Local Joint Executive Board v. NLRB

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LOCAL JOINT EXECUTIVE BOARD OF No. 15-72878
LAS VEGAS; CULINARY WORKERS
UNION LOCAL #226; BARTENDERS NLRB No.
UNION LOCAL 165, 28-CA-013274
Petitioners,
v. OPINION
NATIONAL LABOR RELATIONS
BOARD,
Respondent,
ARCHON CORPORATION,
Respondent-Intervenor.
On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted November 14, 2017
San Francisco, California
Filed February 27, 2018
Before: William C. Canby, Susan P. Graber,
and Richard A. Paez, Circuit Judges.
Opinion by Judge Paez
2 LOCAL JOINT EXEC. BD. V. NLRB
SUMMARY*
National Labor Relations Act
The panel granted a Union’s petition for review, vacated
an order of the National Labor Relations Board, and
remanded for the Board to award standard make-whole
relief, in a case arising when the now-defunct Hacienda
Resort Hotel and Casino and Sahara Hotel and Casino in Las
Vegas violated section 8(a)(5) of the National Labor
Relations Act (“NLRA”) by unilaterally terminating the
Local Joint Executive Board, Culinary Workers Union Local
226 and Bartenders Union Local 165’s dues-checkoff
without bargaining to agreement or impasse.
In a prior case, this court determined that there was a
violation of the NLRA and remanded to the Board to
determine what relief was warranted. The Board declined to
award make-whole relief, the standard remedy when an
employer unlawfully ceases union dues-checkoff. Instead,
the Board awarded the Union prospective-only relief.
The panel held that the Union’s arguments were not
premature.
The panel held that the Board clearly abused its discretion
in declining to award the standard remedy of make-whole
relief.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
LOCAL JOINT EXEC. BD. V. NLRB 3
First, the panel held that the Board did not provide a valid
explanation for departing from its standard remedy in dues-
checkoff cases. Specifically, the panel held that the Board’s
reliance-based explanation was improper, because it was
unreasonable for the employers to rely on Board precedent
that had never been applied in a reasoned manner in the
absence of a union security clause, and because the Board’s
other explanations were similarly erroneous.
Second, the panel held that by ordering prospective-only
relief against defunct entities, the Board effectively ordered
no relief at all, and therefore did not effectuate the policies of
the NLRA.
COUNSEL
Kimberley C.Weber (argued) and Richard G. McCracken,
McCracken Stemerman & Holsberry LLP, San Francisco,
California, for Petitioners.
Greg P. Lauro (argued), Attorney; Julie B. Broido,
Supervisory Attorney; Linda Dreeben, Deputy Associate
General Counsel; John H. Ferguson, Associate General
Counsel; Jennifer Abruzzo, Deputy General Counsel; Richard
F. Griffin Jr., General Counsel; National Labor Relations
Board, Washington, D.C.; for Respondent.
Stephen R. Lueke (argued) and Stefan H. Black, Ford &
Harrison LLP, Los Angeles, California, for Respondent-
Intervenor.
4 LOCAL JOINT EXEC. BD. V. NLRB
OPINION
PAEZ, Circuit Judge:
The Local Joint Executive Board, Culinary Workers
Union Local 226 and Bartenders Union Local 165 (the
“Union”) petitions for review of an order of the National
Labor Relations Board (“NLRB” or the “Board”) for the
fourth time in this dispute that has now spanned more than
two decades. When this case was last before the court, we
determined that the operators of the now-defunct Hacienda
Resort Hotel and Casino and Sahara Hotel and Casino in Las
Vegas (the “Employers”)1 violated section 8(a)(5) of the
National Labor Relations Act (“NLRA”), 29 U.S.C.
§ 158(a)(5), by unilaterally terminating the Union’s dues-
checkoff without bargaining to agreement or impasse. Local
Joint Exec. Bd. v. NLRB (LJEB III), 657 F.3d 865, 876 (9th
Cir. 2011). In light of that violation, we remanded for the
Board to determine what relief was warranted.
