Local Joint Executive Board, et al v. NLRB
Filing
FILED OPINION (WILLIAM C. CANBY, SUSAN P. GRABER and RICHARD A. PAEZ) GRANTED; REMANDED., Judge: RAP Authoring. Costs on appeal are awarded to petitioners. FILED AND ENTERED JUDGMENT. [7891188]
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
LOCAL JOINT EXECUTIVE BOARD OF
LAS VEGAS; CULINARY WORKERS
UNION LOCAL #226; BARTENDERS
UNION LOCAL 165,
Petitioners,
v.
NATIONAL LABOR RELATIONS
BOARD,
Respondent.
No. 10-72981
NLRB Nos.
28-CA-13274/75
OPINION
On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted
June 7, 2011—Portland, Oregon
Filed September 13, 2011
Before: William C. Canby, Jr., Susan P. Graber, and
Richard A. Paez, Circuit Judges.
Opinion by Judge Paez
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COUNSEL
Richard G. McCracken, Andrew J. Kahn, and Barry J. Jellison, Davis, Cowell & Bowe LLP, San Francisco, California,
for petitioners Local Joint Executive Board of Las Vegas,
Culinary Workers Union Local 226 and Bartenders Union
Local 165.
Usha Dheenan and Greg P. Lauro, National Labor Relations
Board, Washington, D.C., for respondent National Labor
Relations Board.
OPINION
PAEZ, Circuit Judge:
We review a petition by the Local Joint Executive Board of
Las Vegas, Culinary Workers Union Local 226 and Bartenders Union Local 165 (the “Union”) from an order of the
National Labor Relations Board (“NLRB” or the “Board”)
dismissing a complaint alleging unfair labor practices by
Hacienda Resort Hotel and Casino and Sahara Hotel and
Casino (the “Employers”). This dispute between the Union
and the Employers is now more than 15 years old, and this is
the third petition brought by the Union challenging a ruling by
the Board. The Union alleges that the Employers violated sec-
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tions 8(a)(1) and 8(a)(5) of the National Labor Relations Act
(“NLRA”), 29 U.S.C. §§ 151-169, when the Employers unilaterally terminated union dues-checkoff before bargaining to
agreement or impasse.
On remand from this court for the second time, the Board
deadlocked on the merits with one of five members recused.
Hacienda Hotel, Inc. Gaming Corp. (Hacienda III), ___
N.L.R.B. ___, 355 NLRB No. 154, 2010 WL 3446120, at *1
(Aug. 27, 2010). Unable to form a majority in support of a
different rule, the Board followed its prior rulings in Bethlehem Steel Co., 136 N.L.R.B. 1500 (1962), and Tampa Sheet
Metal Co., 288 N.L.R.B. 322 (1988), in concluding that termination of dues-checkoff is an exception to the rule articulated
in NLRB v. Katz, 369 U.S. 736 (1962), that unilateral changes
to mandatory subjects of bargaining violate the duty to bargain collectively under the NLRA. Hacienda III, 2010 WL
3446120, at *1. The Board affirmed the ruling of an administrative law judge (ALJ) dismissing the Union’s complaint.
We have jurisdiction under 29 U.S.C. § 160(f) to review
the Board’s ruling. As we explain below, we conclude that the
Board’s decision in Hacienda III is arbitrary and capricious
because the Board provides no explanation for the rule it follows in dismissing the Union’s complaint. We further conclude that, although we must show deference to the Board in
its promulgation of labor policy, a third open remand is inappropriate in this case because the Board, after more than fifteen years, has reached a deadlock on the merits and
continues to be unable to form a reasoned analysis in support
of its ruling. Last, upon consideration of the merits, we conclude that the Employers violated section 8(a)(5) of the
NLRA when they unilaterally ceased dues-checkoff before
bargaining to impasse. We therefore grant the Union’s petition, vacate the Board’s ruling, and remand to the Board so
that it can determine what relief is appropriate in light of our
opinion.
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I.
