N.L.R.B. v. Oklahoma Fixture Co.

• Citation: 332 F.3d 1284
• Decision Date: 18 June 2003
• Docket Number: No. 01-9516.,01-9516.
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OKLAHOMA FIXTURE COMPANY, Respondent.
• Court: United States Courts of Appeals. United States Court of Appeals (10th Circuit)

332 F.3d 1284

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. OKLAHOMA FIXTURE COMPANY, Respondent.

No. 01-9516.

United States Court of Appeals, Tenth Circuit.

June 18, 2003.

Ruth E. Burdick, Attorney, (David Habenstreit, Supervisory Attorney, Arthur F. Rosenfeld, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, with her on the brief) of the National Labor Relations Board, Washington, DC, for Petitioner.

D. Kevin Ikenberry, (Stephen L. Andrew, with him on the briefs) of Stephen L. Andrew & Associates, A Professional Corporation, Tulsa, OK, for Respondent.

Before TACHA, Chief Judge, SEYMOUR, EBEL, KELLY, HENRY, BRISCOE, LUCERO, MURPHY, HARTZ, O'BRIEN and McCONNELL, Circuit Judges.

SEYMOUR, Circuit Judge.

The National Labor Relations Board (Board) seeks an order enforcing its determination that Oklahoma Fixture Company did not violate section 302 of the Labor Management Reporting Act, 29 U.S.C. § 186¹ by deducting permit fees from employee paychecks and remitting them to the union, and therefore that the company violated sections 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5) and (1), by unilaterally discontinuing that practice. A panel of this court held that the statutory phrase "membership dues" at issue in the Board decision is unambiguous, declined to defer to the Board's construction of section 302, and denied enforcement. NLRB v. Okla. Fixture Co., 295 F.3d 1143 (10th Cir.2002). We granted the Board's request for rehearing en banc and now determine that under governing Supreme Court authority, the statute is ambiguous, the Board's interpretation is reasonable, and the Board's order should be enforced.

I

Section 302 criminalizes money payments between employers and unions but provides various exceptions for payments related to legitimate business between those entities. Under one of these exceptions, section 302(c)(4), employers may forward to the union payments of "membership dues" deducted from employees' paychecks pursuant to their authorization cards.²

The employees in this case are probationary workers in their first ninety days of employment, during which time they are not required by the collective bargaining agreement (CBA) to join the union. These employees nevertheless were required to pay permit fees to the union after their first thirty days of employment. See Oklahoma Fixture Co., 331 NLRB 1116, 1122 (2000). They made these payments pursuant to a "check-off" provision: in other words, they signed cards authorizing their employer, Oklahoma Fixtures Company, to deduct the amount of the permit fees (or any other fees) from their paychecks and forward this amount to the union.³ Oklahoma Fixtures participated in this check-off process for eight years until it was advised by counsel to cease, which it did without consulting the union. As a result, the union filed unfair labor practice charges against the company.

The issue in this case is whether Oklahoma Fixtures engaged in criminal conduct as defined under section 302 by forwarding these employees' permit fees to their union, or whether forwarding such payments constituted non-criminal conduct under the section 302(c)(4) exception for "membership dues." The Board determined that the permit fees at issue here are "membership dues" and therefore excepted from the criminal provision. Okla. Fixture Co., 331 NLRB 1116, 1120-22 (2000). The Board observed that the Department of Justice, which is the agency responsible for enforcing section 302, the Board itself, and numerous courts have consistently interpreted "membership dues" broadly to include initiation fees and other assessments of employees by their unions, as well as agency fees paid by nonmembers. The Board determined that the permit fees are analogous to dues, noting that probationary employees are members of the collective bargaining unit and are therefore legitimate subjects of service fees for the union's representation even though they are not required to be union members. On this basis, the Board concluded the permit fees are permissible "membership dues" under section 302. Oklahoma Fixtures appealed. Sitting en banc, we enforce the Board's order.

II

As the Supreme Court noted in Holly Farms Corp. v. NLRB, 517 U.S. 392, 116 S.Ct. 1396, 134 L.Ed.2d 593 (1996):

If a statute's meaning is plain, the Board and reviewing courts "must give effect to the unambiguously expressed intent of Congress." Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). When the legislative prescription is not free from ambiguity, the administrator must choose between conflicting reasonable interpretations. Courts, in turn, must respect the judgment of the agency empowered to apply the law "to varying fact patterns," [Bayside Enterprises, Inc. v. NLRB, 429 U.S. 298, 304, 97 S.Ct. 576, 50 L.Ed.2d 494 (1977)], even if the issue "with nearly equal reason [might] be resolved one way rather than another", id. at 302, 97 S.Ct. 576 (citing [Farmers Reservoir & Irrigation Co. v. McComb, 337 U.S. 755, 770, 69 S.Ct. 1274, 93 L.Ed. 1672 (1949)] (Frankfurter, J., concurring)).

