Teamsters Local Union No. 455 v. NLRB

Filing

[10201631] Denied; Terminated on the merits after oral hearing; Written, signed, published; Judges Gorsuch (authoring), Ebel and O'Brien. Mandate to issue. [12-9519]

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FILED
PUBLISH

United States Court of Appeals
Tenth Circuit

UNITED STATES COURT OF APPEALS

August 27, 2014

TENTH CIRCUIT

Elisabeth A. Shumaker
Clerk of Court

TEAMSTERS LOCAL UNION NO.
455,
Petitioner,
v.

No. 12-9519

NATIONAL LABOR RELATIONS
BOARD,
Respondent.

HARBORLITE CORPORATION,
Intervenor.

PETITION FOR REVIEW OF AN ORDER OF
THE NATIONAL LABOR RELATIONS BOARD
(NLRB No. 27-CA-21386)

Michael J. Belo, Berenbaum Weinshienk PC, Denver, Colorado, for Petitioner
Teamsters Local Union No. 455.
Zachary Henige, Washington, D.C. (Robert J. Engelhart, Supervising Attorney,
Amy H. Ginn, Attorney, Lafe E. Solomon, Acting General Counsel, Celeste J.
Mattina, Deputy General Counsel, John H. Ferguson, Associate General Counsel,
and Linda Dreeben, Deputy Associate General Counsel, on the brief) for
Respondent National Labor Relations Board and Stuart F. Delery, Principal
Deputy Assistant Attorney General, Beth S. Brinkmann, Deputy Assistant
Attorney General, Douglas N. Letter, Scott R. McIntosh, Joshua P. Waldman,
Mark R. Freeman, Sarang V. Damle, Melissa N. Patterson, and Benjamin M.

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Shultz, Civil Division, United States Department of Justice, Washington, D.C.,
filed a supplemental brief for Respondent National Labor Relations Board.
J. Thomas Kilpatrick, Alston & Bird LLP, Atlanta, Georgia (Wes R. McCart with
him on the briefs) for Intervenor Harborlite Corporation.

Before GORSUCH, EBEL, and O’BRIEN, Circuit Judges.

GORSUCH, Circuit Judge.

What happens when company and union can’t come to terms? Sometimes
the union might wish to strike, but sometimes not. What happens then — when
the union prefers work to continue? Under Supreme Court precedent employers
are often permitted to “lock out” the employees and hire temporary replacement
workers until a collective bargaining agreement is reached. But what happens if
the employer threatens to hire permanent replacements? Does this violate the
law, even if the employer doesn’t carry through on the threat and quickly retreats
from it? The National Labor Relations Board thought so. It ordered Harborlite to
desist from future threats and to post a notice promising its employees that much.
But the Teamsters wanted the Board to go further — to hold not only the threat
unlawful but also the entire lockout, and to award the employees backpay. This
much the Board declined to do, finding that the company’s short-lived threat
didn’t materially affect negotiations during the lockout, which in any case ended