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Background
The Employers operate resorts and casinos in the state of
Nevada. The Union maintained collective bargaining relationships with the Employers for more than thirty years, and each
union had a substantially identical collective bargaining
agreement (“CBA”) in place with the Employers. Nevada is
a “right-to-work” state where union security clauses conditioning employment upon membership in a union are prohibited. Nev. Rev. Stat. § 613.250;1 see also 29 U.S.C. § 164(b)
(providing that federal law does not authorize union security
provisions in right-to-work states). Although the CBAs
between the Union and the Employers therefore did not
include a union security clause, the Union successfully negotiated for automatic union membership dues deductions from
employees’s wages, or “dues-checkoff.”
Under the dues-checkoff provision, the Employers, upon
written authorization by a union-member employee, were
required to deduct union dues automatically from the worker’s paycheck and submit that amount directly to the Union.2
1
Nev. Rev. Stat. § 613.250 reads in full:
“No person shall be denied the opportunity to obtain or retain
employment because of nonmembership in a labor organization,
nor shall the State, or any subdivision thereof or any corporation,
individual or association of any kind enter into any agreement,
written or oral, which excludes any person from employment or
continuation of employment because of nonmembership in a
labor organization.”
2
The dues checkoff provision reads:
3.03. Check-Off
The Check-Off Agreement and system heretofore entered into
and established by the Employer and the Union for the check-off
of Union dues by voluntary authorization, as set forth in Exhibit
2, attached to and made part of this Agreement, shall be continued in effect for the term of the Agreement.
Exhibit 2 reads:
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Thus, although the Union could not require that all workers
become dues-paying members of the Union because of
Nevada’s right-to-work law, it was guaranteed timely, accurate payment of dues by the workers who chose to join the
Union and authorize a checkoff. The dues-checkoff provision
also benefitted participating employees, who did not incur the
cost and effort of submitting dues to the Union themselves.
The CBAs expired in May 1994, and the parties unsuccessfully negotiated for new agreements through the end of 1994.
Despite the expiration of the CBAs, the Employers initially
continued to deduct union dues from workers’ paychecks
under the dues-checkoff clause in the expired CBAs. In June
1995, however, the Employers informed the Union that they
intended to cease checking off dues, and they in fact stopped
deducting dues from employees’ paychecks shortly thereafter.
A.
Hacienda I and LJEB I
In response to the Employers’ unilateral cessation of duescheckoffs, the Union filed unfair labor practice charges
against the Employers. The Union alleged that the Employers’
cessation of dues-checkoffs violated the unilateral change
doctrine affirmed by the Supreme Court in Katz. Under that
doctrine, “an employer’s unilateral change in conditions of
employment under negotiation is . . . a violation of § 8(a)(5)
[of the NLRA], for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does
flat refusal.” Katz, 369 U.S. at 743.
General Counsel for the NLRB consolidated the charges
Pursuant to the Union Security provision of the Agreement . . .
the Employer, during the term of the agreement, agrees to deduct
each month Union membership dues . . . from the pay of those
employees who have authorized such deductions in writing as
provided in this Check-Off Agreement.
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and issued complaints against the Employers. An ALJ dismissed the complaints. Upon review of the ALJ’s decision,
the NLRB affirmed the dismissal in a 3-2 decision,3 relying
on the “well-established precedent [of Bethlehem Steel and its
progeny] that an employer’s obligation to continue a duescheckoff arrangement expires with the contract that created
the obligation.” Hacienda Hotel, Inc. Gaming Corp. (Hacienda I), 331 N.L.R.B. 665, 666 (2000).4 The Board ruled that,
although this line of precedent “initially developed in the context of a contract containing both union security and dues
checkoff, it has clearly come to stand for the general rule that
an employer’s dues-checkoff obligation terminates at contract
expiration.” Id. at 667. The Board ruled that the exception to
the unilateral change doctrine first stated in Bethlehem Steel
had been applied in a right-to-work context in Tampa Sheet
Metal, 288 N.L.R.B. 322, and this extension of the exception
to contracts not involving union security had been relied on
in numerous Board decisions. Hacienda I, 331 N.L.R.B. at
668-69.