On remand, the Board declined to award make-whole
relief, the standard remedy when an employer unlawfully
ceases union dues-checkoff. The Board reasoned that make-
whole relief was not warranted because, inter alia, the
Employers had relied on a Board rule providing that dues-
checkoff is not subject to mandatory bargaining. Instead, the
Board awarded the Union prospective-only relief against the
defunct Employers and their unidentified successors.
1
Archon Corporation (“Archon”) is the Employers’ parent company.
We granted Archon’s motion to intervene pursuant to Federal Rule of
Appellate Procedure 15(d).
LOCAL JOINT EXEC. BD. V. NLRB 5
We conclude, for two reasons, that the Board clearly
abused its discretion in declining to award the standard
remedy of make-whole relief. First, the Board did not
provide a valid explanation for departing from its standard
remedy in dues-checkoff cases. In particular, the Board’s
reliance-based explanation was improper, as it was
unreasonable for the Employers to rely on Board precedent
that had never been applied in a reasoned manner in the
absence of a union security clause, and the Board’s other
explanations were similarly erroneous. Second, by ordering
prospective-only relief against defunct entities, the Board
effectively ordered no relief at all and therefore did not
“effectuate the policies of [the NLRA].” 29 U.S.C. § 160(c).
Accordingly, we grant the Union’s petition, vacate the
Board’s order, and remand for the Board to award standard
make-whole relief.
I.2
The Employers maintained collective bargaining
agreements (“CBAs”) with the Union until 1994. The CBAs
did not contain union security clauses—clauses that condition
employment upon union membership—as these clauses are
prohibited in Nevada, a “right-to-work” state. Nev. Rev. Stat.
§ 613.250; see also 29 U.S.C. § 164(b) (providing that federal
law does not authorize union security clauses in right-to-work
states). The CBAs did, however, require the Employers to
deduct union dues from the paychecks of employees who had
authorized such deductions. After the final CBA expired in
2
For context, we briefly restate the facts set out in our prior opinions
in this case. See LJEB III, 657 F.3d at 868–70; Local Joint Exec. Bd. v.
NLRB (LJEB II), 540 F.3d 1072, 1075–78 (9th Cir. 2008); Local Joint
Exec. Bd. v. NLRB (LJEB I), 309 F.3d 578, 580–81 (9th Cir. 2002).
6 LOCAL JOINT EXEC. BD. V. NLRB
May 1994, the Employers continued to honor these “dues-
checkoff” authorizations until June 1995. At that time, the
Employers unilaterally terminated the Union’s dues-checkoff.
The Union filed unfair labor practice charges against the
Employers in August 1995, and the General Counsel for the
NLRB subsequently issued consolidated complaints. The
Union alleged that the Employers’ cessation of dues-checkoff
violated the “unilateral change” doctrine articulated in NLRB
v. Katz, 369 U.S. 736 (1962). Under that doctrine, “an
employer’s unilateral change in conditions of employment
under negotiation is . . . a violation of § 8(a)(5) [of the
NLRA], for it is a circumvention of the duty to negotiate
which frustrates the objectives of § 8(a)(5) much as does a
flat refusal.” Id. at 743.
An administrative law judge (“ALJ”) dismissed the
complaints and the Board affirmed, with two members
dissenting. Hacienda Hotel, Inc. Gaming Corp. (Hacienda I),
331 N.L.R.B. 665, 667 (2000). The majority relied on a then-
existing exception to the unilateral change doctrine developed
in Bethlehem Steel Co., 136 N.L.R.B. 1500 (1962), a case
involving a union security clause, and Tampa Sheet Metal
Co., 288 N.L.R.B. 322 (1988), which applied Bethlehem Steel
in a right-to-work state in a footnote and without explanation.
