National Labor Relations Board v. Bluefield Hospital Co.

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 15-1203
NATIONAL LABOR RELATIONS BOARD,
Petitioner,
NATIONAL NURSES ORGANIZING COMMITTEE,
Intervenor,
v.
BLUEFIELD HOSPITAL CO., LLC, d/b/a Bluefield Regional
Medical Center; GREENBRIER VMC, d/b/a Greenbrier Valley
Medical Center,
Respondents.
On Application for Enforcement of an Order of the National Labor
Relations Board. (10-CA-093042)
Argued: January 26, 2016 Decided: May 6, 2016
Before AGEE and THACKER, Circuit Judges, and Henry E. HUDSON,
United States District Judge for the Eastern District of
Virginia, sitting by designation.
Application for enforcement granted by published opinion. Judge
Agee wrote the opinion, in which Judge Thacker and Judge Hudson
joined.
ARGUED: Micah Prieb Stoltzfus Jost, NATIONAL LABOR RELATIONS
BOARD, Washington, D.C., for Petitioner. Kaitlin Ann Kaseta,
Charleston, South Carolina, for Respondents. ON BRIEF: Jill
Ann Griffin, Supervisory Attorney, Richard F. Griffin, Jr.,
General Counsel, Jennifer Abruzzo, Deputy General Counsel, John
H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy
Associate General Counsel, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Petitioner. Bryan T. Carmody, CARMODY &
CARMODY LLP, Glastonbury, Connecticut, for Respondents.
2
AGEE, Circuit Judge:
This case involves a labor dispute between two West
Virginia hospitals, Bluefield Regional Medical Center and
Greenbrier Valley Medical Center (collectively, the
“Hospitals”), and a group of their employees. After registered
nurses employed at the Hospitals elected the National Nurses
Organizing Committee (the “Union”) as their bargaining
representative, the Hospitals challenged the election results
and refused the Union’s requests to bargain. The National Labor
Relations Board (the “Board”) issued a final decision concluding
the Hospitals violated the National Labor Relations Act (the
“Act”), 29 U.S.C. § 151 et seq., by refusing to bargain with the
Union. The Board then brought an application for enforcement
before this Court, which the Hospitals oppose. For the reasons
set forth below, we grant the Board’s application for
enforcement.
I.
A.
To place the issues in context, we briefly explain some of
the Board’s functions and the authority the Act grants the
Board. As a quasi-judicial body, the Board is responsible for
determining whether certain conduct constitutes an unfair labor
practice in violation of the Act. 29 U.S.C. §§ 158, 160. In
3
addition, the Board has principal authority to conduct
representation proceedings, in which employees may select a
collective bargaining representative. Id. § 159(b), (c). The
Act expressly permits the Board to delegate to its Regional
Directors authority to oversee representation elections and to
certify election results. Id. § 153(b). The Board delegated
that general authority to its Regional Directors in 1961, and
they have been administering and certifying results of
representation elections since that time. 26 Fed. Reg. 3911
(May 4, 1961).
Although the Regional Directors have delegated authority to
oversee representation elections, the Board retains plenary
authority to “review any action of a regional director” at the
objection of an interested person. 29 U.S.C. § 153(b).
However, the parties may waive that right and agree to give the
Regional Director’s decision finality. See 29 C.F.R. § 102.62. 1
In the absence of such an agreement, a Regional Director’s
actions only become final if the parties decline to seek Board
review or if the Board, upon review, does not alter the Regional
Director’s decision. 29 U.S.C. § 153(b). 2
1
Unless otherwise indicated, all citations to the Code of
Federal Regulations are to the version in effect at the time the
described events took place.
2 Parties, upon mutual consent, may give up their right to
plenary Board review by entering into one of several standard
(Continued)
4
Section 3(a) of the Act requires that the Board be composed
of five members appointed by the President upon advice and
consent of the Senate. Id. § 153(a). “[T]hree members of the
Board shall, at all times, constitute a quorum of the Board[.]”
Id. § 153(b).
The Act 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, with two panel members constituting a
panel quorum. Id. § 153(b). This delegation of cases across
various panels is intended to allow the Board to process labor
disputes more efficiently. The panel delegation survives the
expiration of up to two of the five Board members’ terms, such
that the Board may continue to adjudicate unfair labor practice
disputes pending appointment of new members so long as the
three-member Board quorum requirement is met. Id. § 153(b).
election agreements. See 29 C.F.R. § 102.62. The parties in
this case chose to enter into a “[c]onsent election agreement
with final regional director determinations of post-election
disputes,” meaning that the rulings and determinations of the
Regional Director with respect to a union election “shall be
final . . . with the same force and effect, in that case, as if
issued by the Board.” Id. § 102.62(a); see also J.A. 15-20.
Distinct from a consent election agreement is a stipulated
election agreement, which provides that the representation
“election shall be conducted under the direction and supervision
of the regional director,” but retains “Board review of the
regional director’s resolution of post-election disputes.” 29
C.F.R. § 102.62(b).
5
As of January 3, 2012, the terms of three of the Board’s
five members had expired. Asserting authority under the Recess
Appointments Clause, U.S. Const. art. II, § 2, cl. 3, the
President appointed three persons to the Board to fill these
vacancies on January 4, 2012, during a brief recess between the
Senate’s twice-weekly pro forma sessions. In NLRB v. Noel
Canning, 134 S. Ct. 2550 (2014), the Supreme Court held those
appointments unconstitutional as not within the President’s
powers. Id. at 2578. These Board seats remained vacant until
August 5, 2013 when the Senate confirmed new Board members for
the seats. By reason of the three vacancies, the Board was
composed of only two members from January 3, 2012 through August
5, 2013 and thus lacked a quorum as required by the Act. During
this period, Regional Directors continued to oversee
representation elections and certify election results pursuant
to the 1961 delegation of authority from the Board.
B.
The Hospitals provide inpatient and outpatient care in
Bluefield and Ronceverte, West Virginia. In August 2012, while
the Board lacked a quorum, the Union filed two petitions with
the Board seeking to become the bargaining entity for registered
6
nurses at the Hospitals. 3 The Hospitals and the Union entered
into Consent Election Agreements (the “Agreements”) that, among
other things, identified the proposed bargaining unit and
provided that the Regional Director, Claude Harrell, would
oversee secret-ballot elections in accordance with the Board’s
regulations. 4 Under the Agreements and corresponding
regulations, the parties were required to file objections to the
results of the elections with the Regional Director no later
than seven days after the ballots were tallied. The Agreements
specified that “[t]he method of investigation of objections and
challenge[s], including whether to hold a hearing, shall be
determined by the Regional Director, whose decision shall be
final.” J.A. 314. The Regional Director also retained the
authority to certify the Union as the representative of the
Hospitals’ registered nurses, pending the outcome of the
elections.
The Regional Director held a representation election at
each hospital on August 29 and 30, 2012, and the Union prevailed
in both elections. In response, the Hospitals filed several
3
It is undisputed that the Hospitals are “employer[s]”
engaged in “commerce,” and the Union qualifies as a “labor
organization,” under the definitional provisions of the Act. 29
U.S.C. § 152(2), (5), (6), (7).
4 The Agreements waived the Hospitals’ right to pre-election
hearings, which are otherwise mandatory. See 29 U.S.C.
§ 159(c)(1).
7
objections to the election results. The Regional Director
issued notices of hearings for the objections and gave written
notification to the Hospitals that the Board’s rules and
regulations required the Hospitals to submit evidence in support
of their objections within specific time limits. See 29 C.F.R.
§ 102.69. The Hospitals did not produce any evidence in support
of their objections, nor did they seek an extension of time to
do so. On September 24, 2012, the Regional Director overruled
the Hospitals’ objections and withdrew the hearing notices,
actions that amounted to final rulings on the objections under
the Agreements. The Regional Director certified the Union as
the registered nurses’ collective bargaining representative the
next day. See J.A. 38-41.
