Valley Hosp. Med. Ctr. v. Nat'l Labor Relations Bd.

• Docket Number: 22-1804,22-1978
• Decision Date: 20 February 2024
• Citation: 93 F.4th 1120
• Parties: VALLEY HOSPITAL MEDICAL CENTER, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Local Joint Executive Board of Las Vegas, Intervenor. National Labor Relations Board, Petitioner, v. Valley Hospital Medical Center, Inc., Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

93 F.4th 1120

VALLEY HOSPITAL MEDICAL CENTER, INC., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent,Local Joint Executive Board of Las Vegas, Intervenor.

National Labor Relations Board, Petitioner, v. Valley Hospital Medical Center, Inc., Respondent.

No. 22-1804

No. 22-1978

United States Court of Appeals, Ninth Circuit

Argued and Submitted December 6, 2023 Pasadena, California

Filed February 20, 2024

On Petition for Review of an Order of the National Labor Relations Board, NLRBNo. 28-CA-213783

Proloy K. Das, I (argued), Ford Harrison LLP, Hartford, Connecticut; Thomas H. Keim, Jr., Ford Harrison LLP, Spartanburg, South Carolina; Tammie Rattray, Ford Harrison LLP, Tampa, Florida; for Petitioner.

Eric Weitz(argued), Attorney; Kira D. Vol, Supervisory Attorney; David Habenstreit, Assistant General Counsel; Ruth E. Burdick, Deputy Associate General Counsel; Peter S. Ohr, Deputy General Counsel; Jennifer A. Abruzzo, General Counsel; National Labor Relations Board, Washington, D.C.; for Respondent.

Kimberley C. Weber(argued), McCracken Stemerman & Holsberry LLP, Oakland, California, for Intervenor Local Joint Executive Board of Las Vegas.

Before: Diarmuid F. O'Scannlain and John B. Owens, Circuit Judges, and Matthew F. Kennelly, District Judge.^*

Opinion by Judge O'Scannlain;

Special Concurrence by Judge O'Scannlain

OPINION

O'SCANNLAIN, Circuit Judge:

We previously remanded this case to the National Labor Relations Board to explain better its decision that an employer may unilaterally cease union dues checkoff after the expiration of a collective bargaining agreement.Instead, the Board changed its mind and rendered a new decision to the contrary.We must decide whether its new decision violated our mandate and whether that decision was rational and consistent with the National Labor Relations Act.

I

A

The Local Joint Executive Board of Las Vegas("the Union") represented employees at Valley Hospital Medical Center ("Valley Hospital"), a hospital in Las Vegas, Nevada.The Collective Bargaining Agreement ("the Agreement") between the Union and Valley Hospital included a checkoff provision that required Valley Hospital to deduct union dues from participating employees' paychecks and remit those dues to the Union.The Agreement also included a union security provision that required certain Valley Hospital employees to be Union members.Because Nevada is a right-to-work state, the union security provision was not applicable.Nev. Rev. Stat. § 613.250.

The Agreement expired, and Valley Hospital initially continued dues checkoff.But about thirteen months later, Valley Hospital stopped deducting dues, without an agreement in place and without negotiating with the Union.The Union filed an unfair labor practice charge, the Board Regional Director issued a complaint, and an Administrative Law Judge dismissed the complaint.

On review, the National Labor Relations Board("the Board") also dismissed the complaint.ValleyHosp. Med. Ctr., Inc., 368 N.L.R.B. No. 139, slip op. at 9, 2019 WL 6840790(2019)("Valley Hospital I").The Board overruled its precedent requiring employers to continue dues checkoff after the expiration of a collective bargaining agreement and reinstated a longstanding rule that employers have no such obligation.Id. at 8-9.

We granted the Union's petition for review and remanded the case because the Board's "contract creation rationale" failed to acknowledge apparent departures from Board precedent.Local Joint Exec. Bd. v. NLRB, 840 F. App'x 134, 137(9th Cir.2020)("LJEB V")(remanding so that the Board could "explicitly address the prior decisions").¹We did not vacate the Board's decision because we recognized that the Board would likely be able to cure the flaw in its reasoning.Id. at 137-38.But we also acknowledged that the Board has discretion and "may change direction."Id. at 137.

On remand, the Board indeed changed direction.The Board reversed its decision in Valley Hospital I, readopted its prior rule prohibiting employers from unilaterally ceasing dues checkoff after expiration of a collective bargaining agreement, and found that Valley Hospital engaged in an unfair labor practice.ValleyHosp. Med. Ctr., Inc., 371 N.L.R.B. No. 160, slip op. at 17, 2022 WL 5179877(2022)("Valley Hospital II").Valley Hospital now petitions for review, and the Board applies for enforcement.

B

The National Labor Relations Act("NLRA") requires employers and unions to bargain collectively over "terms and conditions of employment," including dues checkoff.29 U.S.C. § 158(d);Tribune Publ'g Co. & Graphic Commc'ns Int'l, 351 N.L.R.B. 196, 197(2007), enforced, 564 F.3d 1330(D.C. Cir.2009).Refusing to bargain over terms and conditions, known as "mandatory subjects of bargaining," is an unfair labor practice.29 U.S.C. § 158(a)(5);see, e.g., LJEB I, 309 F.3d 578, 581-82(9th Cir.2002)(referring to "mandatory subjects").An employer violates its duty to bargain by unilaterally changing terms and conditions of employment during negotiations.NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230(1962);see alsoLitton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198, 111 S.Ct. 2215, 115 L.Ed.2d 177(1991)(the same rule applies during negotiations after the expiration of a collective bargaining agreement).Under Katz's "unilateral change doctrine," when a collective bargaining agreement expires, its terms and conditions persist under the NLRA.LJEB II, 540 F.3d 1072, 1078(9th Cir.2008).

