Denton County Electric Coop v. NLRB

Case: 18-60474 Document: 00515454291 Page: 1 Date Filed: 06/16/2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
June 16, 2020
No. 18-60474
Lyle W. Cayce
Clerk
DENTON COUNTY ELECTRIC COOPERATIVE, INCORPORATED, doing
business as CoServ Electric,
Petitioner Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent Cross-Petitioner.
On Petitions for Review and Cross-Application
For Enforcement of an Order of the
National Labor Relations Board
Before DAVIS, STEWART, and ELROD, Circuit Judges.
JENNIFER WALKER ELROD, Circuit Judge:
The March 18, 2020 opinion filed in this case is WITHDRAWN, and the
following is substituted in its place.
Denton County Electric Cooperative (CoServ) challenges the National
Labor Relations Board (Board) ruling that it engaged in unfair labor practice
and the Board’s issuance of an affirmative bargaining agreement and public-
notice-reading order. The Board cross-applies for enforcement. We DENY
CoServ’s petition for review in part and GRANT in part. We DENY in part and
GRANT in part the Board’s cross-application for enforcement.
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I.
CoServ is an electrical cooperative corporation in Corinth, Texas.
CoServ hires various types of employees to conduct its business: linemen,
groundmen, journeymen, servicemen, power quality technicians, system
operators, and senior system operators.
At least from 2009 to 2014, CoServ gave raises to its employees based on
either the Employee Development Program (EDP) structure or the non-EDP
structure. Of CoServ’s employees, “linemen are part of the lockstep EDP. The
EDP anticipates that linemen advance to the next level every six months and
receive an automatic raise with each advancement.” Other employees who are
not part of the EDP—such as system operators, power quality technicians,
etc.—are compensated on an hourly rate within the established wage ranges
for each position and given “merit-based, discretionary raises” based on their
annual performance evaluation.
CoServ contracts with an outside firm to provide an annual
compensation survey called the Mercer Study that recommends wage-range
adjustments. Between 2009 and 2014, CoServ increased the wage range
according to the Mercer Study every year.
On July 27, 2012, after a Board-certified election, the Union became the
exclusive bargaining representative for 32 CoServ employees. In December
2012, CoServ proposed, and the Union accepted, an interim rate increase for
EDP employees while the collective bargaining process continued. In January
2013, CoServ proposed, and the Union accepted, an interim pay increase for
non-EDP employees as well.
While CoServ and the Union continued negotiating in 2013, a Union
employee filed a decertification petition with the Board. On October 28, 2013,
the decertification vote was held, and the Union survived by a single vote.
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In early 2014, CoServ continued to conduct annual evaluations but did
not give a raise. In response to the lack of raises, the Union filed an unfair
labor practice complaint with the Board against CoServ alleging: (1) that the
suspension of raises violated Section 8(a)(5) of the National Labor Relations
Act (NLRA), which requires an employer to bargain with the union chosen by
a majority of its employees, and (2) that blaming the lack of raises on the Union
violated Section 8(a)(1), which prohibits the employer from interfering with the
employees’ exercise of labor rights.
Three employees—Robert Shelby, Derek Wolzen, and Chad Beck—
testified before the ALJ that their supervisor Kevin Vincent blamed the Union
for the lack of raises that year during their performance reviews. Shelby
testified that Vincent told him that “there will not be a raise . . . because . . .
CoServ . . . was waiting for the [U]nion.” Wolzen testified that Vincent told
him that he would not receive a raise or promotion “because it’s tied up in
[U]nion and CoServ negotiations,” and because the Union had “rejected a
contract offer that would have enabled us to get more money.” Beck also
testified that Vincent told him that “the reason you’re not going to get a raise
is because of the [U]nion.”
On November 4, 2014, the Board and CoServ reached a settlement
agreement. Under the settlement agreement, CoServ agreed to implement the
wage increase, pay back pay to the employees, and post a remedial notice for
60 days after the final approval of the agreement. The settlement agreement
contained a “non-admission clause” stating that CoServ “does not admit that
it has violated the National Labor Relations Act.” 1 The settlement agreement
also provided that CoServ “shall commence [the performance of the agreement]
1 Although CoServ did not admit to wrongdoing in the settlement agreement, the
Board found that CoServ had committed unfair labor practices in later proceedings.
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immediately after the Agreement is approved by the Regional Director.” The
Board’s Regional Director approved the settlement agreement on November
21, 2014.
