Nat'l Labor Relations Bd. v. Lily Transp. Corp.

Citation853 F.3d 31
Decision Date31 March 2017
Docket NumberNo. 15-2398,15-2398
Parties NATIONAL LABOR RELATIONS BOARD, Petitioner, v. LILY TRANSPORTATION CORPORATION, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (1st Circuit)

853 F.3d 31

NATIONAL LABOR RELATIONS BOARD, Petitioner,
v.
LILY TRANSPORTATION CORPORATION, Respondent.

No. 15-2398

United States Court of Appeals, First Circuit.

March 31, 2017


Jared David Cantor , Counsel, with whom Kira Dellinger Vol , Supervising Attorney, Richard F. Griffin, Jr. , General Counsel, Jennifer Abruzzo , Deputy General Counsel, John H. Ferguson , Associate General Counsel, and Linda Dreeben , Deputy Associate General Counsel, were on brief, for petitioner.

Kay H. Hodge , with whom Alan S. Miller , Katherine D. Clark and Stoneman, Chandler & Miller LLP , Boston, MA, were on brief, for respondent.

Before Kayatta, Circuit Judge, Souter,

853 F.3d 33

Associate Justice,* and Selya, Circuit Judge.

SOUTER, Associate Justice.

The National Labor Relations Board applies for enforcement of its bargaining order against Lily Transportation Corporation. We grant the application.

I.

Pumpernickel Express, Incorporated, carried automotive parts from warehouses in Mansfield, Massachusetts, to Toyota and Chrysler dealerships in the region. Pumpernickel's drivers were represented by the International Association of Machinists and Aerospace Workers, AFL-CIO, District Lodge 15, Local 447.

In October 2013, Pumpernickel filed for bankruptcy, and Lily subsequently obtained the portion of Pumpernickel's business that involved distributing parts for Toyota. Lily hired many of Pumpernickel's former employees, including drivers, and began operations in November 2013. The Union promptly demanded that Lily recognize it as the drivers' bargaining representative, but Lily refused. Lily later produced signed statements it allegedly had received from a majority of the drivers saying that they no longer wished to be represented by the Union.

The Union filed an unfair labor practice charge with the National Labor Relations Board, claiming that Lily's refusal to bargain violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act.1 After a hearing, the Administrative Law Judge found that in distributing for Toyota, Lily was a "successor employer" to Pumpernickel, that is, an employer who "makes a conscious decision to maintain generally the same business and to hire a majority of its employees from the predecessor," Fall River Dyeing & Finishing Corp. v. NLRB , 482 U.S. 27, 41, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987) ; accord Asseo v. Centro Médico Del Turabo, Inc. , 900 F.2d 445, 450-51 (1st Cir. 1990). The Judge held that Lily, as a successor, was required under Fall River to recognize and bargain with the Union, and rejected Lily's position that its refusal to bargain about terms of employment in the affected unit was justified by the signed employee statements of repudiation. Rather, the Judge explained, under the "successor bar doctrine," as adopted by the Board in UGL-UNICCO Service Co. , 357 N.L.R.B. 801 (2011), an incumbent union is entitled to represent a successor employer's employees for a reasonable period of time for bargaining before its majority status may be questioned.

The Board affirmed, agreeing with the Administrative Law Judge that insofar as Lily was a successor employer, it was obligated to bargain with the Union, and that UGL barred Lily from challenging the Union's majority status until a reasonable period of time for bargaining had elapsed. The Board accordingly ordered Lily to recognize and bargain with the Union.

The Board now asks this Court to enforce its order over Lily's objection. Lily submits that the Board erred in relying on UGL 's successor bar doctrine and that we should instead substitute only a rebuttable presumption of majority union support under the rule of MV Transportation , 337 N.L.R.B. 770 (2002), of the kind the Board

853 F.3d 34

adopted and enforced prior to its rejection in UGL . Lily also says that it has rebutted that presumption with its documentary evidence that a majority of the affected drivers no longer support the Union.

II.

Lily's objection to the successor bar implicates some doctrinal history. The National Labor Relations Act provides neither bar nor presumption to address the unstable labor climate that can develop in successor employment, a silence the Board has seen as leaving a statutory gap needing to be filled. In 1999, it adopted a successor bar partially resembling its present iteration, in St. Elizabeth Manor, Inc. , 329 N.L.R.B. 341 (1999). There, the Board held that "once a successor employer's obligation to recognize an incumbent union attaches [under Fall River ], the union is entitled to a reasonable period of time for bargaining without challenge to its majority status." Id. at 341. The Board recognized that it was overruling its previous decision of some twenty-four years earlier in Southern Moldings, Inc. , 219 N.L.R.B. 119 (1975), which had held that at the beginning of a successorship situation a union generally enjoys only a rebuttable presumption of continuing majority membership support. St. Elizabeth Manor , 329 N.L.R.B. at 341.