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with Harborlite retreating. It is this decision the union now asks us to undo, but
one we find we cannot.
*
Given recent events, one might wonder whether we can even reach the
merits of the union’s challenge. We found ourselves wondering just that after
several circuits last year declined to enforce NLRB orders on the ground the
Board lacked the quorum required by law to issue any order at all.
The controversy began when the President appointed individuals to serve
on the NLRB without the advice and consent of the Senate. The President argued
that his appointments were lawful under the Constitution’s Recess Appointments
Clause — because they were made during times when the Senate was either
adjourned temporarily or operating in pro forma sessions. A number of courts
disagreed, however, thinking that the Clause authorizes appointments only when
the Senate is between sessions, not during intra-session breaks. Some held, too,
that the President’s recess appointment power permits him to fill merely those
positions that become vacant during an inter-session recess. These same courts
concluded that, without the unlawfully appointed members, the Board couldn’t
meet its quorum requirement or the statutory requirement that its decisional
panels consist of three members. See, e.g., Noel Canning v. NLRB, 705 F.3d 490
(D.C. Cir. 2013); NLRB v. New Vista Nursing & Rehab., 719 F.3d 203 (3d Cir.
2013); cf. U.S. Const. art. II, § 2, cl. 3.
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We worried that a similar problem might be lurking in our case. When it
decided our case, after all, the Board had just three members, and one of these —
Craig Becker — was appointed without Senate confirmation during an intrasession Senate recess. Indeed, the Third Circuit had specifically declared his
appointment invalid. See New Vista Nursing & Rehab., 719 F.3d at 221. But
with some other courts voicing disagreement and the Supreme Court agreeing to
tackle the issue, we thought the prudent course to put this case on hold until the
Court could speak.
The Court has now spoken and its guidance dispels our main worries. In
NLRB v. Noel Canning, the Court clarified that the President’s recess appointment
powers extend to filling vacancies that arise during a Senate session and extend to
filling vacancies during intra-session recesses of a “sufficient” duration. 134 S.
Ct. 2550, 2567, 2573 (2014). The Court did go on to hold several NLRB
members’ appointments unlawful because they occurred during a three-day intrasession recess that was “too short to trigger the President’s recess-appointment
power.” Id. at 2574. But in light of historical practice the Court held that only
recesses lasting fewer than ten days are “presumptively too short.” Id. at 2567.
Mr. Becker, by contrast, was appointed during an intra-session recess exceeding
two weeks — one lasting from March 26 to April 12, 2010. 156 Cong. Rec.
S2180 (daily ed. Mar. 26, 2010) (statement of Sen. Kaufman); New Vista, 719
F.3d at 213. So it is that, after Noel Canning, there seems little reason to doubt
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the validity of the appointment before us and the power of the Board to issue the
order under review.
To be sure, the Supreme Court stopped short of validating every
appointment made during a recess ten days or longer. One might even read the
majority opinion as leaving the door open for future challenges to some such
appointments: from the proposition that shorter than ten days is usually too short
it doesn’t follow that ten days or longer is always long enough. Cf. Noel
Canning, 134 S. Ct. at 2599 (Scalia, J., concurring in the judgment).
But whatever questions may linger along these lines, we see no reason to
venture any answers here. The ably represented parties didn’t question the
Board’s authority in administrative proceedings and even now don’t seek to press
the issue. That’s enough to end the matter. We don’t often raise arguments to
help litigants who decline to help themselves, especially when the litigants have
consciously waived the arguments by steering us away from them and toward the
merits instead. See Wood v. Milyard, 132 S. Ct. 1826, 1834 (2012); Richison v.
Ernest Grp., Inc., 634 F.3d 1123, 1127-28 (10th Cir. 2011); see also 29 U.S.C.
§ 160(e); Pub. Serv. Co. of N.M. v. NLRB, 692 F.3d 1068, 1076 (10th Cir. 2012).
Of course like most rules this waiver rule bears its exceptions. If, for
example, we lacked jurisdiction to review the Board’s decision we would have to
admit it regardless of the parties’ wishes. Here, though, our jurisdiction depends
on the National Labor Relations Act, which confirms this court’s authority to
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entertain the union’s petition even if there happens to be some defect in the
Board’s composition. The statute authorizes courts of appeals to review “final
order[s]” of the Board and to “enforc[e], modify[], . . . or set[] aside” any Board
order as the law requires. 29 U.S.C. § 160(f). In assessing whether a particular
agency action is final, we ask “whether the action’s impact is direct and
immediate, whether the action marks the consummation of the agency’s
decisionmaking process, and whether the action is one by which rights or
obligations have been determined.” Pub. Serv. Co. of Colo. v. U.S. EPA, 225
F.3d 1144, 1147 (10th Cir. 2000) (brackets omitted). All of those things are
present here: the Board’s order denied the union’s requested relief, marked the
end of the road for the agency’s consideration of the issue, and purported to
decide the union’s rights under the NLRA. The order could be invalid and issued
without authority, but none of that would destroy our jurisdiction to hear the case.
Indeed, it would be passing strange for an ultra vires agency action to be better
insulated from judicial review than one issued under lawful authority. And so
whatever the constitutional status of Mr. Becker’s appointment, nothing prevents
us from proceeding to decide the merits of our case. See, e.g., D.R. Horton, Inc.
v. NLRB, 737 F.3d 344, 351 (5th Cir. 2013) (“[T]he validity of Member Becker’s
recess appointment is not a matter we must address for jurisdictional reasons.”);
cf. Freytag v. Comm’r, 501 U.S. 868, 878-79 (1991) (“Appointments Clause

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objections to judicial officers” are “nonjurisdictional structural constitutional
objections”). 1
*
The union’s challenge on the merits arises from a routine collective
bargaining dispute. When negotiations between the Teamsters and Harborlite
reached an impasse, management told the union that unless it would agree to the
company’s final offer it would lock out union members and “immediately begin
hiring permanent replacements for locked out employees.” Several days later —
and (not incidentally) after the union initiated legal action — the company (sort
of) changed its tune. While it continued the lockout and began hiring new
workers, it said that “until further notice” these workers would only be temporary.
Harborlite insisted it had a right to hire permanent replacements but promised to
refrain from doing so — for the time being at least — “in an effort to show that
[it was] being more than reasonable.” And in fact, in three months’ time the
company let its temporary workers go and permitted union members to return to

1

The court might yet have discretion afforded by statute to decide whether
the Board was properly composed even though the question isn’t jurisdictional
and even though the parties never raised it. The D.C. Circuit held as much in
Noel Canning, 705 F.3d at 497-98, and we see no occasion to disagree with its
opinion on that score. But the lack of any advocacy — and after the Supreme
Court’s Noel Canning instruction, any authority — suggesting a problem with Mr.
Becker’s appointment, together with the ease with which the merits of this case
can be resolved, conspire to convince us that sua sponte intervention in this case
isn’t appropriate.
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work even though the union never did accept the company’s purportedly final
offer.
The Board agreed with the union that the act of threatening to hire
permanent replacement workers violated 29 U.S.C. § 158(a)(1), a provision of the
NLRA that says employers may not “interfere with, restrain, or coerce employees
in the exercise of” their collective bargaining rights. See Harborlite Corp., 357
N.L.R.B. No. 151, at 1-2 (Dec. 22, 2011). The Board ordered Harborlite to cease
making such threats and to post a notice admitting its violation of the law —
punishments the company acceded to voluntarily. So far so good in the union’s
eyes — but not far or good enough. As the union sees things, Harborlite’s
lockout was itself unlawful and this entitles its union employees to back pay.
Like the Board before us, we cannot agree. The Supreme Court has long
instructed that an employer may, consistent with the NLRA, lock out employees
during collective bargaining negotiations to “bring[] economic pressure to bear in
support of [its] legitimate bargaining position.” Am. Ship Bldg. Co. v. NLRB, 380
U.S. 300, 318 (1965); see also Serv-Air, Inc. v. NLRB, 395 F.2d 557, 562 (10th
Cir. 1968). It is equally settled that during a lawful lockout an employer may hire
temporary replacement employees to get its work done. See NLRB v. Brown, 319
F.2d 7, 11 (10th Cir. 1963), aff’d, 380 U.S. 278 (1965); Harter Equip., Inc., 280
N.L.R.B. 597 (1986), review denied sub nom. Local 825, Int’l Union of Operating