Between November 3 and 18, 2014, CoServ’s employees circulated a
second decertification petition which garnered 28 out of 32 votes to oust the
Union. The employees filed the petition with the Board on November 19, 2014,
and then provided a copy to CoServ on November 25, 2014.
Throughout November 2014—despite the complaint and the second
decertification petition—the Union and CoServ continued negotiating for a
collective bargaining agreement. On November 25, 2014, CoServ and the
Union met for a final bargaining session. The parties agreed to finalize the
previously discussed tentative agreement by signing and dating it later. The
finalized agreement would have prevented CoServ from unilaterally
withdrawing the recognition of the Union. 2 On November 26, 2014, after
receiving the second decertification petition, CoServ informed the Union that
it no longer recognized the Union and would not bargain with the Union.
After withdrawing its recognition of the Union, CoServ did not provide
certain information that the Union had requested. Furthermore, in 2015,
CoServ returned to its practice of compensating its employees according to the
Mercer Study.
The Union filed unfair labor practice charges regarding CoServ’s alleged
unfair labor practices. An administrative law judge ruled against CoServ.
Both sides filed exceptions. A three-member panel of the Board found that
CoServ committed unfair labor practices by failing to increase the employees’
wage ranges and blaming the Union for the lack of raises. The Board, however,
2 Whether the collective bargaining agreement was formed and became enforceable is
not before this court. The ALJ, however, found that the collective bargaining agreement was
not finalized.
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did not impose independent sanctions for these unfair labor practices as the
Board had settled these allegations previously through the settlement
agreement. Instead, the Board found that these unfair labor practices tainted
the second decertification petition that ousted the Union. Accordingly, the
Board found that CoServ unlawfully withdrew the recognition of the Union
and failed to provide requested information to the Union.
To remedy the unlawful withdrawal of recognition and unlawful
withholding of information, the Board issued a cease-and-desist order to
prevent CoServ from refusing to bargain with the Union; an affirmative
bargaining order requiring CoServ to bargain with the Union and prohibiting
it from withdrawing recognition for a reasonable period of time; and a public-
notice-reading order. CoServ filed a petition for review and the Board filed a
cross-application for enforcement.
II
There are four primary issues in this case: (1) whether substantial
evidence supports the Board’s findings of unfair labor practices; (2) whether
substantial evidence supports the Board’s finding that CoServ’s unfair labor
practices tainted CoServ employees’ second decertification petition ousting the
Union; (3) whether the Board properly issued an affirmative bargaining order;
and (4) whether the Board properly issued a public-notice-reading order.
We hold that CoServ’s challenge against the Board’s findings of unfair
labor practices fails. We also hold that under the governing four-factor test,
substantial evidence supports the Board’s finding that CoServ’s unfair labor
practices tainted the second decertification petition. As to the affirmative
bargaining order, however, we determine that the Board failed to justify the
bargaining order under Fifth Circuit case law. Under our case law, a
bargaining order was not justified and therefore, we vacate. Finally, we vacate
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the Board’s issuance of the public-notice-reading order because it cannot be
justified under the facts of this case. We discuss each issue in turn.
A
CoServ contends that the Board erred in determining that CoServ
committed unfair labor practices by failing to give raises to its employees and
blaming the Union for the lack of raises. 3 The Board subsequently found that
these unfair labor practices tainted the second decertification petition that
ousted the Union. CoServ challenges these underlying findings that it
committed unfair labor practices. The Board contends that CoServ waived any
challenge to these findings by failing to adequately brief the issue.
Alternatively, the Board argues that its determination that CoServ committed
unfair labor practices is correct because it is well-established that attributing
lack of wage increases to a union violates Section 8(a)(1) of the NLRA. See Twin
City Concrete, Inc., 317 N.L.R.B. 1313, 1318 (1995). Assuming arguendo that
CoServ’s argument is adequately briefed 4, it nonetheless fails on its merits.
3 These are the same alleged unfair labor practices that CoServ and the Board settled.
Because of the settlement agreement, the Board did not independently impose sanctions for
these violations. Instead, the Board merely relied on these unfair labor practices to determine
whether the subsequent decertification petition was tainted and then imposed remedies for
the unlawful withdrawal of recognition and withholding of information from the Union only.
4 Federal Rule of Appellate Procedure 28(a)(8)(A) requires an appellant’s opening brief
to contain the “appellant’s contentions and the reasons for them, with citations to the
authorities and parts of the record on which the appellant relies.” “We have often stated that
a party must ‘press’ its claims.” United States v. Scroggins, 599 F.3d 433, 447 (5th Cir. 2010)
(quoting Knatt v. Hospital Serv. Dist. No. 1 of E. Baton Rouge Parish, 327 F.App’x 472, 782
(5th Cir. 2009)). “At the very least, this means clearly identifying a theory as a proposed basis
for deciding the case—merely ‘intimat[ing] an argument is not the same as ‘pressing’ it.” Id.