The Union then made several requests to bargain with the
Hospitals on behalf of the registered nurses. The Hospitals
refused to bargain, and the Union filed unfair labor practice
charges with the Board. On November 29, 2012, the Regional
Director issued a consolidated complaint on behalf of the Acting
General Counsel of the Board, Lafe Solomon, which alleged that
the Hospitals’ refusal to bargain with the Union violated
Sections 8(a)(1) and (5) of the Act. See 29 U.S.C. § 158(a)(1),
(a)(5). The Hospitals answered by admitting their refusal to
bargain, but claiming an oral agreement between the Union and
the Hospitals required arbitration of election disputes and
8
precluded the Regional Director from overruling their election
objections. 5
While the unfair labor practice proceedings were ongoing,
the United States Court of Appeals for the District of Columbia
Circuit issued its decision in NLRB v. Noel Canning, 705 F.3d
490 (D.C. Cir. 2013), aff’d on other grounds, 134 S. Ct. 2550
(2014), holding that the President’s recess appointment of the
three Board members on January 4, 2012 was unlawful and that the
Board as then constituted lacked a quorum. On February 8, 2013,
the Hospitals filed an amended answer citing the Noel Canning
decision and arguing under that case the actions of the Regional
Director in certifying the Union were invalid because the
certifications issued during the time in which the Board lacked
a quorum. The Board’s acting general counsel moved for summary
judgment.
Upon confirmation of new members by the U.S. Senate, the
Board regained a quorum on August 5, 2013. Almost a year later,
the Supreme Court issued its decision in NLRB v. Noel Canning,
134 S. Ct. 2550 (2014), affirming, albeit on different grounds,
5 During the unfair labor practice proceedings, the
Hospitals submitted a sworn statement, stating the Hospitals and
the Union agreed orally that the parties would submit election
objections to the Board and an arbitrator concurrently, and that
the agreement was reduced to writing in a document entitled
“Election Procedure Agreement.” However, no written agreement
was offered to the Board or otherwise made a part of the record.
9
the District of Columbia Circuit’s holding that the President’s
recess appointments were unconstitutional. The Hospitals then
raised the Supreme Court’s Noel Canning decision, along with
various other affirmative defenses, in a third amended answer to
the consolidated complaint, arguing specifically that the
Regional Director lacked authority to approve the Agreements or
issue the election certifications when the Board lacked a
quorum. Tangentially, the Hospitals contended that the Regional
Director’s appointment was invalid because the Board’s Acting
General Counsel was not validly holding his position at the time
he appointed the Regional Director.
On December 16, 2014, the Board granted summary judgment to
the Acting General Counsel, finding that the Hospitals’ refusal
to bargain with the Union violated Sections 8(a)(1) and (5) of
the Act. The Board found that the Hospitals waived Board review
of the Regional Director’s actions with respect to the election
objections because the defense could have been raised during the
representation phase and the Agreements stated that the Regional
Director’s actions would be final. Alternatively, the Board
concluded the Regional Director had validly exercised authority
over the representation proceedings under the longstanding
delegation of such authority by the Board to its Regional
Directors in 1961. The Board also concluded the Regional
Director’s appointment by the Acting General Counsel was valid.
10
Accordingly, the Board ordered the Hospitals to bargain with the
Union, to implement any resulting understanding in a signed
agreement, and to post a remedial notice.
The Board now brings an application for enforcement
pursuant to 29 U.S.C. § 160(e). We have jurisdiction in this
appeal under that statute.
II.
The Hospitals raise several arguments in opposition to the
application for enforcement, which they contend require vacating
the certificates of elections and remanding for new elections.
Primarily, the Hospitals argue the Regional Director lacked
authority to act during the period when the Board did not have a
quorum thereby rendering his decisions on the elections invalid.
The Hospitals also contend the Regional Director’s appointment
to that position occurred after the Board lost a quorum and is
void, thus rendering invalid any actions he took including
conducting and certifying the elections. Relatedly, the
Hospitals argue the Regional Director’s appointment was invalid
because the Acting General Counsel had also lost authority to
act at the time of his appointment. The Hospitals lastly posit
that the Regional Director erred in requiring them to present
evidence in support of their election objections because a
separate contract with the Union precluded such a requirement.
11
For the reasons discussed below, we resolve each of these
arguments in favor of the Board.
A.
As an initial matter, the Board contends that we need not
reach any issue regarding the Board’s lack of a quorum because
the Hospitals waived that argument by failing to raise it during
the representation proceedings and by entering into the
Agreements. The District of Columbia Circuit recently rejected
nearly identical waiver arguments from the Board in UC Health v.
NLRB, 803 F.3d 669 (D.C. Cir. 2015). It held that UC Health had
not waived its no-quorum challenge premised on Noel Canning
because “challenges to the composition of an agency can be
raised on review [by a Circuit Court] even when they are not
raised before the agency.” Id. at 672-73. In addition, it
observed that holding that an election agreement foreclosed the
no-quorum challenge would present a fairness problem:
UC Health did not expressly give up the challenge it
brings now when it executed the Agreement; it merely
signed a form agreement providing that the Board's
regulations would govern the election. Indeed, when
UC Health entered the Stipulated Election Agreement,
no one knew whether Congress might confirm the
President's appointments and obviate the quorum issue
by the time the representation election in this case
took place. And for that matter, UC Health could not
have known with any certainty that the Board had no
quorum even without Senate approval for the
President's appointments until the Supreme Court
handed down its decision in Noel Canning fourteen
12
months after the election. We will not hold UC Health
responsible for failing to see the future.
Id. at 673.
The reasoning in UC Health applies with equal force here,
as the Hospitals raised a no-quorum argument before the Board
and long before the enforcement application in this Court. This
is not the circumstance where a party failed to pursue
diligently a viable defense. The Hospitals promptly raised
before the Board the Supreme Court’s Noel Canning decision,
handed down approximately 22 months after the representation
elections took place, and we thus find no waiver.
B.
The Hospitals’ main argument is that the authority of the
Regional Director lapsed during any period in which the Board
lacked a quorum. Citing to the Restatement (Third) of Agency, §
3.07(4) (Am. Law Inst. 2006), the Hospitals contend that once
the principal (the Board) lost its authority, then its agent
(the Regional Director) lost all delegated authority that
derived from the principal: “an agent may carry out a delegated
authority only so long as the entity that delegated the
authority continues to hold the necessary authority of its own.”
Opening Br. 17. As a consequence, the Hospitals conclude the
Agreements and certifications of elections issued by the
13
Regional Director “were void ab initio” because they occurred
when the Board lacked a quorum. Opening Br. 16.
The Board responds that the Supreme Court has implicitly
rejected the Hospitals’ underlying argument in New Process
Steel, L.P. v. NLRB, 560 U.S. 674 (2010). Further, the Board
contends even if New Process Steel is not controlling, the
Board’s interpretation of the Act verifying the ongoing
authority of Regional Directors is entitled to deference under
Chevron, U.S.A., Inc., v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984).
We find the Hospitals’ argument wanting in view of the
Chevron deference owed the Board’s interpretation of the Act
regarding the authority of Regional Directors during the absence
of a Board quorum. 6 The Board has construed the Act as
6
The Board correctly points out that the Supreme Court has,
in dictum, implicitly acknowledged that delegation to Regional
Directors survives the loss of a Board quorum in New Process
Steel, L.P. v. NLRB, 560 U.S. 674 (2010). The issue in that
case was whether two Board members could continue to act on
behalf of the Board after the Board itself lost a quorum. Id.
at 682-83. While the Supreme Court made clear that the Board
lost the authority to act, the Court also observed that its
“conclusion that the delegee group ceases to exist once there
are no longer three Board members to constitute the group does
not cast doubt on the prior delegations of authority to nongroup
members, such as, the regional directors or the general
counsel.” Id. at 684 n.4. We give great weight to Supreme
Court dicta. See McCravy v. Metro. Life Ins. Co., 690 F.3d 176,
182 n.2 (4th Cir. 2012) (assuming that the pertinent language is
dictum, “we cannot simply override a legal pronouncement
endorsed . . . by a majority of the Supreme Court.”); United
(Continued)
14
authorizing Regional Directors to exercise delegated authority
during a period in which the Board lacks a quorum. Bluefield
Hosp. Co., 361 N.L.R.B. No. 154 (2014).
