By Ronald Miller, J.D. In a challenge to the authority of an NLRB regional director (RD) to oversee a union election stemming from the Board’s lack of a valid quorum, the Third Circuit found that an employer did not lose the ability to raise this claim for the first time before the appeals court. The appeals court disagreed with the Board’s contention that the challenge was precluded because the employer failed to raise that issue during representation proceedings, or that it agreed to the RD’s authority by signing an election agreement. However, the employer’s victory was short-lived, as the appeals court found that the Board and RD properly ratified their previously unauthorized actions. Addressing the merits of the dispute, the appeals court found that substantial evidence supported the Board’s determination that the employer unlawfully refused to bargain with a union after it was elected as the representative of bargaining unit employees (Advanced Disposal Services East, Inc. v. NLRB, April 21, 2016, Smith, B.). Invalid recess appointments. The RD was appointed at a time when the Board lacked a valid quorum. Because of the invalid recess appointments of several NLRB members, a situation was created in which the validity of hundreds of NLRB orders and other official actions were cast into doubt. On appeal, the employer challenged the authority of the RD who ordered the union election. On March 5, 2014, the union filed a representation petition with the RD seeking to represent a unit of workers at three of the employer’s facilities. The parties entered a stipulated election agreement. The union won the election and the employer challenged the election outcome. A three-member panel of the NLRB overruled the employer’s objections. Thereafter, the employer refused to bargain with the employee representative. Subsequently, the RD filed a complaint seeking to enforce the union’s certification and force the employer to bargain. The Board concluded that the employer unlawfully refused to bargain. The employer petitioned for review of an NLRB decision, and the Board sought enforcement of its order. Forfeiture. As an initial matter, the appeals court had to determine whether the employer forfeited the right to challenge the RD’s authority to conduct the election by failing to properly raise that issue before the Board. The Board argued that if the employer had timely raised this issue, it could have “corrected the flaw before the election.” However, the appeals court disagreed that a belated attack on the RD’s authority can be forfeited. Rather, the court concluded that this challenge went to the authority of the Board to act, and constituted an “extraordinary circumstance” under Section 160(e), and so could be raised for the first time on appeal. The D.C. Circuit has held that a challenge that goes to the very power of the Board to act is by definition an extraordinary circumstance. Moreover, challenges to a RD’s authority also implicate the very power of the Board to act and thus constitute extraordinary circumstances. The Eighth Circuit, however, has concluded that a challenge to the Board’s quorum requirement is not an extraordinary circumstance. The Third Circuit found the D.C. Circuit’s analysis more persuasive. Thus, it held in this case that a challenge that goes to the composition of the NLRB, and thus implicates its authority to act, constitutes an “extraordinary circumstance” under Section 160(e). Accordingly, the appeals court had jurisdiction to reach the question of whether the actions of the Board and RD were proper despite the RD’s invalid appointment. Stipulated election agreement. Next, the Third Circuit rejected the Board’s contention that the employer’s signing of the stipulated election agreement constituted explicit acceptance of the agency’s authority to act. The Board could not point to any language in the agreement stating that the employer affirmatively acceded to the RD’s authority. Thus, the employer did not expressly give up its challenge to the authority of the RD when it executed the agreement. Ratification. Nevertheless, the appeals court concluded that the Board and RD’s later ratification were sufficient to cure the quorum that stripped the Board, and by extension the RD, of the authority to oversee the union election. On July 18, 2014, all five members of a properly constituted Board ratified all administrative, personnel, and procurement matters approved by the Board or taken by or on behalf of the Board from January 4, 2012, to August 5, 2013, inclusive. In the context of administrative agency ratification, the presumption of regularity allows courts to presume that what appears regular is regular, thereby shifting the burden to the attacker to show the contrary. Applying the presumption in this case, the burden was on the employer to produce evidence that cast doubt on the agency’s claim that the Board and RD properly ratified their earlier actions. Here, the employer made no claims that undermined the presumption of regularity. Thus, the appeals court held that both the Board and RD properly ratified their earlier actions. Election-day conduct. Substantial evidence supported the Board’s decision to overrule the employer’s election objections. The employer pointed to several incidents on the morning of the election it claimed destroyed laboratory conditions for a fair election. There was a confrontation between a union rep and manager at one facility, and the employer asserted that a union supporter acted in a threatening manner at another facility. With respect to the conduct by the employee, a hearing officer concluded that there was no indication the alleged threat was disseminated to any eligible voters, and so did not interfere with employees’ exercise of free choice. Further, with respect to the confrontation, the hearing officer found no evidence the incident was witnessed by employees and so concluded it was unlikely to create an atmosphere of fear and reprisal. Accordingly, the incidents were deemed insufficient to warrant setting aside the election. The appeals court held that the Board’s determinations regarding the election-day conduct were supported by substantial evidence.
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