Hacienda I, 331 N.L.R.B. at 666–67. The Union filed a
petition for review, and we vacated the Board’s order. LJEB
I, 309 F.3d at 580. We remanded the case “so that the Board
c[ould] either articulate a reasoned explanation for its rule or
adopt a different rule with a reasoned explanation to support
it.” Id. at 582.
On remand, the Board abandoned its reliance on
Bethlehem Steel but affirmed the ALJ’s dismissal in another
LOCAL JOINT EXEC. BD. V. NLRB 7
split decision, on the ground that the Union waived the right
to dues-checkoff beyond the expiration of the CBAs.
Hacienda Hotel, Inc. Gaming Corp. (Hacienda II),
351 N.L.R.B. 504, 505 (2007). We again vacated and
remanded because there was “simply no clear and
unmistakable waiver.” LJEB II, 540 F.3d at 1075.
In response to the second remand, the Board again
concluded without explanation that Bethlehem Steel and
Tampa Sheet Metal compelled the conclusion that the
Employers did not violate the NLRA by unilaterally ceasing
dues-checkoff. Hacienda Hotel, Inc. Gaming Corp.
(Hacienda III), 355 N.L.R.B. 742, 742 (2010).3 On review
for the third time, we reached the merits and vacated the
Board’s ruling. LJEB III, 657 F.3d at 876. We explained
that, where “dues-checkoff provisions do not implement
union security . . . but instead exist as a free-standing,
independent convenience to willingly participating
employees, the reasoning of Bethlehem Steel loses its force.”
Id. at 875. We thus “conclude[d] that in a right-to-work state
. . . dues-checkoff is akin to any other term of employment
that is a mandatory subject of bargaining.” Id. at 876.
Although we left open the possibility for “the Board [to]
adopt a different rule in the future,” we expressly stated that
the Employers in this case violated section 8(a)(5) of the
NLRA. Id. We remanded with directions to the Board to
3
The Board deadlocked 2–2, with one member recused, on the
question of whether to overrule Bethlehem Steel and Tampa Sheet Metal.
Hacienda III, 355 N.L.R.B. at 742, 745. Because the Board unanimously
agreed that a three-member majority was necessary to overrule existing
Board precedent, the Board did not do so at the time. Id. at 743, 745. The
Board subsequently overruled Bethlehem Steel following our decision in
LJEB III. See Lincoln Lutheran of Racine, 362 N.L.R.B. No. 188, 2015
WL 5047778, at *10 (Aug. 27, 2015).
8 LOCAL JOINT EXEC. BD. V. NLRB
award appropriate relief and observed that “the parties cannot
be expected to wait any longer.” Id.
On remand for the third time, the Board, recognizing the
section 8(a)(5) violation, ordered the Employers and their
officers, agents, successors, and assigns to (1) cease and
desist the unilateral cessation of dues-checkoff; (2) bargain
with the Union; (3) rescind the unilateral dues-checkoff
changes; and (4) post or mail remedial notices. The four-
member majority recognized that make-whole relief is the
standard remedy in dues-checkoff cases but declined to award
such relief in light of the Employers’ reliance on the rule
stated in Bethlehem Steel. The Board also noted that make-
whole relief would require an award of compound interest
and that there was “no reason to believe that [the Employers]
will not continue to abide by Board law.” Dissenting,
Member Hirozawa argued that the majority in effect sought
to block the retroactive effect of this court’s holding in LJEB
III and that its remedy did not effectuate the policies of the
NLRA. Member Hirozawa also noted that the Employers’
reliance on Bethlehem Steel was “questionable.”
The Union timely filed a petition for review.
II.
The Board is vested with “broad discretion in devising
remedies to undo the effects of violations of [the NLRA].”
Detroit Edison Co. v. NLRB, 440 U.S. 301, 316 (1979); see
also 29 U.S.C. § 160(c) (granting the Board the authority to
order relief “as will effectuate the policies of [the NLRA]”).
