June 2016 FBA Labor and Employment Law Third Circuit Update

 

Stephen E. Trimboli, Esq.

Trimboli & Prusinowski, L.L.C.

The Third Circuit lacks appellate jurisdiction to consider employer’s argument that the NLRB’s Acting General Counsel was serving in violation of the Federal Vacancies Reform Act because the argument had not first been raised before the NLRB at the agency level.

 

1621 Route 22 West Operating Company, LLC, d/b/a Somerset Valley Rehabilitation and Nursing Center v. National Labor Relations Board, __ F.3d __ (3d Cir. 2016), 2016 WL 3146014, C.A. 3, (NLRB), June 6, 2016, available at www2.ca3.uscourts.gov/opinarch/152466p.pdf

 

This matter arose from a union organizing campaign and election conducted at a 32-room, 64-patient nursing home located in Bound Brook, New Jersey, that since 2006 had been operated by CareOne Management, Inc., a manager of multiple nursing and rehabilitation facilities. A union organization drive had begun around June 2010 among the nursing home’s registered nurses, licensed practical nurses and certified nurses’ aides following the announcement of planned reductions in working hours and changes in work schedules. During the election campaign, nursing home management interrogated employees about their union sympathies and solicited grievances from among employees in the proposed bargaining unit, including the cancelation of the proposed work hour reductions and schedule changes. A recognition election was conducted on September 2, 2010, at which 38 employees voted in favor of unionization as against 28 opposed. Within one and one-half months of the election, three of the leading union advocates and a fourth employee who had engaged in pro-union activities had been terminated due to alleged disciplinary infractions.

 

These actions led to the filing of multiple unfair practice charges with the National Labor Relations Board (NLRB) that the NLRB consolidated into a single complaint, which was tried for nineteen days before an Administrative Law Judge. The NLRB simultaneously sought temporary injunctive relief before the United States District Court for the District of New Jersey. The District Court reviewed the record developed before the ALJ, conducted eight additional days of hearing on its own, heard two days of oral argument, and issued an 129-page opinion analyzing the case in what the Third Circuit termed as “exacting detail.” Both the ALJ and the District Court found that the nursing home had committed unfair practices by, inter alia, terminating the four union activists. But whereas the ALJ recommended that all four activists be reinstated, the District Court granted injunctive relief reinstating only two, finding that reinstatement of the remaining two activists would endanger the nursing home’s patients more than it advance the purposes of the National Labor Relations Act (NLRA). The NLRB issued an order on September 26, 2012, adopting the ALJ’s recommended decision, which led the Third Circuit to vacate the District Court’s temporary relief decision and order as moot. The Third Circuit subsequently vacated the NLRB’s order because of the invalid recess appointment, under NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), of two of the three members who had issued the order. On June 11, 2015, a duly-constituted NLRB reaffirmed its original order in the matter, again adopted the ALJ’s recommendation to reinstate all four terminated activists, and rejected the reasons offered by the District Court for denying reinstatement to two of the activists. This appeal followed.

 

On appeal, the Third Circuit affirmed the finding that the nursing home had engaged in unfair practices by interrogating employees about their union preferences, by soliciting employee grievances during the pendency of a union election, and by terminating the four union activists after the union’s election victory. It also rejected the argument that the failure of the NLRB Chairman to recuse himself from the matter required the vacating of the NLRB order. However, a substantial portion of the Third Circuit’s opinion addressed whether the court possessed appellate jurisdiction to consider the nursing home’s threshold claim that the NLRB’s actions in the matter were void ab initio under the Federal Vacancies Reform Act (FVRA), 5 U.S.C. Sec. 3345, et seq.

