Sands v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 18, 2016 Decided June 17, 2016
No. 14-1185
LAURA SANDS,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL
UNION, LOCAL 700,
INTERVENOR
On Petition for Review of an Order
of the National Labor Relations Board
Aaron B. Solem argued the cause for petitioner. With him
on the briefs was Glenn M. Taubman.
Robert J. Englehart, Supervisory Attorney, National
Labor Relations Board, argued the cause for respondent.
With him on the brief were Richard F. Griffin, General
Counsel, John H. Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General Counsel, and Doug
Callahan, Attorney.
2
James B. Coppess argued the cause for intervenor. With
him on the brief was Laurence Gold.
Before: TATEL, GRIFFITH, and KAVANAUGH, Circuit
Judges.
GRIFFITH, Circuit Judge: In this matter, the National
Labor Relations Board held that a union does not commit an
unfair labor practice by failing to tell a prospective member
how much money she will save in reduced dues should she
choose not to join. But we cannot reach the merits of that
decision. Actions undertaken by the union since the filing of
this petition for review have rendered the matter moot. For
that reason, we dismiss the petition for review as moot and
vacate the Board’s order under our equitable authority.
I
In 2004, petitioner Laura Sands began working at a
Kroger grocery store in Crawfordsville, Indiana, whose
employees had been organized by the United Food and
Commercial Workers International Union, Local 700. The
collective-bargaining agreement between Kroger and the
union included a “union-security clause,” which provided that
all grocery department employees—even those who did not
join the union—had to pay dues to the union to cover the
costs of representational activities.
When Sands began her job at the store, the union sent her
a letter and membership application explaining to her what
rights and obligations she had under the union-security clause.
The application explained that, whether she joined the union
or not, she was required to pay dues to the union to
compensate it for acting as her collective-bargaining agent.
The application was also careful to explain that she need not
3
join the union, and that if she did not, she could refuse to pay
for the union’s activities that were unrelated to collective
bargaining. Important for this case, however, neither the letter
nor the application told her how much money she would save
if she did not join the union, which for Sands was about $3.50
per month.
Sands decided to join the union and paid all her dues until
she quit work at the store in 2005. At that time, she sent the
union a letter claiming that she “never wanted to join [the
union] in the first place,” and that the union had “deliberately
misled” her about her obligations under the union-security
clause.1 Shortly thereafter, Sands filed an unfair labor practice
charge with the Board, and the General Counsel issued a
complaint against the union. According to the complaint, the
union violated section 8 of the National Labor Relations Act
(NLRA) by failing to tell Sands when she began work at
Kroger how much less in dues she would have to pay if she
did not join the union. See 29 U.S.C. § 158(b)(1)(A). Before
the administrative law judge (ALJ), the union argued that
Sands was not entitled to that information until after she
chose not to join the union. The General Counsel and Sands
argued that she was entitled to the information at the same
time that she was told about the union-security clause. The
ALJ recommended dismissing the complaint based on prior
Board decisions supporting the union’s position.
1
Letter from Laura Sands to the Secretary-Treasurer, United
Food and Commercial Workers International Union, Local 700
(June 25, 2005). Although Sands’s letter to the union and her
charge filed with the Board claimed that she received inadequate
notice regarding both her right not to join the union generally as
well as the amount she would save in monthly dues were she not to
join, the General Counsel’s complaint focused exclusively on the
union’s failure to adequately explain the financial implications of
not joining.
4
Both the General Counsel and Sands filed exceptions
with the Board, arguing that the Board decisions on which the
ALJ relied conflicted with D.C. Circuit case law. In
particular, they cited our decision in Penrod v. NLRB, 203
F.3d 41 (D.C. Cir. 2000), where we held that new employees
must be given “sufficient information” to decide whether to
join the union, including “the percentage of union dues that
would be chargeable” should they not join. Id. at 47 (applying
Abrams v. Commc’ns Workers of Am., 59 F.3d 1373 (D.C.