“[A]mong other requirements to properly raise an argument, a party must ordinarily identify
the relevant legal standards.” Id. We have construed this to mean that an appellant’s
opening brief forfeits an issue if it “provides no explanatory analysis or supporting authority”
for a particular contention. Maria S. ex. rel. E.H.F. v. Garza, 912 F.3d 778, 782 n.3 (5th Cir.
2019). We have also said that “[a]rguments subordinated in a footnote are insufficiently
addressed in the body of the brief” and thus are forfeited. Arbuckle Mountain Ranch of Tex.
v. Chesapeake Energy Corp., 810 F.3d 335, 339 n.4 (5th Cir. 2016).
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We review the Board’s finding of unfair labor practices for substantial
evidence. El Paso Elec. Co. v. NLRB, 681 F.3d 651, 656 (5th Cir. 2012). The
Board’s finding that CoServ blamed the lack of raises on the Union is supported
by substantial evidence. The Board reviewed the testimony put before the ALJ
and the associated credibility determinations made by the ALJ. Vincent, a
manager at CoServ, testified that he had not blamed the lack of raises on the
Union. The ALJ found that Vincent was “a less than candid witness, who
mostly appeared motivated to aid [CoServ] and its leadership [and] escape
culpability.” [ROA 1685] The Board then juxtaposed this testimony with that
of three CoServ employees who all stated that they heard Vincent blame the
lack of raises and promotions on the Union. [ROA 1685] The Board cited the
ALJ’s statement that the three employees had nothing to gain from testifying
against Vincent, while Vincent had incentive to deny the statements as he was
in a leadership position at CoServ. The Board found the ALJ “properly
discredited [Vincent’s] testimony.” [ROA 1685]
We are “bound by the credibility choices of the ALJ, unless: (1) the choice
is unreasonable; (2) the choice contradicts other findings of fact; (3) the choice
is based on inadequate reasons or no reasons; or (4) the ALJ failed to justify
the choice.” Valmont Industries, Inc. v. NLRB, 24 F.3d 454, 463–64 (2001).
Here, the ALJ explained its reasoning and justified its choice to credit the three
CoServ employees’ testimony over Vincent’s. The testimony supports the
finding that CoServ management blamed the lack of raises on the Union. Doing
so is clearly established as an unfair labor practice under the NLRA. See Twin
City Concrete, 317 N.L.R.B. at 1318 (“[I]t is well settled that an employer violates
the Act by attributing its failure to grant promised wages and benefits to the
presence of the union or pending election.”); see also America’s Best Quality
Coatings Corp., 313 N.L.R.B. 470 (1993).
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We deny CoServ’s petition for review on this issue because the Board’s
finding that CoServ committed unlawful unfair labor practices is supported by
substantial evidence.
B
The second issue before us is whether substantial evidence supports the
Board’s conclusion that CoServ’s unfair labor practices tainted the employees’
second decertification petition ousting the Union. The Board’s theory is that
CoServ’s unfair labor practices—failing to give raises and blaming the Union
for the lack of raises—created disaffection toward the Union and “tainted” the
second decertification petition that ousted the Union. CoServ argues that,
even assuming that CoServ’s failure to increase wages was an unfair labor
practice, this does not support a finding of taint. We hold that substantial
evidence supports the Board’s finding of taint.
We review the Board’s finding of taint for substantial evidence. See
Tenneco Auto., Inc. v. NLRB, 716 F.3d 640, 649 (D.C. Cir. 2013); see also NLRB
v. Hi-Tech Cable Corp., 128 F.3d 271, 278–79 (5th Cir. 1997). “Substantial
evidence is ‘such relevant evidence that a reasonable mind would accept to
support a conclusion.’” NLRB v. Allied Aviation Fueling of Dallas, LP, 490
F.3d 374, 378 (5th Cir. 2007) (quoting Valmont Indus., Inc. v. NLRB, 244 F.3d
454, 463 (5th Cir. 2001). We do not disturb a finding “simply because the
evidence may also reasonably support other inferences or because we might
well have reached a different result had the matter come before us de novo.”
NLRB v. Universal Packing & Gasket Co., 379 F.2d 269, 270 (5th Cir. 1967).