Accordingly, we review the Board’s remedial orders for a
“clear abuse of discretion.” Cal. Pac. Med. Ctr. v. NLRB,
LOCAL JOINT EXEC. BD. V. NLRB 9
87 F.3d 304, 308 (9th Cir. 1996) (quoting NLRB v. C.E. Wylie
Constr. Co., 934 F.2d 234, 236 (9th Cir. 1991)).
“Nonetheless, the rule of deference to the Board’s choice
of remedy does not constitute a blank check for arbitrary
action.” Detroit Edison, 440 U.S. at 316. The Board clearly
abuses its discretion when its remedial order is a “patent
attempt to achieve ends other than those which can fairly be
said to effectuate the policies of the [NLRA].” Va. Elec. &
Power Co. v. NLRB, 319 U.S. 533, 540 (1943); see also Cal.
Pac. Med. Ctr., 87 F.3d at 308.
III.
The standard remedy that the Board awards when an
employer violates the NLRA by unilaterally ceasing dues-
checkoff is make-whole relief.4 Although the Board may
exercise its broad discretion to deviate from a standard
remedy, it must provide a rational explanation for doing so,
NLRB v. Hartman, 774 F.2d 1376, 1388 (9th Cir. 1985), and
the remedy that it does order must “effectuate the policies of
[the NLRA],” 29 U.S.C. § 160(c); Va. Elec. & Power,
319 U.S. at 540. Here, the prospective-only relief ordered by
the Board satisfied neither of those requirements. We first
address the Board’s explanations for declining to award the
standard remedy of make-whole relief, and then we turn to
the effect of prospective-only relief in this case.
4
Indeed, as counsel for the NLRB conceded at oral argument, the
remedial order under review here appears to be the only instance in which
the Board has declined to award make-whole relief for an employer’s
unlawful cessation of dues-checkoff.
10 LOCAL JOINT EXEC. BD. V. NLRB
A.
The Board cannot impose different remedies in similar
situations “[a]bsent some explanation for doing so.”
Hartman, 774 F.2d at 1388. Such an explanation must be
“consistent with [the Board’s] statutory mandate,” Sheet
Metal Workers’ Int’l Ass’n, Local No. 355 v. NLRB, 716 F.2d
1249, 1257 n.3 (9th Cir. 1983), and factually supportable, see
Hartman, 774 F.2d at 1384. In particular, the Board may not
depart from a standard remedy because of an employer’s
reliance on prior law where such reliance was unreasonable.
Cf. NLRB v. Sav-On Drugs, Inc., 728 F.2d 1254, 1256 (9th
Cir. 1984) (en banc) (concluding that the employer could not
reasonably rely on a regional director’s determination
because it could be reversed on appeal); NLRB v. St. Luke’s
Hosp. Ctr., 551 F.2d 476, 484 (2d Cir. 1976) (“[T]he
presumption against retroactivity is designed to protect
reasonable reliance on prior settled law . . . .” (emphasis
added)).
Here, the Board provided three explanations for its
decision not to award the standard remedy of make-whole
relief: (1) the Employers reasonably relied on the rule stated
in Bethlehem Steel at the time of the violation; (2) make-
whole relief would require the Employers to pay compound
interest on dues reimbursements for the time period covering
this protracted litigation; and (3) there is no reason to believe
that the Employers will violate the NLRA or Board rules in
the future. We address each explanation in turn.
1.
The Board first explained in its remedial order that,
“[p]roperly rationalized or not, the rule in Bethlehem Steel
LOCAL JOINT EXEC. BD. V. NLRB 11
had been in place for over 50 years,” during which time
“[e]mployers, like the [Employers] here, have relied upon [it]
when considering whether to cease honoring dues-checkoff
arrangements following contract expiration.” The Board then
reasoned that, when the Employers ceased checking off dues
in 1995, they “could not have foreseen the . . . decision by the
court [of appeals] finding, contrary to Bethlehem Steel and its
progeny, that the [Employers] committed an unfair labor
practice when they ceased dues checkoff upon contract
expiration.” “In these circumstances,” the Board concluded,
“it would not be appropriate to order make-whole relief.”
