Nat'l Labor Relations Bd. v. FedEx Freight, Inc.

• Decision Date: 09 August 2016
• Docket Number: No. 15–2712,No. 15–2585,15–2585
• Citation: 832 F.3d 432
• Parties: National Labor Relations Board, Petitioner, v. FedEx Freight, Inc., Respondent. FedEx Freight, Inc., Petitioner, v. National Labor Relations Board, Respondent.
• Court: U.S. Court of Appeals — Third Circuit

832 F.3d 432

National Labor Relations Board, Petitioner,

v.FedEx Freight, Inc., Respondent.

FedEx Freight, Inc., Petitioner,

v.National Labor Relations Board, Respondent.

No. 15–2585

No. 15–2712

United States Court of Appeals, Third Circuit.

Argued: March 1, 2016

Filed: August 9, 2016

Linda Dreeben, Jill A. Griffin, Milakshmi V. Rajapakse [ARGUED], National Labor Relations Board, 1015 Half Street, SE, Washington, DC 20570, Counsel for National Labor Relations Board.

Brett M. Anders, Jackson Lewis 220 Headquarters Plaza East Tower, 7th Floor Morristown, NJ 07960, David A. Prather, Ivan Rich, Jr. [ARGUED], FedEx Freight Corp, 1715 Aaron Brenner Drive, Suite 600, Memphis, TN 38120, Counsel for FedEx Freight, Inc.

Before: AMBRO, JORDAN, and SCIRICA, Circuit Judges.

OPINION

SCIRICA, Circuit Judge

The National Labor Relations Board certified a collective-bargaining unit comprised of FedEx Freight, Inc. drivers at FedEx's South Brunswick Terminal in Monmouth Junction, New Jersey. To test the appropriateness of the unit, FedEx refused to bargain with the unit's certified bargaining representative, Local 701, contending the terminal's dockworkers must also be included in the unit.¹ The Regional Director issued an unfair labor practices order against FedEx, and the Board granted summary judgment in favor of the union. FedEx filed a petition for review, contending the Board (having adopted the Regional Director's reasoning) abused its discretion in certifying the unit because it applied a unit-determination standard from Specialty Healthcare & Rehabilitation Center , 357 N.L.R.B. No. 83 (2011),enforced sub nom. Kindred Nursing Centers East, LLC v. NLRB , 727 F.3d 552 (6th Cir. 2013). It contends this decision violated Board precedent, the National Labor Relations Act, and the Administrative Procedure Act. Alternatively, FedEx contends that even if the Specialty Healthcare standard applies, the Board abused its discretion by failing to properly apply it here.²

Because the Board's interpretation of the legal standard to apply in unit-determination cases in Specialty Healthcare was reasonable, and the Board properly applied that standard here, we will deny the petition for review and grant the Board's cross-petition for enforcement of its order to bargain.

I.

FedEx provides pick-up and delivery services to customers throughout the United States and has a service center, or “terminal”—the South Brunswick Terminal—in Monmouth Junction, New Jersey. This terminal has an administrative building and a dock where freight is loaded and unloaded onto FedEx trucks by FedEx dockworkers. There is also a yard surrounding the office building and dock where these dockworkers move and store vehicles and equipment.

The FedEx employees at issue here are city and road drivers and dockworkers.³ City drivers transport freight locally, and road drivers transport freight over longer distances. The petitioned-for unit is comprised of all drivers, both city and road, but excludes all dockworkers. FedEx's South Brunswick Terminal employs eighty-one city drivers, thirty-three road drivers, and fifty-two dockworkers. All drivers are full-time employees, and twenty of the fifty-two dockworkers are full-time employees—the other thirty-two dockworkers are part-time.

The basic requirements for city and road drivers are the same—all drivers must have a commercial driver's license, at least one year of relevant driving experience (or have gone through FedEx's one-year dock-to-driver program, see infra ) and have acceptable motor-vehicle reports. They must also submit to random drug testing and wear company-issued uniforms. All drivers spend most of their working time away from the dock and are supervised remotely by dispatchers—operational supervisors who rotate between dock and dispatch supervision. In addition, either type of driver “[m]ay be required to perform job duties of [the other type of driver] or [of] a dock employee where operationally necessary.” J.A. 72, 74–75.

The differences between city and road drivers primarily relate to compensation. Although all drivers' wages are based on their years of experience, city drivers are paid between $20.63 and $24.93 per hour, whether or not they are driving or working on the dock. Road drivers make the same as city drivers when working on the dock or driving locally, but make between $0.53 and $0.62 per mile when driving longer distances.

