Consent Election Certifications While NLRB Lacked a Quorum May Be Invalid: DC Circuit | Practical Law

Consent Election Certifications While NLRB Lacked a Quorum May Be Invalid: DC Circuit | Practical Law

In Hospital of Barstow, Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that while the National Labor Relations Board (NLRB) lacked a quorum, NLRB regional directors may not have retained authority to certify elections under a consent election agreement providing that the regional director's actions would be final and not subject to eventual Board review.

Consent Election Certifications While NLRB Lacked a Quorum May Be Invalid: DC Circuit

by Practical Law Labor & Employment
Law stated as at 01 Aug 2018 • USA (National/Federal)
In Hospital of Barstow, Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that while the National Labor Relations Board (NLRB) lacked a quorum, NLRB regional directors may not have retained authority to certify elections under a consent election agreement providing that the regional director's actions would be final and not subject to eventual Board review.
On April 29, 2016, in Hospital of Barstow, Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that during the nearly 20-month period when the panel (Board) heading the NLRB's judicial and election functions lacked a valid three-member quorum, NLRB regional directors may not have retained authority to certify elections where the employer and union reached a consent election agreement providing that the regional director's actions would be final and not subject to eventual Board review. The court also held that an employer's challenge to the regional director's authority to issue a final election certification is a non-waivable jurisdictional issue. The DC Circuit noted two other decisions in which it deferred to the Board's interpretation that regional directors retained authority to conduct stipulated elections and issue election certifications subject to Board review while the Board lacked a quorum. The court granted Barstow's petition for review and remanded the case to the Board, which had deemed the hospital's objections as waived (when Barstow bargained unsuccessfully with the certified union) and did not address whether regional directors retained authority under the consent election agreement applicable in this case. ( (Apr. 29, 2016).)

Background

Barstow Hospital and a union seeking to represent the hospital's nurses entered into a consent election agreement in May 2012, while the Board lacked a valid quorum as held in the US Supreme Court's decision in NLRB v. Noel Canning (134 S. Ct. 2550 (2014). (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; Article, Expert Q&A on Noel Canning and Its Aftermath.) The consent election agreement authorized the NLRB regional director to:
  • Supervise the election.
  • Render decisions on election objections that would be "final" and in the place of the Board.
In June 2012, after the union won the election (and while the Board continued to lack a statutory quorum), the regional director:
  • Rejected Barstow's objections.
  • Certified the union as bargaining representative.
The union filed unfair labor practice (ULP) charges against Barstow for failing or refusing to bargain in good faith. Ultimately, in August 2014, the Board, with a valid quorum:
Barstow petitioned the DC Circuit for review of the Board's decision. The Board cross-applied for enforcement of its decision.

