ABM Onsite Services-West, Inc. v. National Labor Relations Board , 849 F.3d 1137 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 21, 2016 Decided March 7, 2017
No. 15-1299
ABM ONSITE SERVICES - WEST, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
INTERNATIONAL ASSOCIATION OF MACHINISTS AND
AEROSPACE WORKERS, DISTRICT LODGE W24 AND LOCAL
LODGE 1005,
INTERVENOR
Consolidated with 15-1347
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Douglas W. Hall argued the cause and filed the briefs for
petitioner.
2
Amy H. Ginn, 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 Usha Dheenan, Supervisory Attorney.
David L. Neigus argued the cause and filed the brief for
intervenor International Association of Machinists and
Aerospace Workers, District Lodge W24 and Local Lodge
1005 in support of respondent. Mark D. Schneider and William
H. Haller entered appearances.
Before: GRIFFITH, SRINIVASAN, and MILLETT, Circuit
Judges.
Opinion for the court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: This petition for review
challenges the determination of the National Labor Relations
Board that a union’s effort to represent the workers who handle
airline baggage is governed by the National Labor Relations
Act and not the Railway Labor Act. In reaching its conclusion,
the Board departed from its precedent without offering a
rationale for its new approach. We therefore vacate the Board’s
order and remand the matter for further proceedings.
I
A
The National Labor Relations Act, 29 U.S.C. §§ 151 et
seq., regulates most private-sector labor relations. Concerned,
however, that labor strife in the railway and airline industries
could disrupt commerce nationwide, Congress expressly
carved out these industries, which were already covered by the
3
Railway Labor Act, from coverage under the NLRA
framework when it passed the NLRA. See id. § 152; see also
Tex. & New Orleans R.R. v. Bhd. of Ry. & S.S. Clerks, 281 U.S.
548, 565 (1930) (remarking that “the major purpose of
Congress in passing the Railway Labor Act was to provide a
machinery to prevent strikes”). 1 The Act creates a “special
scheme” for the railway and airline industries, premised on
“their unique role in serving the traveling and shipping public
in interstate commerce.” Verrett v. SABRE Grp., Inc., 70 F.
Supp. 2d 1277, 1281 (N.D. Okla. 1999). Under this separate
regulatory scheme, various mediation and arbitration boards
work to resolve airline and railway labor disputes that could
interrupt interstate commerce. See id.The question of which labor scheme governs has
meaningful consequences for both employers and employees.
Chief among them are the different powers Congress has given
the agencies that administer the relevant statutes. For example,
the NLRB can initiate unfair-labor-practice proceedings and
issue orders to employers, but the National Mediation Board
(NMB), which administers the RLA, performs no law-
enforcement function. The NMB’s role is limited mainly to
determining whether employees in the airline and railway
industries have chosen union representation and then mediating
collective bargaining. In addition, under the RLA, both
employers and employees must exhaust an extended
negotiation and mediation process before they can lawfully
resort to self-help measures, such as unilaterally altering
working conditions or calling a strike. This prolonged process
1
Although the RLA initially applied only to rail carriers, “[a]ir
carriers and their employees were made subject to the . . . Act in
1936.” Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S.
369, 381 n.16 (1969) (citing 45 U.S.C. §§ 181-182).
4
is designed to avoid strikes and “keep transportation moving”
in the specific subset of the American economy that concerns
the RLA. Pan Am. World Airways, Inc. v. United Bhd. of
Carpenters & Joiners of Am., 324 F.2d 217, 220 (9th Cir.
1963). Under the NLRA, by contrast, employers and
employees have much more latitude to engage in self-help.
Employees often prefer to organize under the NLRA, as it
protects a wider array of “concerted activity” by employees
than does the RLA. See Beckett v. Atlas Air, Inc., 968 F. Supp.
814, 820 (E.D.N.Y. 1997) (citing cases).
The RLA originally covered only common carriers, but
Congress expanded the Act in 1934 to cover certain companies
that perform transportation-related services for those carriers.
As a result, a company is subject to the RLA and falls outside
the jurisdiction of the NLRB if it “is directly or indirectly
owned or controlled by or under common control with any
carrier” and “operates any equipment or facilities or performs
any service” related to transportation. 45 U.S.C. § 151.