The unilateral change doctrine has exceptions.See, e.g., Litton, 501 U.S. at 199, 111 S.Ct. 2215(collecting exceptions).For example, union security provisions must expire with the collective bargaining agreement.Id.For many decades, dues checkoff was one of these exceptions.In Bethlehem Steel Co., the Board reasoned that an employer's obligation to deduct and to remit dues under a checkoff provision expired with the agreement because dues checkoff provisions "implemented the union-security provisions."136 N.L.R.B. 1500, 1502(1962), remanded on other grounds sub nom.Indus. Union of Marine & Shipbuilding Workers of Am. v. NLRB, 320 F.2d 615(3d Cir.1963).

The Board routinely applied Bethlehem Steel until this court questioned its application in right-to-work states that prohibit union security provisions.LJEB I, 309 F.3d at 583-84;LJEB II, 540 F.3d at 1082;LJEB III, 657 F.3d 865, 876(9th Cir.2011).After the Board could not reach a decision, we interpreted the NLRA ourselves and held that, in right-to-work states where dues checkoff cannot "implement" union security provisions, dues checkoff is "akin to any other term of employment that is a mandatory subject of bargaining," and cannot be unilaterally changed during negotiations.LJEB III, 657 F.3d at 876.The Board subsequently overruled Bethlehem Steel.Lincoln Lutheran of Racine, 362 N.L.R.B. 1655, 1662-63(2015);see alsoWKYC-TV, Inc., 359 N.L.R.B. 286, 293(2012)(overrulingBethlehem Steel), invalidated by NLRB v. Noel Canning, 573 U.S. 513, 134 S.Ct. 2550, 189 L.Ed.2d 538(2014).

That brings us to this dispute.In Valley Hospital I, the Board overruled Lincoln Lutheran and reinstated the longstanding rule from Bethlehem Steel.368 N.L.R.B. No. 139at 8-9.Then, following our remand, the Board in Valley Hospital II reversed Valley Hospital I and readopted the rule from Lincoln Lutheran prohibiting employers from unilaterally ceasing dues checkoff after expiration of the collective bargaining agreement.371 N.L.R.B. No. 160at 17.

II

Valley Hospital raises two arguments, which we address in turn.Valley Hospital first argues that the Board exceeded its authority because our mandate authorized the Board to supplement its reasoning but not to change its interpretation of the NLRA.The mandate rule jurisdictionally bars district courts and agencies from revisiting matters that this court has decided.United States v. Thrasher, 483 F.3d 977, 981-82(9th Cir.2007)(citingIn re Sanford Fork & Tool Co., 160 U.S. 247, 255-56, 16 S.Ct. 291, 40 L.Ed. 414(1895));see alsoCal. Pub. Utils. Comm'n v. FERC, 29 F.4th 454, 462(9th Cir.2022)(applying the mandate rule to agency adjudication)."An administrative agency may therefore consider on remand 'any issue not expressly or impliedly disposed of on appeal.' "Olivas-Motta v. Whitaker, 910 F.3d 1271, 1280(9th Cir.2018)(quotingStacy v. Colvin, 825 F.3d 563, 568(9th Cir.2016)).

A

As a preliminary matter, we must determine whether we have jurisdiction to consider Valley Hospital's argument.As the Board observes, Valley Hospital did not raise its mandate rule argument before the Board.Under section 10(e) of the NLRA, we lack jurisdiction to consider objections that were not raised before the Board, unless excused by "extraordinary circumstances."29 U.S.C. § 160(e);see alsoid.§ 160(f)(incorporating same standard);Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665-66, 102 S.Ct. 2071, 72 L.Ed.2d 398(1982).Yet we have also recognized that "[w]hen § 10(e) bars our consideration of a party's objection . . . the Board is entitled to enforcement unless the Board has 'patently traveled outside the orbit of its authority.'In such a case, there would be 'legally speaking no order to enforce.' "Int'l Union of Painter & Allied Trades v. J & R Flooring, Inc., 656 F.3d 860, 867(9th Cir.2011)(quotingNLRB v. Cheney Cal. Lumber Co., 327 U.S. 385, 388, 66 S.Ct. 553, 90 L.Ed. 739(1946));see alsoPolynesian Cultural Ctr., Inc. v. NLRB, 582 F.2d 467, 472(9th Cir.1978)("[J]urisdiction in the sense of 'power to hear and determine the controversy' . . . can be questioned at any time . . . ."(quotingNLRB v. Pappas, 203 F.2d 569, 571(9th Cir.1953))).

The mandate rule limits the jurisdiction of district courts and agencies on remand.If the Board did not follow our mandate, it would be patently obvious that the Board exceeded its authority.AccordCarroll Coll., Inc. v. NLRB, 558 F.3d 568, 574(D.C. Cir....