The Union filed a petition for review of the Board’s decision with this court, and we granted the petition, vacated the
Board’s ruling, and remanded for further proceedings. Local
Joint Exec. Bd. of Las Vegas v. NLRB (LJEB I), 309 F.3d 578,
580 (9th Cir. 2002). We explained that “[w]e are unable to
discern the Board’s rationale for excluding dues-checkoff
from the unilateral change doctrine in the absence of union
security.” Id. at 582. We rejected as inadequate the Board’s
3
The full board participated in the decision. Chairman Truesdale and
Members Hurtgen and Brame were in the majority. Members Liebman
and Fox dissented.
4
In Bethlehem Steel, the Board held that a union security clause making
union membership a condition of employment was lawful only under a
contract complying with § 8(a)(3) of the NLRA, and therefore could not
remain effective after the expiration of that contract. 136 N.L.R.B. at
1502. The Board also held that a checkoff provision, mandatory in that
instance, was subject to “similar considerations” because it “implemented
the union-security provisions.” Id.
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conclusion that the rule of Bethlehem Steel, a case concerning
dues-checkoff in the context of a union security agreement,
was equally valid in right-to-work states merely because such
a rule had been assumed without explanation in Tampa Sheet
Metal and was subsequently repeated in several prior NLRB
decisions. Id. We remanded the case “so that the Board
c[ould] either articulate a reasoned explanation for its rule or
adopt a different rule with a reasoned explanation to support
it.” Id.
B.
Hacienda II and LJEB II
On remand, the Board abandoned its reliance on Bethlehem
Steel but again affirmed the ALJ’s dismissal, in another split
decision, on the ground that the CBAs contained an express
waiver of the right to continued dues-checkoff past the expiration of the CBA. Hacienda Hotel, Inc. Gaming Corp. (Hacienda II), 351 N.L.R.B. 504, 505 (2007).5 The Union
petitioned for review and we concluded that there was “simply no clear and unmistakable waiver.” Local Joint Exec. Bd.
of Las Vegas v. NLRB (LJEB II), 540 F.3d 1072, 1075 (9th
Cir. 2008). We granted the Union’s petition, vacated the
Board’s decision, and remanded the case to the Board for a
second time. Id. Noting that “[t]he Board is the appropriate
body for developing and applying national labor policy,” we
directed the Board to either “explain the rule it adopted in
Hacienda I, or abandon Hacienda I to adopt a different rule
and present a reasoned explanation to support it.” Id. at 1082.
We explained that “the question squarely in front of the Board
is whether dues-checkoff in right-to-work states is subject to
unilateral change, or whether, under such circumstances,
dues-checkoff is a mandatory subject of bargaining.” Id.
5
The full board participated in the second decision as well. Chairman
Battista and Members Schaumber and Kirsanow were in the majority.
Members Liebman and Walsh dissented.
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C.
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Hacienda III
On the second remand, the Board deadlocked on the merits
of the Union’s claim. Hacienda III, 2010 WL 3446120, at *1.
Two members of the Board, Liebman and Pearce, voted in
favor of overturning the Board’s rule in Bethlehem Steel and
argued that the Hotel had engaged in an unfair labor practice.
Id. at *2 (Liebman & Pearce, concurring). Two other members, Schaumber and Hayes, voted in favor of upholding the
ALJ’s decision and dismissing the Union’s complaints. Id. at
*6 (Schaumber & Hayes, concurring). Member Becker
recused himself, a decision that we are not called on to
review.
Despite their split on the merits, the Board unanimously
agreed that existing NLRB precedent established in Bethlehem Steel and Tampa Sheet Metal compelled the conclusion
that the Employers did not violate the NLRA by unilaterally
ceasing dues-checkoff. Hacienda III, 2010 WL 3446120, at
*1. The Board also unanimously agreed that Board tradition
required a three-member majority to overrule existing precedent. Id. at *3, 6. Purportedly following its precedent and tradition, the Board therefore dismissed the Union’s complaint.
