Court Opinion

ID: 185310
Source: CourtListenerOpinion
Date Created: 2011-02-05 02:30:28+00
Date Added: 2024-06-11T17:26:14.823291
License: Public Domain

233 F.3d 611 (D.C. Cir. 2000)
Joe Jacoby, Petitionerv.National Labor Relations Board, Respondent
Steamfitters Local Union No. 342 of the  United Journeymen and Apprentices of the Plumbing and  Pipefitting Industry of the United States and Canada, AFL-CIO Intervenor
No. 99-1450
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2000Decided December 12, 2000

[Copyrighted Material Omitted]
Dylan B. Carp argued the cause for petitioner.  With him  on the briefs were Jeffrey L. Rhodes and Glenn M. Taubman.
Meredith L. Jason, Attorney, National Labor Relations  Board, argued the cause for respondent.  With her on the  brief were Leonard R. Page, General Counsel, Linda Sher,  Associate General Counsel, Aileen A. Armstrong, Deputy  Associate General Counsel and Fred L. Cornnell, Supervisory  Attorney.
James B. Coppess argued the cause for intervenor. With  him on the brief were John L. Anderson and Laurence Gold.
Before:  Williams, Sentelle and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge:

1
Under a labor agreement governing construction work at a refinery jobsite in California,  Steamfitters Local Union No. 342 held an exclusive right to  dispatch workers to subcontractor Contra Costa Electric. Petitioner Joe Jacoby, a member of the union for 27 years,  registered for employment through the union's hiring hall; due to his skills and experience, his name was placed on the  highest priority "A" list.  For a period the union mistakenly  dispatched several lower-priority individuals ahead of Jacoby. On discovery of the error, it dispatched Jacoby.  All parties  agree, for current purposes at least, that the priority mix-up  was merely negligent, and reflected no intentional wrongdoing.

2
Jacoby filed an unfair labor practice charge with the National Labor Relations Board, and the Board's General Counsel issued a complaint.  After a hearing an administrative law  judge found that the union's negligent deviation from established hiring hall rules breached its duty of fair representation and thereby violated SS 8(b)(1)(A) & (2) of the National  Labor Relations Act as amended (the "NLRA"), 29 U.S.C.  S 158(b)(1)(A) & (2).  Steamfitters Local No. 342 (Contra  Costa Electric), 329 N.L.R.B. No. 65, slip op. at 10-12 (Dec. 5,  1995).  The Board reversed, ruling that the union's negligence violated neither the duty of fair representation nor the  Act.  Steamfitters Local No. 342 (Contra Costa Electric), 329  N.L.R.B. No. 65 (Sept. 30, 1999) ("Board Decision").  Although the Board agreed that the ALJ had correctly applied the Board's previous decision in Iron Workers Local 118  (California Erectors), 309 N.L.R.B. 808 (1992), it reasoned  that  decision, as well as the ALJ's findings, were inconsistent with the Supreme Court's pronouncements about the  duty of fair representation in United Steelworkers of America  v. Rawson, 495 U.S. 362 (1990), and Air Line Pilots Ass'n,  Int'l v. O'Neill, 499 U.S. 65 (1991).  Board Decision, 329  N.L.R.B. No. 65, slip op. at 2-4.  In addition, the Board found  that the union's negligent conduct did not, apart from the fair  representation issue, independently violate the Act.  Id. at 4.

3
We have held that the Board's interpretation of the duty of  fair representation is entitled to deference under Chevron,  U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984), when the Board  enforces that duty as part of its jurisdiction to identify and  remedy unfair labor practices.  Ferriso v. NLRB, 125 F.3d 865, 869 (D.C. Cir. 1997);  Finerty v. NLRB, 113 F.3d 1288,  1291 (D.C. Cir. 1997).  We shall explain why this is sodespite  the fact that the duty also exists as a judge-made, courtenforced duty.  But Chevron does not help an agency that  rests its decision on a misinterpretation of Supreme Court  precedent, as the Board did here.  Accordingly, we reverse  and remand the case to the Board for it to address the duty  of fair representation anew.

4
In addition, the Board's conclusion that the union's negligence did not independently violate the Act is, as we explain  below, intertwined with the issue of the duty of fair representation.  Accordingly, we find that it would be premature to  rule on it before the Board has had an opportunity to revisit  the question on remand.

