
Barstow facility. On May 2, 2012, during the time that the
Board’s membership fell below a quorum, Barstow and the
Union entered into a consent election agreement enabling the
Regional Director to supervise a secret-ballot election. Under
the terms of the agreement, objections to the election were to
                              4
be filed with the Regional Director, “whose decision shall be
final.” J.A. 182.

    On May 10, 2012, the nurses voted in favor of the Union,
38 to 19. Barstow lodged two objections to the election, both
of which the Regional Director rejected. On June 29, 2012,
the Regional Director certified the Union as the nurses’
bargaining representative. Barstow and the Union began
bargaining, but the process proved unsuccessful, with
Barstow eventually declaring impasse. On September 26,
2012, the Union filed an unfair labor practice charge against
Barstow. An administrative law judge found that Barstow
had committed unfair labor practices (including a refusal to
bargain) in violation of the National Labor Relations Act.

     On August 29, 2014, the Board affirmed the
administrative law judge’s findings that Barstow had violated
the Act. Hosp. of Barstow, 361 N.L.R.B. No. 34 (Aug. 29,
2014), slip op. at 3. The Board also rejected Barstow’s
contention, raised for the first time in the proceedings before
the Board, that the Regional Director lacked delegated
authority to certify the Union because the certification issued
at a time when the Board was without a statutory quorum.
The Board did not address the merits of that argument.
Instead, the Board concluded that Barstow had waived the
right to challenge the certification by entering into
negotiations with the Union. Id. at 1 n.5.

    Barstow now petitions for review of the Board’s decision
and order, and the Board cross-applies for enforcement.

                              II.

     While Barstow challenges certain of the Board’s findings
that it committed unfair labor practices, Barstow additionally,
as a threshold matter, renews its argument that the Regional
                               5
Director lacked delegated authority to certify the Union
during a time when the Board lacked a quorum. We grant the
petition for review, vacate the Board’s decision, and remand
the case to enable the Board to address the merits of that
argument in the first instance. In light of that disposition, we
do not reach Barstow’s challenges to the Board’s findings of
unfair labor practices.

                              A.

     The Board submits that Barstow waived its challenge to
the Regional Director’s exercise of delegated authority. In the
Board’s view, Barstow, to preserve its ability to contest the
Regional Director’s authority to certify the Union, should
have refused to bargain with the Union and then defended
against an ensuing refusal-to-bargain complaint by arguing
that the certification was invalid. But Barstow, instead of
refusing to bargain with the Union, embarked on the process
of bargaining. By doing so, the Board contends, Barstow
waived its ability to challenge the Regional Director’s
authority to certify the Union. We disagree.

    Although the Board’s waiver theory generally holds force
in the context of certification challenges, see NLRB v.
Downtown Bid Servs. Corp., 682 F.3d 109, 112 (D.C. Cir.
2012), it is inapplicable in the circumstances of this case. We
recently made clear that challenges of the specific sort raised
by Barstow are not subject to waiver based on any failure to
preserve the argument before the Board. In particular, we
explained, “[w]e have consistently held . . . that challenges to
the composition of an agency can be raised on review even
when they are not raised before the agency.” UC Health, 803
F.3d at 672-73; see SSC Mystic, 801 F.3d at 308.
                              6
     UC Health and SSC Mystic, like this case, involved
challenges to the Regional Director’s exercise of delegated
authority to certify the results of a representation election
during the time the Board lacked a quorum. To be sure, the
particular type of election at issue in those cases (a
“stipulated” election) differed from the type of election at
issue here (a “consent” election), a matter we explore further
below. See Part II.B, infra. But both in those cases and this
one, the “challenge directly involves the question of whether
the Board’s lack of a quorum stripped the Regional Directors
of power.” UC Health, 803 F.3d at 673. That type of
challenge, concerning “the very composition or constitution
of an agency,” can be raised before us “even if the objecting
party failed to make that objection at the appropriate time
below.” Id. (internal quotation marks omitted); accord SSC
Mystic, 801 F.3d at 308.

     Additionally, in declining to find waiver in UC Health,
we observed that the employer “could not have known with
any certainty” at the time of the challenged certification
whether the Board was operating without a valid quorum
because the Supreme Court had yet to issue its decision in
Noel Canning finding the President’s recess appointments
invalid. 803 F.3d at 673. We declined to “hold [the
employer] responsible for failing to preserve expressly an
argument the substance of which had not yet arisen.” Id.
That rationale has even more force in this case: here, the
challenged certification took place before the one in UC
Health—indeed, before even our own court’s decision in Noel
Canning finding the President’s recess appointments invalid
(a decision later upheld by the Supreme Court, albeit on
different grounds).
                              7
                              B.

     Having found that Barstow’s challenge to the Regional
Director’s exercise of delegated authority is not subject to
waiver for failure to preserve the claim before the agency, we
turn to the merits of that issue. Our decisions in UC Health
and SSC Mystic form the backdrop for Barstow’s challenge.

