ABM Onsite Servs.—W., Inc. v. Nat'l Labor Relations Bd., 15-1299

• Decision Date: 07 March 2017
• Docket Number: C/w 15-1347,No. 15-1299,15-1299
• Parties: ABM ONSITE SERVICES—WEST, INC., Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent International Association of Machinists and Aerospace Workers, District Lodge W24 and Local Lodge 1005, Intervenor
• Court: U.S. Court of Appeals — District of Columbia Circuit

849 F.3d 1137

ABM ONSITE SERVICES—WEST, INC., Petitioner

v. NATIONAL LABOR RELATIONS BOARD, RespondentInternational Association of Machinists and Aerospace Workers, District Lodge W24 and Local Lodge 1005, Intervenor

No. 15-1299

C/w 15-1347

United States Court of Appeals, District of Columbia Circuit.

Argued November 21, 2016

Decided March 7, 2017

Douglas W. Hall, Washington, DC, argued the cause and filed the briefs for petitioner.

Amy H. Ginn, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Usha Dheenan, Supervisory Attorney.

David L. Neigus argued the cause and filed the brief for intervenor International Association of Machinists and Aerospace Workers, District Lodge W24 and Local Lodge 1005 in support of respondent. Mark D. Schneider, Washington, DC, and William H. Haller entered appearances.

Before: Griffith, Srinivasan, and Millett, Circuit Judges.

Griffith, Circuit Judge:

This petition for review challenges the determination of the National Labor Relations Board that a union's effort to represent the workers who handle airline baggage is governed by the National Labor Relations Act and not the Railway Labor Act. In reaching its conclusion, the Board departed from its precedent without offering a rationale for its new approach. We therefore vacate the Board's order and remand the matter for further proceedings.

I

A

The National Labor Relations Act, 29 U.S.C. §§ 151 et seq. , regulates most private-sector labor relations. Concerned, however, that labor strife in the railway and airline industries could disrupt commerce nationwide, Congress expressly carved out these industries, which were already covered by the Railway Labor Act, from coverage under the NLRA framework when it passed the NLRA. See id. § 152; see also Tex. & New Orleans R.R. v. Bhd. of Ry. & S.S. Clerks , 281 U.S. 548, 565, 50 S.Ct. 427, 74 L.Ed. 1034 (1930) (remarking that "the major purpose of Congress in passing the Railway Labor Act was to provide a machinery to prevent strikes").¹ The Act creates a "special scheme" for the railway and airline industries, premised on "their unique role in serving the traveling and shipping public in interstate commerce." Verrett v. SABRE Grp., Inc. , 70 F.Supp.2d 1277, 1281 (N.D. Okla. 1999). Under this separate regulatory scheme, various mediation and arbitration boards work to resolve airline and railway labor disputes that could interrupt interstate commerce. See id.

The question of which labor scheme governs has meaningful consequences for both employers and employees. Chief among them are the different powers Congress has given the agencies that administer the relevant statutes. For example, the NLRB can initiate unfair-labor-practice proceedings and issue orders to employers, but the National Mediation Board (NMB), which administers the RLA, performs no law-enforcement function. The NMB's role is limited mainly to determining whether employees in the airline and railway industries have chosen union representation and then mediating collective bargaining. In addition, under the RLA, both employers and employees must exhaust an extended negotiation and mediation process before they can lawfully resort to self-help measures, such as unilaterally altering working conditions or calling a strike. This prolonged process is designed to avoid strikes and "keep transportation moving" in the specific subset of the American economy that concerns the RLA. Pan Am. World Airways, Inc. v. United Bhd. of Carpenters & Joiners of Am. , 324 F.2d 217, 220 (9th Cir. 1963). Under the NLRA, by contrast, employers and employees have much more latitude to engage in self-help. Employees often prefer to organize under the NLRA, as it protects a wider array of "concerted activity" by employees than does the RLA. See Beckett v. Atlas Air, Inc. , 968 F.Supp. 814, 820 (E.D.N.Y. 1997) (citing cases).

The RLA originally covered only common carriers, but Congress expanded the Act in 1934 to cover certain companies that perform transportation-related services for those carriers. As a result, a company is subject to the RLA and falls outside the jurisdiction of the NLRB if it "is directly or indirectly owned or controlled by or under common control with any carrier" and "operates any equipment or facilities or performs any service" related to transportation. 45 U.S.C. § 151. Whether a company is controlled by a carrier, however, is often unclear. Thus, "the NLRB and the NMB have, in the absence of any statute addressing the point, jointly developed their own method for determining their mutual jurisdictional question of whether the NLRA or the RLA governs" in any given case. United Parcel Serv., Inc. v. NLRB , 92 F.3d 1221, 1223 (D.C. Cir. 1996).

The NLRB frequently refers the jurisdictional question to the NMB for an advisory opinion and then defers to the NMB's view, based on the NMB's expertise in administering the RLA. See United Parcel Serv., Inc. , 318 N.L.R.B. 778, 780 (1995) (referring cases to the NMB "enables the [NLRB] to obtain the NMB's expertise on jurisdictional matters most familiar to it"), aff'd , 92 F.3d 1221 (D.C. Cir. 1996) ; Pan Am. World Airways, Inc. , 115 N.L.R.B. 493, 495 (1956) (explaining the NLRB's view of the NMB's primacy in resolving jurisdictional questions that implicate the RLA). The NLRB follows this accepted practice when a party raises a colorable claim that the NLRB lacks jurisdiction. See Spartan Aviation Indus. , 337 N.L.R.B. 708, 708 (2002) ("When a party raises a claim of arguable jurisdiction under the RLA, the Board generally refers the case to the National Mediation Board ... for an advisory opinion...."). This practice dates back to at least 1956. See Pan Am. World Airways, Inc. , 115 N.L.R.B. at 495 (declining to assert jurisdiction in a case over which the NMB claimed jurisdiction). An exception exists to the general rule, however: under "long-standing practice," the NLRB will not refer jurisdictional questions to the NMB in situations where NMB precedent provides a clear answer. United Parcel Serv., Inc. , 92 F.3d at 1228.

B

The airlines that fly into and out of the Portland International Airport formed the Portland Airlines Consortium ("PAC" or "the Consortium") to operate the airport's baggage-handling system. Since 2011, the Consortium has retained ABM Onsite Services—West ("ABM" or "the Company"), an independent contractor, to run the system.² The issue in this case is whether ABM is a "carrier" under the RLA and thus falls outside the NLRB's jurisdiction.

The answer turns on the degree of control that the Consortium exercises over the Company. To assess that control, it is important to understand the extent of the Consortium's contractual and practical involvement in a number of areas: how ABM employees do their jobs, how they are trained, what equipment they use, and even how they dress.

Most notably, the contract allows the Consortium to establish all standard operating procedures and provide all operating manuals for ABM. These manuals serve as the basis for ABM employee training. The contract also allows the Consortium to keep a close eye on the performance of ABM and its employees. For example, the Company is required to provide the Consortium with access to documents dealing with its operations, its compliance with non-discrimination laws, its operations and maintenance safety plans, and reports of on-the-job accidents.

In addition, the contract enables the Consortium to exercise influence over the Company's personnel decisions. All of the Company's staffing plans, for instance, must be approved by the Consortium before taking effect, and the Consortium's general manager must approve overtime work by ABM employees. Importantly, the Consortium also has the right to approve any changes in the Company's "key personnel," and to direct the company to remove employees from the contract. The contract does not, however, authorize the Consortium to discipline the Company's employees directly or require the Company to consult with it about discipline.

Furthermore, the contract specifies that the Consortium is to provide the Company with certain equipment, such as electric vehicles to move baggage and industrial bicycles to get around the baggage-handling system. The Consortium also must provide, free of charge, office space for the Company at the airport. Finally, the contract dictates that ABM employees meet certain appearance standards and wear uniforms that display the Consortium's logo, rather than the logo of ABM.

C

In January 2015, the International Association of Machinists (the Union) filed a petition with the NLRB seeking to represent ABM's "jammer technicians," who ensure that passenger bags get from the airlines' ticket counters to the aircraft, and its dispatchers, who take calls from airline employees regarding baggage issues and are the primary point of contact with the airlines. The Company protested that the NLRB lacked jurisdiction over the matter because the Company was subject to the RLA, not the NLRA. In the alternative, the Company argued, the NLRB should refer the jurisdictional question to the NMB for an advisory opinion. To resolve that jurisdictional question, the NLRB's regional director held a hearing at which the Company's facility manager and branch manager testified, along with two dispatchers. The regional director found that the Consortium did not exercise control over the Company and its employees within the meaning of the RLA and concluded that the NLRB thus had jurisdiction over the matter. The Company sought review of the order by the NLRB itself, which summarily denied the Company's request and affirmed its own jurisdiction in a 2-to-1 decision. The majority determined that the petition raised "no substantial issues warranting review." J.A. 608. The dissenting member,...