The validity of an agency’s interpretation of a
congressional act the agency is charged to administer is
reviewed by a Court under the familiar two-step test set out in
Chevron. See Montgomery Cty., Md. v. F.C.C., 811 F.3d 121, 2015
WL 9261375, at *6 (4th Cir. Dec. 18, 2015) (“Here, a Chevron
analysis is appropriate because the issue before us involves the
FCC’s interpretation of a statute it is charged with
administering.”). At step one, the Court determines “whether
Congress has directly spoken to the precise question at issue.”
Chevron, 467 U.S. at 842. Here, that would mean if Congress has
plainly addressed whether Regional Directors may continue to act
in the absence of a Board quorum, “that is the end of the
matter[,] for the court, as well as the agency, must give effect
to the unambiguously expressed intent of Congress.” Id. at 842-
43. However, if the statute is silent or ambiguous, the Court
will proceed to Chevron’s second step, which asks whether the
Board’s interpretation is “a permissible construction of the
States v. Fareed, 296 F.3d 243, 246 (4th Cir. 2002) (following
“dictum endorsed by six justices” of the Supreme Court).
Because the Chevron deference argument resolves this issue, we
do not specifically address the effect of New Process Steel.
15
statute.” Id. at 843. If it is, then we must defer. Id. at
844; see also City of Arlington v. FCC, 133 S. Ct. 1863, 1870-71
(2013).
Beginning with the first step of the Chevron analysis,
whether the statute speaks directly and unambiguously to the
Regional Director’s authority during the absence of a Board
quorum, we examine the relevant statutory text:
The Board is authorized to delegate to any group of
three or more members any or all of the powers which
it may itself exercise. The Board is also authorized
to delegate to its regional directors its powers under
section 159 of this title to determine the unit
appropriate for the purpose of collective bargaining,
to investigate and provide for hearings, and determine
whether a question of representation exists, and to
direct an election or take a secret ballot under
subsection (c) or (e) of section 159 of this title and
certify the results thereof, except that upon the
filing of a request therefor with the Board by any
interested person, the Board may review any action of
a regional director delegated to him under this
paragraph, but such a review shall not, unless
specifically ordered by the Board, operate as a stay
of any action taken by the regional director. A
vacancy in the Board shall not impair the right of the
remaining members to exercise all of the powers of the
Board, and three members of the Board shall, at all
times, constitute a quorum of the Board, except that
two members shall constitute a quorum of any group
designated pursuant to the first sentence
hereof. . . .
29 U.S.C. § 153(b). Nothing in the statute addresses the effect
of the Board’s loss of quorum on a prior delegation of authority
to Regional Directors. See Id. As Congress has not plainly
addressed the issue, we must engage in the second part of the
16
Chevron analysis: whether the Board’s interpretation that the
delegation of authority to Regional Directors survives despite
the absence of a Board quorum is a reasonable one to which we
owe deference.
Relying on the express statutory authorization in Section
3(b) of the Act, the Board delegated decisional authority in
representation proceedings to Regional Directors in 1961. 26
Fed. Reg. 3911 (May 4, 1961). At the time of this delegation to
the Regional Directors, the Board had sufficient members to meet
the Board quorum requirement. 26 NLRB Ann. Rep. 1 (1962). The
Board has never rescinded that delegation.
Although the Board lacked a quorum at the time the Regional
Director conducted the elections at issue here, “[t]he policy of
the National Labor Relations Board is that during any period
when the Board lacks a quorum normal Agency operations should
continue to the greatest extent permitted by law.” 29 C.F.R.
§ 102.178; see also id. § 102.182 (“During any period when the
Board lacks a quorum, . . . [t]o the extent practicable, all
representation cases should continue to be processed and the
appropriate certification should be issued by the Regional
Director[.]”).
Only one other Circuit Court of Appeals, the District of
Columbia Circuit, has addressed this precise issue of whether
the Board’s interpretation of the Act, which delegated authority
17
to Regional Directors remains intact during the absence of a
Board quorum, is reasonable and entitled to Chevron deference.
UC Health, 803 F.3d 669; SSC Mystic Operating Co. v. NLRB, 801
F.3d 302 (D.C. Cir. 2015). The D.C. Circuit has now twice held
that the Board’s interpretation “easily” satisfies the standard
of being “reasonable and consistent with the statute’s purpose.”