5
*  *  *

6
The duty of fair representation originated in the context of  the Railway Labor Act, judicially inferred from that statute  and enforceable in the courts.  See Steele v. Louisville &  Nashville R.R. Co., 323 U.S. 192 (1944).  The Supreme Court  extended the Steele principle to the NLRA in Ford Motor Co.  v. Huffman, 345 U.S. 330 (1952), finding that the statutory  authority of unions as exclusive bargaining representatives under Sec. 9(a) of the NLRA, 29 U.S.C. S 159(a), also gave  rise to a duty of fair representation, requiring unions to  "make an honest effort to serve the interests of all [bargaining unit] members, without hostility to any."  Id. at 337.  A  union breaches this duty when its actions are "arbitrary,  discriminatory, or in bad faith."  Vaca v. Sipes, 386 U.S. 171,  190 (1967).

7
Originally, the duty was the exclusive province of the  courts, falling within the federal courts' general federal question jurisdiction.  See Syres v. Oil, Chemical and Atomic  Workers Local 23, 350 U.S. 892 (1955)(mem.), rev'g 223 F.2d 739 (5th Cir. 1955).  Beginning with its decision in Miranda  Fuel Co., 140 N.L.R.B. 181 (1962), however, the NLRB has  enforced the duty of fair representation itself as part of its  authority to identify and remedy unfair labor practices.  We  have upheld this branch of the Board's unfair labor practice  jurisdiction.  See Plumbers & Pipe Fitters Local Union No.  32 v. NLRB, 50 F.3d 29, 31-32 (D.C. Cir. 1995);  Truck  Drivers and Helpers, Local Union 568 v. NLRB, 379 F.2d 137, 141-42 (D.C. Cir. 1967).

8
At the same time, the Supreme Court refused to find that  the Board's enforcement of the duty of fair representation  preempted judicial jurisdiction over the duty of fair representation inferred from the NLRA.  Vaca v. Sipes, 386 U.S. 171,  183, 188 (1967).  See also Marquez v. Screen Actors Guild,  Inc., 525 U.S. 33, 49 (1998);  Breininger v. Sheet Metal  Workers Int'l Ass'n Local No. 6, 493 U.S. 67, 74-75 (1989). As a result the duty is subject to a kind of dyarchy.  The  Board is entitled to Chevron deference when it interprets the  duty as part of its unfair labor practice jurisdiction, yet many  cases involving the duty continue to originate in the courts. See, e.g., Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65  (1991);  United Steelworkers of America v. Rawson, 495 U.S. 362 (1990).

9
And it is important to emphasize that for these courtadjudicated cases the Board's definition of the duty of fair  representation for purposes of adjudicating unfair labor practices appears only marginally relevant.  The Supreme Court in Breininger explicitly "reject[ed] the proposition that the  duty of fair representation should be defined in terms of what  is an unfair labor practice." 493 U.S. at 86.  "[T]here is no  reason to equate breaches of the duty of fair representation  with unfair labor practices."  Id.  Thus, for cases arising in  the courts, NLRB interpretations are relevant for what theymay contribute on their intellectual merits, enjoying deference to the extent of their "power to persuade."  Skidmore v.  Swift & Co., 323 U.S. 134, 140 (1944).  Nonetheless, as we  explained, the Board's decision here is reviewable under the  Chevron doctrine.

10
The duty of fair representation clearly extends to a union's  operation of an exclusive hiring hall.  See Breininger, 493 U.S. at 87-88 (1989).  Prior decisions of the Board described  the duty, in the hiring hall context, in rather demanding  terms.  Ruling in favor of the Board in such a case, we said:

11
[A]ny departure from established exclusive hiring hall procedures which results in a denial of employment to an applicant falls within that class of discrimination which inherently encourages union membership, breaches the duty of fair representation owed to all hiring hall users, and violates Section 8(b)(1)(A) and (2) [of the NLRA], unless the union demonstrates that its interference with employment was pursuant to a valid union-security clause or was necessary to the effective performance of its representative function.

12
Boilermakers Local No. 374 v. NLRB, 852 F.2d 1353, 1358  (D.C. Cir. 1988) (quoting Teamsters Local 519 (Rust Engineering), 276 N.L.R.B. 898, 908 (1985)).  And we also said  that breach of the duty required no evidence of intent to  discriminate:

13
No specific intent to discriminate on the basis of union membership or activity is required;  a union commits an unfair labor practice if it administers the exclusive hall arbitrarily or without reference to objective criteria and thereby affects the employment status of those it is expected to represent.  "By wielding its power arbitrarily, the Union gives notice that its favor must be curried,  thereby encouraging membership and unquestioned adherence to its policies."

14
Id. (quoting NLRB v. International Ass'n of Bridge, Structural & Ornamental Iron Workers, Local 433, 600 F.2d 770,  777 (9th Cir. 1979)).

