NLRB Arbitrarily and Capriciously Applied Anticipatory Withdrawal of Recognition Precedent Prospectively and Issued Affirmative Bargaining Order: DC Circuit | Practical Law

NLRB Arbitrarily and Capriciously Applied Anticipatory Withdrawal of Recognition Precedent Prospectively and Issued Affirmative Bargaining Order: DC Circuit | Practical Law

In Leggett & Platt, Inc. v. NLRB, the DC Circuit held that the National Labor Relations Board (NLRB) acted arbitrarily and capriciously by applying an anticipatory withdrawal of recognition precedent only prospectively and issuing an affirmative bargaining order.

NLRB Arbitrarily and Capriciously Applied Anticipatory Withdrawal of Recognition Precedent Prospectively and Issued Affirmative Bargaining Order: DC Circuit

by Practical Law Labor & Employment
Law stated as of 26 Sep 2022 • USA (National/Federal)
In Leggett & Platt, Inc. v. NLRB, the DC Circuit held that the National Labor Relations Board (NLRB) acted arbitrarily and capriciously by applying an anticipatory withdrawal of recognition precedent only prospectively and issuing an affirmative bargaining order.
On February 19, 2021, in Leggett & Platt, Inc. v. NLRB, the DC Circuit held that the NLRB acted arbitrarily and capriciously by:
  • Refusing to retroactively apply its controlling precedent in Johnson Controls, Inc., a factually indistinguishable case in which the NLRB:
    • revised the standard of proof required for an employer's lawful anticipatory withdrawal of recognition based on a decertification petition showing a loss of majority support, overruling the standard relied upon by the administrative law judge in this case to find that the employer had committed an unfair labor practice (ULP) when it withdrew recognition and subsequently changed employment terms and conditions without bargaining with the union; and
    • expressly stated that the new standard would apply retroactively to all pending cases at whatever stage, unless retroactive application would work a manifest injustice.
    (368 N.L.R.B. No. 20 (July 3, 2019); see Legal Update, NLRB Revises Standard for Evaluating Anticipatory Withdrawals of Recognition of Unions Losing Majority Support.)
  • Failing to adequately justify its issuance of an affirmative bargaining order through a meaningful balancing of:
    • the employees' Section 7 rights;
    • whether other purposes of the NLRA override the employees' rights to choose their bargaining representatives; and
    • whether alternative remedies are adequate to remedy the violation.
(988 F.3d 487 (D.C. Cir. 2021), granting review of and vacating Leggett & Platt, Inc., 368 N.L.R.B. No. 132 (Dec. 9, 2019).)
The DC Circuit's decision in Leggett & Platt illustrates that the NLRB's departure from agency precedent, and particularly its own retroactivity determinations, must be supported by a reasoned explanation to avoid being deemed arbitrary and capricious on judicial review. The DC Circuit also reaffirmed its position that an affirmative bargaining order is an extraordinary remedy that must be justified by a meaningful—and not merely reductive—analysis of the circumstances of the specific case.

UPDATE:

On September 26, 2022, in Leggett & Platt, Inc., the NLRB accepted as the law of the case the DC Circuit's decision which applied Johnson Controls retroactively, granted review of the NLRB's findings that the employer violated Section 8(a)(5) by withdrawing recognition from the union and unilaterally changing employment terms and conditions, and denied enforcement of the NLRB's affirmative bargaining order. On remand from the DC Circuit in this case, the NLRB also confirmed its prior cease-and-desist and notice-posting remedy for the employer's unlawful assistance to an employee's decertification petition efforts. The NLRB concluded that this standard ULP remedy was appropriate even though the employer's violation might have been an isolated incident, the employer's withdrawal of recognition was ultimately held to be lawful, and the union no longer represents the former bargaining unit. (371 N.L.R.B. No. 148 (Sept. 26, 2022).)