Bannum Place of Saginaw, LLC v. NLRB ( 2022 )

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 22a0155p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
┐
BANNUM PLACE OF SAGINAW, LLC,
│
Petitioner/Cross-Respondent, │
> Nos. 21-2664/2690
│
v. │
│
NATIONAL LABOR RELATIONS BOARD, │
Respondent/Cross-Petitioner. │
┘
On Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board.
Nos. 07-CA-207685; 07-CA-211090; 07-CA-215356.
Decided and Filed: July 14, 2022
Before: MOORE, COLE, and NALBANDIAN, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Thomas R. Meagher, FOSTER SWIFT COLLINS & SMITH PC, Lansing,
Michigan, for Petitioner/Cross-Respondent. Usha Dheenan, Joel A. Heller, Ruth E. Burdick,
David Habenstreit, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Respondent/Cross-Petitioner.
_________________
OPINION
_________________
KAREN NELSON MOORE, Circuit Judge. Under the National Labor Relations Act
(“Act”), the National Labor Relations Board (“Board”) has jurisdiction over unfair labor practice
claims brought against an “employer.” 29 U.S.C. §§ 158(a), 160(a). Exempt from the definition
of “employer” is the federal government. Id. § 152(2). In its petition for review of the Board’s
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decision finding that the company had committed unfair labor practices, Bannum Place of
Saginaw, LLC (“Bannum”) argues that it is a joint employer with the Federal Bureau of Prisons
(“BOP”) and thus falls within the federal-government exemption. The Board has filed a cross-
application to enforce its order remedying the unfair labor practices. We hold that the Board had
jurisdiction and that its order must be enforced.1
I. BACKGROUND
Bannum is a private company that runs a residential reentry center in Saginaw, Michigan.
Administrative Record (“A.R.”) at 653 (Answer ¶ 2). The center offers transitional services that
help recently released inmates from federal prisons seek employment, find housing, and
reintegrate into society. Id. at 813 (Decision & Direction of Election (“Election Decision”) at 2).
Bannum manages this center under a contract with the BOP that regulates many day-to-day
operations at the facility through a detailed set of requirements called the “Statement of Work.”
Id. at 886–1021 (Statement of Work).
In 2017, employees at Bannum met with Local 406, International Brotherhood of
Teamsters (the “Union”), leading the Union to file an election petition with the Board and the
Board to schedule a representation election. Id. at 1280 (NLRB Decision & Order (“NLRB
Order”) at 1). Bannum challenged the Board’s jurisdiction to conduct the election, arguing to the
Board’s Regional Director that Bannum was a joint employer with the BOP because the terms of
their contract gave substantial control over the company’s daily operations to the agency. Id. at
811 (Election Decision at 1). The Regional Director rejected this argument. Id. Despite being
informed of its right to seek review of this decision from the Board, id. at 829 (Election Decision
at 18), Bannum did not do so. The Union subsequently won the election, and the Board certified
it as the employees’ exclusive representative. Id. at 1280 (NLRB Order at 1).
Bannum’s efforts to prevent the Union from representing its workers were not limited to
legal challenges, however. Both before and after the Union’s certification, Bannum tried to
dissuade its workers from supporting the Union. For example, the company interrogated
1
Additionally, we grant the Board’s motion to lodge in the record Bannum’s brief filed before the Board in
support of exceptions.
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employees about their views on unions, threatened reprisals if they voted for the Union, and
discharged known supporters of the Union. Id. at 1280–85 (NLRB Order at 1–5).
Such conduct led the Union and an employee to file unfair labor practice charges against
Bannum. Id. at 1173 (Administrative Law Judge (“ALJ”) Decision at 1). The Board then filed a
complaint alleging that Bannum had engaged in unfair labor practices in violation of several
provisions of 29 U.S.C. § 158. Id. at 1280 (NLRB Order at 1).
During the unfair labor practice proceedings that followed in 2020, Bannum moved to
dismiss the complaint, reiterating the same joint-employer argument against the Board’s
jurisdiction that it had made in the representation proceedings. Id. at 640–50 (Mot. to Dismiss).
An ALJ held a hearing, found that Bannum had raised the same argument before the Regional
Director, and ruled that the Board’s rule against relitigation precluded the company from raising
the issue again. Id. at 12–14 (Hearing Tr. at 12–14). That rule prevents parties “from
relitigating, in any related subsequent unfair labor practice proceedings, any issue which was, or
could have been, raised in the representation proceeding” if they failed to request review of the
Regional Director’s actions by the Board. 29 C.F.R. § 102.67(g). During the hearing, the ALJ
also presented Bannum with the opportunity to present evidence concerning any changed facts or
law regarding jurisdiction since the representation proceeding. A.R. at 1174 (ALJ Decision at 2).
Bannum did not do so. Id.The ALJ ultimately concluded that Bannum had engaged in various unfair labor practices
and ordered Bannum to cease and desist from the practices and to take affirmative steps to
remedy the violations. Id. at 1200–03 (ALJ Decision at 28–31). Bannum filed exceptions and a
supporting brief in which it objected to the ALJ’s denial of its motion to dismiss for lack of
jurisdiction. Id. at 1210 (Exceptions ¶ 1); App. R. 31 (Bannum Br. in Support of Exceptions at
47–48).
The Board affirmed the ALJ’s denial of Bannum’s motion to dismiss, holding that the
rule against relitigation precluded the company from raising its joint-employer argument again.
Id. at 1280 (NLRB Order at 1 n.1). The Board also found that Bannum had engaged in unfair
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labor practices in violation of 29 U.S.C. § 158(a)(1), (3), and (4), and ordered that these
violations be remedied. Id. at 1280–86 (NLRB Order at 1–6).
Pursuant to 29 U.S.C. § 160(f), Bannum has petitioned this court for review of the
Board’s final order. App. R. 1 (No. 21-2664) (Pet. for Review). The Board has cross-applied for
enforcement under § 160(e). App. R. 1 (No. 21-2690) (Cross-Application).
II. ANALYSIS
“Our review of the Board’s decision is quite limited.” Caterpillar Logistics, Inc. v.
NLRB, 835 F.3d 536, 542 (6th Cir. 2016) (quoting Torbitt & Castleman, Inc. v. NLRB, 123 F.3d
899, 905 (6th Cir. 1997)). “We defer to the Board’s factual determinations if they are supported
by substantial evidence on the record as a whole.” Id; see also 29 U.S.C. § 160(e), (f).
“Substantial evidence means such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Caterpillar Logistics, 835 F.3d at 542 (quoting Dupont Dow
Elastomers, L.L.C. v. NLRB, 296 F.3d 495, 500 (6th Cir. 2002)). “The Board’s application of
law to the facts is also reviewed for substantial evidence, and its ‘[c]onclusions of law are subject
to a de novo review, although [we] will uphold the Board’s reasonable interpretation of the
[National Labor Relations Act] where Congress has not spoken to the contrary on the same
issue.’” Id. (alterations in original) (quoting Dupont Dow Elastomers, 296 F.3d at 500 (citation
omitted)).
A. Bannum’s Challenge
Bannum reraises the argument that the company is a joint employer with the BOP and
that this deprived the Board of jurisdiction to conduct the union-representation election. As a
threshold matter, however, we must address the Board’s argument that this issue is not properly
before us. For this proposition, the Board points to its rule against relitigation, 29 C.F.R.
§ 102.67(g), arguing that Bannum’s failure to comply with that rule “precludes further
consideration now” of the company’s previously raised joint-employer argument. Board Br. at
14. For the reasons that follow, we agree with the Board.
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1. The Rule Against Relitigation
To understand what the rule against relitigation is and how it functions in this case
requires some context about the Board’s procedures and their history. Proceedings before the
Board are normally split between two stages: a representation proceeding and then an unfair-
labor-practice proceeding. At the representation stage, employees request that the Board conduct
a union-representation election, as the Union did here when it filed its election petition with the
Board. See 29 U.S.C. § 159. A Regional Director may then decide matters such as logistics
pertaining to the election, the size of the bargaining unit, and the scope of the Board’s
jurisdiction. See id. § 153(b); 29 C.F.R. § 102.67(a)–(b). Again, that is akin to what occurred in
the present case, this time when the Regional Director assessed and rejected Bannum’s joint-
employer argument.
If the employer is dissatisfied with the Regional Director’s decision, then it has two
options for requesting review. On the one hand, the employer may request that the Board review
the Regional Director’s decision. 29 C.F.R. § 102.67(c). (Here, the facts begin to diverge from
the law—Bannum did not request that the Board review the Regional Director’s rejection of its
joint-employer argument.) The Board, however, will grant such requests “only where
compelling reasons exist.” Id. § 102.67(d). On the other hand, the employer can obtain judicial
review of the Board’s certification of the bargaining unit, but not directly from the representation
proceeding. Boire v. Greyhound Corp., 376 U.S. 473, 477 (1964). Instead, the Act requires that
an employer “refuse to bargain with the union and then raise the issue of the unit’s
appropriateness in a subsequent unfair-labor-practice proceeding.” Kindred Nursing Ctrs. E.,
LLC v. NLRB, 727 F.3d 552, 558 (6th Cir. 2013). Should the Board reject the employer’s
arguments at the unfair-labor-practice proceeding, the employer may then seek judicial review of
the Board’s decision in a federal circuit court. See 29 U.S.C. § 160(f); Kindred Nursing Ctrs. E.,
727 F.3d at 558; see also Pace Univ. v. NLRB, 514 F.3d 19, 24 (D.C. Cir. 2008) (explaining that
a “court generally will review a representation issue upon the filing of a petition from an unfair
labor practice proceeding as long as a party litigated the issue during the representation
proceeding and presented its arguments on the issue as a defense to an unfair labor practice
charge”). As will become clear, these two options, though distinct, are closely related.
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The Regional Directors have come to play an important role in this two-step process.
Before the 1960s, “the Board itself determined and certified for election, after hearing and
investigation, the appropriate unit of employees for collective bargaining.” Ritz-Carlton Hotel
Co. v. NLRB, 123 F.3d 760, 762 (3d Cir. 1997). This created a “huge backlog” of representation
petitions that the Board struggled to process. Id. Seeking to remedy this problem, Congress
amended the Act “to allow the Board to delegate to its Regional Directors the power to
determine the appropriate bargaining units, to direct elections, and to certify the results of such
elections, subject to review by the Board.” Id. The Board then “promulgated rules delegating
the initial decisionmaking on representation issues to the Regional Directors, but retaining the
authority in the Board to make the final administrative decision.” Id. (citing 29 C.F.R. § 102.67).
This delegation allowed the Board to ease its workload while retaining overall authority over the
proceedings.
Among the rules that the Board promulgated after Congress amended the Act was the
rule against relitigation, 29 C.F.R. § 102.67(g). See generally Magnesium Casting Co. v. NLRB,
401 U.S. 137, 139–41 (1971) (detailing rule). Based on the Board’s long-settled practice of
requiring parties to litigate fully issues related to the certification of a bargaining unit when that
matter is originally decided, see Pittsburgh Plate Glass Co. v. NLRB, 313 U.S. 146, 161–62
(1941); NLRB v. Mar Salle, Inc., 425 F.2d 566, 571–72 (D.C. Cir. 1970), the rule against
relitigation prevents parties who fail to request that the Board review a Regional Director’s
decision in a representation proceeding from relitigating “any issue which was, or could have
been, raised” in that proceeding in “any related subsequent unfair labor practice proceeding,”
29 C.F.R. § 102.67(g). In effect, the rule has “drawn a . . . line between representation and unfair
labor practice proceedings, requiring that any issues that may be presented during the
representation proceeding must be offered there” to the Board for its consideration. Pace Univ.,
514 F.3d at 23 (citing predecessor of 29 C.F.R. § 102.67(g)).
The rule against relitigation furthers several notable ends. First, by requiring that an
employer seek the Board’s review of the Regional Director’s decision to preserve any arguments
related to it, the rule increases the chances that the Board will be presented with objections to
that decision. See Ritz-Carlton Hotel Co., 123 F.3d at 762–63. This allows the Board to correct
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errors in the certification order earlier rather than later, thus streamlining the process. Relatedly,
the rule also prevents “undue and unnecessary delay in representation elections” by safeguarding
“the results of a representation proceeding from duplicative, collateral attack in a related unfair
labor practice proceeding.” Pace Univ., 514 F.3d at 24 (quoting Amalgamated Clothing Workers
of Am. v. NLRB, 365 F.2d 898, 905 (D.C. Cir. 1966)).
To be served, these ends sometimes require judicial enforcement. See id. Although the
Board cannot use its regulations to limit the issues that a court may consider, Ritz-Carlton Hotel
Co., 123 F.3d at 763, courts have consistently declined to review challenges to a Regional
Director’s decision that an employer could have, but did not, request that the Board review, see,
e.g., id. at 765 (applying predecessor of 29 C.F.R. § 102.67(g) in this fashion); NLRB v. Rod-Ric
Corp., 428 F.2d 948, 950 (5th Cir. 1970) (same); NLRB v. Thompson Transp. Co., 406 F.2d 698,
701–02 (10th Cir. 1969) (same); NLRB v. Rexall Chem. Co., 370 F.2d 363, 365–66 (1st Cir.
1967) (same). That consistency is reflected in our caselaw, which has followed the same course.
See NLRB v. Int’l Health Care, Inc., 898 F.2d 501, 504–05 (6th Cir. 1990); Keco Indus., Inc. v.
NLRB, 458 F.2d 1356, 1357 (6th Cir. 1972) (order); M.P.C. Cash-Way Lumber Co. v. NLRB, 452
F.2d 1197, 1198 (6th Cir. 1971) (order).
This uniformity is unsurprising. It is a general principle of administrative law that courts
will “not topple over administrative decisions unless the administrative body not only has erred
but has erred against objection made at the time appropriate under its practice.” United States v.
L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952). That principle applies equally in the
context of the rule against relitigation, which incentivizes parties to have the Board consider
objections and correct errors in a timely manner. See Pace Univ., 514 F.3d at 24; Ritz-Carlton
Hotel Co., 123 F.3d at 763. Indeed, if this principle did not apply here, we “would undermine
the congressional delegation of authority to promulgate administrative rules and procedures to
the Board”—rules and procedures that include the rule against relitigation. Ritz-Carlton Hotel
Co., 123 F.3d at 765.
For this reason, we have followed other circuits and treated 29 C.F.R. § 102.67(g) as an
administrative procedure that a party must first exhaust before seeking judicial review of the
merits of a representation issue. See Int’l Health Care, Inc., 898 F.2d at 504–05 (collecting
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cases); see also Ritz-Carlton Hotel Co., 123 F.3d at 763–64. In other words, a party’s failure to
request that the Board review a Regional Director’s decision to reject some argument in a
representation proceeding will trigger our doctrine of administrative exhaustion once the party
petitions for review from the unfair-labor-practice proceeding. Under this well-established
approach, the concepts of administrative exhaustion and the rule against relitigation are thus
separate yet interrelated.
That approach largely settles this case. Bannum presented its joint-employer argument to
the Regional Director in the representation proceedings. A.R. at 811 (Election Decision at 1).
The Regional Director rejected this argument. Id. Given the opportunity to request that the
Board review this decision, Bannum decided against it. Id. at 829 (Election Decision at 18). In
its petition for review now pending before us, Bannum “does not suggest that the Board lacked
authority to promulgate the [rule against relitigation, which] imposes a waiver when an objection
has not been preserved, and we see no reason why that salutary procedure should not be followed
by the courts as well.” Ritz-Carlton Hotel Co., 123 F.3d at 765. Therefore, because Bannum
failed to exhaust the Board’s administrative procedures, we decline to review the merits of
Bannum’s joint-employer argument.
Merits aside, we review the Board’s application of the rule against relitigation in the
unfair-labor-practice proceeding for abuse of discretion. See American Bread Co. v. NLRB,
411 F.2d 147, 152 (6th Cir. 1969); see also Pace Univ., 514 F.3d at 24. “There are only limited
exceptions” to the rule’s application. Pace Univ., 514 F.3d at 23; accord Salem Hosp. Corp. v.
NLRB, 808 F.3d 59, 73 (D.C. Cir. 2015). One exception that would allow relitigation is if
“newly discovered evidence or other special circumstances requir[e] reexamination of the
decision in the representation proceeding.” Pace Univ., 514 F.3d at 23 (quoting Joseph T.
Ryerson & Son, Inc. v. NLRB, 216 F.3d 1146, 1151 (D.C. Cir. 2000)). Another exception is
when “legal authority . . . changed governing law.” Id. (quoting Alois Box Co. v. NLRB, 216
F.3d 69, 78 (D.C. Cir. 2000)). As the D.C. Circuit has explained, these exceptions might “arise,
for example, where a new legal argument is based on after-arising or after-discovered facts. Id.at 23–24.
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Such circumstances are not present here. During the representation proceeding, the
Regional Director considered Bannum’s joint-employer argument and rejected it. A.R. at 811
(Election Decision at 1). The Regional Director then informed Bannum that the company could
request that the Board review the decision. Id. at 829 (Election Decision at 18). Rather than
seek review, Bannum waited to present the same arguments to the ALJ in the unfair-labor-
practice proceedings three years later. Id. at 1174 (ALJ Decision at 2). The ALJ applied the rule
against relitigation, but not before allowing Bannum
to present evidence of (1) any changed facts since October 3, 2017, when the
representation case (R case) hearing concluded; (2) any changes in the law since
October 31, 2017, when the Regional Director issued a Decision and Direction of
Election; and (3) any other evidence for which it could show good cause why it
was not presented at the R case hearing.
Id. Bannum did not pursue these options. Consequently, Bannum has given us no reason to
upend the Board’s decision to apply the rule against relitigation. The Board did not abuse its
discretion.
2. Relatedness of Proceedings
Against this conclusion, Bannum makes two arguments. First, Bannum contends that the
Board erred in applying the rule against relitigation because the representation proceeding was
not related to the subsequent unfair-labor-practice proceeding. As a general matter, Bannum is
right to emphasize relatedness. “The no-relitigation rule, as formulated in the Board’s case law
and rules, bars relitigation of a waived issue only in an unfair labor practice proceeding that is
‘related’ to the proceeding in which the waiver occurred.” Thomas-Davis Med. Ctrs., P.C. v.
NLRB, 157 F.3d 909, 913 (D.C. Cir. 1998). What this means here is that if the unfair-labor-
practice proceeding in the present case were unrelated to the representation proceeding at issue,
then the Board may have abused its discretion in applying the rule against relitigation.
Yet just as Bannum never requested review of the Regional Director’s decision in the
representation proceeding, the company also never raised arguments about relatedness to the
Board in the unfair-labor-practice proceeding. Bannum did not make this objection to the ALJ in
that proceeding, see A.R. at 640–50 (Mot. to Dismiss), did not present the issue in its brief to the
Board, see App. R. 31 (Bannum Br. in Support of Exceptions), and did not file a motion for
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reconsideration with the Board to preserve the matter. By not raising this issue before the Board
at all, Bannum has once again limited our ability to examine its arguments, this time for a
statutory reason. As the Act makes clear, “[n]o objection that has not been urged before the
Board . . . 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). Therefore,
barring “extraordinary circumstances,” we may not consider the relatedness question. See
Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665 (1982). And Bannum has
presented no such circumstances here.
3. Statutory Jurisdiction
In its other attempt to evade the consequences of its failure to seek review of the Regional
Director’s decision, Bannum emphasizes that its joint-employer argument undermines the
Board’s statutory jurisdiction. Specifically, Bannum argues that its contract with the BOP cedes
so much control over daily operations to the government agency that the two are joint employers,
making Bannum an exempt entity under § 2(2) of the Act, 29 U.S.C. § 152(2), and outside of the
Board’s authority to regulate the company. As a result, Bannum concludes that we must not
enforce the rule against relitigation because the Board’s statutory jurisdiction may be challenged
“at any time.” Bannum Br. at 17.
As background, the Board’s jurisdiction comes in two forms: statutory and discretionary.
Statutory jurisdiction, as the name suggests, is created by Congress. It empowers the Board to
act if certain statutory requirements are met, such as when an “employer” engages in an unfair
labor practice that affects interstate commerce. 29 U.S.C. §§ 158(a), 160(a). Whereas this
source of law provides the Board with authority, discretionary jurisdiction limits it. In certain
cases, the Board, “in its own discretion, choose[s] not to exercise the jurisdiction that it may
otherwise invoke.” Pikeville United Methodist Hosp. of Ky. v. United Steelworkers of America,
AFL-CIO-CLC, 109 F.3d 1146, 1151 (6th Cir. 1997); see also 29 U.S.C. § 164(c)(1). To guide
the exercise of its discretion, the Board has created monetary standards that different entities
must meet before the Board will act. Pikeville United Methodist Hosp., 109 F.3d at 1152 n.4.
Because Bannum maintains that this case presents an instance of the Board’s reach exceeding its
Nos. 21-2664/2690 Bannum Place of Saginaw, LLC v. NLRB Page 11
congressionally sanctioned grasp, we focus on the scope of the Board’s statutory jurisdiction and
whether challenges to it are barred by non-compliance with the rule against relitigation.
It is true that we have held that the issue of the Board’s statutory jurisdiction “cannot be
waived.” Mich. Cmty. Servs., Inc. v. NLRB, 309 F.3d 348, 361 (6th Cir. 2002) (quoting NLRB v.
Ferraro’s Bakery, Inc., 353 F.2d 366, 369 (6th Cir. 1965)). These cases, however, do not furnish
much guidance for the present issue. In neither Michigan Community Services nor Ferraro’s
Bakery did we deal with a party who had already litigated the issue of the Board’s statutory
jurisdiction and was seeking to revisit the matter in unfair-labor-practices litigation before us.
This raises the question of whether the rule against relitigation applies in such instances similar
to how res judicata principles apply to subject-matter jurisdiction. Cf. Ins. Corp. of Ir. v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 n.9 (1982) (“A party that has had an
opportunity to litigate the question of subject-matter jurisdiction may not . . . reopen that
question in a collateral attack upon an adverse judgment.”). Regardless of the answer, we need
not examine this problem further. Both the text of § 2(2) and our precedents firmly establish that
the Board has statutory jurisdiction over Bannum.
Section 2(2) of the Act confines the Board’s regulatory authority to “employer[s].” See
Pikeville United Methodist Hosp., 109 F.3d at 1151. Under § 2(2), the definition of “employer”
includes any person acting as an agent of an employer, directly or indirectly, but
shall not include the United States or any wholly owned Government corporation,
or any Federal Reserve Bank, or any State or political subdivision thereof, or any
person subject to the Railway Labor Act, as amended from time to time, or any
labor organization (other than when acting as an employer), or anyone acting in
the capacity of officer or agent of such labor organization.
29 U.S.C. § 152(2). Absent from the text is any mention of “joint employers.” Instead, the
section “simply and straightforwardly exempts only certain named governmental units and other
organizations from the reach of the NLRB.” Pikeville United Methodist Hosp., 109 F.3d at 1152.
“If a statute’s meaning is plain, the Board and reviewing courts ‘must give effect to the
unambiguously expressed intent of Congress.’” Holly Farms Corp. v. NLRB, 517 U.S. 392, 398
(1996) (quoting Chevron USA Inc. v. Nat. Res. Def. Council, Inc., 467 U.S. 837, 843 (1984)).
Because Congress chose to exempt only a limited number of entities from the Act’s definition of
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“employer,” the Board decided in Management Training Corp. “that it had jurisdiction over an
employer with close ties to an exempt governmental entity.” Mich. Cmty. Servs., 309 F.3d at
351. In fact, the Board there interpreted § 2(2) as rendering the question of “[w]hether the
private employer and the exempt entity are joint employers . . . irrelevant” for determining the
Board’s jurisdiction. Mgmt. Training Corp., 317 N.L.R.B. 1355, 1358 n.16 (1995).
We have upheld this interpretation. In Pikeville United Methodist Hospital, a hospital
asserted that it was exempt under § 2(2) by virtue of a lease that it had signed with the City of
Pikeville. According to the hospital, this lease “vested such total control of the hospital’s
activities in the City that Pikeville United Methodist Hospital itself became a political
subdivision of the State of Kentucky.” 109 F.3d at 1151. To this end, the hospital contended
that § 2(2) “mandated” that the Board consider the extent to which the State exercised control
over the hospital to determine whether jurisdiction existed. Id. at 1152. We rejected this
argument, stressing both the narrowness of the enumerated exemptions in § 2(2) and the
reasonableness of Management Training’s interpretation of that provision. Id. at 1152–53.
Although Pikeville United Methodist Hospital concerned a lessee claiming to be a
political subdivision of a State rather than a contractor claiming to be a joint employer with the
federal government, the distinction does not make a difference under the statutory language.
Every other circuit of which we are aware that has considered the issue has held that contractors
are not exempt from the definition of “employers” in § 2(2) merely because a contract vests
substantial control with a governmental entity over the contractor’s daily operations. See NLRB
v. Young Women’s Christian Ass’n, 192 F.3d 1111, 1118 (8th Cir. 1999); Aramark Corp. v.
NLRB, 179 F.3d 872, 879 (10th Cir. 1999) (en banc) (unanimous); NLRB v. Fed. Sec., Inc., 154
F.3d 751, 754–55 (7th Cir. 1998); Teledyne Econ. Dev. v. NLRB, 108 F.3d 56, 59 (4th Cir. 1997).
As the Tenth Circuit held, “because Congress has unambiguously limited the reach of the
exemption in § 2(2) to governmental entities and wholly owned government corporations, this
court will not extend the exemption to government contractors.” Aramark Corp., 179 F.3d at
878. Given the Supreme Court’s instructions to avoid interpreting exemptions from the Act’s
coverage “expansively,” Holly Farms, 517 U.S. at 399, we see no reason to part from this
consensus.
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Insofar as Bannum’s jurisdictional challenge can be read as an argument that the Board
exceeded its discretionary, rather than its statutory, authority, that argument also is not properly
before us. Unlike the issue of statutory jurisdiction, the issue of discretionary jurisdiction can be
waived. Cf. Fed. Sec., Inc., 154 F.3d at 754 (noting that discretionary jurisdiction may be
waived). Because discretionary jurisdiction is a limit that the Board imposes on itself, Bannum
needed to exhaust the Board’s administrative procedures—that is, seek Board review of the
Regional Director’s decision about the company’s joint-employer argument during the
representation proceedings—before we would assess arguments related to that issue.
Additionally, we note that the cases from other circuits illustrate what Bannum could
have done. In each case, the employers argued to the Regional Directors in the representation
proceedings that they were exempt entities under § 2(2) due to being government contractors.
When the Regional Directors rejected this argument, however, the employers did not allow the
decisions to go unchallenged. Instead, the employers promptly requested that the Board review
the Regional Directors’ determinations. After the Board rejected the employers’ joint-employer
arguments and the unions won the elections, the employers refused to bargain, the Board found
that the employers had committed unfair labor practices, and the employers raised the issue of
the Board’s jurisdiction in their petitions for review. See Young Women’s Christian Ass’n,
192 F.3d at 1115; Aramark Corp., 179 F.3d at 877; Teledyne Econ. Dev., 108 F.3d at 58.
Because the employers had exhausted their administrative remedies in each case, the Circuits
decided the jurisdictional question without having to scrutinize how the rule against relitigation
applied. See Young Women’s Christian Ass’n, 192 F.3d at 1118; Aramark Corp., 179 F.3d at
879; Teledyne Econ. Dev., 108 F.3d at 59. Had Bannum followed these examples and sought
Board review of the Regional Director’s decision, the company would not find itself in need of
skirting that rule.
In sum, even if Bannum’s contract vests in the BOP substantial control over Bannum’s
daily operations, that does not transform the company from a covered employer into either a
governmental entity or a wholly owned government corporation and thus beyond the Board’s
reach. We hold that Bannum meets § 2(2)’s definition of “employer,” and Bannum’s attempt to
sidestep the rule against relitigation fails.
Nos. 21-2664/2690 Bannum Place of Saginaw, LLC v. NLRB Page 14
B. Enforcement of the Board’s Order
That leaves us with whether to enforce the Board’s order. Bannum’s sole attempt to
contest enforcement is a passing assertion that it “vigorously denies th[e] charges [of unfair labor
practices] and emphatically disagrees as well with the credibility and other fact findings of the
tribunals below.” Bannum Br. at 4 n.2. Despite Bannum labelling its denial “vigorous,” its
argument is better described as “perfunctory,” resulting in a waiver of the issue. Kuhn v.
Washtenaw County, 709 F.3d 612, 624 (6th Cir. 2013). The Board is entitled to the order’s
summary enforcement. Vanguard Fire & Supply Co. v. NLRB, 468 F.3d 952, 956 (6th Cir.
2006).
III. CONCLUSION
For the foregoing reasons, we deny Bannum’s petition for review and grant the Board’s
cross-application for enforcement.