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Eng’rs v. NLRB, 829 F.2d 458 (3d Cir. 1987). We see no way we might now
permissibly overturn such long-settled precedent.
To be sure, the union doesn’t ask us to do quite so much. Its position is a
bit more nuanced than that: it doesn’t dispute that lockouts can be lawful or that
companies may hire temporary workers during lockouts. Instead, it contends a
previously lawful lockout becomes unlawful when a company threatens to hire not
temporary workers but permanent ones. It is Harborlite’s initial (if quickly
withdrawn) threat to hire permanent replacement workers, the union says, that
tainted its otherwise lawful lockout and rendered it unlawful.
This argument hinges on an uncertain premise. Implicit in the union’s
position is the belief that hiring permanent workers during a lockout, or
threatening to do so, violates the NLRA. But that belief isn’t obviously true.
What if an employer is tempted toward permanent replacement not to “interfere
with, restrain, or coerce” employees seeking to exercise their collective
bargaining rights but for entirely licit business reasons — expecting, for example,
that better qualified replacements might be found through a promise of morethan-merely-temporary employment? Cf. Medite of N.M., Inc. v. NLRB, 72 F.3d
780, 788 (10th Cir. 1995) (“allowing replacement workers to be kept on
permanently” helps give “the replacement workers adequate incentive to take
replacement jobs”). Consider, as well, that employers are permitted to hire
permanent replacements for striking employees. See, e.g., NLRB v. Int’l Van
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Lines, 409 U.S. 48, 50 (1972); NLRB v. Fleetwood Trailer Co., 389 U.S. 375, 379
(1967); NLRB v. MacKay Radio & Tel. Co., 304 U.S. 333, 345-46 (1937). If that
doesn’t “interfere with, restrain, or coerce” employees exercising their collective
bargaining rights during a strike, how does the same conduct do so during a
lockout? Doesn’t labor law generally recognize employees’ right to strike for the
sake of a better deal no less than their right to hold out against an employer’s
lockout? Cf. 29 U.S.C. § 163 (“Nothing in this subchapter, except as specifically
provided for herein, shall be construed so as either to interfere with or impede or
diminish in any way the right to strike . . . .”). Perhaps there are answers to these
statutory interpretation questions, but they are not insignificant ones. Indeed, the
Supreme Court has twice noted but declined to resolve them. See Am. Ship Bldg.
Co., 380 U.S. at 308 n.8; NLRB v. Brown, 380 U.S. 278, 292 n.6 (1965).
Happily, to decide this particular case we need not attempt any answers of
our own either. Neither need we evaluate the Board’s views on the matter or the
amount of deference owed them. Even granting the union its premise — even
assuming without deciding that threatening to hire permanent replacement
workers itself violates the NLRA — it doesn’t necessarily follow that such threats
also and automatically turn an otherwise lawful lockout unlawful and in this way
generate a second violation of the statute.
Why not? As the Board explained, there is no evidence in our record that
the hastily made and quickly withdrawn threat did anything to harm the parties’
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collective bargaining efforts or impeded resolution of their labor dispute. Given
this, the Board declared that, while the threat itself may be unlawful, it didn’t
transform the lockout itself into an act that “interfere[d] with, restrain[ed], or
coerce[d]” collective bargaining employees. In reaching this conclusion, the
Board pointed to and relied on its decision in Peterbilt Motors Co. — a case in
which the Board held that an employer’s unlawful conduct during an otherwise
lawful lockout won’t render the lockout itself unlawful so long as the conduct
doesn’t “materially affect the progress of negotiations.” 357 N.L.R.B. No. 13, at
4 (July 15, 2011), review denied sub nom. UAW v. NLRB, 516 F. App’x 488 (6th
Cir. 2013).
Before us, the union doesn’t argue that the Board’s holding — that an
unconsummated and rapidly withdrawn threat to hire permanent replacement
workers must materially affect the progress of negotiations before potentially
rendering an otherwise lawful lockout unlawful — is inconsistent with the NLRA.
We have no claim before us that the Board’s view on this score defies the statute
under which it operates. Instead, the union’s theory is again more nuanced and a
good deal more modest too. The union argues only that the Board’s rule and its
application in this case defy the Board’s own administrative precedents.
