Racing to the Courthouse—Who Picks the Court in Labor Cases?

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By Lawrence E. Dubé

Is it ever good news when you lose a labor case before a federal agency? Maybe, if it’s only a partial loss and it gives you an opportunity to improve your position on appeal. That may be the situation in unfair labor practice cases decided by the National Labor Relations Board.

The National Labor Relations Act permits any “aggrieved” party to appeal a final labor board decision, allowing the possibility that employers, unions, and individuals in a single case could all seek to appeal to different federal appeals courts.

The rules for appealing NLRB decisions can be a “trap for the unwary,” union lawyer David Rosenfeld of Weinberg, Roger & Rosenfeld in Alameda, Calif., told Bloomberg Law. But lawyers can take steps to improve their clients’ options from the beginning of a labor dispute.

Rosenfeld’s tactic? “I just ask the board for some remedy I’m not likely to get,” said the lawyer, who has defended several appeal petitions that pressed the limits on defining who’s an aggrieved party under the NLRA.

David Durham, a management attorney at DLA Piper in San Francisco, told Bloomberg Law that the right to appeal under the NLRA shouldn’t be abused by “forum-shopping” in the federal courts. In some cases, Durham said, some parties might go too far by making “outrageous” requests for NLRB relief just to qualify themselves as aggrieved parties that can appeal NLRB orders to federal courts.

Pathways to Court

When the National Labor Relations Board issues a final order in an action alleging that a company or union engaged in an unfair labor practice, the case can reach an appellate court in one of several ways.

The NLRB can petition an appeals court to enforce a board order. The board takes such action, allowed under Section 10(e) of the NLRA, when it appears that the employer or union named in the order won’t voluntarily comply with the board’s order.

In a Section 10(e) case, the board files its enforcement petition either in the federal circuit where the unfair labor practice occurred or where the respondent employer or union “resides or transacts business.”

On the other hand, any person “aggrieved by a final order of the Board granting or denying in whole or in part the relief sought” may appeal a board order under Section 10(f) of the act. In such a case, the aggrieved party can seek review in any federal circuit where an unfair labor practice allegedly occurred, where such person resides or transacts business, or in the U.S. Court of Appeals for the District of Columbia Circuit.

If multiple parties file Section 10(f) petitions in different circuits, the first-to-file determines the circuit in which an appeal will be heard. Where all parties are quick to file, there can also be a tiebreaker. If multiple petitions are filed and the NLRB receives court-stamped copies of each within 10 days of the issuance of the agency’s order, then a federal court panel will “by means of random selection” designate one of the circuits to hear and decide the case.

D.C. Circuit Popular Venue for Employers

Employers often make strategic choices to file for court review right away rather than waiting on the NLRB to seek judicial enforcement of a board order.

Employers located in any circuit can appeal a board ruling to the D.C. Circuit. Companies flocked to the D.C. Circuit in recent years when that court issued favorable rulings on the NLRA or the board’s authority.

But the race to the circuits takes place on a two-way street.

A union or any charging party in an NLRB case can also seek review if they can show they were aggrieved by a final board order—say, for example, the board dismisses a charge in its entirety.

A claim of aggrievement can’t be inconsequential, but some recent cases suggest there’s room for argument under Section 10(f) appeals.

One Small Setback Can Help in Appeal Request

In Our Walmart v. NLRB, an employee organization that filed unfair labor practice charges against the retail giant prevailed on a Section 10(f) dispute in the Ninth Circuit.

The NLRB found that Wal-Mart had committed various unfair labor practices, and the company petitioned for review in the D.C. Circuit.

However, Our Walmart, represented by Rosenfeld, said the NLRB had denied its request for “certain enhancements” to the NLRB’s traditional order requiring the employer to post notices of employee rights. The NLRB ordered the company to post the customary notice only at one store, not at all of the company’s California stores as Our Walmart had requested. That decision by the board made Our Walmart an aggrieved party with appeal rights, the organization said.

Walmart said the employee organization’s failure to obtain one item on a “wish list” of extraordinary remedies didn’t make it aggrieved within the meaning of Section 10(f). OUR Walmart was really angling “to help sustain the Board’s decision, not review it in any meaningful way,” the company argued, but it failed to persuade the appeals court.

The Ninth Circuit backed Our Walmart’s position it was aggrieved, and refused the retailer’s bid to transfer the appeal proceedings to the D.C. Circuit.

Wal-Mart’s counsel declined a request for comment on the issue of judicial review of NLRB cases.

Incentive to Reach for the Unreachable?

Another recent case suggests unions can and will reach (or stretch) to make such claims.

In Thyme Holdings, LLC d/b/a Westgate Gardens Care Center, the employer had refused to bargain with a union after an NLRB election, and the board’s general counsel filed a motion for summary judgment, which resulted in a final board order.

The employer wanted the unfair labor practice case reviewed in the D.C. Circuit, while the union sought review in the Ninth Circuit.

This time, the charging party, an SEIU local represented by Rosenfeld, requested relief that included demands for the employer to post an “affirmative statement” of NLRA violations along with a “permanent” posting of an NLRB notice of employee rights. The union said its rare demand for the permanent posting was inspired by the NLRB’s adoption of a 2011 regulation that required most U.S. employers to post a notice of employee rights under the act; the board abandoned the rule in 2014 after two federal courts found it was invalid.

Westgate Gardens was referred to the U.S. Judicial Panel on Multidistrict Litigation. Due to the nearly simultaneous filings in two circuits within 10 days of the NLRB order, the panel randomly selected the D.C. Circuit to consider the case. The union then withdrew its Ninth Circuit petition and the multidistrict panel didn’t rule on the issue of whether it was really aggrieved by the NLRB’s actions. NLRB, union and employer attorneys will present their arguments on the board’s unfair labor practice findings to the D.C. Circuit, which is expected to rule in the case in 2018.

Warning Signs

Rosenfeld said a union or charging party seeking to preserve an issue as the foundation for court review of a case has to be careful to make a record that the issue or request showing the party was “aggrieved” under the NLRA was presented and denied in whole or in part by the agency.

Such action by an opponent early in an NLRB proceeding can be a telltale sign that taking an NLRB case to an appellate court will likely end up as a contest of the “aggrieved.”

But even where an employer sees it coming, Durham said “it’s tough” to head off an adversary’s tactical use of an appeal petition.

Management’s only option, Durham said, is to challenge dubious petitions after they are filed. The challenge, the lawyer told Bloomberg Law, is convincing courts that being an aggrieved party with appeal rights under the federal labor law “should mean at least losing on a substantial point” before the NLRB.

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

To contact the editor responsible for this story: Terence Hyland at thyland@bna.com

For More Information

The text of Section 10 of the NLRA, covering court enforcement and review of NLRB orders is available at http://www.bloomberglaw.com/public/document/US_Code_29_USC__160_Prevention_of_unfair_labor_practices/1?doc_id=XEIO1M003?jcsearch=29+usc+160(f).

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