Advanced Disposal Servs. E., Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 21 April 2016
• Docket Number: No. 15–2321,No. 15–2229,15–2229,15–2321
• Citation: 820 F.3d 592
• Parties: ADVANCED DISPOSAL SERVICES EAST, INC., Petitioner in 15–2229 v. NATIONAL LABOR RELATIONS BOARD, Petitioner in 15–2321.
• Court: U.S. Court of Appeals — Third Circuit

820 F.3d 592

ADVANCED DISPOSAL SERVICES EAST, INC., Petitioner in 15–2229

v.NATIONAL LABOR RELATIONS BOARD, Petitioner in 15–2321.

No. 15–2229

No. 15–2321

United States Court of Appeals, Third Circuit.

Argued March 2, 2016.

Filed: April 21, 2016.

Daniel D. Barker, Esquire, [Argued], Jackson Lewis, Madison, WI, John E. MacDonald, Esquire, Constangy Brooks Smith & Prophete, Lawrenceville, NJ, for Petitioner.

Linda Dreeben, Esquire, Kellie Isbell, Esquire, [Argued], Kira D. Vol, Esquire, Eric Weitz, Esquire, National Labor Relations Board, Appellate and Supreme Court Litigation Branch, Washington, DC, for Respondent.

Before: SMITH and HARDIMAN, Circuit Judges.^*

OPINION

SMITH, Circuit Judge.

Advanced Disposal Services East, Inc. (“Advanced”) petitions for review of an order of the National Labor Relations Board (“NLRB” or “the Board”) which held that Advanced violated sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (“NLRA”), by “refus[ing] to bargain collectively with the representatives of [its] employees.” 29 U.S.C. § 158(a)(5). Before this Court, Advanced not only challenges the merits of the NLRB's determination but also argues that the NLRB Regional Director who facilitated the contested election lacked the authority to do so. Advanced claims that because Director Dennis Walsh was appointed at a time when the Board lacked a valid quorum, his actions were ultra vires. See generally NLRB v. Noel Canning, –––U.S. ––––, 134 S.Ct. 2550, 189 L.Ed.2d 538 (2014).¹ The NLRB cross-applies for enforcement of its order.

Precisely because the Supreme Court's decision in Noel Canning was so “rare and remarkable,” Bryan J. Leitch, NLRB v. Noel Canning: The Separation–of–Powers Dialogue Continues, 2014 Cato Sup. Ct. Rev. 221, 259, the litigation it has spawned raises novel questions that have yet to be addressed by this Court. This case, in particular, requires us to consider several issues which, while not directly related to Noel Canning, arose only because the invalid recess appointments of several NLRB members created a situation in which the validity of hundreds of NLRB orders and other official actions were cast into doubt. See, e.g., Ben James, Noel Canning Ruling Casts Doubt on Regional Directors, Law360 (June 27, 2014, 9:11 PM), http://www.law360.com/articles/552592/noel-canning-ruling-casts-doubt-on-regional-directors.

Specifically, we will consider three questions. First, did Advanced forfeit its right to challenge Director Walsh's authority by not raising the issue prior to the representation election? Second, did Advanced's execution of a Stipulated Election Agreement constitute an accession to Director Walsh's authority, preventing Advanced from now challenging that authority? Third, if we conclude that Director Walsh originally lacked authority to oversee the election, were his and the Board's attempts to ratify their unauthorized conduct sufficient?

After considering the arguments put forward by both sides, we conclude that Advanced did not lose the ability to challenge Director Walsh's authority by failing to raise this issue during the representation proceeding, nor did the Stipulated Election Agreement constitute an implied accession to Director Walsh's authority. We also hold that Director Walsh and the Board both properly ratified their previously unauthorized actions.

We must next address the merits of Advanced's Petition for Review. In doing so, we ask whether substantial evidence supported the Board's determination that certain allegedly disruptive conduct did not “destroy[ ] the laboratory conditions of the election” and “render[ ] a free expression of choice of representation impossible.” Zeiglers Refuse Collectors, Inc. v. NLRB, 639 F.2d 1000, 1011 (3d Cir.1981). Upon careful review of the record, we hold that substantial evidence supports the Board's determination and the Hearing Officer's findings. We will therefore deny the petition for review and will grant the NLRB's cross-application for enforcement.

I. Procedural History

On March 5, 2014, the Teamsters Local Union No. 384 filed a representation petition with Director Walsh seeking to represent a unit of workers at three of Advanced's facilities. The proposed unit consisted of approximately 120 full-time and regular part-time drivers, helpers, and mechanics. The Union and Advanced entered into a Stipulated Election Agreement on March 13, 2014. On April 16 and 17, 2014, secret ballot elections were held at all three of Advanced's facilities, with sixty voters supporting unionization and fifty-eight opposing it.² Advanced challenged the election outcome and was granted a hearing on May 19, 2014, before Hearing Officer Devin Grosh. On July 3, 2014, Grosh issued his report, recommending that Advanced's objections be overruled. On December 16, 2014, a three-member panel of the NLRB affirmed Grosh's report and overruled all of Advanced's additional objections to Grosh's report.

