Canning v. Nat'l Labor Relations Bd., s. 12–1115

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Writing for the CourtSENTELLE
Citation705 F.3d 490
PartiesNoel CANNING, a Division of the Noel Corporation, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent International Brotherhood Of Teamsters Local 760, Intervenor.
Docket NumberNos. 12–1115,12–1153.,s. 12–1115
Decision Date25 January 2013

705 F.3d 490

Noel CANNING, a Division of the Noel Corporation, Petitioner
International Brotherhood Of Teamsters Local 760, Intervenor.

Nos. 12–1115, 12–1153.

United States Court of Appeals,
District of Columbia Circuit.

Argued Dec. 5, 2012.
Decided Jan. 25, 2013.

[705 F.3d 492]

On Petition for Review and Cross–Application for Enforcement of an Order of the National Labor Relations Board.

Noel J. Francisco argued the cause for petitioner.
With him on the briefs were G. Roger King, James M. Burnham, and Gary E. Lofland.

Miguel A. Estrada argued the cause for amici curiae Senate Republican Leader Mitch McConnell and 41 other members of the United States Senate in support of petitioner/cross-respondent Noel Canning.

Jay Alan Sekulow was on the brief for amicus curiae The Speaker of the United States House of Representatives, John Boehner, in support of petitioner. John N. Raudabaugh entered an appearance.

Glenn M. Taubman, William L. Messenger, Richard P. Hutchison, and Mark R. Levin were on the brief for amici curiae Landmark Legal Foundation, et al. in support of petitioner.

Beth S. Brinkmann, Deputy Assistant Attorney General, U.S. Department of Justice, and Elizabeth A. Heaney, Attorney, National Labor Relations Board, argued the causes for respondent. With them on the brief were Stuart F. Delery, Acting Assistant Attorney General, Scott R. McIntosh, Sarang V. Damle, Melissa N. Patterson, and Benjamin M. Shultz, Attorneys, John H. Ferguson, Associate General Counsel, National Labor Relations Board, Linda Dreeben, Deputy Associate General Counsel, and Jill A. Griffin, Attorney.

James B. Coppess argued the cause for intervenor. With him on the brief were Bradley T. Raymond and Laurence Gold.

Victor Williams, pro se, filed the brief for amicus curiae Professor Victor Williams.

Before: SENTELLE, Chief Judge, HENDERSON and GRIFFITH, Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.
Concurring opinion filed by Circuit Judge GRIFFITH.

SENTELLE, Chief Judge:

Noel Canning petitions for review of a National Labor Relations Board (“NLRB” or “the Board”) decision finding that Noel Canning violated section 8(a)(1) and (5) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 158(a)(1), (5), by refusing to reduce to writing and execute a collective bargaining agreement reached with Teamsters Local 760 (“the Union”). See Noel Canning, A Division of the Noel Corp., 358 N.L.R.B. No. 4, 2012 WL 402322 (Feb. 8, 2012) (“Board Decision”). NLRB cross-petitions for enforcement of its order. On the merits of the NLRB decision, petitioner argues that the Board did not properly follow applicable contract law in determining that an agreement had been reached and that therefore, the finding

[705 F.3d 493]

of unfair labor practice is erroneous. We determine that the Board issuing the findings and order could not lawfully act, as it did not have a quorum, for reasons set forth more fully below.

I. Introduction

At its inception, this appears to be a routine review of a decision of the National Labor Relations Board over which we have jurisdiction under 29 U.S.C. § 160(e) and (f), providing that petitions for review of Board orders may be filed in this court. The Board issued its order on February 8, 2012. On February 24, 2012, the company filed a petition for review in this court, and the Board filed its cross-application for enforcement on March 20, 2012. While the posture of the petition is routine, as it developed, our review is not. In its brief before us, Noel Canning (along with a movant for status as intervenor whose motion we will dismiss for reasons set forth hereinafter) questions the authority of the Board to issue the order on two constitutional grounds. First, petitioner asserts that the Board lacked authority to act for want of a quorum, as three members of the five-member Board were never validly appointed because they took office under putative recess appointments which were made when the Senate was not in recess. Second, it asserts that the vacancies these three members purportedly filled did not “happen during the Recess of the Senate,” as required for recess appointments by the Constitution. U.S. Const. art. II, § 2, cl. 3. Because the Board must have a quorum in order to lawfully take action, if petitioner is correct in either of these assertions, then the order under review is void ab initio. See New Process Steel, L.P. v. NLRB, ––– U.S. ––––, 130 S.Ct. 2635, 177 L.Ed.2d 162 (2010).

