NLRB Regional Directors Were Authorized by Earlier Delegation to Act Despite Lack of Board Quorom: DC Circuit | Practical Law

NLRB Regional Directors Were Authorized by Earlier Delegation to Act Despite Lack of Board Quorom: DC Circuit | Practical Law

In UC Health v. NLRB and SSC Mystic Operating Co. LLC v. NLRB, the US Court of Appeals for the DC Circuit held that the National Labor Relations Board’s (NLRB) regional directors had authority under the National Labor Relations Act (NLRA) to conduct elections and certify election results during the period when the panel heading the NLRB’s judicial and election functions lacked an NLRA-required quorum.

NLRB Regional Directors Were Authorized by Earlier Delegation to Act Despite Lack of Board Quorom: DC Circuit

by Practical Law Labor & Employment
Published on 23 Sep 2015 • USA (National/Federal)
In UC Health v. NLRB and SSC Mystic Operating Co. LLC v. NLRB, the US Court of Appeals for the DC Circuit held that the National Labor Relations Board’s (NLRB) regional directors had authority under the National Labor Relations Act (NLRA) to conduct elections and certify election results during the period when the panel heading the NLRB’s judicial and election functions lacked an NLRA-required quorum.
On September 18, 2015, in two separate 2-1 decisions, UC Health v. NLRB and SSC Mystic Operating Co., LLC v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that the NLRB's regional directors had authority under the NLRA to conduct elections and certify election results during the period between January, 2012 and August, 2013 when the panel (Board) heading the NLRB's judicial and election functions lacked a statutorily-required three-member quorum. The DC Circuit found the NLRA's text ambiguous about whether regional directors could continue to act when the Board lacked a quorum and deferred to the Board's interpretation that a 1961 Board delegation to regional directors did not expire when the Board lacked a quorum, finding that a permissible construction of the NLRA. (No. 14-1049, (D.C. Cir. Sept. 18, 2015); No. 14-1045, (D.C. Cir. Sept. 18, 2015).)
In each case, unions prevailed in the underlying representation elections. After the NLRB regional directors certified the unions as representatives, the employers refused to bargain to contest the regional directors' actions as ultra vires because they occurred when the Board lacked a quorum as held in the US Supreme Court's decision in Noel Canning. (For more information about Noel Canning, see Legal Update, Supreme Court Holds 2012 Recess Appointments to the NLRB Were Invalid, Effectively Invalidates 20-Months of NLRB Decisions and Article, Expert Q&A on Noel Canning and Its Aftermath.)
In each case, the Board decided that the elections were valid and rejected the employers' assertions about the regional directors' authority (SSC Mystic Operating Co., LLC, 360 N.L.R.B. slip op. 68, , n.1 (Mar. 31, 2014); UC Health, 360 N.L.R.B. slip op. 71, n.2 (Mar. 31, 2014)).
In UC Health, the DC Circuit noted that:
  • Ordinarily, courts defer to federal agency's interpretations of their enabling statutes when:
    • Congress did not directly address the question at issue in the statute's text; and
    • the agency that Congress charged with interpreting the statute in the first instance devises a permissible construction of the statute.
    (Chevron USA, Inc. v. NRDC, 467 U.S. 837, 842-843 (1984).)
  • The NLRA:
    • requires that three members of the Board constitutes a quorum "at all times"; and
    • authorizes the Board to delegate to Regional Directors the authority to direct representation elections and certify election results.
    (29 U.S.C. § 153(b).)
  • In 1961, the Board delegated its authority over representation elections to NLRB regional directors and the regional directors have maintained this function ever since (26 Fed. Reg. 3911 (May 4, 1961)).
The DC Circuit found that:
  • The NLRA was ambiguous about the continued vitality of Board delegations through periods in which the Board lacked a statutory three-member quorum.
  • The Board's interpretation of the NLRA that the Board's delegation to regional directors was unceasing despite the intervening loss of a Board quorum was a permissible construction of the NLRA, because it was:
    • sensible to interpret the NLRA's quorum requirement as applying to the Board's authority to act and not to the regional directors' ability to exercise delegated authority;
    • not contrary to the NLRA's text or purpose; and
    • in line with the underlying policy goal of expediting final Board disposition of cases through delegation to regional directors.
  • The Board's interpretation of the NLRA was therefore entitled to Chevron deference.
  • The DC Circuit's decision in Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, holding that the Board could never adjudicate unfair labor practice charges with fewer than three active members, was distinguishable from this case (564 F.3d 469 (D.C. Cir. 2009)).
Separately, in SSC Mystic, another DC Circuit panel in a 2-1 decision:
  • Relied on the court's analysis in UC Health about regional directors retaining authority to conduct representation elections and certify election results despite the Board's lack of quorum.
  • Found the NLRB's conclusion that a supervisor's support of the union did not sufficiently taint the election results certified by a regional director to require a new election was supported by substantial evidence.
  • Found that the employer was not prejudiced by the NLRB hearing officer's decision in the underlying hearing on the employer's election objections not to enforce a subpoena for the phone records of the former supervisor alleged to have tainted the election results through her union support.