Outcome

The DC Circuit:
  • Granted Barstow's petition for review.
  • Vacated the Board's decision.
  • Held that an employer's challenge to the regional director’s authority to issue a final election certification is a non-waivable jurisdictional issue.
  • Distinguished this case from two other cases in which the DC Circuit held that the regional directors retained authority to act when the Board lacked a quorum. In those cases:
    • the regional directors' authority was not final and was subject to eventual Board review;
    • the Board had interpreted the NLRA's quorum provision as making its delegation to regional directors unceasing despite the intervening loss of a Board quorum; and
    • the DC Circuit deferred to the Board's interpretation.
    (See UC Health v. NLRB, 803 F.3d 669 (D.C. Cir. 2015); SSC Mystic Operating Co. v. NLRB, 801 F.3d 302 (D.C. Cir. 2015); Legal Update, NLRB Regional Directors Were Authorized by Earlier Delegation to Act Despite Lack of Board Quorum: DC Circuit)).
  • Remanded for the Board to determine whether the regional director retained authority to certify the election when:
    • the Board lacked a quorum; and
    • the regional director's actions based on the consent election agreement were final and not subject to Board review.
The DC Circuit noted that:
  • The cases that the Board relied on to hold that Barstow waived its right to challenge the regional director's certification of the election was inapplicable because a challenge to the Board's composition can be raised on review even when not raised before the Board (UC Health, 803 F.3d 672-673)).
  • Barstow could not have known at the time the union was certified (2012) that the Board lacked a valid quorum because the certification occurred before the US Supreme Court's 2014 decision in Noel Canning.
  • In its UC Health and SSC Mystic decisions, the Board interpreted the statutory quorum provision as permitting regional directors to "continue exercising their delegated authority while the Board lacks a quorum" (see 29 U.S.C. § 153(b); SSC Mystic Operating Co., LLC, 360 N.L.R.B. No. 68, , n.1 (Mar. 31, 2014); UC Health, 360 N.L.R.B. No. 71, n.2 (Mar. 31, 2014)).).
  • In UC Health and SSC Mystic, the DC Circuit:
    • held that the statute was silent on whether regional directors have authority to act while the Board lacks a quorum; and
    • deferred to the Board's "reasonable interpretation that the lack of quorum at the Board does not prevent Regional Directors from continuing to exercise delegated authority that is no final because it is subject to eventual review by the Board."
    (UC Health, 803 F.3d at 674; SSC Mystic, 801 F.3d at 308.)
  • Barstow's election agreement with the union was a consent election agreement giving the regional director final decision-making authority that would have the same "force and effect . . . as if issued by the Board," while the election agreements in UC Health and SSC Mystic were stipulated election agreements that gave the regional directors nonfinal authority.
  • The Board has yet to decide whether the quorum statute allows regional directors to exercise final authority to certify election results under a consent election agreement when the Board lacks a valid quorum.

Practical Implications

The DC Circuit's decision in Barstow holds that NLRB regional directors may have lacked authority to certify election results or unions as collective bargaining representative during the period from January 4, 2012 through July 31, 2013, when the Board lacked a valid quorum. The DC Circuit remanded the case to the Board to initially interpret whether the NLRA's quorum provision allows regional directors to exercise final authority to certify election results under a consent election agreement when the Board lacks a valid quorum. It remains to be seen how the Board will rule on this issue. Regardless of how the Board rules, this case may ultimately invalidate the small percentage of representation elections that regional directors certified under consent or full-consent election agreements that regional directors certified while the Board lacked a valid quorum.
Update: In NLRB v. Bluefield Hospital Co., the US Court of Appeals for the Fourth Circuit enforced a Board order requiring the employer to bargain with a union an NLRB regional director certified as its employees' bargaining representative. As in Barstow, the certification followed a consent election and occurred while the Board lacked a valid quorum. The Fourth Circuit acknowledged Barstow but found its holding inapposite because in its case:
It is likely that the Board on remand in Barstow will endorse the same analysis to which the Fourth Circuit granted Chevron deference in Bluefield Hospital. If Barstow continues to refuse to bargain to again challenge the underlying consent election certification by petitioning the DC Circuit for review, that case would set up a potential circuit split on whether:
UPDATE: In Hospital of Barstow, Inc., the NLRB:
  • Determined whether the regional director retained authority to certify the election when:
    • the Board lacked a quorum; and
    • the regional director's actions based on the consent election agreement were final and not subject to Board review.
  • Adopted the analysis from its earlier decision and order in this proceeding (361 NLRB No. 34 (Aug. 29, 2014)).
(364 NLRB No. 52 (July 15, 2016).)
UPDATE: On July 31, 2018, the US Court of Appeals for the District of Columbia Circuit:
  • Held that the Board's interpretation of NLRA's quorum provision as allowing NLRB regional directors to conduct representation elections under a consent election agreement despite a lapse of a Board quorum was reasonable.
  • Granted enforcement of the Board's order.
  • Denied the employer's petition for review.
(NLRB v. Cal. Nurses Ass'n/Nat'l Nurses Org. Comm., (D.C. Cir. July 31, 2018).)