1
“Section 8(a)(5) makes it an unfair labor practice for an employer ‘to
refuse to bargain collectively with the representative[e] of [its] employees’; it is
violated if a company disregards the bargaining representative by acting
unilaterally or dealing directly with employees.” NLRB v. Arkema, Inc., 710
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F.3d 308, 320 (5th Cir. 2013) (alterations in original) (citations omitted)
(quoting 29 U.S.C. § 158(a)(5)). “Section 8(a)(1) violations are derivative of
violations of § 8(a)(5). A violation of § 8(a)(1) occurs when an employer takes
adverse action against specific employees in connection with terms and
conditions of their employment that are subject to collective bargaining.” Id.
(quoting El Paso Elec. Co. v. NLRB, 681 F.3d 651, 657 (5th Cir. 2012)).
The requirement that the employer bargain with the union “attaches
only for so long as the union retains the support of a majority of employees in
the bargaining unit.” Tri-State Health Serv., Inc. v. NLRB, 374 F.3d 347, 352
(5th Cir. 2004). Under the Board’s precedent, a union carries a rebuttable
presumption that it enjoys a majority support. Levitz Furniture Co., 333
N.L.R.B. 717, 723-24 (2001); see also Auciello Iron Works, Inc. v. NLRB, 517
U.S. 781, 786 (1996); Tri-State, 374 F.3d at 352. “An employer may overcome
this . . . presumption and refuse to bargain if it shows either that the union
did not enjoy majority support within the relevant bargaining unit, or that the
employer had a ‘“good-faith” doubt, founded on a sufficient objective basis, of
the union’s majority support.’” Tri-State, 374 F.3d at 352 (quoting NLRB v.
Curtin Matheson Sci., Inc., 494 U.S. 775, 778 (1990)).
Although “objective evidence” of the loss of majority status—such as a
decertification petition—could serve as basis for rebutting the presumption of
majority status, Levitz Furniture, 333 N.L.R.B. at 725, “an employer cannot
lawfully withdraw recognition from a union if it has committed yet unremedied
unfair labor practices that could have reasonably tended to contribute to
employee disaffection from the union,” Hi-Tech Cable Corp., 128 F.3d at 279
(quoting United Supermarkets, Inc. v. NLRB, 862 F.2d 549, 554 (5th Cir.
1989)); see also Williams Enters., Inc v. NLRB, 956 F.2d 1226, 1234 (D.C. Cir.
1992) (“An employer is precluded . . . from asserting a good faith doubt based
on an employee petition when the employer’s unfair labor practices
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‘significantly contribute’ to the loss of majority status by undercutting the
employees’ support of the union.” (quoting St. Agnes Med. Center v. NLRB, 871
F.2d 137, 147 (D.C. Cir. 1989)). “In other words, if erosion of workers’ support
for a union is ‘tainted’ by an employer’s prior bad acts, that taint renders the
union’s presumption of continuing majority support temporarily conclusive.”
Veritas Health Servs., Inc. v. NLRB, 895 F.3d 69, 79 (D.C. Cir. 2018).
In Hi-Tech Cable Corp., this court required that, to prove “taint,” there
be a “nexus . . . between the unfair labor practices and employee disaffection.”
128 F.3d at 279. We have not elaborated on a test other than to state that
“[d]irect evidence of causation is not required.” Id. The Board applied an
objective, four-factor test to determine whether an employer’s prior bad acts
could have contributed to or tainted the decertification petition:
(1) The length of time between the unfair labor practices and the
withdrawal of recognition; (2) the nature of the illegal acts,
including the possibility of their detrimental or lasting effect on
employees; (3) any possible tendency to cause employee
disaffection from the union; and (4) the effect of the unlawful
conduct on employee morale, organizational activities, and
membership in the union.
Master Slack Corp., 271 N.L.R.B. 78, 84 (1984). CoServe has not asked us to
review whether the Board’s four-factor test in Master Slack is arbitrary and
capricious or contrary to law, and it appears to agree that Master Slack is the
correct test. Our analysis simply determines whether substantial evidence
supports the Board’s finding of “taint” under Master Slack.
The Master Slack test “calls on the Board to consider the nature and
timing of the unfair labor practices as they bear on the reasonable likelihood
of discouraging employees under a given set of circumstances from continuing
to support their union.” Veritas Health, 895 F.3d at 82 (emphasis added). As
the D.C. Circuit has explained, “[t]he Master Slack test allows parties to focus
on objective and readily discernible considerations.” Id. “[T]he Board has held
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that ‘it is the objective evidence of the commission of unfair labor practices that
has the tendency to undermine the Union, and not the subjective state of mind
of the employees, that is the relevant inquiry in this regard.’” Id. (quoting AT
Sys. W., Inc., 341 N.L.R.B. 57, 60 (2004)). We consider each of the Master Slack
factors in turn.