Id. at *1.
The Union again petitioned for review of the Board’s ruling.
II.
Standard of Review
The unilateral change doctrine—and the exclusion of duescheckoff from that doctrine under Bethlehem Steel—
“represent[s] the Board’s interpretation of the NLRA requirement that parties bargain in good faith.” Litton Fin. Printing
Div., Inc. v. NLRB, 501 U.S. 190, 200 (1991). Under the
Administrative Procedure Act, we may hold unlawful and set
aside only “agency action, findings, and conclusions found to
be . . . arbitrary, capricious, an abuse of discretion, or other-
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wise not in accordance with law.” 5 U.S.C. § 706(2)(A).
Under Chevron USA, Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837 (1984), we defer to the Board’s interpretation of
the NLRA if its interpretation is rational and consistent with
the Act. United Food & Commercial Workers Union, Local
1036 v. NLRB, 307 F.3d 760, 766 (9th Cir. 2002) (en banc).
“Where the statute is ambiguous, Chevron dictates that ‘a
court may not substitute its own construction of [the] statutory
provision for a reasonable interpretation made by . . . an agency.’ ” Id. at 767 (alteration in original) (quoting Chevron, 467
U.S. at 844). We may ignore the views of the Board only
where the intent of Congress is clear on the face of the statute.
Id.
We also review the Board’s decision-making process, and
“[i]t is well-established that an agency’s action must be
upheld, if at all, on the basis articulated by the agency itself.”
Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.
Auto. Ins. Co., 463 U.S. 29, 50 (1983). We therefore defer to
a rule adopted by the Board only if its “ ‘explication is not
inadequate, irrational or arbitrary.’ ” Allentown Mack Sales &
Serv. v. NLRB, 522 U.S. 359, 364 (1998) (quoting NLRB v.
Erie Resistor Corp., 373 U.S. 221, 236 (1963)).
III.
Discussion
In LJEB I, we vacated the Board’s order in Hacienda I
because we were not able to discern the Board’s rationale for
the exclusion of dues-checkoff from the unilateral change
doctrine in the absence of a union security agreement. 309
F.3d at 585. We concluded that nothing in Bethlehem Steel or
Tampa Sheet Metal provided a reasoned explanation for such
a rule. Id. On this point, the four voting members of the Board
who participated in Hacienda III agree. See Hacienda III,
2010 WL 3446120, at *2 (Liebman & Pearce, concurring)
(“[T]he Board has never provided a reasoned analysis for
applying the holding in Bethlehem Steel in a right-to-work
context where dues checkoff could not lawfully be linked
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with union-security arrangements.”); id. at *6 (Schaumber &
Hayes, concurring) (conceding that “we may have failed to
adequately explain previously” the reasons for the rule of
Bethlehem Steel and Tampa Sheet Metal).6
Hacienda III, however, does not respond to our direction
that the Board either offer a reasoned explanation for its rule
or abandon it. Instead, the Board perfunctorily ruled that the
dismissal of the Union’s complaint “was compelled by [its]
decisions in Bethlehem Steel . . . and Tampa Sheet Metal.”
Hacienda III, 2010 WL 3446120, at *1. The Board characterized its conclusory ruling as “follow[ing] existing precedent.”
Id. at *2.
A.
The Board’s ruling in Hacienda III is
arbitrary and capricious
[1] The Board’s most recent ruling in Hacienda III rests on
essentially the same reasoning it provided in Hacienda I.
Namely, the Board insists that the exception to the unilateral
change doctrine for dues-checkoff, even in right-to-work
states, is the rule the Board must follow in this case simply
because it is the rule that the Board has followed in the past.
We rejected this very reasoning in LJEB I, 309 F.3d at 583,
and we reject it again here. As we have explained, “Although
a Board rule may become ‘well-established’ through repetition, it may ‘come to stand for’ a legal rule only through rea6
The Seventh Circuit criticized our conclusion in LJEB I, stating that it
had “no similar problem understanding the basis of the Board’s rule.”
