Snell Island Snf LLC v. N.L.R.B.

• Decision Date: 17 June 2009
• Docket Number: Docket No. 08-3822-ag (L).,Docket No. 08-4336-ag (XAP).
• Citation: 568 F.3d 410
• Parties: SNELL ISLAND SNF LLC, d/b/a Shore Acres Rehabilitation and Nursing Center, LLC, and HGOP, LLC, d/b/a Cambridge Quality Care, LLC, Petitioners-Cross-Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.
• Court: U.S. Court of Appeals — Second Circuit

568 F.3d 410

SNELL ISLAND SNF LLC, d/b/a Shore Acres Rehabilitation and Nursing Center, LLC, and HGOP, LLC, d/b/a Cambridge Quality Care, LLC, Petitioners-Cross-Respondents, v. NATIONAL LABOR RELATIONS BOARD, Respondent-Cross-Petitioner.

Docket No. 08-3822-ag (L).

Docket No. 08-4336-ag (XAP).

United States Court of Appeals, Second Circuit.

Argued: April 15, 2009.

Decided: June 17, 2009.

Charles P. Roberts, III, (Clifford H. Nelson, Jr., on the brief), Constangy, Brooks & Smith, LLC, Winston-Salem, NC, and Atlanta, GA, for Petitioners-Cross-Respondents.

Ruth E. Burdick, Attorney (Ronald Meisburg, General Counsel, John E. Higgins, Jr., Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, Robert J. Englehart, Supervisory Attorney, and David A. Seid, Attorney, on the brief), National Labor Relations Board, Washington, D.C., for Respondent-Cross-Petitioner.

Before: WINTER, CABRANES, and SACK, Circuit Judges.

JOSÉ A. CABRANES, Circuit Judge:

We consider two questions arising from a labor dispute adjudicated before a panel of the National Labor Relations Board ("NLRB" or the "Board"): (1) whether an adjudication by a two-member panel of the NLRB is permitted under Section 3(b) of the National Labor Relations Act, 29 U.S.C. § 151 et seq. (the "Act"), where a third member of the panel was disqualified because his term had expired and the total membership of the NLRB was only two members; and (2) whether it was an "abuse of discretion" for a regional director of the NLRB to overrule an employer's objections to a union election without holding a hearing or interviewing witnesses.

BACKGROUND

The following facts are not in dispute. See generally Snell Island SNF LLC, 352 NLRB No. 106, at 2-3 (2008). The NLRB is the administrative agency of the United States responsible for overseeing labor-union elections and adjudicating certain types of labor disputes. It consists of five members, each of whom is appointed by the President, with the advice and consent of the Senate, for a term of five years. See 29 U.S.C. § 153(a) (providing further that "[t]he President shall designate one member to serve as Chairman of the Board"). In the ordinary course, the NLRB hears and decides cases by panels of three members in accordance with section 3(b) of the Act, which provides that the NLRB

is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise. . . . A vacancy in the Board shall not impair the right of the remaining members to exercise all of the powers of the Board, and three members of the Board shall, at all times, constitute a quorum of the Board, except that two members shall constitute a quorum of any group designated pursuant to the first sentence hereof.

29 U.S.C. § 153(b).¹

At the beginning of December 2007, the NLRB consisted of four members—Wilma B. Liebman, Peter C. Schaumber, Peter N. Kirsanow, and Dennis P. Walsh—whose terms were staggered. One seat was vacant, and the terms of Kirsanow and Walsh were set to expire on December 31, 2007. Anticipating that no replacement appointments were forthcoming, and that it would lose its three-member quorum, the Board delegated all of its powers to a three-member panel consisting of Liebman, Schaumber, and Kirsanow, effective December 28, 2007. In reaching this decision, which the Board memorialized in a December 20, 2007, Minute of Board Action, the Board relied on the plain language of the Act and also

relied on . . . the March 4, 2003 opinion issued by the Office of Legal Counsel of the U.S. Department of Justice (OLC) in response to the Board's May 16, 2002 request for OLC's opinion whether the Board may issue decisions during periods when three or more of the five seats on the Board are vacant. OLC's opinion concluded that "if the Board delegated all of its powers to a group of three members, that group could continue to issue decisions and orders as long as a quorum of two members remained." . . .

OLC's opinion stands for the proposition that the Board has the authority to issue two-member decisions and orders, but that it is within the Board's discretion whether or not to exercise that authority.

