On March 7, 2017, in Scomas of Sausalito, LLC v. NLRB, the US Court of Appeals for the District of Columbia Circuit (DC Circuit) affirmed an NLRB decision that an employer unlawfully withdrew recognition from the union representing a unit of its employees. However, the DC Circuit vacated the NLRB's chosen remedy, a bargaining order which barred the possibility of a decertification election during the bargaining period. ( (D.C. Cir. Mar. 7, 2017).)

UNITE HERE! Local 2850 (union) represented a bargaining unit of employees working for Scomas of Sausalito, a restaurant in northern California. Dissatisfied with the representation they were receiving from the union, a majority of employees in the bargaining unit signed a decertification petition asking the employer to withdraw recognition from the union. The employees presented the decertification petition to the employer and also filed the petition with the NLRB. Afterwards, a representative of the union convinced six of the employees to revoke their signatures, which meant that the decertification petition was no longer supported by a majority of the employees in the bargaining unit. The union did not notify the employer about this development. On the basis of the decertification petition it received from its employees, the employer withdrew recognition from the union. The employees then withdrew the decertification petition from the NLRB, apparently believing that the petition had been rendered moot.

The union responded by filing an unfair labor practice (ULP) charge with the NLRB claiming that the employer unlawfully withdrew recognition from the union while it continued to enjoy majority support. An administrative law judge (ALJ) held that the employer violated Sections 8(a)(5) and (1) of the NLRA by withdrawing recognition from the union. The ALJ ordered the employer to recognize and bargain with the union and imposed an election bar, preventing any challenges to the majority status of the union, including an employee-filed petition for a decertification election or an employer-filed RM election petition, during the bargaining period. The panel (Board) heading the NLRB's judicial functions affirmed the ALJ's holding and adopted her remedial order. The employer appealed to the DC Circuit, and the NLRB cross-appealed for enforcement.

The DC Circuit affirmed the Board's holding that the employer violated the NLRA by withdrawing recognition from the union. The DC Circuit noted that:

However, the DC Circuit vacated the bargaining order and election bar imposed by the Board, reasoning that:

In concurrence, Circuit Judge Henderson urged that Levitz be narrowly construed, especially in situations like this where the employer has acted in good faith but was not permitted to become aware of the restoration of majority support for a union because of a union's intentional nondisclosure about that status.

Scomas of Sausalito illustrates the DC Circuit's reticence to approve a bargaining order without the NLRB providing a detailed analysis explaining why a bargaining order is necessary given the facts of the case before it. This suggests that employers faced with the task of challenging an NLRB affirmative bargaining order should consider appealing to the DC Circuit. The panel's reluctant application of Levitz and Judge Henderson's concurrence also suggest that an en banc panel of the DC Circuit might be amenable to recognizing an exception to Levitz or narrowing the circumstances in which Levitz applies. Employers that want to assert a union concealment or similar Levitz exception should introduce direct evidence that had they been fully informed of the union's restored majority support, they would not have withdrawn recognition.