Office & Prof’l Emps. Int’l Union v. Wood Cnty. Tel. Co., 408 F.3d 314,
317 (7th Cir. 2005). The Seventh Circuit, however, mischaracterized our
opinion in LJEB I as holding “that the rule of [Katz] . . . applies to dues
checkoffs as well as wages and fringe benefits.” Id. First, in LJEB I, we
expressly declined to adopt any such broad rule out of deference to the
NLRB. 309 F.3d at 585. Second, our ruling rested on the Board’s failure
to distinguish between dues-checkoff in the context of a union security
agreement and dues-checkoff in a right-to-work state, id. at 585-86, a consideration wholly absent in the Seventh Circuit’s analysis.
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soned decisionmaking.” Id. (quoting Allentown Mack, 522
U.S. at 374).
[2] We also reject the Board’s attempt to veil its familiar
argument in procedural formalities. The Board asks us to
leave its ruling in place out of deference to an NLRB tradition
that requires a three-member majority to overturn existing
precedent. The Board cites Vermont Yankee Nuclear Power
Corp. v. Natural Resource Defense Council, Inc., 435 U.S.
519 (1978), and FCC v. Pottsville Broadcasting Co., 309 U.S.
134 (1940), in support of its argument that agencies are entitled to independence and deference in developing their procedures. In Pottsville, the Supreme Court ruled that agencies
“should be free to fashion their own rules of procedure and to
pursue methods of inquiry capable of permitting them to discharge their multitudinous duties.” 309 U.S. at 143. In Vermont Yankee, the Court reaffirmed that “the formulation of
procedures [is] basically to be left within the discretion of the
agencies to which Congress had confided the responsibility
for substantive judgments.” 435 U.S. at 524. We agree that we
generally must defer to the Board’s choice of particular procedures that it has decided are best suited to the adjudication of
labor disputes, but this deference does not free the Board to
ignore our mandate to explain the rule it chooses to adopt.
[3] The question presented here is not whether the NLRB’s
chosen procedures are adequate, but rather whether the explication of its ruling is adequate. See LJEB I, 309 F.3d at 583
(citing NLRB v. Erie Resistor Corp., 373 U.S. at 236). Pottsville and Vermont Yankee do not hold that the Board’s adherence to its traditional practices eliminates the Board’s
responsibility to provide an adequate, rational, non-arbitrary
rule that is consistent with the NLRA. The fact that the Board
offers only a procedural justification for its substantive ruling
only highlights that the ruling is substantively arbitrary. We
will not defer to an agency’s procedures or traditional practices when they result in arbitrary substantive rules.
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We recognize the Board’s interest in protecting the stability
of its legal precedent. Unlike other federal agencies, the
NLRB promulgates nearly all of its legal rules through adjudication rather than rulemaking. Allentown Mack, 522 U.S. at
374. Under such a scheme, the Board’s rules would be of little
assistance to employers and unions in following the NLRA if
the Board’s rules interpreting the Act were subject to routine,
frequent change. The Board reasonably has decided that
requiring a three-member majority to overturn precedent provides for the necessary stability of its rules, and we defer to
that judgment.
[4] Reasoned decisionmaking, however, is paramount to
consistent decisionmaking. Where the Board breaches its duty
to provide any rational and logical explanation for its rules,
“the consistent repetition of that breach can hardly mend it.”
Id. In their concurrence to Hacienda III, Members Shaumber
and Hayes argue that abandoning the rule of Bethlehem Steel
and Tampa Sheet Metal “would have a destabilizing impact
on bargaining relationships” because “[t]he rule is wellknown, well-understood, and practitioners have relied upon it
in doing business on behalf of their clients.” 2010 WL
3446120 at *8. A pattern of obedience to an arbitrary rule,
however, does not by itself support the rule’s continued application. Our responsibility is to ensure that the Board’s rules
are consistent with the NLRA. Stability in labor relations
must arise from reasoned rules promulgated by the Board, not
from our willful ignorance of the Board’s arbitrary decisionmaking in an effort to avoid rocking the boat.