Cir. 1995)). The Board agreed that Penrod and Abrams, the
case on which Penrod relied, would answer the question at
hand against the union, but quite remarkably dismissed the
complaint anyway. The Board asserted that it was not bound
to follow Penrod and Abrams because our decisions there had
failed to account for a policy that underlay the Board’s
position. UFCW, Local 700 (Kroger), 361 N.L.R.B. No. 39
(2014). Before us, the Board recognizes again, as it did below,
that our prior decisions would compel us to vacate the
Board’s order on the merits. The Board hopes that we will
revisit those decisions en banc.
Sands petitions for review of the Board’s order and
asserts jurisdiction under 29 U.S.C. § 160(f). But this case is
moot, and we do not have jurisdiction to reach the merits of
the petition.
II
All the time that Sands worked at Kroger, she paid full
dues as a union member. It was her claim to a refund of at
least a portion of those dues that gave her a personal interest
in this case. But that interest has disappeared. In 2014, about
two months after Sands petitioned this court for review of the
Board’s decision rejecting her claims, the union refunded the
dues she had paid by sending her a check for $350, claiming
that those funds equaled the total dues Sands had paid plus
5
interest.2 With a refund of her dues in hand, Sands can no
longer claim her payment of dues as the basis for her interest
in this matter.
Sands expressly waived any argument to the contrary.
See Defs. of Wildlife v. Jewell, 815 F.3d 1, 8 (D.C. Cir. 2016)
(refusing to reach arguments that were “affirmatively
waived”). In fact, she conceded in her reply brief that “she
now lacks [a refund] remedy” because the union “has
refunded her all of her dues.” Reply Br. 21. We will not
therefore consider whether—as counsel first suggested in a
supplemental filing just two days before oral argument—her
failure to cash the refund check has any legal significance.
We have jurisdiction only over live cases or
controversies. U.S. CONST. art. III, § 2, cl. 1. We cannot
“retain jurisdiction over cases in which one or both of the
parties plainly lack a continuing interest, as when the parties
have settled.” Friends of the Earth, Inc. v. Laidlaw Envtl.
Servs. (TOC), Inc., 528 U.S. 167, 192 (2000). In the labor law
context, this means that if the parties have already
“completely resolved the dispute” between them “and cured
any unfair labor practice” that may have occurred, it is “the
court’s duty to dismiss th[e] case as moot.” Am. Fed’n of
Gov’t Emps., AFL-CIO, Local 3090 v. FLRA, 777 F.2d 751,
753 n.13 (D.C. Cir. 1985); see also Calderon v. Moore, 518
U.S. 149, 150 (1996) (per curiam) (“[A]n appeal should . . .
be dismissed as moot when, by virtue of an intervening event,
a court of appeals cannot grant ‘any effectual relief whatever’
in favor of the appellant.” (citation omitted)). The Board
2
Although Sands would have avoided paying only about $3.50
per month in partial union expenses had she never joined the union,
the union refunded Sands the significantly larger amount of $350.
The union explained that it did so “in an unsuccessful attempt to
avoid wasting resources in litigation.” Union Br. 5 n.1.
6
carries the burden to show mootness, Friends of the Earth,
528 U.S. at 189, and it has done so here.
In her briefs, Sands argues against mootness by invoking
theories of relief unrelated to her claim for a refund of a
portion of the dues she has paid, but none of them establishes
her personal interest in what remains of this dispute. First,
Sands asks that the union be ordered to post a notice at the
grocery store where she worked announcing to the public that
the union violated the NLRA. As Sands points out, the
possibility of such a remedial notice usually keeps an unfair
labor practice case from becoming moot, even if the parties
resolve the underlying dispute. See Am. Fed’n of Gov’t Emps.,
777 F.2d at 753 n.13.
But the cases on which Sands relies, in which the interest
of a particular affected employee had disappeared, assume an
ongoing relationship between the petitioner and the company
or union that committed a labor violation. Only then can the
posting of a remedial notice address the petitioner’s injury.
For example, where the Board petitions to enforce its order
requiring a remedial notice to be posted, the Board has an
independent interest at stake even if the employee involved in
the suit quits the company or dies. See, e.g., Dep’t of Justice
v. FLRA, 144 F.3d 90, 95 (D.C. Cir. 1998); Dep’t of Justice v.