The Board’s explanation relies on a false premise. Our
decision in LJEB III was not contrary to Bethlehem Steel or
its progeny. As for Bethlehem Steel, we explicitly declined
to “express[] an opinion on the wisdom of the rule” in that
case. LJEB III, 657 F.3d at 875. Rather, we merely held that
the rule in Bethlehem Steel did not apply when, as here, there
is no union security clause for dues-checkoff to implement.
Id. at 876. Moreover, our holding was entirely consistent
with the Board’s reasoning in Bethlehem Steel, which linked
its rule to the presence of a union security clause. See
Bethlehem Steel, 136 N.L.R.B. at 1502 (explaining that the
checkoff provisions were subject to “similar considerations”
as the union security provisions—which became inoperative
upon the termination of the CBA and were not subject to
mandatory bargaining—because the checkoff provisions
“implemented the union-security provisions”).
As for Bethlehem Steel’s progeny, “[t]he Board has
applied its rule in only one case in which the collective
bargaining agreement did not contain a union security
provision, but it provided no rationale for doing so beyond
that offered in Bethlehem Steel.” LJEB I, 309 F.3d at 583–84
12 LOCAL JOINT EXEC. BD. V. NLRB
(citing Tampa Sheet Metal Co., 288 N.L.R.B. at 326 n.15).
This isolated and unexplained extension of the rule in
Bethlehem Steel is not a reasonable ground for reliance. As
we have explained, “[a]lthough a Board rule may become
‘well-established’ through repetition, it may ‘come to stand
for’ a legal rule only through reasoned decisionmaking.” Id.
at 583 (quoting Allentown Mack Sales & Serv., Inc. v. NLRB,
522 U.S. 359, 374 (1998)). The rule in Bethlehem Steel was
not “well-established” in the absence of a union security
clause, nor had it “come to stand for” a legal rule in that
context. See id. at 583–84. Therefore, any reliance by the
Employers on Bethlehem Steel and Tampa Sheet Metal was
unreasonable and could not provide a proper basis for the
Board’s departure from standard make-whole relief.
2.
The Board next explained that an award of make-whole
relief “would carry with it a requirement that compound
interest be paid on all amounts due.”5 The Board appeared
particularly concerned about awarding such interest in light
of the fact that the Employers “could not have foreseen the
protracted litigation . . . before the Board and the Ninth
Circuit.” Intervenor Archon echoes this concern, pointing out
that “this case has been pending for 22 years, of which
approximately 15 years ha[ve] been spent waiting for the
Board to issue a decision in a case under submission.”
5
The Board has adopted daily compounded interest as the standard
form of interest on awards of make-whole relief. See Jackson Hosp.
Corp., 356 N.L.R.B. 6, 9 (2010); see also, e.g., Emerald Green Bldg.
Servs., LLC, 364 N.L.R.B. No. 109, 2016 WL 4547528, at *2 (Aug. 26,
2016) (ordering daily compounded interest on dues-checkoff
reimbursements).
LOCAL JOINT EXEC. BD. V. NLRB 13
Archon argues that “it would be unjust to multiply [its]
liability by almost a factor of ten because of the
administrative delay in this case,” and it requests that we toll
the accrual period for interest in the event that we direct the
Board to order make-whole relief.
Although we are sympathetic to Archon’s position, we
reject the Board’s explanation regarding compound interest
and decline to toll the accrual period. As the Board itself
explained in a prior decision addressing compound interest:
There is no force to the argument . . . that
compound interest wrongly penalizes
respondents for the sometimes protracted
nature of unfair labor practice proceedings.
The Supreme Court has rejected a similar
argument with respect to backpay awards
generally, recognizing that delay injures
backpay claimants and that the Board is “not
required to place the consequences of its own
delay . . . upon wronged employees to the
benefit of wrongdoing employers.” [NLRB v.
