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Fallbrook Hospital Corp. v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

May 8, 2015


Argued: January 8, 2015.

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[Copyrighted Material Omitted]

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On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

Kaitlin A. Kaseta argued the cause for petitioner. On the briefs was Bryan T. Carmody.

Barbara A. Sheehy, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Jill A. Griffin, Supervisory Attorney.

Before: GARLAND, Chief Judge, PILLARD, Circuit Judge, and EDWARDS, Senior Circuit Judge. OPINION by Senior Circuit Judge EDWARDS.


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Edwards, Senior Circuit Judge.

In a decision issued on April 14, 2014, the National Labor Relations Board (" Board" ) held that Fallbrook Hospital Corporation (" Fallbrook" or " Hospital" ) had violated Sections 8(a)(1) and (5) of the National Labor Relations Act (the " Act" ), 29 U.S.C. § 158(a)(1), (5), by refusing to bargain in good faith with the California Nurses Association/National Nurses Organizing Committee, AFL-CIO (" Union" ), after the Union had been certified to represent a bargaining unit of registered nurses working in the Hospital's acute care unit. See Fallbrook Hosp. Corp., 360 N.L.R.B. No. 73 (2014), slip op. at 1-2 & n.2. The Board further held that " an award of negotiating expenses [was] necessary to fully remedy the detrimental impact [that Fallbrook's] unlawful conduct has had on the bargaining process." Fallbrook now petitions for review of the Board's decision ordering it to pay negotiation expenses to the Union. The Board, in turn, cross-petitions for enforcement of its order. We deny Fallbrook's petition and grant the Board's cross-petition.

Far from the run-of-the-mill failure to bargain, the Board specifically found that Fallbrook acted in an " obstinate and pugnacious manner," "operated with a closed mind and put up a series of roadblocks designed to thwart and delay bargaining," id., and that the totality of Fallbrook's conduct made it " clear" that " there was no intent to bargain,". The Board found multiple violations of the Act based on Fallbrook's conduct at the bargaining table, including but not limited to refusing to bargain over mandatory subjects and refusing to provide information requested by the Union. & n.2.

As the Board's decision makes clear, a reimbursement remedy is appropriate " where it may fairly be said that [an employer's] substantial unfair labor practices have infected the core of a bargaining process to such an extent that their effects cannot be eliminated by the application of traditional remedies." (internal quotation marks omitted) (quoting Unbelievable, Inc., 318 N.L.R.B. 857, 859 (1995), enf'd in pertinent part, Unbelievable, Inc. v. NLRB, 118 F.3d 795, 326 U.S. App.D.C. 194 (D.C. Cir. 1997)). Such a remedy " is warranted both to make the charging party whole for the resources that were wasted because of the unlawful conduct, and to restore the economic strength that is necessary to ensure a return to the status quo ante at the bargaining table." Unbelievable, 318 N.L.R.B. at 859.

On May 21, 2014, after the Hospital filed its Petition for Review with this court, Fallbrook gave notice to the Union that it

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intended to terminate the acute care unit in which members of the bargaining unit worked. In light of this development, " Fallbrook has decided to abandon all issues presented on appeal, except for the Board's award of negotiating expenses." Br. of Petitioner 2 n.2. In other words, the Hospital does not challenge the findings underlying the Board's conclusion that Fallbrook " deliberately acted to prevent any meaningful progress during bargaining" and that it committed a number of serious violations of the Act. Fallbrook, 360 N.L.R.B. No. 73, slip op. at 2.

The only question before the court on the petition for review is whether the Board's award of negotiation expenses was a " clear abuse of discretion." See United Steelworkers of Am. v. NLRB, 376 F.2d 770, 773, 126 U.S. App.D.C. 215 (D.C. Cir. 1967). Fallbrook argues that the Board's decision is wanting because it fails to take account of the totality of the circumstances and is unsupported by law. We reject this argument. As explained below, the Board's decision that negotiation expenses were warranted in this case is amply supported by substantial evidence in the record and has a rational basis in the law.

