UC Health v. Nat'l Labor Relations Bd., s. 14–1049

Citation803 F.3d 669
Decision Date18 September 2015
Docket Number14–1193.,Nos. 14–1049,s. 14–1049
PartiesUC HEALTH, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent.
CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)

Kerry P. Hastings argued the cause and filed the briefs for petitioner.

Kellie Isbell, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Richard Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Ruth E. Burdick, Supervisory Attorney.

Before: GRIFFITH, Circuit Judge, and EDWARDS and SILBERMAN, Senior Circuit Judges.

Opinion

Opinion for the Court filed by Circuit Judge GRIFFITH.

Concurring opinion filed by Senior Circuit Judge EDWARDS.

Dissenting opinion filed by Senior Circuit Judge SILBERMAN.

GRIFFITH, Circuit Judge:

In NLRB v. Noel Canning, ––– U.S. ––––, 134 S.Ct. 2550, 189 L.Ed.2d 538 (2014), the Supreme Court determined that the National Labor Relations Board lacked authority to act during the time that three of its five members held office via appointments that violated the Recess Appointments Clause. This petition for review asks whether a Regional Director of the Board had authority to conduct a union election and certify its result during that same time. We conclude that the Regional Director maintained his authority and therefore deny the petition for review.

I
A

Section 3(a) of the National Labor Relations Act (NLRA) calls for a National Labor Relations Board made up of five members who are appointed by the President with the advice and consent of the Senate. 29 U.S.C. § 153(a). The Board has two main functions under the NLRA. Its quasi-judicial function involves deciding whether particular conduct violates the provisions of the Act that bar unfair labor practices. Id. §§ 158, 160. The Board also has the primary responsibility for directing and holding representation elections by which employees may choose to designate representatives for purposes of collective bargaining. Id. § 159(b), (c). Representation proceedings differ from unfair labor practice proceedings in that they may only be reviewed in a court of appeals when they are relevant to the court's review of an unfair labor practice proceeding. See Am. Fed'n of Labor v. NLRB, 308 U.S. 401, 409, 60 S.Ct. 300, 84 L.Ed. 347 (1940). The Act authorizes the Board to delegate to Regional Directors the authority to direct representation elections and certify the results. 29 U.S.C. § 153(b). The Board first delegated its authority over representation proceedings to the Regional Directors in 1961. See 26 Fed.Reg. 3911 (May 4, 1961). Regional Directors have been responsible for administering and certifying the results of representation elections in their particular regions ever since.

In what turns out to be a critical distinction for the purposes of this challenge, the statute preserves for the Board the power to review “any action of a regional director” taken pursuant to that delegation, should a party object. 29 U.S.C. § 153(b). Thus, though the Board may empower Regional Directors to oversee representation elections, the terms of the delegation authorized under the Act provide that no Regional Director's actions are ever final on their own; they only become final if the parties decide not to seek Board review or if the Board leaves those actions undisturbed. Id.

The Act separately permits the Board to delegate “any or all of the powers which it may itself exercise” to panels made up of three or more of its members. 29 U.S.C. § 153(b). When such a panel is created, the Act provides that two of its members make up a quorum of that group. Id. This provision allows the Board to process cases more quickly by spreading them across more panels. Moreover, it allows the Board to continue to function without requiring the attendance of all members. Should two of the five members' terms expire, the Board can continue to act despite the vacancies, while waiting for Congress to appoint new members. Nevertheless, the statute mandates that “three members of the Board shall, at all times, constitute a quorum of the Board.” Id.

Between August 2010 and January 3, 2012, three of the Board's five members' terms expired and the Senate refused to confirm any of the President's nominees to fill the vacancies, leaving the Board without a quorum and therefore unable to act. Claiming authority under the Recess Appointments Clause, see U.S. Const. art. II, § 2, cl. 3, the President named three individuals to the Board during a three-day break between pro forma Senate sessions, but the Supreme Court held those appointments unconstitutional in Noel Canning, 134 S.Ct. 2550. No Senate-confirmed appointees were sworn in until August 5, 2013. In the interim, Regional Directors continued to hold elections and certify the results, relying upon the Board's previous delegation of authority.