[5] We conclude, as we did in Hacienda I, that the Board
has yet to provide a reasoned explanation for its rule excluding dues-checkoff from the unilateral change doctrine in rightto-work states. The Board’s purported adherence to its procedural rules does nothing to correct this inadequacy, and we
therefore vacate the ruling in Hacienda III as arbitrary and
capricious.
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B.
Judicial interpretation of the NLRA
[6] Next, we must decide how we should proceed, taking
into account that this controversy is more than fifteen years
old and that the Board is deadlocked on the merits. Were we
to remand this case with the same instructions that we have
given to the Board twice before, it would likely mean that a
case long overdue for a final decision on the merits would
continue to remain without one. Without a change in the composition of the Board,7 the Board will continue to be unable
to form a majority that can provide a reasoned explanation for
a rule either extending or limiting a dues-checkoff exception
in right-to-work states.
Despite these concerns, we also remain mindful of the deference due the NLRB. The Board “has the primary responsibility for developing and applying national labor policy.”
NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786
(1990). Indeed, the Supreme Court has cautioned:
If the record before the agency does not support
the agency action, if the agency has not considered
all relevant factors, or if the reviewing court simply
cannot evaluate the challenged agency action on the
basis of the record before it, the proper course,
except in rare circumstances, is to remand to the
agency for additional investigation or explanation.
The reviewing court is not generally empowered to
conduct a de novo inquiry into the matter being
reviewed and to reach its own conclusions based on
such an inquiry.
7
Currently the NLRB is composed of three members: Mark G. Pearce,
Chair; Craig Becker; and Brian Hayes. Member Becker is serving a recess
appointment; if the Senate does not act on his renomination, his term will
expire when the Senate adjourns later this year. There is a pending nomination for Terence F. Flynn and one open seat for which no person has
been nominated. See NLRB, The Board, https://www.nlrb.gov/who-weare/board (last visited Sept. 2, 2011).
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Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)
(emphasis added). The court of appeals’ role is thus normally
limited to evaluating whether the Board’s rules are rational
and consistent with the Act. See United Food & Commercial
Workers Union, 307 F.3d at 766.
Accordingly, only in rare circumstances will we address the
merits of a case where the agency has failed to do so. See
Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007)
(vacating a finding of “no adverse impact” by the National
Oceanic and Atmospheric Administration (“NOAA”) where
the agency had failed twice to perform statutorily-required
environmental studies); Sierra Club v. EPA, 346 F.3d 955
(9th Cir. 2003) (vacating an order by the Environmental Protection Agency and ordering a specific finding where the
administrative record was fully developed and conclusions
following from the record were clear); Ariz. Electric Power
Coop., Inc. v. United States, 816 F.2d 1366, 1376 (9th Cir.
1987) (vacating a decision of the Interstate Commerce Commission (“ICC”) and remanding with specific instructions
“[b]ecause of the history of recalcitrance displayed by the
ICC”).
Our cases directing agency action have often responded to
an agency’s stubborn refusal to follow our mandate or statutory provisions. For instance, in Earth Island, we vacated an
environmental finding by the NOAA rather than remand for
further study because of the agency’s “intransigence” in twice
failing to conduct statutorily required studies. 494 F.3d at 770.
Similarly, in Arizona Electric Power Cooperative, we ordered
the ICC to review power rates under Coal Rate Guidelines
when the agency’s prior refusal to do so demonstrated a “history of recalcitrance” including the ICC’s failure to abide by
representations the agency made to this court and reliance on
a mistaken interpretation of applicable statutes. 816 F.2d at
1376. While we cannot say that the NLRB has been guilty of
similar practices in this case, the Board’s inability to resolve
the issue repeatedly presented to it and its failure to produce
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a reasoned ruling is no less frustrating to the timely, final disposition of the dispute between the Employers and the Union.