FLRA, 991 F.2d 285, 289 (5th Cir. 1993); NLRB v. Methodist
Hosp. of Gary, Inc., 733 F.2d 43, 48 (7th Cir. 1984). The
Board’s orders impose continuing obligations that do not
cease when the particular offending conduct ends. See NLRB
v. Raytheon Co., 398 U.S. 25, 27 (1970); see also Dep’t of
Justice, 144 F.3d at 95 (recognizing that resolution of the
underlying dispute generally does not moot the case “because
the Board is entitled to have the resumption of the unfair
practice barred by an enforcement decree” (quoting Dep’t of
Justice, 991 F.2d at 289) (internal quotation marks omitted)).
Similarly, where a union challenges a Board order in favor of
7
a company, the union has an interest in the court overturning
the Board’s decision so that the company will be ordered to
post a remedial notice at the workplace where the union
operates. See, e.g., Am. Fed’n of Gov’t Emps., 777 F.2d at 753
n.13; Ass’n of Admin. Law Judges v. FLRA, 397 F.3d 957,
960 n.* (D.C. Cir. 2005). In both of these situations, the
petitioner, whether the Board or a union, has a concrete stake
in the litigation because of its interest in the posting of a
notice that a violation of the labor laws has occurred.
Our decision in American Federation of Government
Employees, Local 1941, AFL-CIO v. Federal Labor Relations
Authority, 837 F.2d 495 (D.C. Cir. 1988), is instructive. In
AFGE, an employer denied an employee’s request to have a
union representative with him at a disciplinary hearing.
Rather than contest that decision, the employee resigned from
work. After the employee died, the union pressed the
employee’s claim to the Federal Labor Relations Authority,
which concluded that no labor violation had occurred. The
union appealed that decision to us. We held that the case was
not moot, despite the employee’s death. The union, we
reasoned, had “a derivative right to be present, on the
employee’s request,” at the disciplinary hearing. This
derivative right gave the union a direct stake in the outcome—
standing to contest the denial of representation and to seek the
posting of a notice of a violation of labor law. Id. at 497 n.2.
The controversy did not survive the employee’s death because
of a free-floating right that anyone would have, whenever a
violation occurs, to the posting of a notice. Rather, the
controversy remained alive because the union had a personal
and particular ongoing interest in the posting.
Sands’s situation is much different. She ended her
relationship with the union when she quit her job at the
grocery store in 2005, and her counsel conceded at oral
argument that there is no reason to think she will work there
8
again. Thus, even if posting a notice about the labor violation
might affect a current store employee, it cannot redress
Sands’s injury.
Sands resists this conclusion, urging us to follow the
reasoning of the Sixth Circuit in Montague v. NLRB, 698 F.3d
307 (6th Cir. 2012). In Montague, a union and an employer
negotiated a preliminary agreement before employees had
recognized the union, but the Board found no violation of the
NLRA. Two employees petitioned for review of that decision.
At the time, the company operated about ninety facilities, but
the facility where the alleged violation took place was no
longer covered by the agreement or even owned by the
company. Accordingly, the company argued that the case was
moot. But the employees and the Board emphasized that
should the Board lose the appeal, the company and the union
would have to post notices, presumably at the company’s
other facilities, acknowledging their violation of law. Id. at
313. This requirement, they argued, kept the case from being
moot. The court accepted that position without further
reasoning.
To the extent the Sixth Circuit held that an employee
without a personal interest in the posting of a remedial notice
can pursue her case on the basis of that remedy, we disagree.
Instead, our approach is more like that of the Second Circuit,
which has also recognized under similar facts that an unfair
labor practice case is moot when the petitioner lacks an
ongoing personal interest in the proceedings. See Gally v.