J. H. Rutter-Rex Mfg. Co., 396 U.S. 258, 265
(1969)]. Moreover, as the Federal courts have
observed, during the period before a backpay
award becomes effective, the respondent
enjoys “an interest-free loan for as long as [it
can] delay paying out back wages.” Clarke v.
Frank, 960 F.2d 1146, 1154 (2d Cir. 1992).
Jackson Hosp. Corp., 356 N.L.R.B. 6, 9 (2010). The Board’s
reasoning in Jackson Hospital properly applies where, as
here, an employer causes unwarranted loss to a union by
unilaterally ceasing to collect and remit voluntary dues-
14 LOCAL JOINT EXEC. BD. V. NLRB
checkoff payments. Accordingly, we conclude that the
Board’s consideration of compound interest as a reason not
to award standard make-whole relief in this case was
improper.
3.
Finally, the Board explained that make-whole relief is
“not necessary to effectuate the purposes of the [NLRA]”
because “the [Employers] believed, correctly, that they were
following settled Board law at the time they acted, and there
is no reason to believe that they will not continue to abide by
Board law.” As we explained supra, however, the Employers
were not following settled Board law applicable to this case
at the time they acted. Moreover, although deterrence is a
proper remedial consideration, the main purpose of make-
whole relief is to “recreate the conditions and relationships
that would have been had there been no unfair labor
practice.” Enter. Leasing Co. of Fla., LLC, 362 N.L.R.B. No.
135, 2015 WL 4179685, at *1 n.1 (June 26, 2015) (quoting
Local 60, United Bhd. of Carpenters v. NLRB, 365 U.S. 651,
657 (1961)). Thus, even if there were no reason to believe
that the Employers would violate the law in the future, that
would not be a sufficient basis on which to depart from the
standard remedy of make-whole relief. The Board’s decision
not to award the standard remedy of make-whole relief,
without offering a valid explanation, was a clear abuse of
discretion.
B.
The Union argues that the Board also clearly abused its
discretion by ordering prospective-only relief against defunct
entities. The Board disagrees that such relief is ineffective
LOCAL JOINT EXEC. BD. V. NLRB 15
and further contends that the Union prematurely raises factual
issues that must be left for compliance proceedings. We
conclude that the Union’s arguments are not premature and
that the prospective-only relief at issue does not effectuate the
policies of the NLRA.
1.
We first consider whether the Union’s arguments are
premature. The Board asserts that questions as to the identity
of potential viable successors of the Employers, “as well as
the specific contours of bargaining, rescinding the unlawful
cessation of dues checkoff, and posting or mailing notices,
involve[] matters to be determined at the compliance phase.”
Thus, the Board contends, the question whether any viable
entity “can carry out the remedies” at issue “involve[s] issues
for a compliance proceeding.” We disagree.
Whereas “factual issues which relate to the details of the
remedy should be delayed to the compliance hearing[,] . . . no
exhaustion is required where the challenge on review is to the
underlying legal basis of the Board’s remedial order.” Local
512, Warehouse & Office Workers’ Union v. NLRB, 795 F.2d
705, 715 (9th Cir. 1986) (second emphasis added), abrogated
on other grounds by Hoffman Plastic Compounds, Inc. v.
NLRB, 535 U.S. 137 (2002). Prior to the compliance phase,
the Board considers whether a form of relief would
“effectuate the policies of the [NLRA],” but “does not
concern itself with the amount of [relief] actually owing”
because the “determination of specific liabilities may involve
a protracted contest.” NLRB v. Deena Artware, Inc., 361 U.S.
398, 411 (1960) (Frankfurter, J., concurring) (discussing back
pay). For example, “questions relating to the exact amount of
back pay owing . . . are prematurely raised in [an]
16 LOCAL JOINT EXEC. BD. V. NLRB
enforcement petition,” but “those issues [of back pay,
mitigation, and job elimination] may be explored in a
compliance proceeding.” NLRB v. Trident Seafoods Corp.,
642 F.2d 1148, 1150 (9th Cir. 1981) (quoting Great Chinese
Am. Sewing Co. v. NLRB, 578 F.2d 251, 255–56 (9th Cir.
