Enterprise Must Reimburse Teamsters Local for Union Dues

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By Lawrence E. Dubé

Aug. 5 — A rental car company waited too long to challenge an order that it reimburse a labor organization out of its own funds for union dues that should have been deducted from employee paychecks, the U.S. Court of Appeals for the District of Columbia Circuit held ( Enterprise Leasing Co. of Fla., LLC v. NLRB, 2016 BL 153618, D.C. Cir., No. 15-1200, 8/5/16 ).

The court closed the case without reaching the merits of an unusual order that precludes the employer from recouping dues payments from the employees who would have made them but for the employer's labor law violations.

Enterprise Leasing Co. of Florida argued that the National Labor Relations Board lacked authority to make the company shoulder the dues obligations of union-represented employees, but Judge Cornelia T. L. Pillard wrote for the court Aug. 5 that the company failed to preserve its objection in proceedings before the NLRB.

The appeals court said the NLRB had substantial evidence that Enterprise illegally withdrew recognition from an International Brotherhood of Teamsters local and refused to honor the union dues checkoff authorizations of bargaining unit employees.

Second Round in D.C. Circuit

In 2013, an NLRB panel mostly adopted the findings of an administrative law judge that Enterprise illegally withdrew recognition from International Brotherhood of Teamsters Local 769 (359 N.L.R.B. No. 149, 196 LRRM 1613 (2013)).

The panel also found that Enterprise committed a number of National Labor Relations Act violations after its withdrawal of recognition, including failing to honor a dues checkoff provision that remained in effect until the collective bargaining agreement expired.

Enterprise filed a petition for review in the D.C. Circuit, and the board set aside that ruling after the U.S. Supreme Court held in NLRB v. Noel Canning, 134 S. Ct. 2550, 199 LRRM 3685 (U.S. 2014) that President Barack's Obama's January 2012 recess appointments to the NLRB, including those of two members on the Enterprise panel, were unconstitutional.

Board 2-1 Adopted Dues Remedy

A new three-member panel issued an order in 2015 (362 N.L.R.B. No. 135, 203 LRRM 2779 (2015)). The board members agreed that the employer had committed unfair labor practices, including withdrawing recognition from Local 769, and they ordered the company to recognize and bargain with the union.

However, a board majority (Chairman Mark Gaston Pearce and Member Lauren McFerran) also required Enterprise to make the union whole for union dues that should have been withheld from employee wages under the union's contract. The board's order precluded Enterprise from recouping the dues amounts from workers.

Requiring employees to make the back dues payments would impose “an additional burden” on the workers, the board said, “for which they might well blame the Union, undermining its standing—and exacerbating the consequences of the Respondent's unlawful conduct.”

Member Philip A. Miscimarra dissented from the remedial order. Writing that Section 302 of the Labor-Management Relations Act, 29 U.S.C. § 186, limits employer payments to labor unions, Miscimarra said the board should order Enterprise to “remit past dues that, in turn, are deducted from unit employees' wages or otherwise recouped by the Respondent.”

Jurisdiction Limited in Appeals Court

Enterprise challenged the board order, including the dues remedy, in the appeals court, but the D.C. Circuit enforced the NLRB order.

Pillard said the board's unfair labor practice findings were supported by substantial evidence, and she found the court lacked jurisdiction to consider the employer's challenge to the dues reimbursement remedy.

Section 10(e) of the NLRA, 29 U.S.C. § 160(e), precludes a reviewing court from considering an objection that has not been “urged before the board.”

D.C. Circuit Finds Objection Wasn't Preserved

Pillard wrote that the NLRB's general counsel, not Enterprise, brought the remedial issue to the board by filing exceptions to an administrative law judge's decision.

“Nowhere in any of its filings in the proceedings below did Enterprise argue that it was impermissibly punitive or otherwise unlawful for the Board to prevent Enterprise from collecting from its employees the dues it had failed to pay to the Union,” she wrote.

Enterprise could not rely on Miscimarra's dissent to excuse its failure to raise an objection, Pillard said. The employer could have filed a motion for board reconsideration after the 2015 decision but did not do so, she added.

Finding the company's objection to the remedial order was not timely, the appeals court concluded “We thus lack jurisdiction to consider it” and enforced the board order in full.

Judges Thomas B. Griffith and Robert L. Wilkins joined in the opinion.

D. John Sauer of James Otis Law Group LLC argued the case for Enterprise Leasing Co. of Florida. NLRB attorney Greg Lauro 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

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