[7] Weighing the Board’s consistent failure to provide a
reasoned disposition against the deference we owe the NLRB
in dictating labor policy, we conclude that this case presents
the “rare circumstance” in which another remand would be
inappropriate. Fla. Power & Light, 470 U.S. at 744. The
Board conceded at oral argument that we can only speculate
whether the Board would be able to break its deadlock and
reach a different decision were we to remand the case for a
third time. Therefore, given the amount of time that this case
has been pending before the Board and the Board’s continued
inability to provide a rational justification for the rule it proposes, we are convinced that a third remand would be futile,
or at least that the likelihood of continued deadlock outweighs
the speculative benefit of providing the Board with one more
opportunity to comply with our prior orders.
[8] We therefore turn finally to the question we put to the
Board in LJEB II, namely, “whether dues-checkoff in right-towork states is subject to unilateral change, or whether, under
such circumstances, dues-checkoff is a mandatory subject of
bargaining.” 540 F.3d at 1082. We note first that section
8(a)(5) of the NLRA, providing that it is an unfair labor practice for an employer to refuse to bargain collectively with a
union, is silent regarding the treatment of dues-checkoff in
right-to-work states after the expiration of a CBA. Section
8(d), governing the obligation to bargain collectively “in good
faith with respect to wages, hours, and other terms and conditions of employment” is also silent as to dues-checkoff. The
text of the statute is therefore ambiguous regarding whether
dues-checkoff is a mandatory subject of bargaining in rightto-work states.
[9] As we have said, when a statute is ambiguous, we may
not substitute our own interpretation of the statute for that of
the Board. See United Food & Commercial Workers Union,
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307 F.3d at 767. Therefore, had the Board provided a reasoned analysis for a rule excluding dues-checkoff from the
unilateral change doctrine in the absence of union security, we
would be required to defer to that rule so long as it was rational and consistent with the NLRA. Id. Because the Board was
unable to provide a reasoned explanation for the rule, however, we are forced to interpret the statute as if the Board had
not spoken at all.8
[10] In comparing this case to the facts of Bethlehem Steel,
we conclude that there is no justification for carving out an
exception to the unilateral change doctrine for dues-checkoff
in the absence of union security. The Supreme Court has long
recognized that automatic dues-checkoff is a powerful tool
under a union security agreement for a union to combat the
problem of “ ‘free riders,’ i.e., employees who receive the
benefits of union representation but are unwilling to contribute their fair share of financial support to such union.” NLRB
v. Gen. Motors Corp., 373 U.S. 734, 742-43 (1963). Where a
union security agreement is present, as in Bethlehem Steel,
automatic dues-checkoff is forced upon all employees
whether they wish to be part of the union or not. This arrangement serves to keep a union funded even though individual
workers might otherwise choose to enjoy the benefits of a
union-negotiated CBA without paying union dues. In a rightto-work state, on the other hand, dues are deducted from an
employee’s paycheck only if the employee specifically
requests the employer to do so. Dues-checkoff is thus not a
8
We recognize that even if an agency has not formally interpreted a statute, the agency’s interpretation may merit some deference whatever its
form, in light of the “ ‘specialized experience and broader investigations
and information’ available to the agency.” United States v. Mead Corp.,
533 U.S. 218, 234 (2001) (quoting Skidmore v. Swift & Co., 323 U.S. 134,
139 (1944)). Counsel for the NLRB stated at oral argument, however, that
neither of the concurrences to Hacienda III represent the view of the
Board, which is limited to the procedural justification we discussed above
in Section III(A). There is thus no substantive position to which we must,
or even may, defer.
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benefit to the union forced upon employees, but rather is a
benefit to those employees who choose to be part of the union
and also choose a checkoff.