NLRB, 487 F. App’x 661 (2d Cir. 2012) (unpublished)
(dismissing as moot an employee’s petition for review
because the employee was no longer a union member subject
to a disputed requirement and the union had refunded dues);
Orce v. NLRB, 133 F.3d 907 (2d Cir. 1997) (unpublished)
(dismissing as moot an employee’s petition for review
because the employee had “no ‘personal stake’ in the
9
requested refund” of union dues and the employer was out of
business). This approach adheres to the basic requirement that
our jurisdiction depends on all parties having a “continuing
interest” in the case before us. Friends of the Earth, 528 U.S.
at 192.
Sands next argues that the case is not moot because she
seeks relief on behalf of those still employed by the grocery
store whose rights the union also violated. But Sands cannot
avoid mootness by asserting the rights of third parties when
she herself fails to meet Article III’s requirements. See
Lepelletier v. FDIC, 164 F.3d 37, 42 (D.C. Cir. 1999)
(“Because [the appellant] seeks to raise the rights of third
parties . . . he must show that he has standing under Article
III, and that he satisfies third party, or jus tertii, standing
requirements.”). Sands argues that the Eighth Circuit has
allowed an employee to seek judicial review on behalf of
other employees, but that case does not help her because
unlike Sands, that petitioner satisfied Article III standing. See
Bloom v. NLRB, 153 F.3d 844 (8th Cir. 1998), vacated on
other grounds, 525 U.S. 1133 (1999). In Bloom, a union and
an employer had entered into a voluntary settlement of a case
involving inadequate notice to employees about their right not
to join the union. The settlement created a forward-looking
remedy to notify employees about their rights, but the union
had not agreed to compensate employees for past violations.
When the Board dismissed an employee’s complaint based on
that settlement, the employee petitioned for review, even
though he had since left his job. The Eighth Circuit concluded
that the petitioner “himself satisfie[d] the minimum
requirements for Article III standing” because he, unlike
Sands, had not yet been refunded his union dues plus interest.
Id. at 848-49.
Finally, Sands warns that if we dismiss the petition as
moot, the union could resume its illegal conduct. To be sure,
10
ordinarily that would be our concern as well. In Knox v.
Service Employees International Union, Local 1000, 132 S.
Ct. 2277 (2012), a union similarly attempted to moot a case
by offering to refund dues after certiorari was granted. The
Supreme Court stressed that “[s]uch postcertiorari maneuvers
designed to insulate a decision from review . . . must be
viewed with a critical eye.” Id. at 2287. The Court applies a
“stringent” standard in such cases: “A case might become
moot if subsequent events made it absolutely clear that the
allegedly wrongful behavior could not reasonably be expected
to recur.” Friends of the Earth, 528 U.S. at 189 (quoting
United States v. Concentrated Phosphate Export Ass’n, 393
U.S. 199, 203 (1968)). Because the union mooted this case
after Sands petitioned for review, the Board and the union
face an uphill battle to show that it is “absolutely clear” that
the labor violation at issue cannot “reasonably be expected” to
happen again. Id.The Board and the union have met this “heavy burden.”
Friends of the Earth, 528 U.S. at 189. As Sands conceded at
oral argument, there is no reason to think she will ever return
to work at the grocery store, and thus she cannot reasonably
be expected to suffer another labor violation at the hands of
this union. Add to that a recent change in Indiana law
prohibiting the use of a union-security clause in a collective-
bargaining agreement. See IND. CODE § 22-6-6-8 (“A person
may not require an individual” to “pay dues, fees,
assessments, or other charges of any kind or amount to a labor
organization.”). Because the union operates only in Indiana
and it can no longer use any union-security clause there, it
cannot reasonably be expected to resume sending employees
inadequate information about their rights under such clauses.
11
III
Although this case is moot, our inquiry does not end
there. Instead, we must consider whether to vacate the
Board’s order rejecting Sands’s position. “[T]he established
practice . . . in the federal system . . . is to reverse or vacate
the judgment below” when a civil case becomes moot while
awaiting appellate review. Humane Soc’y of U.S. v.