Just three years later, though, in MV Transportation , 337 N.L.R.B. 770, the Board overturned St. Elizabeth Manor in favor of the rebuttable presumption. The Board declared that the presumption represented the appropriate balance between the two "fundamental purposes" of the National Labor Relations Act, that is, "employee freedom of choice and the maintenance of stability in bargaining relationships." Id. at 772-73. In some circumstances, it said, the successor bar could preclude employees from making a choice of representation "for as long as several years," id. at 773, and as an example it cited the possible combination of the successor bar and a bar running for three years from the execution of a collective bargaining agreement, id. One Board member dissented, however, citing the dramatic increase in the number of corporate mergers and acquisitions over the previous twenty-five years, and taking that as a reason to argue that "the interest of stability should be given greater ... weight in shaping national labor policy." Id. at 776-77 (Member Liebman, dissenting).

Nine years afterwards, in UGL , 357 N.L.R.B. 801, the Board changed course again, citing the figures from the MV Transportation dissent along with current statistics. It observed that successorship situations had become increasingly common owing to a rising level of corporate merger and acquisition activity, id. at 801 & n.4, 805 & n.17, and held that the bar "better achieves the overall policies of the Act, in the context of today's economy," than a rebuttable presumption does, id. at 801. The Board did not, however, merely reinstate the St. Elizabeth Manor bar, which it modified in two respects. It defined the previously unspecified "reasonable period" of time for bargaining after the successor's arrival as being between six months and a year, depending on the circumstances. Id. at 808-09. The Board also provided a special variant of the bar for successorship situations that involve successorship followed by execution of a collective bargaining agreement. It reduced that latter bar's duration to two years, so as to mitigate the limitation on employee choice (or other challenges) that could previously have resulted from adding the contract and successor bars together. Id. at 810. It is the successor bar thus doubly modified that is at stake here.

853 F.3d 35

III.

Lily attacks the Board's reliance on UGL 's successor bar on two grounds: (1) that a bar to challenging the union's support, as distinguished from a rebuttable presumption, deserves no judicial deference under Chevron , U.S.A. Inc. v. Nat. Res. Def. Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), because it flatly violates employees' rights under Section 7 of the National Labor Relations Act to choose or reject union representation;2 and (2) that the Board's irregularity in successor cases, switching back and forth between rebuttable presumption and bar rules, most recently in the St. Elizabeth Manor , MV Transportation , and UGL sequence, independently disentitles the current bar rule to the judicial deference that an otherwise lawful administrative rule of decision would deserve if consistently applied.

The claim of a Section 7 violation on these facts is untenable. To be sure, we can imagine bars on challenges to unions so patently arbitrary as to run afoul of the Section 7 guarantee; a ten-year bar following certification, say. The bar choice here, however, is for a newly limited period (alone or in tandem with the contract bar), a fact that Lily disregards on the apparent absolutist theory that duration is not of the essence: in its view, any bar, no matter its length, would unlawfully burden Section 7 rights. But the assumption that a bar per se patently trespasses on Section 7 while some rebuttable presumptions would not does not survive scrutiny. If we compare a two-year bar with a two-year presumption, we may easily suspect that the burdens of the bar on employees' Section 7 rights would be demonstrably the heavier of the two alternatives and require a comparatively more powerful justification to fall within the zone of reasonable agency action. But if the comparison is between...

To continue reading

Request your trial
14 cases
  • Victim Rights Law Ctr. v. Cardona
    • United States
    • U.S. District Court — District of Massachusetts
    • July 28, 2021
    ...that it is changing position" and "show that there are good reasons for the new policy." Id.; see also National Labor Relations Bd. v. Lily Transp. Corp., 853 F.3d 31, 36 (1st Cir. 2017). There are at least two situations in which an agency must provide "a more detailed justification" for a......
  • Saget v. Trump
    • United States
    • U.S. District Court — Eastern District of New York
    • December 14, 2018
    ...provide a reasoned explanation of the change in position. See Centro Presente , 332 F.Supp.3d at 417 ; Nat'l Labor Relations Bd. v. Lily Transp. Corp. , 853 F.3d 31, 36 (1st Cir. 2017) ("The Court in Fox was unanimous in its acceptance of the view, often expressed, that an agency is not for......
  • Saget v. Trump
    • United States
    • U.S. District Court — Eastern District of New York
    • April 11, 2019
    ...addressed expressly, at least by the agency's articulate recognition that it is departing from its precedent." N.L.R.B. v. Lily Transp. Corp. , 853 F.3d 31, 36 (1st Cir. 2017). Notably, the court in Centro Presente relied on Lily Transportation to conclude "even if the alleged new policy is......
  • Centro Presente v. U.S. Dep't of Homeland Sec.
    • United States
    • U.S. District Court — District of Massachusetts
    • July 23, 2018
    ...expressly, at least by the agency's articulate recognition that it is departing from its precedent." Nat'l Labor Relations Bd. v. Lily Transportation Corp., 853 F.3d 31, 36 (1st Cir. 2017). Defendants contend that Lily Transportation is not applicable because that case involved an express c......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT