NLRB Must Review Obligations to Arbitrate Grievances under Expired CBA with Employees' Former Union: DC Circuit

Practical Law Legal Update 4-617-2045 (Approx. 7 pages)

NLRB Must Review Obligations to Arbitrate Grievances under Expired CBA with Employees' Former Union: DC Circuit

by Practical Law Labor & Employment

Background

Until May 2012, the Service Employees International Union (SEIU) represented most employees of the Children's Hospital and Research Center of Oakland. On May 24, 2012, when the National Union of Healthcare Workers (NUHW) was certified as the new representative for the hospital's employees, the SEIU and the hospital had three outstanding grievances based on incidents that occurred while their currently-expired CBA was in effect. The hospital declined to arbitrate the grievances because SEIU no longer represented the employees. The NLRB:

Concluded that the hospital:
- was obliged to arbitrate the grievances as part of collective bargaining obligations it had with the SEIU; and
- committed an unfair labor practice (ULP) under Section 8(a)(5) of the NLRA by refusing to arbitrate those grievances.
Ordered the hospital to arbitrate the pending grievances.

(360 N.L.R.B. slip op. 56 (Feb. 28, 2014).)

The hospital petitioned the DC Circuit Court of Appeals for review and the NLRB cross-petitioned for enforcement.

Outcome

The DC Circuit granted the hospital's petition for review, denied the NLRB's cross-petition for enforcement, and remanded. The DC Circuit held that:

There is a latent ambiguity in the NLRA between:
- Section 8(a)(5), which may require an employer to arbitrate disputes covered by a collective bargaining agreement (CBA) (sometimes even after the CBA expires) as part of its duty to bargain with its employees' union; and
- Section 9(a), which provides that once a union is certified as a bargaining unit's collective bargaining representative, an employer must bargain with that union exclusively regarding the bargaining unit.
The NLRA does not address when an employer's obligation to arbitrate grievances filed by a subsequently-decertified union, under an expired CBA ends and its duty to bargain exclusively with its employees' newly certified union begins.
The NLRB is responsible for initially interpreting the NLRA to resolve statutory ambiguities and failed to do so in this case.

The DC Circuit noted that:

Section 8(a)(5) of the NLRA makes it unlawful "for an employer to refuse to bargain collectively with the representatives of his employees" (29 U.S.C. § 158(a)(5)).
The employer's duty to bargain under Section 8(a)(5) is subject to Section 9(a) of the NLRA, which provides that collective bargaining representatives selected by the majority of a bargaining unit's employees are that bargaining unit's exclusive representatives (29 U.S.C. § 159(a)).
Section 8(a)(5) may require employers to arbitrate outstanding grievances even after a CBA expires (Nolde Bros. v. Bakery Workers Local 358, 430 U.S. 243 (1977); Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 205-06 (1991)).
Section 9(a) effectively requires employers to negotiate with no representative other than the union selected by a majority of employees in a bargaining unit once that new union is certified (Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 684 (1944)).
Congress decided that the NLRB, not courts, is the appropriate body to initially resolve latent statutory ambiguities in the NLRA and set labor policy (Lechmere, Inc. v. NLRB, 502 U.S. 527, 536 (1992); NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786 (1990)).
Ordinarily, courts defer to federal agency's interpretations of 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 DC Circuit found that:

the Board's order is not entitled to Chevron deference because the NLRB:
- failed to resolve, or much less, acknowledge the statutory ambiguity under Sections 8(a)(5) and 9(a) about whether an employer has a duty to arbitrate outstanding grievances with an old union under an expired CBA after a new union has been certified;
- did not rely on precedent dealing with the situation of a decertified union replaced by a new union and how that affects Section 9(a)'s exclusivity principle; and
- curiously, did not argue that its decision was entitled to deference under Chevron's two-step framework.
It is premature to decide whether the NLRB's decision was "manifestly contrary" to the NLRA or arbitrary and capricious because the NLRB has not yet attempted to resolve a relevant ambiguity in the NLRA, as required (Chevron, 467 U.S. at 844; SEC v. Chenery, 318 U.S. 80, 94 (1943)).

Practical Implications

The DC Circuit's decision in Children's Hospital provides the NLRB with the initial opportunity to decide whether an employer's collective bargaining obligations to resolve business remaining under an expired CBA with a formerly certified union survive the intervening certification of a new union as collective bargaining representative. Assuming the parties do not settle this matter the NLRB will likely reconsider the case on remand. Assuming the NLRB reconciles the ambiguity between Sections 8(a)(5) and 9(a) and applies its analysis to these facts, it is likely that the DC Circuit will be asked a few years from now to review if the Board exercised its interpretative authority in a manner that is "manifestly contrary" to the NLRA or otherwise arbitrary and capricious under Chevron.

To see summaries of sample SEIU CBAs and compare them with other unions' CBAs, visit the What's Market Collective Bargaining Agreements Database.

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