The first Master Slack factor is the “[t]he length of time between the
unfair labor practices and the withdrawal of recognition.” Master Slack, 271
N.L.R.B. at 84. The Board concluded that there was little to no lag time
between the unfair labor practices and the withdrawal of recognition. More
specifically, in the Board’s view, “each time the employees received a paycheck
without the customary annual raise, they were reminded of the Union’s
ineffectiveness in preserving such raises, let alone in obtaining additional wage
increases.” Because the violations were ongoing throughout the year, the
Board concluded that the 7 to 11 months between the first denial of raise and
the circulation of the second petition were not enough to dissipate the effects
of the unfair labor practices.
CoServ fixates on the first denial of raises and contends that 7 to 11
months was sufficient time to dissipate the effects of any unfair labor practices.
But CoServ overlooks the fact that annual raises (or the lack thereof) were
implemented throughout the year on an employee’s anniversary date, not on a
single day that occurred 7 to 11 months prior to the decertification petition.
The Board’s conclusion that the unfair labor practices were being
implemented throughout the year—creating little to no lag time between the
unfair labor practices and the withdrawal of recognition—is supported by
substantial evidence.
The second and third Master Slack factors are typically analyzed
together. Tenneco Auto., 716 F.3d at 649. The factors are: “the nature of the
illegal acts, including the possibility of their detrimental or lasting effect on
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employees” and “any possible tendency to cause employee disaffection from the
union.” Master Slack, 271 N.L.R.B. at 84. “These factors obviously are related
because unfair labor practices that have a lasting effect[] on employees are
likely to be serious enough to cause disaffection with a union.” Tenneco Auto.,
Inc., 716 F.3d at 649.
The unfair labor practice at issue here was the lack of raises. Wage
increases are a “bread-and-butter” issue for the Board. M & M Auto. Grp., Inc.,
342 N.L.R.B. 1244, 1247 (2004) (finding taint where the employer’s “unilateral
changes involved the important, bread-and-butter issue[] of wage increases”).
The Board concluded that the lack of raises—and CoServ’s blaming the Union
for the lack of raises—could have had a lasting effect on the employees. The
Board cites numerous examples of this “lasting effect,” one of which is the
“dramatic swing in support” the Union experienced: it won the first
decertification vote but lost the second decertification vote almost
unanimously. Although the employees specifically testified that the lack of
raises or the blame on the Union had nothing to do with their support of
decertification, Master Slacks is an objective test, and the employees’
subjective intent does not matter. See Veritas Health, 895 F.3d at 82. The
Board could reasonably interpret the “swing” as an effect of CoServ’s unfair
labor practice that caused disaffection with the union. Substantial evidence
supports the board’s conclusion that Master Slack factors two and three
supported a finding of taint.
The fourth Master Slack factor asks “the effect of the unlawful conduct
on employee morale, organizational activities, and membership in the union.”
Master Slack, 271 N.L.R.B. at 84. This factor also favors the Board’s finding
of taint.
CoServ argues that that the ALJ did not adequately consider the
employees’ testimony as to the reasons they stopped supporting the Union.
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The employees’ reasons were that (1) the Union allegedly did not know what it
was doing; (2) the Union allegedly communicated poorly with the employees;
(3) the employees believed that the Union was giving money to one political
party over the other; (4) the employees believed that they did not have
problems with the management previously, thus negating the need for the
Union; and (5) the employees’ personal preferences for a non-union workplace.
These reasons, however, are not sufficient to disturb the Board’s
findings. “[S]pecific employees’ subjective attitudes” are not “the relevant
inquiry.” Veritas Health, 895 F.3d at 82 (quoting AT Sys. W., Inc., 341 N.L.R.B.
at 60). And, under the substantial-evidence standard, we cannot disturb a
finding “simply because the evidence may also reasonably support other
inferences or because we might well have reached a different result had the
matter come before us de novo.” Universal Packing & Gasket Co., 379 F.2d at
270.
While CoServ points us to evidence in the record that tends to support
its position, there is other evidence in the record that demonstrates “a
reasonable likelihood the unfair labor practices have a continuing impact upon
the employees.” United Supermarkets, 862 F.2d at 553. The record reflects
that employee morale and support for the union cratered after CoServ began
unfair labor practice in 2014 as evidenced by the ouster of the Union shortly
thereafter.
