NLRB Disregarded Precedent That Airline Baggage Handlers Are Covered by RLA: DC Circuit | Practical Law

NLRB Disregarded Precedent That Airline Baggage Handlers Are Covered by RLA: DC Circuit | Practical Law

In ABM Onsite Services-West Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that the National Labor Relations Board (NLRB) disregarded its own precedent when it decided that a group of airline baggage handlers were not covered by the Railway Labor Act (RLA).

NLRB Disregarded Precedent That Airline Baggage Handlers Are Covered by RLA: DC Circuit

by Practical Law Labor & Employment
Law stated as of 14 Nov 2018 • USA (National/Federal)
In ABM Onsite Services-West Inc. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that the National Labor Relations Board (NLRB) disregarded its own precedent when it decided that a group of airline baggage handlers were not covered by the Railway Labor Act (RLA).
On March 7, 2017, in ABM Onsite Services-West Inc., the US Court of Appeals for the District of Columbia Circuit held that the NLRB ignored its own precedent when it decided that airline baggage handlers were not covered by the Railway Labor Act (RLA) and instead were covered by the NLRA. The NLRB offered no explanation for its departure from established precedent. ( (D.C. Cir. Mar. 7, 2017).)

Background

ABM Onsite Services-West Inc. (ABM), an independent contractor, was hired to operate the Portland Airlines Consortium (PAC) airport baggage-handling system at Portland International Airport. In January 2015, the International Association of Machinists filed a petition with the NLRB to represent jammer technicians, who took passenger baggage from airline ticket counters to airplanes. The employer objected, challenging the NLRB's jurisdiction over the company and its employees. The employer asserted that both were governed by the RLA, not the NLRA and therefore the matter should be referred to the National Mediation Board (NMB). The NMB administers that RLA, has no enforcement power and frequently decides jurisdictional issues between the NLRA and the RLA. The NLRB regional director held a hearing on the jurisdictional issue and decided that PAC did not exert control over the employer and its employees, which is required under the RLA. The NLRB denied the employer's request and affirmed its own jurisdiction.
ABM's employees voted in favor of union representation. The NLRB certified the union as the technicians' collective bargaining representative. The ABM refused to recognize the union and bargain to permit appellate review of the NLRB's jurisdictional determination and the election. The union filed an unfair labor practice (ULP) charge and the NLRB regional director filed a complaint. The NLRB granted summary judgment for the union and the employer filed a petition for review with the DC Circuit. The NLRB cross petitioned to enforce its bargaining order.

Outcome

The DC Circuit granted the employer's petition for review, denied the NLRB's cross-petition, vacated the NLRB's decision, and remanded the proceedings to the NLRB, holding that:
  • The NLRB acted in an "arbitrary and capricious" manner since it followed the NMB's unexplained new direction and provided no basis for its retreat from established precedent.
  • The NLRB's decision created conflicting law on the issue of RLA jurisdiction.
The DC Circuit noted that:
  • The issue was whether the employer was considered a carrier under the RLA and therefore did not fall within the NLRB's jurisdiction. This was determined by how much control PAC had over the employer and its employees.
  • The NLRB generally defers jurisdictional questions about whether a set of employees' circumstances fall within the purview of the NLRA or the RLA, to the NMB. The NLRB frequently defers to the NMB's advisory opinions on jurisdictional questions and adopts the NMB opinion. The NLRB will not refer a case to the NMB where precedent is clear.
  • The RLA covers a company that is "directly or indirectly owned or controlled by" an airline, if the employees perform work "that is traditionally performed by employees of air carriers." (45 U.S.C §151; for example, see Air Serv. Corp., 33 N.M.B. 272, 284 (2006)).
  • The NMB developed a test to establish whether a company is controlled by an air carrier. The agency must consider:
    • the extent of the airline's control;
    • the amount of access the carrier has to the daily company routine and its records;
    • the extent that the carrier has a role in employment decisions;
    • the extent that the carrier supervises the company's employees;
    • whether the company employees are held out as carrier employees; and
    • the degree to which the carrier controls employee training.
  • The standard for satisfying this test, was the degree to which an air carrier exercised some significant influence over the aspects of the employment relationship. This influence triggered RLA jurisdiction. (Air Serv. Corp., 33 N.M.B. at 284.)
  • The NLRB has acknowledged that the NMB has primary authority to interpret the RLA and deferred to the NMB's test (for example, see Aircraft Serv. Int'l Grp., 342 N.L.R.B. 977 (2004)).
  • Air Serv. Corp., concerned facts almost identical to those in this case, and the NMB found that the baggage handlers were covered under the RLA (33 N.M.B. at 272, 285-86).
  • Under the Administrative Procedure Act, an agency's action must not be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." (5 U.S.C. §706(2)(a)).
  • When an agency does not explain its reasoning for deviating from precedent it is deemed arbitrary and capricious, and its actions must be vacated (see Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 2008) (citing Pontchartrain Broad. Co. v. FCC, 15 F.3d 183, 185 (D.C. Cir. 1994))).
The DC District concluded that:
  • The technicians performed work traditionally performed by airline employers.
  • The employer and the technicians in this case would have fallen under carrier control and been bound by the RLA, had the NLRB adhered to established NLRB precedent that applies the NMB's traditional test.
  • The NMB departed from its previous established guidance that baggage handlers were covered under the RLA without explanation or an acknowledgment of its change. It simply started requiring that air carriers exercise a substantial degree of control over discipline of its contractor's employees. (For example, see Huntleigh USA Corp., 40 N.M.B. 130, 137 (2013).)
  • The NLRB deviated from its own precedent applying the NMB's traditional test without explanation. It accepted the NMB's new direction without requesting a reason for the NMB's departure from precedent. One agency's unexplained departure from precedent does not support another's. An agency cannot rely on a case in which it deviates from precedent if the cited case does not provide a well-reasoned explanation for the departure from precedent. (See Ramaprakash v. FAA, 346 F.3d 1121, 1128-29 (D.C. Cir. 2003).)
  • The NLRB must either:
    • provide a reason for the new jurisdictional standard it applied; or
    • demand that the NMB provide that answer.

Practical Implications

In ABM Onsite Services-West Inc., the DC Circuit rejected the Board's unexplained departure from precedent that, at best, piggy-backed on the NMB's unexplained departure from its longstanding precedent and guidance. Had the NLRB kept with established precedent, the employer and the technicians would have fallen under carrier control in this case and would have been subject to the RLA. Neither the NMB nor the NLRB are fully-staffed. It will be interesting to see how the analysis changes if the new presidential administration's appointees decide this jurisdictional issue.

UPDATE:

On remand from the DC Circuit, the Board issued a supplemental decision in ABM Onsite Services-West, Inc., dated November 14, 2018, in which it:
  • Ruled that the NMB's pre-2013 application of the six-factor traditional carrier control test is entitled to greater deference than the NMB's post-2013 precedent that the DC Circuit held were unexplained departures from longstanding NMB precedent.
  • Deferred to a recent NMB advisory opinion that the employer's bag jammer technicians and dispatchers and operations at the Portland International Airport are subject to the RLA.
  • Held that the NLRB erroneously exercised jurisdiction over the employer, its employees and operations and vacated the union's certification as representative.
  • Dismissed the ULP complaint against the employer for failing to negotiate with the union previously certified by the NLRB.
(367 N.L.R.B. No. 35 (Nov. 14, 2018).)