To be sure, the union here touches on an important principle. It is beyond
dispute that an administrative agency “may not . . . depart from a prior policy sub
silentio or simply disregard rules that are still on the books.” FCC v. Fox Tel.
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Stations, Inc., 556 U.S. 502, 515 (2009). The Administrative Procedure Act’s ban
on arbitrary agency action demands more than that. Id. (citing 5 U.S.C.
§ 706(2)(A)). Surely the most basic of law’s guarantees, due process and equal
treatment, do too. And judicial attention to these demands is, if anything,
especially important where (as in labor law) the governing statute speaks in
indeterminate terms and the agency’s decisions rarely derive from “any specific
statutory language at all.” Catherine L. Fisk & Deborah C. Malamud, The NLRB
in Administrative Law Exile: Problems with Its Structure and Function and
Suggestions for Reform, 58 Duke L.J. 2013, 2039 (2009).
In our case, however, we just cannot discern any inconsistency in the
Board’s treatment of its own precedent. The union says its silver bullet is Ancor
Concepts, Inc., 323 N.L.R.B. 742 (1997), enforcement denied on other grounds,
166 F.3d 55 (2d Cir. 1999). But in Ancor the Board found a lockout illegal only
after an employer told his locked-out employees that he had permanently replaced
them. See id. at 744-45. By its very terms, then, nothing in Ancor speaks to the
effect of a threat to hire permanent replacements that the employer does not claim
to have acted on — let alone one the employer soon pledges not to act on. For
similar reasons, the union is wrong to claim the Board’s decision betrays an
inconsistency with its decisions in Globe Business Furniture, Inc., 290 N.L.R.B.
841 (1988), and KLB Industries, Inc., 357 N.L.R.B. No. 8 (July 26, 2011). The
union reads both cases as holding lockouts unlawful because of the employer’s
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unremedied NLRA violations. But both cases involved employer misconduct that
materially impeded collective bargaining negotiations — the withholding of
critical information from unionized employees. See Globe Bus., 290 N.L.R.B. at
841 n.2; KLB Indus., 357 N.L.R.B. No. 8, at 5. Meanwhile, the Board found in
this case that Harborlite’s threat didn’t have a material impact on negotiations and
that finding is supported by substantial (indeed, uncontested) record evidence.
Having failed to suggest any inconsistency by the Board so far, the union
shifts gears, directing us to an altogether different line of administrative
precedent it says the Board failed to abide — Passavant Memorial Area Hospital,
237 N.L.R.B. 138 (1978), and Grondorf, Field, Black & Co., 318 N.L.R.B. 996,
996-97 (1995). In those cases, the Board held that an employer seeking to avoid
liability through the “repudiation or disavowal of [its] coercive conduct” should
at a minimum “give assurances to employees that in the future their employer will
not interfere with the exercise of their” rights. Passavant, 237 N.L.R.B. at 13839. But this line of precedent is no more helpful than the last to the union’s
cause. True, in our case the Board did impose liability on Harborlite for its threat
to hire permanent replacements, holding that the threat violated § 158(a)(1)
because the company didn’t repudiate it in the particular fashion Passavant
specifies. And to that extent, we readily acknowledge parallels between our case
and the precedent the union cites. But the Board’s holding in this particular isn’t
one the company or the union disputes. Rather, the question before us is whether
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the company’s threat also had the additional knock-on effect of rendering an
otherwise lawful lockout unlawful. Precisely nothing in Passavant or Grondorf
speaks to that question, either expressly or by necessary implication. The union’s
cases establish that an insufficiently repudiated violation of the statute still counts
as a violation; they do not establish that an insufficiently repudiated violation
causes a second and independent violation of the statute.
At the end of the day, the union musters no justification for forcing the
Board to act where it has chosen not to act. In saying this much we don’t mean to
suggest we endorse every jot and tittle in the administrative precedents we’ve
discussed. To resolve this case, we need and do hold only that the Board’s
refusal to order additional remedial measures wasn’t arbitrary in light of the
administrative precedents the union has identified. The petition for review is
denied.

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