15
The Board itself, applying the standard that we upheld in  Boilermakers, found a breach of the duty (and an unfair labor  practice) in circumstances virtually identical to the present  ones.  In Iron Workers Local 118 (California Erectors), 309 N.L.R.B. 808 (1992), it ruled that union officials breached  their duty of representation when, "through mistake and  inadvertence," they failed to dispatch a worker to a job to  which he should have been referred under exclusive hiring  hall procedures.  Id. at 812.  Unsurprisingly, the ALJ applied  California Erectors in its decision below.

16
In reversing the ALJ, the Board here acknowledged that  her reading of that case was "correct," but found that continued application of California Erectors would be inconsistent  with the Supreme Court decisions in United Steelworkers of  America v. Rawson, 495 U.S. 362 (1990), and Air Line Pilots  Ass'n, Int'l v. O'Neill, 499 U.S. 65 (1991).  Board Decision,  329 N.L.R.B. No. 65, slip op. at 2.

17
There is undoubtedly language in these Supreme Court  decisions supporting the Board's view.  Both explicate the  standard earlier laid down by the Court in Vaca v. Sipes, 386 U.S. 171 (1967), which said that a union breached the duty of  fair representation when its actions were "arbitrary, discriminatory, or in bad faith."  Id. at 190.  In Rawson, the Court  rejected a claim that a union breached the duty when it  negligently performed mine-safety related duties pursuant to  a collective bargaining agreement.  The Court observed that  "[t]he courts have in general assumed that mere negligence,  even in the enforcement of a collective-bargaining agreement,  would not state a claim for breach of the duty of fair  representation, and we endorsethat view today." 495 U.S. at  372-73.

18
O'Neill involved a claim that the Air Line Pilots Association  breached its duty of fair representation in its negotiation and  acceptance of a strike settlement.  The Court held that the  Vaca standard "applies to all union activity, including contract  negotiation." 499 U.S. at 67.  Moreover, it explained that "a  union's actions are arbitrary only if, in light of the factual and  legal landscape at the time of the union's actions, the union's  behavior is so far outside a 'wide range of reasonableness' as  to be irrational."  Id. (quoting Ford Motor Co. v. Huffman,  345 U.S. 330, 338 (1953)) (internal citation omitted).

19
Neither Rawson nor O'Neill specifically concerned the duty  owed by a union when it operates an exclusive hiring hall.  In  its decision here, however, the Board reasons that the two  cases, read together, mandate that merely negligent conduct  can never breach the duty of representation in any context,  including that of the hiring hall.  See Board Decision, 329  N.L.R.B. No. 65, slip op. at 2.

20
But as Jacoby points out, the Board's reading of Rawson  and O'Neill cannot be reconciled with our decision in Plumbers & Pipe Fitters.  There we considered and rejected the  argument that O'Neill undermined the standard governing a  union's operation of an exclusive hiring hall--specifically the  principle that a union operate a hiring hall by "reference to  objective criteria." 50 F.3d at 32-33.  We acknowledged that  fragments from O'Neill such as the passage quoted above  might, if read in isolation, support the contention that a  "highly deferential" standard must be applied to the evaluation of union's actions operating a hiring hall. 50 F.3d at 33. But we concluded that the "Court did not intend to weaken  the standard of review applied to a union's operation of a  hiring hall."  Id.

21
In support of this conclusion we relied on the drastic  difference in context.  In O'Neill the Court's focus was on  "protecting the content of negotiated agreements from judicial second-guessing."  Id.  The operation of a hiring hall, by  contrast, was one "where the union has assumed the role of  employer, as well as representative, and where the risk of  judicial second-guessing of a negotiated agreement that was of such concern to the Court in O'Neill is simply not present." Id.  We also relied on the Supreme Court's decision in  Breininger, issued only one year before Rawson and two  years before O'Neill, where the Court said that the imbalance  of power and possibilities for abuse created by union operation of a hiring hall were such that "if a union does wield  additional power in a hiring hall by assuming the employer's  role, its responsibility to exercise that power fairly increases  rather than decreases."  Breininger, 493 U.S. at 89 (quoted in  Plumbers & Pipe Fitters, 50 F.3d at 34).  Thus, we wound  up, "[w]e remain confident that unions that operate hiring  halls without objective criteria violate their duty of fair  representation.  This was the standard we approved in Boiler makers and that the ALJ properly applied in this case. Absent clear instructions from the Supreme Court, we decline  to weaken this principle." 50 F.3d at 34.