The Board weighed this evidence and concluded that the unfair labor
practice influenced employee morale and membership in the Union. This
finding is supported by substantial evidence.
For the forgoing reasons, substantial evidence supports the Board’s
conclusion that, under the Master Slack test, CoServ’s unremedied unfair labor
practices—lack of raises and blaming the Union—tainted the second
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decertification that ousted the Union. We therefore DENY CoServ’s petition
for review.
C
The third issue before us is whether the Board’s decision to issue an
affirmative bargaining order was proper. While the Board alleges that the
order was proper under both its own standard and the D.C. Circuit’s standard,
it failed to analyze the propriety of the order under Fifth Circuit law. We
determine that under this circuit’s case law, the affirmative bargaining order
was improper. We therefore grant CoServ’s petition for review and vacate the
affirmative bargaining order.
The Board issued an affirmative bargaining order that requires CoServ
to bargain with the Union and imposes a decertification bar that prohibits
CoServ from withdrawing recognition of the Union for a reasonable period of
time. The Board issued the order after concluding that the bargaining order
was appropriate under both the Board’s more lenient standard in Caterair, 322
N.L.R.B. 64 (1996), and the D.C. Circuit’s more stringent standard in Vincent
Indus. Plastics, Inc. v. NLRB, 209 F.3d 727 (D.C. Cir. 2000). In its petition for
review, CoServ argues that the bargaining order was inappropriate under the
D.C. Circuit’s precedent. The Board argues that because we have not adopted
the D.C. Circuit’s standard, we should apply the Board’s more lenient
standard, under which the Board claims it easily prevails; alternatively, the
Board argues that it prevails even under the D.C. Circuit’s higher standard.
Both parties, however, initially failed to analyze the propriety of the
bargaining order under applicable Fifth Circuit law. See Cal. Gas Transp., Inc.
v. NLRB, 507 F.3d 847 (5th Cir. 2007); NLRB v. Am. Cable Sys., Inc., 414 F.2d
661 (5th Cir. 1969). We requested supplemental briefs on whether and how
this court’s cases bear on assessing the propriety of the bargaining order in this
case. We determine that Fifth Circuit case law provides the relevant standard
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the Board should have looked to and that it does not support the issuance of
the bargaining order.
1
Under Section 10(c), 29 U.S.C. § 160(c), the Board has the power to
remedy unfair labor practices by ordering a violator “to cease and desist from
such unfair labor practice, and to take such affirmative action . . . as will
effectuate the policies of” the NLRA. Although “[t]he Board’s exercise of
remedial authority under Section 10(c) of the [NLRA], 29 U.S.C. § 160(c), is
entitled to ‘the greatest deference,’” In-N-Out Burger, Inc. v. NLRB, 894 F.3d
707, 720 n.7 (5th Cir. 2018) (quoting ABF Freight Sys., Inc. v. NLRB, 510 U.S.
317, 324 (1994)), an order issued by the Board will not stand if it constitutes “a
patent attempt to achieve ends other than those which can fairly be said to
effectuate the policies of the Act,” NLRB v. Seven-Up Bottling Co. of Miami,
344 U.S. 344, 347 (1953) (quoting Va. Elec. & Power Co. v. NLRB, 319 U.S.
533, 540 (1943)). In reviewing a bargaining order, we review for an abuse of
discretion if the underlying findings of unfair labor practices are supported by
substantial evidence. NLRB v. U.S.A. Polymer Corp., 272 F.3d 289, 297 (5th
Cir. 2001).
2
We have explained that “[a] remedial bargaining order is precisely what
its name suggests; it is a remedy that requires an employer to bargain with a
union as the exclusive representative of an employee unit.” Cal. Gas Transp.,
507 F.3d at 853. A bargaining order also imposes a decertification bar that
prohibits the employer from withdrawing recognition of the union for a
reasonable period of time until “the effects of the employer’s [union-
discouraging] acts have worn off.” Id. at 853 n.4 (alteration in original)
(quoting NLRB v Gissel Packing Co., 395 U.S. 575, 613 (1969)); see also
Williams Enters., Inc. v. NLRB, 956 F.2d 1226, 1237 (D.C. Cir. 1992) (“A
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bargaining order carries with it a ‘decertification bar’ that requires the
employer to recognize the union for a reasonable time in the future.”).
The Supreme Court opinion in NLRB v. Gissel Packing Co. established
two categories of cases in which bargaining orders are justified. 395 U.S. at
613–14.
