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Scomas of Sausalito, LLC v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

March 7, 2017

Scomas of Sausalito, LLC, Petitioner
v.
National Labor Relations Board, Respondent UNITE HERE, