Employment Law Daily NLRB must address RD’s authority to order consent election under quorum-less Board
Tuesday, May 3, 2016

NLRB must address RD’s authority to order consent election under quorum-less Board

By Lisa Milam-Perez, J.D. Resolved: The NLRB’s regional directors have authority to direct union representation elections in the context of a stipulated election, even while the Board itself lacks a quorum, the D.C. Circuit has twice ruled. But what about when the parties enter into a consent election, and agree that the RD’s decisions are final and not subject to Board review? That was the issue before the D.C. Circuit here, but the appeals court sent the question back to the Board, which had not addressed it below (Hospital of Barstow dba Barstow Community Hospital v. NLRB, April 29, 2016, Srinivasan, S.). Consent election. In 2012, while ongoing political machinations left the NLRB without a valid quorum, the hospital employer and union entered into a consent election agreement under which the Board’s regional director would supervise a secret-ballot election among the hospital’s nurses. Any election objections would be resolved by the RD, whose decision would be final. Sure enough, the nurses voted in favor of a union and the hospital filed objections, which the RD rejected, instead certifying the union as bargaining rep. Negotiations went poorly, the union filed charges, and the Board found the employer unlawfully refused to bargain. But it would not address the employer’s contention, since it had not been raised previously, that the RD lacked authority to certify the union in the first place while the Board was without a valid quorum. The hospital renewed its quorum argument in its petition for appellate review of the Board’s order. Twice before, the D.C. Circuit had addressed the validity of the RD’s delegated authority under a quorum-less Board in the stipulated election context. The consent election at issue here presented a new wrinkle, though. Bargaining not a waiver. As a threshold matter, the appeals court rejected the Board’s plea that the employer waived its challenge to the RD’s exercise of delegated authority by choosing to bargain with the union, rather than object to the union’s certification as invalid and refuse to bargain. Certainly this waiver theory usually holds force in the context of a certification challenge, but in the circumstances here—where the very composition of the agency is in question—a defense of this sort can be brought up before the circuit court on review, even when not properly raised first before the Board. Noel Canning was still pending. Another reason the appeals court declined to find waiver here: The Supreme Court had not yet issued its Noel Canning decision (the 2013 opinion finding the President’s recess appointments to the NLRB were invalid), so it was still an open question whether the Board was operating without a valid quorum at the time—and thus, whether the RDs’ delegated authority was suspect. In fact, the Noel Canning challenge hadn’t even winded its way through the circuit court yet at this point. So the appeals court was disinclined to rebuff the employer "‘for failing to preserve expressly an argument the substance of which had not yet arisen.’" "As if issued by the Board." In UC Health v. NLRB and SSC Mystic Operating Co. v. NLRB, two 2015 cases decided on the same day, the D.C. Circuit held that the NLRB’s regional directors retained their delegated authority to direct and conduct representation elections despite a lapse in the Board’s quorum. In doing so, it granted deference to the NLRB’s reasonable conclusion that, while the Board itself couldn’t act while operating with only two valid members, it had long delegated its authority to direct elections to the agency’s RDs. However, those cases involved stipulated elections. The case at hand differed in that it involved a consent election agreement, under which the parties agree that the RD’s actions will be final and unreviewable by the Board. That is, the parties agreed the RD’s determinations would have "the same force and effect . . . as if issued by the Board." If RDs may continue to direct representation elections when their actions are subject to Board review, "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?" The employer urged that even if an RD can exercise nonfinal authority (i.e., authority that is subject to Board reversal), it can’t exercise final (nonreviewable) authority to certify election results in the absence of a Board quorum. Punting to the Board. The NLRB did not reach the merits of this argument below, though, having deemed it waived. As such, unlike in UC Health and SSC Mystic, the appeals court had no NLRB interpretation to consider in the consent election context, to which it may (or may not) defer. "We ‘are left wondering how the Board in these circumstances interprets’ the statute," the appeals court said, "and when ‘an agency fails to wrestle with the relevant statutory provisions, we cannot do its work for it.’" Declining to resolve the question in the first instance, the appeals court remanded the case so that the Board could finish its work.

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