By Ronald Miller, J.D. The NLRB acted unreasonably by overturning an arbitration decision finding that a union’s waiver of its members’ right to picket included the display of pro-union signs in cars that were parked on an employer’s property and lined up so that passers-by could see them, ruled the D.C. Circuit. The appeals court concluded that the Board misapplied its highly deferential standard for reviewing arbitration decisions, and should have upheld the arbitration decision. Accordingly, it granted the employer’s petition for review and denied the Board’s cross-application for enforcement. Judge Henderson filed a separate opinion concurring in part and concurring in the judgment; Judge Srinivasan filed a separate opinion concurring in part and dissenting in part (Verizon New England Inc. v. NLRB, June 21, 2016, Kavanaugh, B.). Waiver of right to picket. The collective bargaining agreement between the employer and union provided for arbitration of disputes arising out of the agreement. In the CBA, the union waived its members’ right to picket, a right the members otherwise would have possessed under the NLRA. During a subsequent labor dispute, the employees visibly displayed pro-union signs in cars that were parked on employer property and lined up so that passers-by would see the signs. The employer ordered the employees to stop displaying the signs. The union challenged the employer’s action. Ultimately, the employer and the union proceeded to arbitration to resolve their dispute about the signs in the cars. An arbitration panel interpreted the CBA in the employer’s favor. The arbitration panel relied on the provision in the CBA expressly waiving the union members’ right to picket. Not satisfied, the union then took the matter to the NLRB. An administrative law judge upheld the decision in favor of the employer. However, the Board overturned the arbitration decision. Deferral standard. Under its highly deferential Spielberg-Olin standard, the Board will defer to an arbitration award unless the award is "clearly repugnant" to the NLRA. Applying the Spielberg-Olin standard, the Board concluded that the arbitration decision was "clearly repugnant" to the NLRA. The Board stated that the arbitration panel incorrectly concluded that the union’s contractual waiver of the right to picket encompassed the right to display pro-union signs in cars. The Board ordered the employer to allow employees to display pro-union signs in their cars. The employer petitioned for review of the Board’s order and the Board cross-petitioned for enforcement. Voluntary arbitration favored. Under Section 10 of the Act, the Board possesses discretion over how much to defer to arbitration decisions. The Spielberg-Olin standard, long used by the Board to review arbitration decisions, is highly deferential to the arbitrator. The Board adopted that highly deferential standard to further the "national policy strongly favor[ing] the voluntary arbitration of disputes." "Clearly repugnant" question. The Spielberg-Olin standard calls for Board deference to the arbitrator’s decision so long as the following conditions are met: (1) the arbitration proceedings appear to have been fair and regular; (2) all parties agreed to be bound by the arbitration decision; (3) the arbitrator has adequately considered the unfair labor practice at issue; and (4) the arbitrator’s decision is not "clearly repugnant" to the NLRA. The only question in this case concerned the fourth Spielberg-Olin factor: whether the arbitration decision was "clearly repugnant" to the NLRA. The fourth Spielberg-Olin factor establishes two ways in which the Board may overturn an arbitrator’s decision as "clearly repugnant to the Act:" (i) if the arbitrator interpreted the contract to mean that one party waived a right that may not be waived under the NLRA, in which case the "arbitrator’s decision" is deemed "not susceptible to an interpretation consistent with the Act;" or (ii) if the arbitrator interpreted the contract in a "palpably wrong" manner and thereby deprived the losing party of a right otherwise guaranteed under the Act. Arbitration decision. An arbitration decision finding waiver of a right protected by the Act is deemed "susceptible to an interpretation consistent with the Act" so long as the right at issue in the arbitration proceeding may be waived under the Act. Therefore, to determine whether an arbitration decision is "susceptible to an interpretation consistent with the Act," the Board must ask only whether the Act permits the Section 7 right at issue to be waived in a CBA. The NLRA allows a union to waive its members’ Section 7 right to display pro-union signs in vehicles parked on company property. Here, the arbitration panel determined that the union did in fact waive that right. Therefore, the arbitration decision was susceptible to an interpretation consistent with the Act. However, the court disagreed with the employer’s contention that finding the union waived a waivable statutory right was the end of the inquiry under the "clearly repugnant" prong of the Spielberg-Olin standard. Rather, the arbitration decision can be shown to be "clearly repugnant" to the Act if the arbitrator interpreted the contract in a "palpably wrong" manner and thereby deprived the losing party of a right otherwise guaranteed under the Act. "Palpably wrong." The fact that the Board might read a contract term differently than the arbitrator read it does not suffice to make an arbitration decision "palpably wrong." Noting that no hard-and-fast definition of the term "picketing" excludes the visible display of pro-union signs in employees’ cars rather than in employees’ hands, the appeals court concluded that the arbitration decision in this instance was far from egregiously wrong. Thus, under a reasonable application of the Spielberg-Olin standard, the Board should have upheld the arbitration panel’s decision. Partial concurrence. While Judge Henderson agreed with granting the employer’s petition for review, she expressed doubts about the Board’s arbitration deferral standard as described in the majority opinion. Henderson pointed out that the majority opinion cited no Board authority for its interpretation of the Board’s use of "palpably wrong." She argued that the court should not give its own interpretation of what Board "orders do not say" when the agency itself has not subsequently done so. The right to picket is a waivable right and the court had no independent reason to think waiver inconsistent with the NLRA. As a consequence, the arbitrator’s conclusion that it was waived passed muster and the court’s inquiry should be at an end. Partial dissent. Judge Srinivasan concurred in the court’s explanation of the legal standards under which the Board reviews an arbitration decision’s interpretation of a CBA. His disagreement with the court concerned the application of that deferential standard in the specific circumstances of this case. In Srinivasan’s view, the Board’s decision was not unreasonable in setting aside the arbitration decision. According to the majority of the arbitration panel, "placing signs in cars" amounts to "picketing" because it "communicates a message." However, the dissent argued that the Board could conclude otherwise. Judge Srinivasan pointed out that the Supreme Court has explained that although written communications "may convey the same information" as workers "patrolling a picket line," the "loyalties and responses evoked and exacted by picket lines are unlike those flowing from appeals by printed word." Thus, he argued that picketing is "qualitatively different from other modes of communication." For that reason, the Board could find it wrong to deem the unattended display of signs in parked cars to be "picketing," urged the dissent.
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