1978) (per curiam)).
Here, the Union does not challenge specific liabilities or
the exact details of the prospective relief at issue. Rather, the
Union argues that the Board failed to effectuate the policies
of the NLRA because it ordered only prospective forms of
relief that cannot be carried out in practice. Although the
Union’s argument raises predicate factual questions, those
questions relate to the legal basis of the Board’s order, not to
the specific contours of the remedy. See Local 512, 795 F.2d
at 715. We may review a legal challenge to the Board’s
remedial order where, as here, predicate factual questions are
capable of clear resolution on the record. Cf. NLRB v. Globe
Sec. Servs., Inc., 548 F.2d 1115, 1118 n.2 (3d Cir. 1977)
(explaining, in the context of a mootness challenge to an
enforcement petition, that courts have left the question of
impossibility of performance for compliance proceedings
usually only “where the record did not clearly show that the
employer had gone out of business”). Accordingly, the
Union’s legal challenge is not premature. The Union’s
entitlement to effective relief for an unfair labor practice that
occurred more than twenty-two years ago cannot be delayed
any further.
2.
The “statutory command” that the Board’s remedial
orders “‘effectuate the policies of the [NLRA]’ . . . at a
minimum . . . encompasses the requirement that a proposed
LOCAL JOINT EXEC. BD. V. NLRB 17
remedy be tailored to the unfair labor practice it is intended
to redress.” Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 900
(1984). In general, prospective-only relief ordered against a
functioning employer for the benefit of a union and its
members satisfies this requirement. See Hoffman Plastic
Compounds, 535 U.S. at 152. Where no such employer or
representative union continues to exist, however, prospective-
only relief amounts to no relief at all. See, e.g., NLRB v.
McMahon, 428 F.2d 1213, 1214 (9th Cir. 1970) (per curiam)
(“Enforcement of an order to bargain directed to a defunct
organization would be futile.”); Globe Sec. Servs., 548 F.2d
at 1117 (“Because the Labor Board’s order directs [the
employer] to bargain with a unit that, all agree, does not exist,
enforcement would be a vain and useless act . . . .”); NLRB.
v. Schnell Tool & Die Corp., 359 F.2d 39, 44 (6th Cir. 1966)
(“It is clear from the face of the order [including a cease-and-
desist provision and other injunctive relief] that enforcement
of its provisions, with the exception of those calling for the
award of back pay, requires the existence of a functioning
employer.”).
Here, the Board ordered the Employers and their
successors to (1) cease and desist the unilateral cessation of
dues-checkoff and from interfering with employees’ rights
under the NLRA “[i]n any like or related manner”;
(2) bargain with the Union; (3) rescind the unilateral dues-
checkoff changes; and (4) post or mail remedial notices.
Although the Board argues that it has “not yet made findings”
as to whether these remedies can be carried out as a practical
matter, the following facts are not in dispute. The Employers
ceased operating when they and their hotels were sold to
Archon in 1995. The same year, Archon sold the hotels to
unrelated businesses; one hotel, the Hacienda, was
demolished in 1996, while the other, the Sahara, was gutted,
18 LOCAL JOINT EXEC. BD. V. NLRB
massively renovated, and opened as a different hotel between
2011 and 2014. Archon remains the parent company of the
Employers, but no longer owns hotels or other unionized
operations in Las Vegas.6 Finally, no party contends that the
current owners of the situs properties are successors-in-
interest or that their employees would even have any use for
the prospective-only relief at issue.
Nonetheless, Archon argues that it can effectively carry
out the relief ordered by the Board. The order to bargain and
the order to rescind the 1995 dues-checkoff changes,
however, are specifically linked to the Union, which has no
relationship to Archon. As for the cease-and-desist order, the
record does not demonstrate that Archon’s current employees
have any need for such relief. Moreover, we do not see how
a cease-and-desist order governing Archon’s current
operations outside of Las Vegas, in response to the
Employers’ cessation of dues-checkoff over twenty-two years
earlier in Las Vegas, is at all “tailored to the unfair labor
practice it is intended to redress.” Sure-Tan, 467 U.S. at 900.