Whether a company is controlled by a carrier, however, is often
unclear. Thus, “the NLRB and the NMB have, in the absence
of any statute addressing the point, jointly developed their own
method for determining their mutual jurisdictional question of
whether the NLRA or the RLA governs” in any given case.
United Parcel Serv., Inc. v. NLRB, 92 F.3d 1221, 1223 (D.C.
Cir. 1996).
The NLRB frequently refers the jurisdictional question to
the NMB for an advisory opinion and then defers to the NMB’s
view, based on the NMB’s expertise in administering the RLA.
See United Parcel Serv., Inc., 318 N.L.R.B. 778, 780 (1995)
(referring cases to the NMB “enables the [NLRB] to obtain the
NMB’s expertise on jurisdictional matters most familiar to it”),
aff’d, 93 F.3d 1221 (D.C. Cir. 1996); Pan Am. World Airways,
Inc., 115 N.L.R.B. 493, 495 (1956) (explaining the NLRB’s
5
view of the NMB’s primacy in resolving jurisdictional
questions that implicate the RLA). The NLRB follows this
accepted practice when a party raises a colorable claim that the
NLRB lacks jurisdiction. See Spartan Aviation Indus., 337
N.L.R.B. 708, 708 (2002) (“When a party raises a claim of
arguable jurisdiction under the RLA, the Board generally refers
the case to the National Mediation Board . . . for an advisory
opinion. . . .”). This practice dates back to at least 1956. See
Pan Am. World Airways, Inc., 115 N.L.R.B. at 495 (declining
to assert jurisdiction in a case over which the NMB claimed
jurisdiction). An exception exists to the general rule, however:
under “long-standing practice,” the NLRB will not refer
jurisdictional questions to the NMB in situations where NMB
precedent provides a clear answer. United Parcel Serv., Inc.,
92 F.3d at 1228.
B
The airlines that fly into and out of the Portland
International Airport formed the Portland Airlines Consortium
(“PAC” or “the Consortium”) to operate the airport’s baggage-
handling system. Since 2011, the Consortium has retained
ABM Onsite Services – West (“ABM” or “the Company”), an
independent contractor, to run the system. 2 The issue in this
case is whether ABM is a “carrier” under the RLA and thus
falls outside the NLRB’s jurisdiction. The answer turns on the
degree of control that the Consortium exercises over the
Company. To assess that control, it is important to understand
the extent of the Consortium’s contractual and practical
involvement in a number of areas: how ABM employees do
2
These facts are drawn from the findings made by the NLRB’s
regional director or come directly from the contract.
6
their jobs, how they are trained, what equipment they use, and
even how they dress.
Most notably, the contract allows the Consortium to
establish all standard operating procedures and provide all
operating manuals for ABM. These manuals serve as the basis
for ABM employee training. The contract also allows the
Consortium to keep a close eye on the performance of ABM
and its employees. For example, the Company is required to
provide the Consortium with access to documents dealing with
its operations, its compliance with non-discrimination laws, its
operations and maintenance safety plans, and reports of on-the-
job accidents.
In addition, the contract enables the Consortium to
exercise influence over the Company’s personnel decisions.
All of the Company’s staffing plans, for instance, must be
approved by the Consortium before taking effect, and the
Consortium’s general manager must approve overtime work by
ABM employees. Importantly, the Consortium also has the
right to approve any changes in the Company’s “key
personnel,” and to direct the company to remove employees
from the contract. The contract does not, however, authorize
the Consortium to discipline the Company’s employees
directly or require the Company to consult with it about
discipline.
Furthermore, the contract specifies that the Consortium is
to provide the Company with certain equipment, such as
electric vehicles to move baggage and industrial bicycles to get
around the baggage-handling system. The Consortium also
must provide, free of charge, office space for the Company at
the airport. Finally, the contract dictates that ABM employees
meet certain appearance standards and wear uniforms that
display the Consortium’s logo, rather than the logo of ABM.
7
C
In January 2015, the International Association of
Machinists (the Union) filed a petition with the NLRB seeking
to represent ABM’s “jammer technicians,” who ensure that
passenger bags get from the airlines’ ticket counters to the
aircraft, and its dispatchers, who take calls from airline
employees regarding baggage issues and are the primary point
of contact with the airlines. The Company protested that the
NLRB lacked jurisdiction over the matter because the
Company was subject to the RLA, not the NLRA. In the
alternative, the Company argued, the NLRB should refer the
jurisdictional question to the NMB for an advisory opinion. To
resolve that jurisdictional question, the NLRB’s regional
director held a hearing at which the Company’s facility
manager and branch manager testified, along with two
dispatchers. The regional director found that the Consortium
did not exercise control over the Company and its employees
within the meaning of the RLA and concluded that the NLRB
thus had jurisdiction over the matter. The Company sought
review of the order by the NLRB itself, which summarily
denied the Company’s request and affirmed its own jurisdiction
in a 2-to-1 decision. The majority determined that the petition
raised “no substantial issues warranting review.” J.A. 608. The
dissenting member, however, was not satisfied that the Board
had jurisdiction, writing that “substantial evidence [exists] that
the Portland Airlines Consortium is involved in [the
Company]’s personnel decisions and operations, which may
have been afforded insufficient weight by the Regional
Director.” J.A. 608.
That same day, a majority of ABM’s participating
employees voted in favor of union representation. The NLRB
certified the Union as the employees’ collective-bargaining
representative. To challenge to the Board’s jurisdictional
8
ruling, the Company refused to bargain with the Union, which
drew an unfair-labor-practice charge from the Union and a
complaint from the regional director of the NLRB. The NLRB
granted summary judgment against the Company, which then
filed this petition for review. The NLRB cross-applied for
enforcement of its order, and the Union subsequently
intervened.
We have jurisdiction under 29 U.S.C. §§ 160(f) and
160(e).
II
This case turns on the fundamental principle that an
agency may not act in a manner that is “arbitrary, capricious,
an abuse of discretion, or otherwise not in accordance with
law.” 5 U.S.C. § 706(2)(a). The NLRB has violated that
cardinal rule here by applying a new test to determine whether
the RLA applies, without explaining its reasons for doing so.
Because an agency’s unexplained departure from precedent is
arbitrary and capricious, we must vacate the Board’s order.
Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 2008)
(citing Pontchartrain Broad. Co. v. FCC, 15 F.3d 183, 185
(D.C. Cir. 1994)).
A
Any company that is “directly or indirectly owned or
controlled by” an airline is governed by the RLA, 45 U.S.C.
§ 151, provided that the company’s employees do work “that
is traditionally performed by employees of . . . air carriers,” Air
Serv Corp., 33 N.M.B. 272, 284 (2006). No party takes issue
with the NMB’s interpretation on that latter point or disputes
that ABM employees do work that is traditionally performed
by employees of air carriers. As a result, because ABM is not
9
owned by air carriers, the only question in this case is whether
it is controlled by them.
In 1980, the NMB began “an extensive evaluation of its
jurisdictional standards,” including on the issue of control, “in
light of changing corporate relationships and increasing use of
contractors to perform work integral to rail and air
transportation.” Bhd. Ry. Carmen of the U.S. & Can., 8 N.M.B.
58, 61 (1980). Over the ensuing years, the NMB developed a
list of six factors to guide it in determining whether a company
is controlled by an air carrier. See, e.g., Miami Aircraft Support,
21 N.M.B. 78, 81 (1993). As stated most directly by the NMB
in 2006, the agency looked to (1) the extent of the carrier’s
control over the manner in which the company conducts its
business; (2) the carrier’s access to the company’s operations
and records; (3) the carrier’s role in the company’s personnel
decisions; (4) the degree of carrier supervision of the
company’s employees; (5) whether company employees are
held out to the public as carrier employees; and (6) the extent
of the carrier’s control over employee training. See Air Serv
Corp., 33 N.M.B. at 285.
As framed by the NMB in that case, the “standard for
satisfying” this test was “the degree of influence that a carrier
has over discharge, discipline, wages, working conditions and
operations,” as opposed to any kind of requirement “that a
carrier hire, fire, set wages, hours and working conditions of
contractor employees.” Id. (emphasis added); see also Roca v.
Alphatech Aviation Servs., Inc., 961 F. Supp. 2d 1234, 1240
(S.D. Fla. 2013) (explaining that control under the RLA would
exist under the “NMB’s . . . test [when the] ‘carrier controls the
details of the day-to-day process by which the contractor
provides services—for example, the number of employees
assigned to particular tasks, the employees’ attire, the length of
their shifts, and the methods they use in their work.’” (quoting
10
Cunningham v. Elec. Data Sys. Corp., No. 06-cv-3530 (RJH),
2010 WL 1223084, at *6 (S.D.N.Y. Mar. 30, 2010))). In other
words, for the NMB to find the type of control that would
trigger the jurisdiction of the RLA, an air carrier did not have
to dictate decisions over employee discharge, discipline,
wages, working conditions, and operations; it simply had to
exercise some significant influence over those aspects of the
employment relationship.
Under this test, ABM would plainly fall under the control
of air carriers. The NLRB does not even attempt to argue
otherwise. Indeed, the NMB previously found control and
jurisdiction with facts similar to these for many airline-services
contractors. In fact, according to one commentator, the NMB
“found RLA jurisdiction in all but one of over thirty [such]
airline-control cases” it considered between the mid-1990s and
2011. Brent Garren, NLRA and RLA Jurisdiction over Airline
Independent Contractors: Back on Course, 31 ABA J. LAB. &
EMP. L. 77, 93 (2015).
Air Serv Corp. is an especially clear example of how that
agency used to find carrier control over contractors like ABM.
With apologies to the reader for the lengthy excerpt, the
NMB’s discussion of the key facts in Air Serv shows that there
is little daylight between that contractor’s situation and
ABM’s:
United’s flight schedules affect the work
schedules of Air Serv employees. United
establishes a minimum level of staffing. United
provides and repairs the equipment used by Air
Serv to service the Carrier’s aircraft. United
provides many of the supplies Air Serv uses to
service the aircraft. United specifies the
cleaning supplies which must be used to clean
11
its aircraft. In order to perform periodic security
and safety audits, United has access to Air
Serv’s records regarding personnel,
maintenance, and training. United’s [internal]
regulations appear, by reference, to be an
extensive set of regulations and standards that
must be adhered to under the terms of the
Services Agreement. Through [its internal]
regulations[,] United dictates the cleaning
guidelines and procedures for servicing the
aircraft. Air Serv has very little discretion
concerning how or when to provide service.
Although Air Serv supervises its own
employees, United exercises a great deal of
control over Air Serv employees through its
comprehensive monitoring of the contract’s
performance. This monitoring includes:
monetary performance penalties, minimum
staffing levels, daily vendor meetings, detailed
. . . regulations and regular audits.
Air Serv Corp., 33 N.M.B. at 285-86.
Indeed, there is no meaningful distinction between the
control United exercised over Air Serv and the control carriers
exercise over ABM. Here, the carriers’ flight schedules
determine the work schedules of the Company’s employees.
The Consortium decides when, where, and how many
employees work at a time. It provides much of the equipment
the Company uses, along with office space. The Consortium
specifies the exact procedures by which ABM employees do
their jobs, and it has access to ABM employee-training and
qualifications records. The Consortium’s general manager
directly trains ABM employees on bag hygiene, and when the
12
general manager does not do the training himself, the
Consortium still provides the training materials and dictates the
procedures to be followed. And even though ABM supervises
its own employees, the Consortium wields a great deal of
influence in practice through its comprehensive monitoring of
the contract’s performance. If anything, carriers appear to
exercise more control over ABM than United did over Air
Serv, given the Consortium’s contractual right to approve
changes in key ABM personnel, its control over the appearance
of ABM employees, and the fact that the Consortium places its
own logo on ABM employees’ uniforms.
Had the NLRB followed the NMB’s analysis in Air Serv,
there is no question that ABM would be covered by the RLA
and that the NLRB would have no jurisdiction over this labor
dispute. Indeed, even in prior cases where carrier influence
over personnel decisions was a factor weighing in favor of a
finding of control, the NMB never went so far as to hold that
the ability to discipline or discharge company personnel was
necessary or even that it was a factor to be given significantly
greater weight than the others. See, e.g., Complete Skycap
Servs., Inc., 31 N.M.B. 1, 5 (2003) (listing the fact that carriers
“may request removal of an employee” as merely one of the
many factors favoring a finding of control). Moreover, in the
past, the NMB had found control even where there was no
indication that an airline “ha[d] the right to request employee
discipline or removal” and where “there [was] no evidence that
[the airline] ha[d] []ever requested [the contractor] to discipline
or remove an employee.” Kanonn Serv. Enters. Corp., 31
N.M.B. 409, 417 (2004). 3 If the ability to dictate personnel
actions (especially negative ones) had been a necessary
3
The NMB has never directly overruled or even disavowed
these decisions. See Garren, supra, at 102-03.
13
condition for finding RLA-level control, the NMB would have
reached the opposite result in such cases. By the same token,
had the NLRB followed the reasoning used in those cases here,
it would have concluded that the RLA governed the dispute
with ABM even though the airlines cannot discipline or
effectively fire ABM’s employees.
In a clear departure from precedent, however, the NMB in
2013 began requiring that air carriers exercise a substantial
“degree of control over the firing[] and discipline of a
company’s employees” before it would find that company
subject to the RLA. Huntleigh USA Corp., 40 N.M.B. 130, 137
(2013); see also Aero Port Servs., Inc., 40 N.M.B. 139, 143
(2013) (finding that a cargo-screening company was not
subject to air-carrier control, based on a lack of direct
involvement by the airlines in employee discipline). 4 The
NMB made no effort to explain this change to its test for RLA
jurisdiction. The agency expanded on this approach later that
year in Bags, Inc., where it found especially relevant that the
employer made the final disciplinary decisions, even though
airlines could provide “input” into the process. See 40 N.M.B.
165, 170 (2013). The NMB determined that meaningful control
was lacking even though, in this line of cases, carriers provided
training and operating-procedure manuals, Menzies Aviation,
Inc., 42 N.M.B. 1, 2 (2014); determined staffing levels, id. at
4
The NMB also emphasized that Aero Port Services’ contract
involved “the type of control expected in nearly any contract for
services.” 40 N.M.B. 139, 143 (2013). Although the NMB did not
explain what a typical contract for services looks like, it subsequently
recited similar language in Bags, Inc., where it observed that “the
type of control exercised by the [airlines] over [the employer] is
found in almost any contract between a service provider and a
customer.” 40 N.M.B. 165, 170 (2013). The NMB has continued to
use this language ever since. See Menzies Aviation, Inc., 42 N.M.B.
1, 4, 7 (2014); Airway Cleaners, LLC, 41 N.M.B. 262, 268 (2014).
14
4; Aero Port Servs., 40 N.M.B. at 141; controlled scheduling,
Bags, Inc., 40 N.M.B. at 170; provided equipment and space,
id.; Menzies Aviation, 42 N.M.B. at 2; recommended
promotions, Airway Cleaners, LLC, 41 N.M.B. 262, 266
(2014); and possessed veto authority over material changes to
contractors’ staff, id. at 265.
We are not the first to remark on this shift in the NMB’s
analysis. In an order issued just two months before the NLRB
granted summary judgment against ABM, an NLRB member
observed “that in . . . recent cases, the National Mediation
Board . . . ha[d] issued advisory opinions to the NLRB
declining jurisdiction, despite air carriers providing detailed
specifications as to the employer’s performance of work
traditionally performed by carriers (and their auditing that
performance).” Primeflight Aviation Servs., Inc., 12-RC-
113687, 2015 WL 3814049, at *1 n.1 (June 18, 2015)
(describing the view of Board Member Harry I. Johnson, III).