In a Gissel category I case, the Board may enter a remedial
bargaining order, even if the union cannot demonstrate that it was
supported by a majority of the unit, to remedy “outrageous and
pervasive unfair labor practices” if the “coercive effects cannot be
eliminated by the application of traditional remedies, with the
result that a fair and reliable [union] election cannot be had.”
Cal. Gas Transport., 507 F.3d at 854 (alteration in original) (quoting Gissel,
395 U.S. at 613–14). CoServ’s case does not fall under category I as the Union
had initially gained the support of a majority of CoServ’s employees through a
successful election.
“In a Gissel category II case, the Board may enter a remedial bargaining
order to remedy ‘less pervasive [unfair labor] practices which nonetheless still
have the tendency to undermine majority strength and impede the election
process’ but only if the union once had majority support.” Id. (alteration in
original) (quoting Gissel, 395 U.S. at 614). Once a case is determined to fit
Gissel category II, there are differing tests a court can apply in determining
whether a bargaining order is justified.
The parties dispute whether CoServ’s case falls within Gissel category
II. The Board maintains that this is a “non-Gissel” case that nonetheless
warrants a bargaining order. But we disagree. In Gissel, the Supreme Court
held that bargaining orders can be appropriate in two categories of cases, now
referred to as Gissel categories I and II. 395 U.S. at 613–14. It also noted that
there is “a third category of minor or less extensive unfair labor practices,
which, because of their minimal impact on the election machinery, will not
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sustain a bargaining order.” Id. at 615. Accordingly, a bargaining order is
appropriate only in a category I or category II case. The Board’s
characterization that this is a “non-Gissel” case that nonetheless warrants a
bargaining order does not square with Gissel.
Here, the Union had initially garnered majority support, and the Board
itself alleges that CoServ’s unremedied unfair labor practices tainted the
second decertification election because the Union no longer had majority
support. We thus determine that this case fits squarely within Gissel category
II. As a Gissel category II case, the Board needed to determine if a remedial
bargaining order was necessary under our relevant precedent. 5
We recognize that “[t]he imposition of a bargaining order is an
extraordinary remedy.” U.S.A. Polymer, 272 F.3d at 297 (emphasis added).
The Board may issue an affirmative bargaining order in a Gissel category II
case if:
(a) the union had valid authorization cards from a majority of
employees in an appropriate bargaining unit; (b) the employer’s
unfair labor practices, although not “outrageous” and “pervasive”
enough to justify a bargaining order in the absence of a card
majority, were still serious and extensive; (c) “the possibility of
5 We do not view the D.C. Circuit’s standard as interchangeable with ours. This
court’s standard expressly probes the seriousness and extent of the unfair labor practices,
whereas the D.C. Circuit’s standard indirectly asks about the harm in determining the
adequacy of alternative remedies. Regarding the efficacy of the alternative remedies, this
court’s inquiry focuses specifically on the election process whereas the D.C. Circuit asks more
generally about labor law violations. And finally, although both this court and the D.C.
Circuit ask about employee sentiment and rights, the D.C. Circuit also asks whether the
“other purposes of the Act” may override employee sentiment and rights. Vincent Indus., 209
F.3d at 738. Simply put, this court’s standard requires a higher level of specificity in
justifying a bargaining order then the D.C. Circuit’s test requires.
The Board’s standard varies significantly from that of both this court and the D.C.
Circuit. The Board has held that “an affirmative bargaining order is the traditional,
appropriate remedy for [a] refusal to bargain” with a union, and that it can be issued as a
matter of course. Caterair, 322 N.L.R.B. at 68. Thus, according to the Board, bargaining
orders do not need to be justified by the facts of the case. Id.
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erasing the effects of past practices and of ensuring a fair election
(or a fair rerun) by the use of traditional remedies, though present,
is slight”; and (d) employee sentiment can best be protected in the
particular case by a bargaining order.
Cal. Gas Transp., 507 F.3d at 854–55 (quoting Am. Cable Sys., 414 F.2d at
668–69).
Here, the Board justified the bargaining order under both its own
standard in Caterair and the D.C. Circuit standard. But it should have applied
this Circuit’s standard in determining the propriety of the bargaining order as
“[a] holding by a court of appeals on a legal question is binding on [an agency]
in all cases arising within that circuit until and unless the court of appeals or
the Supreme Court overturns that holding.” Smith Steel Casting Co. v.
Donovan, 725 F.2d 1032, 1035 (5th Cir. 1984).