UC Health, 803 F.3d at 675; SSC Mystic Operating Co., 801 F.3d
at 309 (concluding the Regional Director’s authority to conduct
the representation election was “beyond dispute”). In UC
Health, the court explained its conclusion as follows:
This is a sensible interpretation that is in no way
contrary to the text, structure, or purpose of the
statute. . . . Moreover, allowing the Regional
Director to continue to operate regardless of the
Board’s quorum is fully in line with the policy behind
Congress’s decision to allow for the delegation in the
first place. Congress explained that the amendment to
the [Act] that permitted the Board to delegate
authority to the Regional Directors was “designed to
expedite final disposition of cases by the Board.”
See 105 Cong. Rec. 19,770 (1959) (statement of Sen.
Barry Goldwater). Permitting Regional Directors to
continue overseeing elections and certifying the
results while waiting for new Board members to be
confirmed allows representation elections to proceed
and tees up potential objections for the Board, which
can then exercise the power the [Act] preserves for it
to review the Regional Director's decisions once a
quorum is restored. And at least those unions and
companies that have no objections to the conduct or
result of an election can agree to accept its outcome
without any Board intervention at all. The Board’s
interpretation thus avoids unnecessarily halting
representation elections any time a quorum lapses due
to gridlock elsewhere.
18
Id. at 675-76. We find the reasoning in UC Health persuasive
and agree that the Board’s interpretation is “imminently
reasonable.” Id. at 676.
The Hospitals attempt to distinguish UC Health on its
facts, as those parties entered into a Stipulated Election
Agreement whereby the Board retained plenary power to review the
outcome of the representation proceedings. See 29 C.F.R.
§ 102.62(b) (describing “stipulated election agreements”). The
parties in this case signed Consent Election Agreements, which
vested in the Regional Director final authority to oversee the
representation elections and certify their results, and it
foreclosed Board review over representation proceedings. See
Id. § 102.62(a) (describing “Consent Election Agreement”). This
distinction makes no difference, as we simply apply the contract
terms of the Agreements.
Agreement by contract is among the ways to relinquish the
right to plenary Board review and confer on the Regional
Director final authority over representation proceedings. UC
Health, 803 F.3d at 680 (“Only the acquiescence of the parties
or the Board’s ratification can give binding force to a Regional
Director’s determination.”). This is a matter of contract law,
not administrative law. NLRB v. MEMC Elec. Materials, Inc., 363
F.3d 705, 709 (8th Cir. 2004) (stating the Board was “on sound
ground in emphasizing that parties are bound by an approved
19
election agreement, just as they are bound by other contracts”).
“When asked to approve election agreements, the Board's long-
standing approach has been to honor the parties' freedom of
contract, unless their contract is contrary to the statute or
Board policy.” Id. By signing the Agreements, the Hospitals
signed a contract in which they agreed to give up Board review
and to vest the Regional Director with authority to issue final
decisions at the representation phase. The Hospitals are bound
by that contract just as they are bound by other contracts.
Accordingly, we give deference to the Board’s
interpretation and conclude that the Regional Director’s
authority to act was not abrogated during the period when the
Board lacked a quorum. 7
7 Although we acknowledge the recent decision of the D.C.
Circuit in Hosp. of Barstow, Inc. v. N.L.R.B., No. 14-1167, 2016
WL 1720366 (D.C. Cir. Apr. 29, 2016), we find it inapposite here
for two distinct reasons. First, no petition for review was
filed in this case. See 29 U.S.C. § 160(f) (requiring a
petition for review to be in writing and filed with the Court).
Second, in Hospital of Barstow, the Board did not offer an
interpretation of the statutory quorum provision that would
raise Chevron deference on appeal, concluding only “that the
challenge to the Regional Director’s authority had been waived.”
Id. at *3. In this case, however, the Board argued waiver and
provided an interpretation of the statute whereby the Regional
Director could act in the absence of a Board quorum. For the
reasons discussed, we owe that interpretation Chevron deference.
20
C.
