Consent NLRB Orders Over General Counsel’s Objections Must Guaranty Full Remedies Under NLRA: NLRB

Practical Law Legal Update w-003-3233 (Approx. 6 pages)

Consent NLRB Orders Over General Counsel’s Objections Must Guaranty Full Remedies Under NLRA: NLRB

by Practical Law Labor & Employment

Background

A local branch of the National Association of Letter Carriers filed a ULP charge alleging that the United States Postal Service (Postal Service) violated Section 8(a)(1) of the NLRA when an agent at one facility threatened to more vigorously enforce work rules if employees chose to be represented by a union steward or sought union support.

The Postal Service requested that an NLRB administrative law judge (ALJ) approve a consent settlement agreement to which the NLRB General Counsel and charging party had not agreed. The General Counsel and the union opposed the consent settlement, arguing that the settlement agreement was inappropriately limited to one facility and that a six-month sunset provision limited the opportunity for the General Counsel to seek a default judgment if the Postal Service failed to honor it. The ALJ accepted the Postal Service's offer to settle "as in the nature of a consent decree" and issued an order dismissing the ULP complaint.

The GC filed a request for special permission to appeal the ALJ's order approving of the settlement terms proposed by the Postal Service.

Outcome

The majority of the Board panel (Chairman Pearce, Member Hirozawa, and Member McFerran):

Granted an appeal on the merits, holding that:
- a proposed consent order to resolve a ULP complaint protects the public interest and effectuates the purposes and policies of the NLRA only if it provides a full remedy for all of the violations alleged in the complaint; and
- when evaluating the remedy under a proposed "consent" order dismissing a ULP complaint, the Board must ask whether the proposed order includes all relief that the aggrieved party would receive under the Board's established remedial practices if the General Counsel were to successfully litigate the case before the Board.
Overruled its previous decisions in Copper State Rubber and Food Lion, Inc. to the extent they are inconsistent with this decision (301 N.L.R.B. 138 (1991); 304 N.L.R.B. 602 (1991)).

The Board majority noted that:

The Board first approved an order accepting a respondent's settlement offer without the agreement of the General Counsel of charging party in Electronic Workers IUE Local 201 (General Electric Co.). In that decision, the Board concluded that:
- no more favorable changes would result for the General Counsel and charging party than would result from the "Consent Board Order and Notice"; and
- the proposed order provided a full remedy for all alleged violations in the complaint.
(188 N.L.R.B. 855 (1971).)
In Independent Stave Co., the Board created a test used to evaluate non-Board settlement agreements (agreements between the charging and charged party without the General Counsel's approval). Under the test, the Board considered all circumstances surrounding a settlement agreement, including whether:
- any of the parties have agreed to be bound, and the General Counsel's position regarding the settlement;
- the settlement is reasonable in light of the nature of the alleged violations, the risks inherent in litigation, and the stage of the litigation;
- there has been any fraud, coercion, or duress by any of the parties in reaching the settlement; and
- the respondent has engaged in a history of NLRA violations or has breached previous settlement agreements resolving ULP disputes.
(287 N.L.R.B. 740, 743 (1987).)
The Board applied the Independent Stave factors to the respondents' offers to settle ULP allegations over the General Counsel and charging parties' objections in Copper State Rubber and Food Lion, Inc.. The Board rejected the settlement proposals in both cases, but stated that it might reach different future results if the proposal covers all allegations and effectuates the NLRA's remedial purposes. (301 N.L.R.B. 138; 304 N.L.R.B. 602.)

The Board majority reasoned that:

Independent Stave is not the appropriate standard to evaluate a judge's order approving settlement terms proposed by a respondent over objection of the charging party and the General Counsel. The considerations justifying approval of non-Board settlements that lack the full remedy are not present in a consent order to which only the respondent has agreed.
General Electric provides the appropriate standards for evaluating settlement terms in proposed orders by respondents which the General Counsel and charging party oppose:
- the ALJ must determine that the proposed order provides a full remedy for all alleged violations in the complaint; and
- the Board must determine whether the proposed order adopted by an ALJ includes all relief that the charging party would receive under the Board's remedial practices if the General Counsel were to successfully litigate the case.

The Board found that:

The ALJ's order approving the respondent's terms over the objection of the charging party and the General Counsel did not provide a full remedy for violations alleged in the complaint, because:
- the typical remedy for NLRA violations at the Postal Service is a cease-and-desist order and notice posting, not a threat of more vigorous rule enforcement;
- Board orders providing remedies for adjudicated violations typically bind the respondent indefinitely; the six-month sunset clause the ALJ adopted in her order would give the General Counsel no recourse if the respondent violated the order after six months; and
- the sunset clause differs from the remedy that would have been ordered if the case was successfully litigated.

Member Miscimarra dissented from the decision, asserting that, among other things:

The Board's holding was contradictory and will make it more difficult to achieve an early resolution of serious allegations that are subject to NLRB litigation. The Board posed an irrational constraint on itself by no longer accepting proposed settlement agreements that an ALJ finds reasonable.
The Board overruled the application of Independent Stave to the evaluation of consent settlement agreements, even though the Board intended to apply the Independent Stave factors to all types of voluntary resolutions of cases through settlement agreements.
The majority erred by suggesting that Independent Stave favored the voluntary resolution of cases only in deference to the charging party's judgment.
The Board should acknowledge that reasonable settlement terms agreed to at an early stage usually will leave parties in a better position than the result that would come from a Board adjudication.
Applying the "full remedy" standard, the settlement terms in this case must be considered acceptable to the Board.
The six-month sunset clause in the settlement order at hand did not render the agreement's remedy less than full.

Practical Implications

In United States Postal Service, the Board overturned long-standing precedent which applied Independent Stave to consent orders, and stated that Independent Stave was intended only to evaluate non-Board settlements to which the General Counsel was not a party.

The Board's decision will deter ALJs from adopting proposed settlements of ULP allegations through "consent" orders and provide the General Counsel and charging parties grounds for appealing these types of orders on the rare occasions they are issued.

Update: On December 11, 2017, in UPMC, a 3-2 Board majority affirmed the ALJ by overruling Postal Service and returning to the reasonableness standard established under Independent Stave when evaluating the terms of consent settlement agreements (365 N.L.R.B. No. 153 (Dec. 11, 2017)). For more information, see Legal Update, NLRB Reinstates "Reasonableness" Settlement Standard and Accepts Alleged Single Employer's Remedial Guarantee.

Consent NLRB Orders Over General Counsel’s Objections Must Guaranty Full Remedies Under NLRA: NLRB | Practical Law