The bargaining order cannot stand under our binding precedent. As
discussed above, a bargaining order in a category II case can only be issued if
the factors detailed in California Gas Transport are met. See 507 F.3d at 854–
55 (quoting Am. Cable Sys., 414 F.2d at 668–69). Here, even before CoServ
committed any unfair labor practices, the employees almost ousted the Union
in the first decertification vote. And the employees who testified indicated that
CoServ’s unfair labor practices were not the motivation for the second,
successful decertification vote. A bargaining order would not protect employee
sentiment because it would nullify their concerted decertification efforts and
bar them from decertifying the Union for a reasonable period of time.
Accordingly, we GRANT CoServ’s petition for review and VACATE the
bargaining order.
D
The fourth issue raised in CoServ’s petition is whether the Board
properly issued a public-notice-reading order. The Board ordered CoServ to
read remedial notices aloud to its employees—either by its president, its vice
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president, or, if it wishes, a Board agent. “Public notice reading in particular
is designed to ‘ensure that the important information set forth in the notice is
disseminated to all employees, including those who do not consult the
[employer’s] bulletin boards.’” UNF W., Inc. v. NLRB, 844 F.3d 451, 463 (5th
Cir. 2016) (quoting Excel Case Ready, 334 N.L.R.B. 4, 5 (2001)). “[F]or repeated
violations persisted in despite intervening declarations of illegality, the Board
is warranted in impliedly concluding that such conduct has created a chill
atmosphere of fear and, further, in recognizing that the reading requirement
is an effective but moderate way to let in a warming wind of information and,
more important, reassurance.” Id. (quoting J.P. Stevens & Co. v. NLRB, 417
F.2d 533, 540 (5th Cir. 1969)). CoServ argues that because it was not a repeat
violator and because its conduct did not create a “chill atmosphere of fear” that
the public-notice-reading order was unwarranted. We agree.
Both parties heavily rely on the D.C. Circuit’s decision in HTH Corp. v.
NLRB, 823 F.3d 668 (D.C. Cir. 2016). In HTH, the D.C. Circuit examined the
potential perils of public-notice-reading orders. It explained that “[t]he public
reading by the employer of the order would . . . be humiliating and degrading
to the employer and undoubtedly would have a lingering effect on future
relations between the company and the Union.” Id. at 675 (quoting Int’l Union
of Elec., Radio & Mach. Workers v. NLRB, 383 F.2d 230, 233 (D.C. Cir. 1967)).
The court in HTH was concerned that such a mandated “confession of sins” by
the employer “conjure[d] up the system of ‘criticism-self-criticism’ devised by
Stalin and adopted by Mao,” id. at 677 and was “incompatible with the
democratic principles of the dignity of man,” id. at 675 (quoting Int’l Union,
383 F.2d at 234). Nevertheless, the D.C. Circuit upheld the public-notice-
reading order at issue in HTH because of “the company’s long history of
unlawful practices and the severe violations” and “the option of having the
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notice read by a Board employee” in lieu of the company’s senior leaders. Id. at
678.
On this issue we are in complete agreement with the D.C. Circuit and
share its skepticism regarding public-notice-reading orders. We do not think
the facts of this case give rise to such an order. CoServ was not a repeat
violator. In its brief, the Board explained that it has “ordered notice-reading
when an employer’s unfair labor practices are serious and widespread even if
the employer is not a repeat offender.” We disagree with this practice.
As to the severity of the offenses, the dispositive question is whether
“such conduct has created a chill atmosphere of fear” among the employees.
J.P. Stevens & Co., 417 F.2d at 540. It is unlikely that there was a “chill
atmosphere of fear” here. The workers narrowly failed to oust the union the
first time, the workers almost unanimously voted to oust the Union the second
time, and the workers testified that the lack of raises had nothing to do with
their decision to oust the Union. CoServ’s conduct, both in type and frequency,
was not as egregious as cases in which this court has upheld a public notice
reading order. See e.g. UNF W., 844 F.3d at 463 (upholding a public notice
reading when there was repeated violations with the same problematic
conduct).
The option to have the notice read by a board member does not assuage
our concerns. Although the order does give CoServ the option to have the
notice read by a Board member, it still requires that the notice be read by a
Board agent “in the presence of either [CoServ’s president] or [vice-president].”
Many of the same concerns with the order are present even when a board
member reads the order and here there is no justification for the public-notice-
reading order. We GRANT CoServ’s petition for review and determine that
the public-notice-reading order was improper and should be VACATED.
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III
For the foregoing reasons, we DENY CoServ’s petition for review in part
and GRANT in part. The affirmative bargaining order and public-notice-
reading order are VACATED. The Board’s cross-petition for enforcement is
GRANTED in part and DENIED in part.
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