Fallbrook has filed a motion to remand the case to the Board pursuant to Section 10(e), 29 U.S.C. § 160(e), for the Board to hear additional evidence. A remand is permissible under Section 10(e) if the movant can demonstrate to the court's satisfaction that any purported new evidence is material and could not reasonably have been raised before the Board. Fallbrook argues that, because the Hospital has effectively terminated the entire bargaining unit by closing its acute care facility, there are " changed factual circumstances" that justify remand to the Board to reconsider its award of negotiating expenses. Fallbrook's theory is that there are two separate purposes for the Board's negotiation expenses remedy: one to redress the effect of Fallbrook's past misconduct on the Union (which Fallbrook does not contest), and one to provide the Union prospective strength at the bargaining table (which Fallbrook claims is now " unnecessary" due to the closure of the Hospital's acute care unit). Fallbrook thus argues that the case should be remanded to the Board to allow it to reconsider whether the disputed remedy is still justified. This argument is not only meritless, it reflects real chutzpah. See, e.g., Harbor Ins. Co. v. Schnabel Found., 946 F.2d 930, 937 n.5, 292 U.S. App.D.C. 56 (D.C. Cir. 1991) (" It reminds us of the legal definition of chutzpah: chutzpah is a young man, convicted of murdering his parents, who argues for mercy on the ground that he is an orphan." ).

The Board's decision does not, as Fallbrook suggests, apportion the remedy to distinguish between relief for past misconduct and relief to ensure that the Union has prospective strength in collective bargaining. Rather, the Board's decision states that the purpose for the remedy is to make the Union whole and to put the Union in the same place it was before the bargaining ever occurred. Furthermore, the Hospital and the Union held a number of bargaining sessions to negotiate over the effects of the closure of the acute care unit, and these bargaining sessions occurred after the Board issued its decision and after Fallbrook announced the closure. Therefore, even accepting Fallbrook's theory -- that a portion of the Board's order was only intended to give the Union prospective strength at the bargaining table -- it is still clear that the Board's remedy is fully justified. In sum, we find no merit in Fallbrook's motion to remand the case to the Board pursuant to Section 10(e).

I. Background

A. Statutory and Legal Background

Section 8(a)(5) of the Act makes it " an unfair labor practice for an employer

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. . . to refuse to bargain collectively with the representatives of his employees. . . ." 29 U.S.C. § 158(a)(5). As is relevant here, the duty to bargain collectively means, " to meet at reasonable times and confer in good faith with respect to . . . the negotiation of an agreement." Id. § 158(d). Because the statutory standard of " good faith" bargaining is determined by the facts of each case, whether or not a party has failed to live up to this duty falls squarely within the province of the Board's expertise. Sign & Pictorial Union Local 1175 v. NLRB, 419 F.2d 726, 731, 136 U.S. App.D.C. 144 (D.C. Cir. 1969). " A violation of Section 8(a)(5) is also a violation of Section 8(a)(1), which makes it an unfair labor practice for an employer to 'interfere with, restrain, or coerce employees in the exercise' of their statutory right to bargain collectively through representatives of their own choosing." S. Nuclear Operating Co. v. NLRB, 524 F.3d 1350, 1356 n.6, 381 U.S. App.D.C. 37 (D.C. Cir. 2008) (quoting 29 U.S.C. § 158(a)(1)).

The Board has discretion to fashion appropriate remedies for violations of the duty to bargain. See 29 U.S.C. § 160(c) (authorizing the Board to order the violator " to take such affirmative action . . . as will effectuate the policies of this subchapter" ). As noted above, " [i]n cases of unusually aggravated misconduct," the Board may order an offending party " to reimburse the charging party for negotiation expenses." Unbelievable, 318 N.L.R.B. at 859. The Board determines whether negotiating expenses are warranted after weighing the evidence in a particular case. Hosp. of Barstow, Inc., 361 N.L.R.B. No. 34 ...

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