Addendum to J.A. 2 ("Minute of Board Action," Dec. 20, 2007, at 2); see also M. Edward Whelan, III, Quorum Requirements: Memorandum Opinion for the Solicitor, National Labor Relations Board 2 (Mar. 4, 2003), available at http://www. usdoj.gov/olc/2003/nlrb_quorum_03042003. pdf (last visited June 11, 2009) (on file with Clerk of Court) ("OLC Opinion"). When Kirsanow's term expired on December 31, the panel continued to operate in the normal course with a two-member quorum consisting of Liebman and Schaumber. As of the filing of this opinion, Liebman and Schaumber remain the only two members of the Board.

Petitioner Snell Island SNF LLC operates a nursing home and long-term care facility in St. Petersburg, Florida, called "Shore Acres." Petitioner HGOP, LLC, provides employee-staffing services to the Shore Acres facility and other nursing homes, and has its principal place of business in Brooklyn, New York. See Snell Island SNF LLC, 352 NLRB No. 106, at 1. Petitioners are joint employers of the employees of Shore Acres.

On December 12, 2007, at a representative election held under the auspices of the NLRB, see 29 U.S.C. § 159, employees at Shore Acres elected United Food and Commercial Workers Union, Local 1625 (the "Union"), as their exclusive collective-bargaining representative. Petitioners promptly filed with the NLRB thirteen objections to the election. A regional director of the NLRB reviewed the objections² and recommended in January 2008 that they be overruled in their entirety. Petitioners filed exceptions to the regional director's recommendation and on March 13, 2008, a two-member panel of the Board—consisting of Liebman and Schaumber—overruled the exceptions and issued an unpublished Decision and Certification of Representative. Footnote 1 to that decision explained the number and selection of the panel members:

Effective midnight December 28, 2007, Members Liebman, Schaumber, Kirsanow, and Walsh delegated to Members Liebman, Schaumber, and Kirsanow, as a three-member group, all of the Board's powers in anticipation of the expiration of the terms of Members Kirsanow and Walsh on December 31, 2007. Pursuant to this delegation, Members Liebman and Schaumber constitute a quorum of the three-member group. As a quorum, they have the authority to issue decisions and orders in unfair labor practice and representation cases. See Sec. 3(b) of the Act.

J.A. 71.

Following the March 13 Decision and Certification, petitioners refused to recognize and bargain with the Union.³ On May 16, 2008, the Union filed an unfair labor practice claim with the NLRB, which was referred to the regional director and ultimately adjudicated by the same two-member panel of the Board. On July 18, 2008, the two-member panel issued a Decision and Order concluding that petitioners had engaged in unfair labor practices by refusing to negotiate with the Union and ordering petitioners to meet with the Union. See Snell Island SNF LLC, 352 NLRB No. 106, at 2-3. The July 18 Decision and Order contained a footnote substantially similar to footnote 1 in the March 13 Decision and Order but indicating that President Bush had, in the interim, designated Schaumber as Chairman.

This appeal followed. Before this Court, petitioners argue principally that the July 18 and March 13 Decisions and Orders were not issued by a properly constituted panel of the NLRB because only two Board members participated in the adjudication. In the alternative, petitioners contend that the NLRB abused its discretion with respect to two of petitioners' thirteen objections to the union election, which objections petitioners argue should not have been overruled without interviewing witnesses or conducting an evidentiary hearing. The NLRB has filed a cross-application for enforcement of its July 18 Decision and Order.

DISCUSSION

I. Jurisdiction

We have jurisdiction to review final orders of the NLRB pursuant to section 10(f) of the Act. See 29 U.S.C. § 160(f) ("Any person aggrieved by a final order of the Board granting or denying in whole or in part the relief sought may obtain a review of such order in any United States court of appeals in the circuit wherein the unfair labor practice in question was alleged to have been engaged in or wherein such person resides or transacts business. . . ."). As we have previously explained, to obtain judicial review of a union's certification by the Board, an employer must refuse to bargain, prompting an unfair labor practice finding—a final order that we may review. See NLRB v. Arthur Sarnow Candy Co., 40 F.3d 552, 556 n. 5 (2d Cir.1994). Accordingly, we consider in this appeal both the March 13 Decision and Order (certifying a union election), and the July 18 Decision and Order (finding an unfair labor practice). See 29 U.S.C. § 159(d) ("Whenever an order of the Board . . . is based in whole or in part upon facts certified following an investigation [of a union election] and there is a petition for the enforcement or review of such order, such certification and the record of such investigation shall be included in the transcript of the entire record . . . and thereupon the decree of the court enforcing, modifying, or setting aside in whole or in part of the order of the Board shall be made and entered upon the pleadings, testimony, and proceedings set forth in such transcript.").

II. Quorum Requirement

Petitioners contend that the NLRB issued its March 13 and July 18 Decisions and Orders without statutory authority because only two Board members participated in those adjudications. According to petitioners, section 3(b) of the Act requires that a panel of the Board consist of at least three members. Petitioners acknowledge that once a three-member panel is...