 

The FVRA provides three prescribed means by which vacant, Presidentially-appointed, Senate-confirmed offices may be filed by acting officers, and generally limits acting appointments to 210 days of service. In SW General, Inc. v. NLRB, 796 F.3d 67 (D.C. Cir. 2015), rehg and rehg en banc denied (Jan. 20, 2016), cert. granted, _ S.Ct. _, 2016 WL 1381487 (2016), the D.C. Circuit Court of Appeals held that the NLRB’s Acting General Counsel had been appointed in violation of the FVRA, and that the Acting General Counsel’s issuance of an unfair practice complaint against an employer was a voidable action that the NLRB had failed to ratify or render harmless. The nursing home in the instant matter cited SW General, Inc., to have the complaint issued against it similarly deemed void. However, the nursing home had failed to raise the issue before the NLRB. It attempted to raise the issue for the first time at the appellate level by arguing that the issue was “jurisdictional.” The Third Circuit rejected the nursing home’s theory.

 

Appellate jurisdiction in NLRB matters is subject to an exhaustion requirement contained in 29 U.S.C. Sec. 160(e). “No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” Id. The nursing home’s failure to raise the FVRA issue at the agency level thus “precludes it from pressing its FVRA claim” absent such “extraordinary circumstances.”

 

The Third Circuit was not persuaded by the nursing home’s argument that its FVRA claim was “jurisdictional.” The Supreme Court’s decision in City of Arlington v. FCC, 133 S.Ct. 1863, 1868 (2013), rejected any distinction between “jurisdictional” and “non-jurisdictional” exercises of administrative agency authority. “City of Arlington tells us plainly that we are not supposed to ‘sift[ ] the entrails of vast statutory schemes to divine whether a particular’ exercise of agency authority ‘qualifies as ‘jurisdictional’ ….’” Purportedly “jurisdictional” claims involving the NLRB are therefore no less subject to the exhaustion requirement of 29 U.S.C. Sec. 160(e) than is any other issue on appeal. “We are bound to follow the Supreme Court’s instruction that treating any particular question of agency action as ‘jurisdictional’ is ‘arbitrary.’” Dicta from a pre-City of Arlington Third Circuit decision cited by the nursing home was rejected as contrary to City of Arlington, and being as “too general” to support a “conclusion that we are free to review unexhausted challenges to agency action whenever such a challenge can be framed as ‘jurisdictional.’” The Third Circuit’s “conclusion accords with the developing consensus of other courts that had considered the issue,” citing D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 350 (5th Cir. 2013), GGNSC Springfield LLC v. NLRB, 721 F.3d 403, 406 (6th Cir. 2013), and NLRB v. RELCO Locomotives, Inc., 734 F.3d 764, 798 (8th Cir. 2013).

 

The exhaustion requirement of 29 U.S.C. Sec. 160(e) may be excused only because of “extraordinary circumstances.” But the nursing home failed to submit any timely argument on the “extraordinary circumstances” exception in its briefing or at oral argument. The nursing home’s attempt to address the “extraordinary circumstances” exception in a post-oral argument submission was rejected. “We therefore have no argument before us as to why the present circumstances are so extraordinary as to warrant review without the {NLRB} having had the first opportunity to address {the nursing home’s} objection.”

 

On the question of reinstatement, the Third Circuit found that the NLRB had not abused its discretion by ordering all four union activists to be reinstated. The NLRB was not required to accept the evidence and expert opinion presented to the District Court in the temporary injunction proceeding. “The NLRA is structured to allow dual (and potentially dueling) proceedings, as the Board has authority to make determinations to prevent unfair labor practices … and the district courts are separately empowered to evaluate petitions for temporary relief … If a district court comes to one conclusion about appropriate temporary relief … that does not preclude the Board from reaching a contrary conclusion on the merits.”

 

The Third Circuit also noted the nursing home’s claim that it had obtained evidence pertaining to one of the activists, subsequent to her termination, that would have resulted in her removal notwithstanding the unfair practice matter. However, the Third Circuit accepted the NLRB’s position that consideration of such after-acquired evidence should be deferred to the NLRB’s compliance proceedings.