In order to preserve its right to appeal, Advanced refused to bargain with the now-certified bargaining unit. Am. Fed'n of Labor v. NLRB, 308 U.S. 401, 404, 60 S.Ct. 300, 84 L.Ed. 347 (1940) ; United Fed'n of Coll. Teachers, Local 1460 v. Miller, 479 F.2d 1074, 1075 (2d Cir.1973) (“It has long been held that N.L.R.B. certification proceedings do not result in reviewable final orders.”). Director Walsh thus filed a Complaint and Notice of Hearing on February 19, 2015, seeking to enforce the Union's certification and force the company to bargain. Ultimately, a three-member panel of the NLRB issued a Decision and Order on May 8, 2015, concluding that Advanced had violated § 158(a)(5) by refusing “to bargain collectively with the representatives of [its] employees.” 29 U.S.C. § 158(a)(5). Advanced filed a petition for review on May 15, 2015, and the NLRB cross-applied, seeking enforcement of its order.³

II. Forfeiture

We must determine whether Advanced forfeited the right to challenge Director Walsh's authority to conduct the election by failing to properly raise the issue before the Board. The NLRB argues that if Advanced had timely raised this issue, it could have “correct[ed] the flaw before the election.” The NLRB also cites precedent suggesting that belated challenges like this are untimely and thus are forfeited on appeal.

We disagree with the Board's conclusion that a belated attack on Director Walsh's authority can be forfeited. Even though this challenge was not properly preserved below,⁴ we hold that a challenge like this one, which goes to the authority of the Board to act, constitutes an “extraordinary circumstance” under § 160(e) and can thus be raised for the first time on appeal. See Noel Canning v. NLRB, 705 F.3d 490, 497 (D.C.Cir.2013), aff'd on other grounds ––– U.S. ––––, 134 S.Ct. 2550, 189 L.Ed.2d 538 (2014).

Turning to § 160(e),⁵ we recognize that “a court of appeals has no power, sua sponte, to find objectionable a portion of any NLRB order, if no objection was raised before the Board and failure to object was not excused by any ‘extraordinary circumstances.’ ” Oldwick Materials, Inc. v. NLRB, 732 F.2d 339, 342 (3d Cir.1984). This is so because § 160(e) is a jurisdictional administrative exhaustion requirement designed to ensure that any issue raised on appeal was first presented to the Board, absent “extraordinary circumstances.” See 29 U.S.C. § 160(e) ; Oldwick Materials, 732 F.2d at 341 (“Application of section 10(e) is mandatory, not discretionary.... [P]etitioner's failure to object or to urge ‘extraordinary circumstances' before both the Board and this court requires foreclosure of any judicial consideration of objections in the enforcement proceeding.”). Section 160(e)'s status as a jurisdictional limitation on our authority is nothing new. As the Supreme Court held in Woelke & Romero Framing, Inc. v. NLRB, if an issue was not raised during the proceedings before the Board, “judicial review is barred by § 10(e) of the Act, 29 U.S.C. § 160(e).” 456 U.S. 645, 665, 102 S.Ct. 2071, 72 L.Ed.2d 398 (1982). The Court then explained that failure to satisfy § 160(e) meant that “the Court of Appeals lack[ed] jurisdiction to review objections that were not urged before the Board.” Id. at 666, 102 S.Ct. 2071 (emphasis added). Because Advanced did not raise its objection to Director Walsh's authority at the proper time, we must decide whether its challenge constitutes an “extraordinary circumstance” under § 160(e).

In making this determination, we are cognizant of competing authority on this issue. In Noel Canning, the D.C. Circuit noted that “the objections before us concerning lack of a quorum raise questions that go to the very power of the Board to act and implicate fundamental separation of powers concerns.” 705 F.3d at 497. Thus, “they are governed by the ‘extraordinary circumstances' exception to the 29 U.S.C. § 160(e) requirement and therefore are properly before us for review.” Id. In other words, the D.C. Circuit held that a challenge which goes to the very power of the Board to act is by definition an extraordinary circumstance.

The D.C. Circuit has since re-affirmed this conclusion, holding in SSC Mystic Operating

Co., LLC v. NLRB,

801 F.3d 302, 308 (D.C.Cir.2015), and UC Health v. NLRB, 803 F.3d 669, 672–73 (D.C.Cir.2015), that challenges to a Regional Director's authority also implicate the very power of the Board to act and thus constitute extraordinary circumstances. As the D.C. Circuit made clear, “[b]ecause this challenge and the argument that Regional Directors may not conduct elections while the Board lacks a quorum are both premised on the Board's lack of authority to act, we believe both are properly before us no matter when they were first raised.” SSC Mystic, 801 F.3d at 308. The factual similarities between Advanced's claim and both SSC Mystic and UC Health further support our conclusion. In both of the above cases, an employer challenged the ability of a Regional Director to conduct the election in question because, at the...