B

UC Health is a nonprofit corporation that operates a hospital and provides inpatient and outpatient medical care near the University of Cincinnati in Ohio. In March 2013, while the Board lacked a quorum, the UC Health Public Safety Union filed a petition with the Board seeking to represent a unit of security officers employed by the company. UC Health and the Union entered into a Stipulated Election Agreement that identified the appropriate bargaining unit and established that the Regional Director would supervise a secret-ballot election following the Board's regulations. Under those regulations, if either party files timely objections to the election, it is entitled to plenary review by the Board of any decision of the Regional Director addressing those objections. 29 C.F.R. § 102.67(c). If no objections are filed, the Regional Director “shall” certify the results. Id. § 102.69(b).

The Regional Director held the representation election on April 16, 2013, and the Union prevailed by a small margin. The Regional Director certified the results without objection from UC Health or the Union on April 24. Shortly thereafter, the Union requested that UC Health bargain, but the company refused. Citing that refusal to bargain, the Acting General Counsel charged UC Health with an unfair labor practice. The company defended itself on the ground that the Regional Director had acted without authority because the Board lacked a quorum at the time of the election.

The Board granted summary judgment to the Acting General Counsel, finding that the company's argument was untimely because it had not been made during the representation proceedings. See UC Health and UC Health Public Safety Union, 360 N.L.R.B. No. 71 (2014). And even if not waived, the Board concluded that UC Health's argument was without merit because the Board had delegated authority over representational proceedings to the Regional Directors in 1961; [p]ursuant to this delegation, NLRB Regional Directors remain vested with the authority to conduct elections and certify their results, regardless of the Board's composition at any given moment.” Id. at *1 n. 2. Therefore, the Board determined that the election was valid and UC Health had committed an unfair labor practice by refusing to bargain with the Union. Id. at *2–3. UC Health filed a petition for review in this court. We have jurisdiction under 29 U.S.C. § 160(e), (f). Absent plain meaning to the contrary, a court is obliged to defer to an agency's reasonable interpretation of its statutory jurisdiction pursuant to the familiar Chevron doctrine. City of Arlington v. FCC, ––– U.S. ––––, 133 S.Ct. 1863, 1870–71, ––– L.Ed.2d –––– (2013).

II

The sole question before us is whether the Regional Director had authority to hold the representation election and certify its results when the Board lacked a quorum. We hold that he did.

A

The Board argues that we need not address whether the Regional Director had the necessary authority because UC Health has waived its challenge by failing to raise its objection to the Regional Director's authority at the representation proceeding. [A]s a general proposition, the applicable case law emphasizes the need for parties seeking judicial review of agency action to raise their issues before the agency during the administrative process in order to preserve those issues for review.” Advocates for Highway & Auto Safety v. Fed. Motor Carrier Safety Admin., 429 F.3d 1136, 1148 (D.C.Cir.2005). The NLRA states that [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). And under the Board's practice, “any issues that may be presented during the representation proceeding must be offered there.” Pace Univ. v. NLRB, 514 F.3d 19, 23 (D.C.Cir.2008). Thus, the Board claims, UC Health's objection to the Regional Director's authority comes too late.

We have consistently held, however, that challenges to the composition of an agency can be raised on review even when they are not raised before the agency. 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) ; Mitchell v. Christopher, 996 F.2d 375, 378–79 (D.C.Cir.1993) (recognizing an exception allowing parties to “raise[ ] for the first time on review ... challenges that concern the very composition or constitution of an agency”). Since this challenge directly involves the question of whether the Board's lack of a quorum stripped the Regional Directors of power, UC Health may make it and we may review it.

The Board also asserts that UC Health may not challenge the Regional Director's authority because the company voluntarily entered into the Stipulated Election Agreement with the Union, and therefore agreed to let the Regional Director supervise the election. According to the Board, the agreement is a contract binding on both parties: UC...

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