22
In its decision here, the Board sought to reconcile Breininger's statement that "additional power" entailed increased  responsibility with its interpretation of Rawson and O'Neill. It reasoned that in Breininger the Court was merely rejecting the argument that the duty of fair representation did not  apply at all in the hiring hall context and had meant the  language about a union's increased responsibility not to refer  to any heightened degree of duty, but merely to the fact that  a union "takes on additional responsibilities" when it operates  a hiring hall.  Board Decision, 329 N.L.R.B. No. 65, slip op.  at 2.  Nothing in the surrounding language in Breininger  lends support to this theory.

23
The question before us today differs from that in Plumbers  & Pipe Fitters primarily with regard to two details, both  ultimately insignificant.  First, this case turns on a different  aspect of the legal standard defined in Boilermakers. Whereas Plumbers & Pipe Fitters involved the operation of a  hiring hall "without reference to objective criteria," see Boilermakers, 852 F.2d at 1358, the facts here implicate the rule  precluding departures "from established exclusive hiring hall  procedures," id.  But this distinction does nothing to help the  Board's position.  That position is premised on the conclusion  that O'Neill generally precludes heightened scrutiny in the hiring hall context, but in Plumbers & Pipe Fitters we  concluded that the "Court did not intend to weaken the  standard of review applied to a union's operation of a hiring  hall." 50 F.3d at 33.  See also Radio-Electronics Officers  Union (Radio Officers Union) v. NLRB, 16 F.3d 1280, 128485 (D.C. Cir 1994) (applying Boilermakers's "departure" standard).

24
In addition, one might argue that in the present context the  Boilermakers standard is more vulnerable to the claim of  erasure by O'Neill and Rawson, as this case involves a claim  of negligence, thus encountering Rawson's conclusion that  "mere negligence" did not violate the duty of fair representation in the contract administration context.  But the Board's  application of Rawson relies exclusively on the type of "onesize-fits-all" theory that Plumbers & Pipe Fitters rejected. And, once again, Rawson is not a hiring hall case.  It  concerned the specific question of whether a union violates  the duty of fair representation through negligent enforcement  of a collective bargaining agreement.  Although the Court  endorsed what courts had "in general assumed," namely, that  negligence does not "state a claim for breach of the duty of  fair representation," 495 U.S. at 372-73, it never considered  the applicability of this principle to the hiring hall.  Thus we  see no reason why Rawson's general statements on negligence should be regarded as any less subject to qualification  than O'Neill's statements about "behavior so far outside a  range of reasonableness as to be irrational." 499 U.S. at 67.

25
The Board's decision here seems in effect to recognize its  contradiction of Plumbers & Pipe Fitters.  Rather than try to  distinguish the case, the Board simply observed that "the  circuit court's assertion that the standard for operation of a  hiring hall can and should be different from the standard for  contract administration seems to us to be unsupportable." Board Decision, 329 N.L.R.B. No. 65, slip op. at 3 n.19.

26
Intervenor's brief relies on two additional decisions issued  after Plumbers & Pipe Fitters, one from the Supreme Court,  Marquez v. Screen Actors Guild, Inc., 525 U.S. 33 (1998), and  one from this circuit, Thomas v. NLRB, 213 F.3d 651 (D.C. Cir. 2000).  As neither case concerned nor even mentioned  the hiring hall context, neither affects our analysis in Plumbers & Pipe Fitters.

27
The Board's reliance on its mistaken analysis of O'Neill and  Rawson compels a remand.  "An agency action, however  permissible as an exercise of discretion, cannot be sustained  'where it is based not on the agency's own judgment but on  an erroneous view of the law.' "  Sea-Land Service, Inc. v.  Department of Transportation, 137 F.3d 640, 646 (D.C. Cir.  1998) (quoting Prill v. NLRB, 755 F.2d 941, 947 (D.C. Cir.  1985)).  On remand, the Board must consider whether, given  the union's heightened duty of fair dealing in the context of a  hiring hall, the union's negligent failure to adhere to its  referral standards was an unfair labor practice.  In remanding, of course, we express no opinion on the validity of any  alternate grounds that the Board might use to overrule  California Erectors.

28
We now turn to the Board's second holding--that the  union's conduct did not, quite apart from any breach of the  duty of fair representation, violate SS 8(b)(1)(A) & 8(b)(2) of  the Act.  The latter bars a union from causing an employer to  discriminate against an employee in violation of S 8(a)(3),  which in turn bars an employer's discrimination against an  employee "to encourage or discourage union membership." A violation of S 8(b)(2) would derivatively violate  S 8(b)(1)(A)'s ban on union restraint of employees in the  exercise of their rights under S 7 of the Act.  Board Decision, 329 N.L.R.B. No. 65, slip op. at 4;  see also id. at 8  (Member Brame, dissenting);  Radio Officers' Union of Commercial Telegraphers Union v. NLRB, 347 U.S. 17, 42 (1954).