     In those cases, the employer and union entered into a
stipulated election agreement under which the Regional
Director supervised the election and decided election
objections, but subject to “plenary review by the Board of any
decision of the Regional Director addressing those
objections.” UC Health, 803 F.3d at 672; see SSC Mystic,
801 F.3d at 305. (We note that the rules governing the
manner and extent of Board review of stipulated elections
have changed since the elections at issue in UC Health and
SSC Mystic. See 79 Fed. Reg. 74,307, 74,332-33 (Dec. 15,
2014).) The Board in those cases concluded that Regional
Directors retained authority to conduct the elections in
question notwithstanding the lapse of a Board quorum. See
UC Health, 803 F.3d at 672; SSC Mystic, 801 F.3d at 308.
The Board interpreted the statutory quorum provision, 29
U.S.C. § 153(b), “to permit Regional Directors to continue
exercising their delegated authority while the Board lacks a
quorum.” UC Health, 803 F.3d at 673. That provision allows
the Board to delegate to Regional Directors the power to
direct elections and certify the results, “except that upon the
filing of a request therefor with the Board by any interested
person, the Board may review any action of a regional
director delegated to him.” 29 U.S.C. § 153(b).

    We found the statute silent on the interpretive issue
before us, see UC Health, 803 F.3d at 674, and we “defer[red]
to the Board’s reasonable interpretation that the lack of a
                              8
quorum at the Board does not prevent Regional Directors
from continuing to exercise delegated authority that is not
final because it is subject to eventual review by the Board,”
SSC Mystic, 801 F.3d at 308. “[O]nce a quorum is restored,”
we noted, the Board could “exercise the power the NLRA
preserves for it to review the Regional Director’s decisions.”
UC Health, 803 F.3d at 675. We distinguished our prior
decision in Laurel Baye Healthcare of Lake Lanier, Inc. v.
NLRB, 564 F.3d 469 (D.C. Cir. 2009) on the ground that it
involved the question “whether plenary, final authority
delegated to panels of the Board’s own members could
survive when the Board had no quorum,” UC Health, 803
F.3d at 678 (emphasis added)—a question to which our
answer in Laurel Baye was no. The question in UC Health
and SSC Mystic, by contrast, concerned the delegation of
“nonfinal authority” to Regional Directors “to supervise
elections, subject to review and approval by the Board itself.”
Id. (emphasis added). We described the “distinction between
[the] forms of delegated authority” as “crucial.” Id.

     This case, as noted, involves a Regional Director’s
conduct of an election pursuant to a consent election
agreement, not, as in UC Health and SSC Mystic, pursuant to
a stipulated election agreement. In a consent election
agreement—unlike a stipulated election agreement of the sort
considered in UC Health and SSC Mystic—the parties agree
that the Regional Director’s actions in connection with the
election will be final and unreviewable by the Board. See 29
C.F.R. § 101.28(a). Here, accordingly, the agreement
between Barstow and the Union specified that the “rulings
and determinations made by the Regional Director will be
final, with the same force and effect . . . as if issued by the
Board.” J.A. 182.
                              9
     Barstow contends that this case thus involves the
delegation to a Regional Director of final Board authority, not
nonfinal authority of the kind at issue in UC Health and SSC
Mystic. Consequently, Barstow argues, even if, under UC
Health and SSC Mystic, a Regional Director can exercise
nonfinal authority when the Board lacks a quorum, the
Regional Director in this case could not exercise final
authority to certify the election results in the absence of a
Board quorum. In Barstow’s view, insofar as this case
involves the delegation of final Board authority, our decision
in Laurel Baye—not our decisions in UC Health and SSC
Mystic—is controlling, and forecloses the exercise of that
authority by a Regional Director when the Board lacks a
statutory quorum.

     We decline to resolve that issue in the first instance. In
UC Health and SSC Mystic, we deferred to the Board’s
interpretation of the statutory quorum provision in the context
of a stipulated election subject to Board review. Here,
however, the Board has not rendered any interpretation of the
statute in the context of a consent election as to which the
employer and the union agree that the Regional Director’s
decisions are final. Instead, the Board deemed the challenge
waived and did not reach the merits of the issue. We
therefore have no decision of the Board setting out whether it
believes that the quorum statute enables a Regional Director
to conduct elections under a consent election agreement when
there is no Board quorum, let alone any such decision taking
into account our decisions in UC Health and SSC Mystic.

     We “are left wondering how the Board in these
circumstances interprets” the statute, and when “an agency
fails to wrestle with the relevant statutory provisions, we
cannot do its work for it.” Children’s Hosp. & Research Ctr.
of Oakland, Inc. v. NLRB, 793 F.3d 56, 59 (D.C. Cir. 2015).
                              10
Our general practice in these sorts of situations is to remand
the proceeding to enable the agency to interpret the statute in
the first instance. See id.; Noble Energy, Inc. v. Salazar, 671
F.3d 1241, 1245-46 (D.C. Cir. 2012); Oil, Chem. & Atomic
Workers Int’l Union, AFL-CIO v. NLRB, 46 F.3d 82, 93 (D.C.
Cir. 1995); Prill v. NLRB, 755 F.2d 941, 942 (D.C. Cir. 1985).
We follow that course here.

                      *   *   *    *   *

    For the foregoing reasons, we grant Barstow’s petition
for review, deny the Board’s cross-application for
enforcement, and remand to the Board for proceedings
consistent with this decision.

                                                  •So ordered.