Kempthorne, 527 F.3d 181, 184 (D.C. Cir. 2008) (quoting
Arizonans for Official English v. Arizona, 520 U.S. 43, 71
(1997)). Vacatur in the event of mootness applies equally to
unreviewed administrative orders. A. L. Mechling Barge
Lines, Inc. v. United States, 368 U.S. 324, 329 (1961); see
also Gally v. NLRB, 487 F. App’x 661, 663 (2d Cir. 2012)
(unpublished) (vacating a similarly mooted petition for
review). Its purpose is to “clear[] the path for future
relitigation of the issues” and “eliminate[] a judgment, review
of which was prevented through happenstance.” U.S. Bancorp
Mortg. Co. v. Bonner, 513 U.S. 18, 22-23 (1994) (quoting
United States v. Munsingwear, Inc., 340 U.S. 36, 40 (1950)).
Because vacatur is equitable in nature, we look to notions
of fairness when deciding whether to use the remedy. See id.
at 25; Kempthorne, 527 F.3d at 186-87. Courts usually vacate
a judgment “when mootness results from unilateral action of
the party who prevailed below” or from circumstances beyond
the control of the parties. Alvarez v. Smith, 558 U.S. 87, 98
(2009) (Stevens, J., concurring in part and dissenting in part)
(quoting Bancorp, 513 U.S. at 25). By contrast, in Bancorp
the Court announced that when a case becomes moot because
the parties reached a settlement—and the petitioner therefore
“voluntarily forfeited” a remedy in court—vacatur is typically
inappropriate. See 513 U.S. at 22-25. When deciding whether
to vacate, we also take the public interest into account. Id. at
26. We may not, however, consider the merits of the appeal.
12
We have no constitutional power to decide the merits in a
mooted case. Id. at 27.
The circumstances here counsel in favor of vacating the
Board’s order. First, at oral argument neither the Board nor
the union resisted Sands’s request for vacatur. Keeping in
mind that vacatur is an equitable remedy, we consider the
opposing side’s silence to be significant.
Second, the roles of the parties in mooting the case
counsel in favor of vacatur. The union prevailed below and
mooted the case by sending Sands a refund check after she
appealed, which can be reasonably seen as a “maneuver[]
designed to insulate a decision from review.” Knox, 132 S. Ct.
at 2287. Although Sands participated to some degree by
failing to return the check,3 there was no “settlement” of the
kind considered in Bancorp. The parties in Bancorp
“stipulated to a consensual plan” that, once accepted by the
bankruptcy court, “constituted a settlement that mooted the
case.” 513 U.S. at 20. There was no agreement of that type
between Sands and the union. See Kempthorne, 527 F.3d at
185 (“We have interpreted Bancorp narrowly.”). Furthermore,
one rationale underlying Bancorp is to prevent litigants from
“manipulat[ing] the judicial system by roll[ing] the dice”
below and then “wash[ing] away any unfavorable outcome
through use of settlement and vacatur.” Id. at 186 (quoting
Nat’l Black Police Ass’n v. District of Columbia, 108 F.3d
346, 351-52 (D.C. Cir. 1997) (internal quotation marks
omitted)). We have no such concern about any “manipulative
purpose” on Sands’s part that would caution against vacatur
here. Id.3
After briefing in this case was complete, the Supreme Court
decided Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016),
which held that an unaccepted settlement offer does not moot a
case. Id. at 666.
13
Finally, we recognize that vacatur would serve the public
interest by furthering the traditional purpose of the doctrine:
clearing the path for future relitigation of the issues. See
Bancorp, 513 U.S. at 22-23. The General Counsel has
withdrawn at least one pending complaint raising the same
issues as Sands on the basis of the Board’s decision below,
SEIU/District 1199 & Serv. Emps. Int’l Union (Rescare, Inc.),
NLRB No. 11-CB-003743 (2014), and the General Counsel’s
refusal to bring a complaint is unreviewable, NLRB v. Sears,
Roebuck & Co., 421 U.S. 132, 155 (1975). Vacatur will
prevent the General Counsel from further relying on the
Board’s unreviewed decision, thereby opening the door to
reconsideration of the merits of the legal issues in this case.
Accordingly, we exercise our equitable power to vacate the
Board’s order.
IV
We dismiss the petition for review as moot and vacate the
Board’s order.