29
The Board in effect has said that its rationale in Boilermakers is inapplicable to this context.  There we upheld its  finding that "[a]ny departure from established exclusive hiring hall procedures which results in a denial of employment to  an applicant falls within that class of discrimination which  inherently encourages union membership," and thereby violates SS 8(b)(1)(A) and (2) of the Act. 852 F.2d at 1358.  And  we endorsed its underlying rationale:  "By wielding its power arbitrarily, the Union gives notice that its favor must be  curried, thereby encouraging membership and unquestioned  adherence to its policies."  Id.  Here the Board reasoned:

30
While this reasoning makes sense when applied to the volitional actions of union officials, it is unpersuasive when applied to simple mistakes.  When as in this case, a union officer in charge of referrals intends to follow the prescribed procedures and thinks he has done so, his inadvertent failure to do so, even to the detriment of an applicant, simply does not carry the message that applicants had better stay in the good graces of the union if they want to ensure fair treatment in referrals.

31
Board Decision, 329 N.L.R.B. No. 65, slip op. at 4.

32
Given the focus of S 8(b)(2) on discrimination, we cannot  fault the Board's view that a purely negligent breach of the  rules would lack the signaling effect that the provision, and  the Board, sought to avoid.  But the Board's analysis is  complicated by its additional holding that this approach does  not contradict any of its earlier decisions--a statement that, if  true, renders inapplicable the Board's duty to give a "reasoned justification for any departure from its prior policies or  practices."  Pittsburgh Press Co. v. NLRB, 977 F.2d 652, 655  (D.C. Cir. 1992) (citing Motor Vehicles Mfrs. Ass'n v. State  Farm Mut. Ins. Co., 463 U.S. 29, 57 (1983)).  Given that the  underlying theory in California Erectors (which the Board  does explicitly overrule) and other duty of fair representation  cases is that breaches of the duty are themselves violations of  SS 8(b)(1)(A) & (2), see, e.g., California Erectors, 309 N.L.R.B. at 811, 812 (treating duty of fair representation  breach as a violation of SS 8(b)(1)(A) and (2)), the Board in  essence argues that the standard for judging violations of the  same statutory provisions may depend upon whether or not a  complaint or ruling specifically invokes the magic words "duty  of fair representation."  The Board does not cite, and we have  been unable to find, any evidence that in hiring hall cases the  Board has ever applied different standards depending on  whether the complaint invoked the duty of fair representation  or not.  See, e.g., Laborers Local No. 135 (Bechtel Corp.), 271 N.L.R.B. 777, 780 (1984) (cited by the Board in the non-duty  of fair representation context, see Board Decision, 329  N.L.R.B. No. 65, slip op. at 4 & n.26, and holding that "[a]  departure from established exclusive hiring hall procedures  that results in a denial of employment to any applicant  inherently encourages union membership and therefore violates Section 8(b)(1)(A) and (2) without regard to the presence  of unlawful motivation.")  Rather, the Board appears merely  to argue that in cases in which it has found a violation of  SS 8(b)(1)(A) & (2) without explicitly invoking the duty of fair  representation, the facts have never involved purely negligent  departures from exclusive hiring hall rules.  See id.

33
At the time of the Board's decision, of course, the effect of  its holding regarding these "independent" violations of  SS 8(b)(1)(A) & (2) was to ensure that, in the relevant context, the statute imposed no broader liability independent of  the duty of fair representation than as construed with that  duty.  Our reversal on the duty of fair representation theory  now puts the question in a different light.  If, on remand, the  Board again decides to overrule California Erectors, it will  need to provide a reasoned justification beyond its current  theory of compulsion by the Supreme Court--and any successful justification is likely to support the Board's more  general interpretation of the relevant statutory provisions,  assuming that that interpretation does in fact depart from  prior Board precedent.  So our remand on the Board's first  holding makes it, as a practical matter, premature to rule on  the sufficiency of its second one.

34
Similarly, we do not pass judgment on the theory proposed  by Member Brane in his dissent, to the effect that if Blevins's  individual negligence did not itself constitute an unfair labor  practice, then the union's subsequent failure to make Jacoby  whole did.  Board Decision, 329 N.L.R.B. No. 65, slip op. at 7 (Member Brame, dissenting).  The Board refused to consider  this theory on the grounds that it was raised neither in the  General Counsel's complaint nor during oral argument, see  Board Decision, 329 N.L.R.B. No. 65, slip op. at 4 n.27, and  Jacoby has not properly appealed this ruling.

35
For the reasons given we reverse and remand the case to  the Board.

36
So ordered.