In that member’s assessment, “these cases represent[ed] a shift
by the NMB from earlier opinions in which it had asserted
jurisdiction on similar grounds.” Id.In 2014, a member of the NMB noted the same change:
“In recent cases where the [National Mediation] Board has
declined to find jurisdiction over similar companies, it [has]
generally relied on the absence of substantial control over ‘the
firing and discipline of a company’s employees . . . .’” Airway
Cleaners, 41 N.M.B. at 275-76 (2014) (Geale, Mem.,
concurring in part and dissenting in part) (quoting Huntleigh
USA Corp., 30 N.M.B. at 137). “Those cases,” Board Member
Nicholas Geale explains, “appear to overly emphasize that
aspect compared to [earlier] NMB precedent.” Id. Member
Geale reiterated those concerns later that year, dissenting from
another NMB advisory opinion. See Menzies Aviation, Inc., 42
N.M.B. at 8 (Geale, Mem., dissenting) (confessing “difficulty
15
understanding what, if any, evidence could convince [the
NMB] of coverage under our traditional . . . test”). The NMB’s
decision to find no control in Menzies Aviation is remarkable
in light of its prior decisions because, as Member Geale
observes, the airline in that case had the right to demand the
removal of particular vendor employees from the contract. See
id. (Geale, Mem., dissenting). These cases and commentary
from members of both boards demonstrate that, under the test
the NMB now applies, the NMB will not find control for RLA
purposes if the contractor is ultimately allowed “to determine
the appropriate discipline” for its own employees. See id. at 6
(majority opinion). That rule is impossible to square with cases
from just a few years earlier. Cf. Garren, supra, at 103 (noting
that the NMB’s decisions in Airway Cleaners and other recent
cases “seem[] inconsistent with [the] more than thirty decisions
from 1996-2011 that found RLA jurisdiction” under similar
facts).
In ABM’s case, the NLRB found “that the record did not
establish whether an employee’s removal from service” at the
airport—which the Consortium has the right to request or
require under certain circumstances—“would effectively result
in the employee’s discharge” from the company. J.A. 568. The
NLRB also emphasized that the Company “conducts its own
investigations of [its] employees” before doling out discipline.
J.A. 568. Under those facts, the most recent NMB precedent
(on its own) might justify the NLRB’s determination that
carriers exercise insufficient control over ABM for the RLA to
apply. See Menzies Aviation, 42 N.M.B. at 6 (explaining that
“the authority to remove employees” from a contract is relevant
only when “an employee has been terminated following a
carrier request that he or she be removed from the contract”
(emphasis added)). After all, it is far from clear that the
Consortium has the power to determine discipline for ABM
16
employees or to ensure that those employees are fired from the
Company (and not just removed from service at the airport).
And that is the very reasoning the NLRB used to conclude
that the RLA did not apply here. See J.A. 571 (citing Menzies
Aviation, Inc., 42 N.M.B. 1; Airway Cleaners, LLC, 41 N.M.B.
262; and Bags, Inc., 40 N.M.B. 165) (finding PAC’s ability to
discipline and discharge ABM employees lacking and
observing “that the degree of control that PAC has over [ABM]
is contractually no greater than the type of control exercised in
a typical subcontractor relationship”). Yet the NMB never
expressly disavowed its precedent that took all six factors into
account when determining whether a carrier controlled a
contractor. Nor did the NMB ever explain why it decided to
replace that traditional approach with an analysis that
emphasized carrier control of discipline and discharge. Given
the NLRB’s previous endorsement of the prior approach, see,
e.g., Aircraft Serv. Int’l Grp., 342 N.L.R.B. 977 (2004), it was
not enough for the NLRB simply to follow suit without an
explanation for why it, too, was leaving behind settled
precedent.
B
The NLRB claims that “the NMB has primary authority to
interpret the RLA,” Oral Arg. Tr. 30:6-7, and readily
acknowledges that its practice is “to apply the NMB’s test,” id.
at 26:22-23. Indeed, the NLRB has for years hitched its wagon
to the NMB’s star, including in formal, published opinions.
See, e.g., Aircraft Serv. Int’l Grp., 342 N.L.R.B. at 977. When
the NLRB first adopted and applied the NMB’s traditional test,
it bound itself to continue doing so; any deviation would
require a reasoned explanation. In finding that it had
jurisdiction over the Company, however, the NLRB relied
exclusively on the NMB’s most recent precedent—silently
17
elevating the airlines’ power over personnel decisions to
dispositive status.