Unlike drivers, dockworkers work only in the yard or on the dock. Dockworkers load freight onto outbound trailers and unload freight from inbound trailers. They may occasionally drive forklifts and other vehicles within the yard to move equipment from place to place (“hostling”),⁴ but this driving does not require a commercial driver's license nor involve the types of vehicles city and road drivers use.

Moreover—unlike the requirements for drivers—no relevant work experience is required to be a dockworker. Dockworkers are also not required to wear uniforms nor are they subject to random drug testing. Full-time dockworkers, like drivers, select their schedules based on seniority. But part-time dockworkers do not—FedEx assigns part-time dockworkers to a shift when they are hired.

Dockworkers also earn considerably less than drivers. Full-time dockworkers earn an average of $20.13 an hour—fifty cents per hour less than the average city driver—and part-time dockworkers make only between $16.31 and $18.31 per hour. Dockworkers have an opportunity to become drivers through the “dock-to-driver” program,⁵ but only about 19 percent of FedEx's drivers at the South Brunswick Terminal (24 percent of the road drivers and 16 percent of the city drivers) graduated from the program. No employee has moved in the opposite direction—from driver to dockworker.

Because drivers and dockworkers are employed by FedEx, they unsurprisingly have some common conditions of employment. All drivers and dockworkers are eligible for the same retirement, healthcare benefits, and personal days off (although part-time dockworkers do not receive paid holidays and cannot accrue paid vacation time). In addition, all drivers and dockworkers share the same break room and locker rooms and must abide by the “General Responsibilities” handbook for all FedEx employees. And, as noted, drivers spend a small amount of their time doing dock work. In 2012, about 3.5 percent of city drivers' time and 10 percent of road drivers' time was spent performing dock work at the South Brunswick Terminal.⁶

II.

We first address whether FedEx preserved its challenges to Specialty Healthcare . In this case, FedEx incorporated the arguments from its previous request for review of the Regional Director's unit determination in its Response to Notice to Show Cause. Parties often incorporate, rather than restate, prior arguments because of the Board's “no-relitigation rule.” Nathan Katz Realty, LLC v. NLRB , 251 F.3d 981, 987 (D.C. Cir. 2001). Under this rule, “[d]enial of a request for review [by the Board of the Regional Director's decision] shall ... preclude relitigating any such issues in any related subsequent unfair labor practice proceeding.” 29 C.F.R. § 102.67(g) (2015) ; see also Nathan Katz , 251 F.3d at 986 (explaining that under this rule an employer may “incorporate[ ] by reference and reaffirm[ ] by reference its post election objections”) (internal quotation marks and citation omitted)). Here, FedEx incorporated in its Response to Notice to Show Cause “the reasons and legal arguments set forth in [its] Request for Review as the basis for its refusal to recognize the Union.” J.A. 217. Therefore, we will consider the arguments set forth in this prior proceeding.

The Board contends FedEx waived any challenges to Specialty Healthcare because, in its request for review, FedEx applied the overwhelming-community-of-interest standard described in Specialty Healthcare rather than argue Specialty Healthcare was wrongly decided. FedEx stated its disapproval of the Specialty Healthcare decision in a footnote.

Under 29 U.S.C. § 160(e), “[n]o objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” 29 U.S.C. § 160(e). The crucial question in a section 160(e) analysis is whether the Board “ ‘received adequate notice of the basis for the objection.’ ” FedEx Freight, Inc. v. NLRB , 816 F.3d 515, 521 (8th Cir. 2016) (quoting Nathan Katz , 251 F.3d at 985 ); see also NLRB v. FES , 301 F.3d 83, 89 (3d Cir. 2002) (holding that because the “tenor of FES's challenge before the Board raised a purely factual question” and did not “provide[ ] the basis for its challenge,” FES failed to raise the issue before the Board); Nathan Katz , 251 F.3d at 986 (explaining a petitioner “has forfeited its right to challenge the Board's disposition” when the petitioner “completely fails to raise an issue during an unfair labor practice proceeding” (internal citation and quotation marks omitted)).

Despite the Board's arguments to the contrary, FedEx's footnote in its petition for review provided sufficient notice. The footnote reads:

[FedEx] posits that Specialty Healthcare was decided erroneously, largely for the reasons cited in Member Hayes' dissent therein. However, on the assumption that [the] Board will not now revisit its decision there, [FedEx] alternatively contends that the case at bar was decided incorrectly even under the rule of Specialty Healthcare and its progeny.

J.A. 183 n.4. As indicated, the footnote states clearly “that Specialty Healthcare was decided erroneously,” and gives as the basis for its challenge “the reasons cited in Member [Brian] Hayes'[s] dissent therein.” Id. The footnote also states that FedEx's argument under Specialty Healthcare 's overwhelming-community-of-interest test was an alternative argument. Its primary argument was that “Specialty Healthcare was decided...