D.C. Cir. Backs NLRB Award of Union's Bargaining Expenses

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Lawrence E. Dubé

June 10 — The National Labor Relations Board had the authority to order two Illinois nursing homes to pay a union's bargaining expenses as a remedy for the employer's unfair labor practices, the U.S. Court of Appeals for the District of Columbia Circuit held ( Camelot Terrace, Inc. v. NLRB, 2016 BL 185321, D.C. Cir., No. 12-1071, 6/10/16 ).

Writing for the court June 10, Judge Karen LeCraft Henderson said Camelot Terrace Inc. and Galesburg Terrace Inc. did not dispute that they engaged in serious unfair labor practices. She wrote that “we have little trouble concluding that awarding bargaining costs in the appropriate case is within the Board's statutory remedial authority.”

However, the court declined to enforce the board's order that the nursing homes pay litigation costs incurred by a labor union and the NLRB's general counsel. The D.C. Circuit recently held that the board lacks statutory authority for such remedial orders.

Labor Board Ordered Employer Payments

The NLRB said in a 2011 decision (357 N.L.R.B. No. 161, 192 LRRM 1179 (2011); (04 DLR A-1, 1/6/12), that the evidence presented showed the nursing homes “blatantly circumvented the bargaining process and disregarded their statutory bargaining obligation by unilaterally implementing numerous changes in the employees' terms and conditions of employment and engaging in direct dealings with employees.”

The board adopted an administrative law judge's findings that the company made patently unreasonable contract proposals, including a proposed ban on union leafletting within 5,000 feet of a facility and a proposal that union-represented employees be allowed to resolve grievances with management and without the union's involvement.

The board ordered traditional remedies, including the reinstatement of an illegally discharged employee, but it also agreed on a 3-0 vote to order the employer to compensate a Service Employees International Union local for its bargaining expenses incurred after commencement of the employer's illegal conduct.

Court Backs Bargaining Expense Remedy

Henderson said the court was facing the question of a bargaining expense remedy for the first time, but she was persuaded the board had the statutory authority to order such relief.

“An award of bargaining expenses remedies an unfair labor practice by ensuring that, upon resolution of the unfair labor practice charge, the injured party can return to negotiations on the same footing it occupied before the violation of the Act occurred,” the court said.

Stating a traditional remedy “is of little value if one party can drain another of its resources by bargaining in bad faith and then extracting concessions as the money wanes,” Henderson found the bargaining expense remedy was authorized by the NLRA and fell within the board's discretion.

D.C. Cir. Recently Nixed NLRB Litigation Costs

However, the court said the NLRB's award of litigation costs against the nursing homes raised a different question, which the court recently addressed in another case.

In HTH Corp. v. NLRB, 2016 BL 161156, 206 LRRM 3302 (D.C. Cir. 2016) (98 DLR AA-1, 5/20/16), the appeals court said the NLRB had the authority to order a variety of remedies for serious unfair labor practices, but it couldn't order a Hawaii hotel to reimburse the NLRB and a labor union for the litigation expenses they incurred in a board proceeding.

Stating “Our decision in HTH controls,” the D.C. Circuit denied enforcement of the litigation cost order against Camelot.

Judges Judith W. Rogers and Stephen F. Williams joined in the opinion.

Christopher Landau of Kirkland & Ellis LLP in Washington argued for Camelot Terrace Inc. NLRB attorney Barbara A. Sheehy in Washington argued for the board.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com