[11] This distinction is crucial. In Bethlehem Steel, the
dues-checkoff arrangement was compelled under the terms of
the CBA just as the employees’ membership in the union had
been compelled pursuant to the union security agreement in
the CBA. In this case, however, union membership was not
a condition of employment, and each employee whose dues
were being checked off signed a request that the Employers
deduct dues from their pay and submit the dues to the Union.
Thus, unlike in Bethlehem Steel, where the unilateral cessation of dues-checkoff merely terminated a contractual
arrangement that individual employees and employers alike
were compelled to accept, the unilateral cessation of checkoff by the Employers in this case stripped employees of a contractual right that they had expressly exercised by requesting
dues-checkoff.
Without expressing an opinion on the wisdom of the rule
of Bethlehem Steel, we see why the Board would treat duescheckoff in the same manner as union security where both are
present. As the Board has stated, “[t]he exception . . . permitting unilateral abandonment of union-security and checkoff
arrangements after contract expiration is based on the fact,
noted in Bethlehem Steel, that ‘[t]he acquisition and maintenance of union membership cannot be made a condition of
employment except under a contract which conforms to the
[NLRA].’ ” Ind. & Mich. Electric Co., 284 N.L.R.B. 53, 55
(1987) (quoting Bethlehem Steel, 136 N.L.R.B. at 1502). In
other words, if union security provisions are limited by statute
to the duration of an existing CBA, dues-checkoff provisions
that “implement[ ] the union-security provisions” are limited
in the same manner. Bethlehem Steel, 136 N.L.R.B. at 1502.
[12] Where the dues-checkoff provisions do not implement
union security, however, but instead exist as a free-standing,
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independent convenience to willingly participating employees, the reasoning of Bethlehem Steel loses its force. We see
nothing in the NLRA that limits the duration of duescheckoffs to the duration of a CBA in the absence of union
security. Moreover, other statutory provisions suggest the
opposite. For instance, the Labor-Management Relations Act
provides that “a written assignment [for dues-checkoff] shall
not be irrevocable . . . beyond the termination date of the
applicable collective agreement.” 29 U.S.C. § 186(c)(4). This
provision would be surplusage if Congress believed that duescheckoff automatically terminated upon the expiration of a
CBA. See Nw. Forest Res. v. Glickman, 82 F. 3d 825, 834
(9th Cir. 1996) (“We have long followed the principle that
‘[s]tatutes should not be construed to make surplusage of any
provision.’ ”) (citation omitted).
[13] Accordingly, we conclude that in a right-to-work
state, where dues-checkoff does not exist to implement union
security, dues-checkoff is akin to any other term of employment that is a mandatory subject of bargaining. Because each
affected employee individually requested dues-checkoff, the
Employers’ actions in this case were an unlawful termination
of a bargained benefit to employees, not merely the cessation
of a provision that automatically terminated along with the
CBA and union security. The Employers’ unilateral termination of dues-checkoff in this case was thus “in effect a refusal
to negotiate . . . which reflect[ed] a cast of mind against
reaching agreement.” Katz, 369 U.S. at 747. In ceasing duescheckoff without bargaining to impasse, the Employers therefore violated section 8(a)(5) of the NLRA.
IV.
Conclusion
[14] In light of this violation, we remand to the Board to
determine what relief is warranted. We stress that, because the
NLRA is ambiguous on this issue, the Board may adopt a different rule in the future provided, of course, that such a rule
is rational and consistent with the NLRA. See Nat’l Cable &
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Telecom. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 98283 (2005) (“Only a judicial precedent holding that the statute
unambiguously forecloses the agency’s interpretation, and
therefore contains no gap for the agency to fill, displaces a
conflicting agency construction.”); see also N. Cal. River
Watch v. Wilcox, 633 F.3d 766, 781 (9th Cir. 2011) (interpreting an ambiguous provision of the Endangered Species Act,
but recognizing that the Forest and Wildlife Service could
adopt a different rule in the future). With regard to this case,
however, the Board has three times failed to provide a workable rule, and the parties cannot be expected to wait any longer.
PETITION GRANTED, and REMANDED.
Costs on appeal awarded to Petitioners.
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