Employment Law Daily NLRB changes standard for evaluating ALJ approval of settlement terms proposed by employer over GC objections
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Tuesday, September 6, 2016

NLRB changes standard for evaluating ALJ approval of settlement terms proposed by employer over GC objections

By Ronald Miller, J.D. A divided four-member panel of the NLRB, in a 3-1 decision, granted the General Counsel’s request for special permission to appeal an administrative law judge’s order approving settlement terms proposed by an employer over the objections of the General Counsel and charging party. The Board determined that Independent Stave, which was relied upon by the ALJ, was not the appropriate standard for evaluating a judge’s order approving and incorporating the settlement terms proposed by a respondent, over the objections of the General Counsel and the charging party. Rather, the Board determined that the justification for approving non-Board settlements that lacked a full remedy were not present in the case of a consent order issued by an ALJ. Member Miscimarra filed a separate dissenting opinion (U.S. Postal Service, August 27, 2016). Settlement offer. The complaint alleged that the employer violated Section 8(a)(1) when an agent at a postal facility threatened more vigorous enforcement of work rules if employees chose to be represented by a union steward or sought support and/or assistance from a union. In advance of a scheduled trial, the employer requested that the ALJ approve a "unilateral settlement agreement," to which neither the General Counsel nor the charging party had agreed. The General Counsel and charging party each filed an opposition to the request. The General Counsel asserted that the employer was a recidivist offender of employees’ statutory rights, and he objected that the proposed agreement’s scope was limited to a single facility and that it included a six-month sunset clause limiting the General Counsel’s ability to seek a default judgment if the employer failed to comply with the agreement. For its part, the charging party argued that the notice-posting provision of the agreement, which required posting only at the facility in question, was insufficient because supervisors moved throughout the postal district. Non-Board settlements. The law judge evaluated the employer’s offer to settle under the factors set forth in Independent Stave Co., and found that the offer was reasonable in light of the "relatively minor and isolated nature" of the alleged violation, the costs and risks of litigation, and the fact that the offer provided "almost the same remedy that would be awarded if the General Counsel fully prevailed on the complaint." Here, the Board concluded that Independent Stave was not the appropriate standard for evaluating a judge’s order approving and incorporating the settlement terms proposed by a respondent, over the objections of the General Counsel and the charging party. Rather, the Board explained that the Independent Stave standard was explicitly formulated to evaluate non-Board settlements, that is, settlement agreements between a respondent and a charging party or parties, to which the General Counsel is not a party. It was this deference to the charging party’s judgment concerning its own interests in accepting less than a full remedy, together with the well-established policy favoring private dispute resolution, that justified compromising the Board’s remedial standards in approving a non-Board settlement. Consent order. However, the Board found that neither of the considerations that justified approving non-Board settlements that lacked the full remedy called for under Board law were present in the case of a consent order agreed to by no party other than the respondent. Here, the Board found that the more appropriate standard for evaluating an order approving and incorporating settlement terms proposed by a respondent, over the objections of the General Counsel and charging party, is the one originally adopted by the Board in General Electric. Accordingly, the Board held that such a proposed order protects the public interest and effectuates the purposes and policies of the Act only if it provides a full remedy for all of the violations alleged in the complaint. Applying that standard here, the Board found that the ALJ’s order approving the respondent’s proffered terms over the objection of the General Counsel and the charging party did not provide a full remedy for all of the violations alleged in the complaint. Here, the complaint alleged that the employer unlawfully threatened more vigorous enforcement of work rules if employee chose to be represented by a union steward or sought support and/or assistance from a union. The typical remedy for such violations is a cease-and-desist order and a notice posting. Moreover, the order included a six-month sunset clause. Board orders providing remedies for adjudicated violations do not place such limitations on the effective duration of their terms. Accordingly, the General Counsel’s request for an appeal was granted. Dissent. In a dissenting opinion, Member Miscimarra characterized the Board’s change to require that: (1) the respondent must agree to provide "a full remedy"; and (2) the respondent must agree to accept a default judgment that forever waives any right to litigate the unproven allegations, in the instance of a consent order as an ill-advised change. The dissent argued the majority’s ruling was self-contradictory, by holding that the Board will no longer accept settlement agreements that it would find "reasonable." Moreover, he argued that the Board was not merely overruling "consent order" cases where the settlement terms were opposed by the General Counsel and charging parties, they were overruling applying Independent Stave itself to the evaluation of consent settlement agreements. Further, Miscimarra disagreed with the majority’s suggestion that the Board in Independent Stave favored the voluntary resolution of cases only in "deference to the charging party’s judgment." According to the dissent, the practical effect of the decision will be to prevent the Board from having any opportunity to secure voluntary early settlements.

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