It is well-settled that the NLRB—like any other agency—
cannot “turn[] its back on its own precedent and policy without
reasoned explanation.” Dupuy v. NLRB, 806 F.3d 556, 563
(D.C. Cir. 2015); see also E.I. Du Pont de Nemours & Co. v.
NLRB, 682 F.3d 65, 70 (D.C. Cir. 2012) (explaining that the
NLRB must “give a reasoned justification for departing from
its precedent”). Generally speaking, “the requirement that an
agency provide reasoned explanation for its action . . .
demand[s] that it display awareness that it is changing position.
An agency may not, for example, depart from a prior policy sub
silentio or simply disregard rules that are still on the books.”
FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).
And if “a party makes a significant showing that analogous
cases have been decided differently, the agency must do more
than simply ignore that argument.” LeMoyne-Owen Coll. v.
NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004). Thus, when the Board
fails to explain—or even acknowledge—its deviation from
established precedent, “its decision will be vacated as arbitrary
and capricious.” Manhattan Ctr. Studios, Inc., v. NLRB, 452
F.3d 813, 816 (D.C. Cir. 2006).
Because the NLRB follows the NMB’s lead in interpreting
and applying the RLA, the question becomes how to treat an
unacknowledged and unexplained deviation from precedent by
the NLRB that is precipitated by a likewise unacknowledged
and unexplained deviation from precedent by the NMB. We
hold that, under such circumstances, the NLRB is not free to
simply adopt the NMB’s new approach without offering a
reasoned explanation for that shift. Indeed, an agency cannot
avoid its duty to explain a departure from its own precedent
simply by pointing to another agency’s unexplained departure
from precedent. This is a corollary of the rule that an agency
18
cannot justify a departure from its precedent simply by pointing
to another one of its cases that departed from precedent, if that
other case does not itself announce the new standard or a
supporting rationale for it. See Ramaprakash v. FAA, 346 F.3d
1121, 1128-29 (D.C. Cir. 2003) (citing Hatch v. FERC, 654
F.2d 825, 834 (D.C. Cir. 1981)).
In short, the NLRB should have recognized that
longstanding NMB precedent—which the NLRB previously
followed—compelled a finding of control in this case. The
NLRB may have fairly read recent NMB opinions to require
greater carrier control over personnel matters than the record
evinced here. But rather than ignore the NMB’s earlier
precedent, which it had effectively adopted as its own, the
NLRB was obligated to consider that precedent and
acknowledge the conflict in this case. See Hatch, 654 F.2d at
834-35 (requiring “explicit recognition by [an agency] that the
standard has been changed” and a genuine “attempt to
forthrightly distinguish or outrightly reject apparently
inconsistent precedent”). At that point, the NLRB would have
had two options. First, it could have attempted to offer its own
reasoned explanation for effectively whittling down the
traditional six-factor test. It would have needed to explain why
such a change was appropriate, how the new test reasonably
interprets the RLA, and why the NLRB has decided to
determine for itself the appropriate test rather than keeping
with its past practice of referring such questions to the NMB
and deferring to their formulation of the test for RLA
jurisdiction. Or the NLRB could have simply referred this
matter to the NMB and asked that agency to explain its decision
to change course. If the NLRB were persuaded, it could then
have adopted the NMB’s explanation as its own. The NLRB,
however, followed neither path. As a result, we must vacate the
NLRB’s order as arbitrary and capricious.
19
At oral argument, counsel for the NLRB was asked what
the appropriate remedy would be if the Board had in fact
applied a new test without explanation. Counsel suggested that,
on remand, it would be up to the NLRB to provide some
explanation justifying the new test or to identify another
agency that could. See Oral Arg. Tr. 24:1-6. We agree. Either
scenario is preferable to the present state of affairs, in which
both employers and employees are caught in a web of
conflicting precedent on the issue of RLA jurisdiction.
III
We grant the Company’s petition for review and deny the
NLRB’s cross-application for enforcement. We vacate the
NLRB’s order and remand for further proceedings consistent
with this opinion.
So ordered.