The Hospitals also urge the Court to hold that the Regional
Director was not validly appointed because the Acting General
Counsel, Lafe Solomon, was without authority to act at the time
of Regional Director Harrell’s appointment. Citing Section 3(d)
of the Act, the Hospitals contend Solomon was a temporary
appointee to his position and that his authority had lapsed
under the statute at the time the Regional Director was
appointed. See 29 U.S.C. § 153(d) (limiting temporary
appointment to “forty days when the Congress is in session
unless a nomination to fill such vacancy shall have been
submitted to the Senate”). We do not find this argument
persuasive because it is the Board, not the General Counsel,
which has final authority to appoint a Regional Director. And
the Board did, in fact, approve Harrell as the Regional
Director.
The Act provides that “[t]he Board shall appoint . . .
regional directors.” 29 U.S.C. § 154(a); see also 29 C.F.R.
§ 102.5 (“The term regional director as used herein shall mean
the agent designated by the Board as the regional director for a
particular region[.]”). The General Counsel is vested by the
Act with “general supervision” over employees in the regional
offices. 29 U.S.C. § 153(d). The Board has implemented rules
and regulations delegating certain appointive responsibilities
21
to the General Counsel, but as to Regional Directors a
designation by the General Counsel is valid “only upon approval
of the Board.” 67 Fed. Reg. 62992-93 (Oct. 1, 2002); see also
24 Fed. Reg. 6666-67 (Aug. 15, 1959). In other words, the Board
must ratify the Regional Director’s appointment and any
“appointment” by the General Counsel is of no effect until the
Board acts. For that reason, even if we assume Solomon’s
appointment as Acting General Counsel had lapsed at the time of
the Regional Director’s appointment, it makes no difference. It
is the Board -– not the General Counsel -- that retains final
authority over the appointment of a Regional Director, and the
Board approved the appointment of the Regional Director in this
case. Accordingly, the Hospitals’ argument fails. 8
8Before the Board, the Hospitals also argued the Acting
General Counsel “lacked the authority to prosecute the
consolidated complaint.” Bluefield Hosp., 361 N.L.R.B. No. at 2
n.5. The Board rejected this argument, and the Hospitals do not
raise this issue on appeal, a point they confirmed at oral
argument. Oral Argument at 18:05-18:15. Although we are fully
cognizant of the decisions in SW General, Inc. v. NLRB, 796 F.3d
67, 83 (D.C. Cir. 2015), and Hooks v. Kitsap Tenant Support
Services, Inc., No. 13-35912, 2016 WL 860335 (9th Cir. Mar. 7,
2016), the Hospitals have waived any argument in that regard.
Equal Rights Ctr. v. Niles Bolton Assocs., 602 F.3d 597, 604 n.4
(4th Cir. 2010) (concluding that an argument not raised in the
opening brief is waived); see also SW General, 796 F.3d at 83
(“We address the [Federal Vacancies Reform Act (“FVRA”)]
objection in this case because the petitioner raised the issue.
. . . We doubt that an employer that failed to timely raise an
FVRA objection -- regardless of whether enforcement proceedings
are ongoing or concluded -- will enjoy the same success.”).
22
D.
The Hospitals also contend that the Board appointed the
Regional Director after the Board lost a quorum and
consequently, the appointment was invalid. This is a factual
dispute; either the Board acted to appoint the Regional Director
before it lost a quorum or it didn’t. In resolving such a
factual dispute, “[t]he findings of the Board with respect to
questions of fact if supported by substantial evidence on the
record considered as a whole shall be conclusive.” 29 U.S.C.
§ 160(e).
The Board determined that the Regional Director’s
appointment became final on December 22, 2011, approximately one
week before the Board lost its quorum. Bluefield Hosp., 361
N.L.R.B. No. at 2 n.5. That factual finding is supported in the
record by a document entitled “Minute of Board Action” of
December 22, 2011, which states that the Board “unanimously
approved” the selection of Claude Harrell as Regional Director
for Region 10 by votes taken December 21 and 22, 2011. Board’s
Response Br., Attach. A. The “Minute of Board Action” settles
the issue, as it is substantial evidence. We are bound on
appeal by that finding and thus find no merit in the Hospitals’
argument.
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E.
Having resolved the issues related to the authority of the
Board or the Regional Director to act, we turn to the merits.