Finally, because the above remedies are ineffectual, the order
directing the Employers and their successors to post or mail
notice of such remedies is ineffectual as well.7
6
In proceedings before the Board on our third remand, the Union
produced public records sufficient to establish the foregoing facts. As
these facts are not subject to reasonable dispute and can be accurately and
readily determined from the public record sources presented to the Board,
we take judicial notice of them. See Fed. R. Evid. 201(b).
7
The Board argues that the Union did not preserve its challenges to
the order to bargain and the order to rescind the unlawful cessation of
dues-checkoff because it failed to raise them specifically before the Board.
See 29 U.S.C. § 160(e). This argument is without merit. The Union filed
a brief before the Board requesting make-whole relief; at that time, the
LOCAL JOINT EXEC. BD. V. NLRB 19
C.
In concluding that the Board clearly abused its remedial
discretion, we take note of the reference in the Board’s order
to Lincoln Lutheran of Racine, 362 N.L.R.B. No. 188, 2015
WL 5047778 (Aug. 27, 2015). There, the Board overruled
Bethlehem Steel but applied its ruling prospectively only. Id.
at *10–11. As a result, employers who had unilaterally
ceased dues-checkoff in reasonable reliance on Bethlehem
Steel in cases pending at the time of Lincoln Lutheran were
never subjected to a remedial order because they necessarily
had not violated the NLRA. Such employers did not and
could not include the Employers in this case because we had
already determined that, in the absence of a union security
clause, their unilateral cessation of dues-checkoff was not
governed by Bethlehem Steel and their reliance on that
decision was unreasonable. They accordingly had violated
the NLRA and we ordered the Board “to determine what
relief is warranted.” LJEB III, 657 F.3d at 876.
When subsequently deciding this case, the Board noted
that its reasons for awarding prospective-only relief were
consistent with the reasons it provided in Lincoln Lutheran
for overruling Bethlehem Steel with prospective-only effect.
Union was under no obligation to challenge the prospective-only relief
that had not yet been ordered by the Board. The Union then restated its
request for make-whole relief in its motion for reconsideration, and argued
that the cease-and-desist and notice orders were meaningless for reasons
that are equally applicable to the order to bargain and the order to rescind.
Finally, when denying that motion, the Board concluded that its entire
remedial order was not “meaningless and moot.” Thus, the Union
challenged the Board’s entire remedial order with “sufficient specificity”
to preserve its arguments on appeal. NLRB v. Legacy Health Sys.,
662 F.3d 1124, 1126 (9th Cir. 2011).
20 LOCAL JOINT EXEC. BD. V. NLRB
There would be nothing inappropriate with such an
observation, but for the fact that the Board’s main
consideration in both cases was the employers’
reliance—which, as we have explained, was unreasonable in
the absence of a union security clause.
After the Board invoked Lincoln Lutheran, it concluded
that, “[n]evertheless, [LJEB III] . . . makes it necessary to
fashion a remedy.” The Board then proceeded to fashion a
remedy that, in effect, amounted to no relief at all. In doing
so, the Board engaged in a “patent attempt to achieve ends
other than those which can fairly be said to effectuate the
policies of the [NLRA].” Va. Elec. & Power, 319 U.S. at
540. We urge the Board to move swiftly on remand to award
the standard remedy of make-whole relief.8
PETITION GRANTED; ORDER VACATED;
REMANDED WITH INSTRUCTIONS. Costs on appeal
awarded to Petitioners.
8
We leave the specific contours of make-whole relief for the Board
to determine on remand. Any disputes that arise concerning the
calculation or amount of relief should be resolved promptly in compliance
proceedings.