Before we can even consider the constitutional issues, however, we must first rule on statutory objections to the Board's order raised by Noel Canning. It is a well-settled principle of constitutional adjudication that courts “will not pass upon a constitutional question although properly presented by the record, if there is also present some other ground upon which the case may be disposed of.” Ashwander v. Tenn. Valley Auth., 297 U.S. 288, 347, 56 S.Ct. 466, 80 L.Ed. 688 (1936) (Brandeis, J., concurring); see also Spector Motor Serv., Inc. v. McLaughlin, 323 U.S. 101, 105, 65 S.Ct. 152, 89 L.Ed. 101 (1944); United States v. Waksberg, 112 F.3d 1225, 1227 (D.C.Cir.1997). We must therefore decide whether Noel Canning is entitled to relief on the basis of its nonconstitutional arguments before addressing the constitutional question. Noel Canning raises two statutory arguments. First, it contends that the ALJ's conclusion that the parties in fact reached an agreement at their final negotiation session is not supported by substantial evidence. Second, it argues that even if such an agreement were reached, it is unenforceable under Washington law. We address each argument in turn.

A. The Sufficiency of the Evidence

Refusal to execute a written collective bargaining agreement incorporating terms agreed upon during negotiations is an unfair labor practice under section 8(a)(1) and (5) of the NLRA. H.J. Heinz Co. v. NLRB, 311 U.S. 514, 525–26, 61 S.Ct. 320, 85 L.Ed. 309 (1941). Whether the parties reached an agreement during negotiations is a question of fact. See NLRB v. Int'l Bhd. of Elec. Workers, 748 F.2d 348, 350 (8th Cir.1984); NLRB v. Roll & Hold Div. Area Transp. Co., 957 F.2d 328, 331 (7th Cir.1992). We therefore must affirm the Board's conclusion that an agreement was in fact reached if that conclusion is supported by substantial evidence. 29 U.S.C. § 160(e).

[705 F.3d 494]

Noel Canning and the Union had in the past enjoyed a long collective bargaining relationship, but the parties were unable to reach a new agreement before their most recent one expired in April 2010. Negotiations began in June 2010. By the time the parties met for their final negotiation session in December 2010, all issues save wages and pensions had been resolved. According to notes taken by Union negotiators at the parties' final negotiating session, the parties agreed to present two alternative contract proposals to the Union membership: one preferred by Noel Canning management and the other by the Union. Each proposal included wage and pension increases but allocated the increases differently. The notes reveal that the Union proposal put no limit on the membership's right to decide how much of the $0.40 per hour pay increase to allocate to its pension fund. According to the notes and Union witnesses, the parties agreed that both proposals would be submitted to the Union membership for a ratification vote and that the parties would be bound by the outcome of that vote. Union negotiators testified that after the parties read aloud the terms of the two proposals, Noel Canning's president stood and said “let's do it.” Deferred Appendix 78. A Noel Canning officer agreed to email the terms to the Union the next day. After the company agreed to allow the Union to use a company conference room to hold the vote, the negotiators shook hands and departed.

The next day, Noel Canning management emailed the Union the wage and pension terms of the two proposals. According to the email, however, the Union proposal capped at $0.10 the amount of the $0.40 pay increase that the membership could devote to its pension fund. The email thus conflicted with the Union negotiators' notes, which left the allocation question entirely to the membership. When the chief Union negotiator, Bob Koerner, called Noel Canning's president to discuss the discrepancy, the president responded that since the agreement was not in writing, it was not binding. The vote took place anyway, and the membership ratified the Union's preferred proposal, which allocated the entire pay increase to the pension fund. Noel Canning posted a letter informing the Union that the company considered the ratification vote to be a counteroffer, which the company rejected, and declared the parties to be at an impasse. Noel Canning subsequently refused to execute a written agreement embodying the terms ratified by the Union.

The Union filed an unfair labor practice charge premised on Noel Canning's refusal to execute the written agreement. After a two-day hearing, the ALJ determined that the parties had in fact achieved consensus ad idem as to the terms of the Union's preferred proposal and that Noel Canning's refusal to execute the written agreement constituted an unfair labor practice under section 8(a)(1) and (5) of the NLRA. The ALJ ordered Noel Canning to sign the collective bargaining agreement. Noel Canning timely filed exceptions to the ALJ's decision, and the Board affirmed.

Unsurprisingly, the parties' testimony at the ALJ hearing conflicted over whether the parties in fact agreed to the terms of the Union proposal. The ALJ's decision thus rested almost entirely on his determination of the witnesses' credibility. Assessing the conflicting testimony, the ALJ determined that because the Union witnesses' testimony was corroborated by contemporaneous notes taken during the December 2010 negotiation session, the Union's witnesses were credible. In contrast, he...

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