Id. at 398-99, 116 S.Ct. 1396. Under the Chevron line of cases, therefore, if the statutory phrase in a labor statute is ambiguous, we usually defer to the Board's reasonable interpretation of it. We are dealing here with a criminal provision, however, and it is not entirely clear exactly how the Chevron analysis is affected by the presence of criminal liability in a statute being interpreted by an agency. The Supreme Court has held that "some degree of deference" is owed to an agency's interpretation of a criminal provision, although the degree of deference may be dependent upon considerations of the agency's particular expertise and the policies implicated by the criminal statute in question, as well as the extent to which Congress has charged the agency with administering the criminal statute. See Babbitt v. Sweet Home Chapter of Cmties. for a Great Ore., 515 U.S. 687, 703-04 & n. 18, 115 S.Ct. 2407, 132 L.Ed.2d 597 (1995), citing Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 ADMIN. L.REV. 363, 372-73 (1986); see also Seneca Cayuga Tribe of Okla. v. Nat'l Indian Gaming Comm'n, No. 01-5066, 2003 WL 1889944 (April 17, 2003) (determining "no deference" owed to National Indian Gaming Commission's construction of Johnson Act because United States Department of Justice, rather than NIGC, is charged with administering statute).⁴

Here, there is a need for a uniform national understanding of the meaning of the statute in question from a labor law standpoint, and the Board has special expertise regarding the labor law implications of the statute. If we determine the statute is ambiguous, therefore, it is appropriate to afford some deference to the Board interpretation as long as it is a reasonable or permissible one, and not in conflict with interpretive norms regarding criminal statutes.⁵

III

Prior constructions of the phrase "membership dues" by the Supreme Court and other circuits persuade us that the meaning of the phrase as used in section 302 is not plain.⁶ For example, the Supreme Court has held in a different context that payments other than those by actual union members can constitute "membership dues" under labor statutes. See NLRB v. General Motors Corp., 373 U.S. 734, 83 S.Ct. 1453, 10 L.Ed.2d 670 (1963); see also Marquez v. Screen Actors Guild, Inc., 525 U.S. 33, 119 S.Ct. 292, 142 L.Ed.2d 242 (1998). These cases considered the treatment of "dues" under section 8(a)(3) of the National Labor Relations Act, 29 U.S.C. § 158(a), which makes it unlawful for an employer to pay employees in an attempt to influence their decisions regarding union membership.⁷ Membership "dues" was interpreted narrowly under section 8(a)(3) because employees can be discharged for failing to pay union membership dues. Because section 8(a)(3) grants unions coercive power over workers' employment, the term was interpreted narrowly to limit the scope of that power. See General Motors, 373 U.S. at 740-43, 83 S.Ct. 1453. Even so, the Supreme Court has stated on more than one occasion that the "dues" in section 8(a)(3) incorporates more than its literal meaning suggests. See Marquez, 525 U.S. at 46, 119 S.Ct. 292; General Motors, 373 U.S. at 742, 83 S.Ct. 1453. Thus, in construing section 8(a)(3) in General Motors the Court held that agency fees, which are payments by nonmembers as service fees to the union for the benefits of representation, constitute "membership dues." General Motors, 373 U.S. at 741-42, 83 S.Ct. 1453.

While both section 8(a)(3) and section 302 are labor statutes and both contain the term "dues," the prescriptions, purpose, and previous interpretations of "dues" in each differ. Section 8 is aimed at protecting employees from union and employer coercion. Section 8(a)(3) prohibits compulsory unionism but does permit CBAs to require employees to compensate unions for representation.⁸ The purpose of section 302, on the other hand, is to prevent corruption between unions and employers, not to cabin any coercive power of the union over employees. Unlike compulsory dues permitted under section 8(a)(3), section 302(c)(4) authorizes the company to deduct the permit fees at issue in this case only after employees submit authorization cards to this effect.

Section 302(c)(4) must be interpreted broadly because it concerns an exception to a criminal statute. See NLRB v. Food Fair Stores, Inc., 307 F.2d 3, 12 (3d Cir.1962) ("The broad construction granted in the administration of section 302 by the Department of Justice is consistent with the criminal character of the sanctions it embodies."). See also Int'l Union of Mine Mill & Smelter Workers, Local 515 v. American Zinc, Lead & Smelter Co., 311 F.2d 656, 659 (9th Cir.1963) ...