Section 8(a)(1) of the Act makes it an unfair labor
practice “to interfere with, restrain, or coerce employees in
the exercise of [their rights under the Act],” while Section
8(a)(5) makes it an unfair labor practice for an employer “to
refuse to bargain collectively with the representatives of his
employees.” 29 U.S.C. § 158(a)(1), (5). The Hospitals admit
they refused to bargain with the Union, but contend that the
Board erred in its decision to uphold the results of the
representation elections because the Regional Director should
not have overruled their objections to the election results on
procedural grounds.
“‘Congress has entrusted the Board with a wide degree of
discretion in establishing the procedure and safeguards
necessary to insure the fair and free choice of bargaining
representatives by employees.’” NLRB v. Md. Ambulance Servs.,
Inc., 192 F.3d 430, 433 (4th Cir. 1999) (quoting NLRB v. A.J.
Tower Co., 329 U.S. 324, 330 (1946)); see also NLRB v. Waterman
Steamship Corp., 309 U.S. 206, 226 (1940) (“The control of the
election proceeding, and the determination of the steps
necessary to conduct [an] election fairly were matters which
Congress entrusted to the Board alone.”). “The results of a
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Board-supervised representation election are presumptively
valid,” NLRB v. Flambeau Airmold Corp., 178 F.3d 705, 707 (4th
Cir. 1999), and we will overturn a representation election only
where the Board has clearly abused its discretion, Elizabethtown
Gas Co. v. NLRB, 212 F.3d 257, 262 (4th Cir. 2000).
The applicable regulations governing post-election
objections instruct parties to file election objections
“[w]ithin 7 days after the tally of ballots has been prepared”
and “[w]ithin 7 days after the filing of objections, or such
additional time as the Regional Director may allow, the party
filing objections shall furnish to the Regional Director the
evidence available to it to support the objections.” 29 C.F.R.
§ 102.69(a)(emphasis added). The NLRB’s “casehandling manual”
provides: “Absent the timely receipt of sufficient evidence, the
Regional Director should overrule the objections without any
further processing.” Nat’l Labor Relations Bd., Casehandling
Manual (Part 2, Representation Proceedings) § 11392.6 (2014).
The Hospitals admit they were aware that their supporting
evidence for the filed objections was to be submitted in the
respective cases no later than September 12 and 13, 2012. They
further admit that they declined to submit any evidence and made
no request for an extension of time to submit evidence. The
regional director overruled their objections on September 24,
well after the 7-day deadline had passed. “[I]t is not
25
sufficient for an employer merely to question the interpretation
of or legal conclusions drawn from the facts by the Regional
Director.” Nat’l Posters, Inc. v. NLRB, 720 F.2d 1358, 1362
(4th Cir. 1983). “To be entitled to a hearing, the objecting
party must make a proffer of evidence which prima facie would
warrant setting aside the election.” NLRB v. Hydrotherm, Inc.,
824 F.2d 332, 335 (4th Cir. 1987) (internal quotation marks
omitted). The Regional Director was well within his authority
to overrule the objections and rescind the hearings notices, and
indeed the Board’s rules directed him to do so in this
circumstance.
The Hospitals counter that they were not obligated to
submit evidence in support of their objections because they had
an oral agreement with the Union to submit the matter to an
arbitrator. However, the Board has since explained that it
consistently rejects employers’ claims of “an oral ad hoc
agreement between the parties g[iving] exclusive jurisdiction to
an arbitrator.” D.H.S.C., LLC, 362 N.L.R.B. No. 78, at *1 n.3
(Apr. 30, 2015) (noting the Board had rejected an identical
argument several times before and warning that continuing to
press the “nonmeritorious” argument could result in disciplinary
proceedings). To the extent the Hospitals now claim this oral
agreement was reduced to writing at some point, it is not in the
26
record. See 9 U.S.C. § 2 (requiring agreements to arbitrate to
be in writing under the Federal Arbitration Act).
We therefore conclude the Hospitals’ sole challenge to the
merits of the Board’s final decision to be baseless.
III.
For the reasons set out above, we grant the Board’s
application for enforcement of its order.
APPLICATION FOR ENFORCEMENT GRANTED
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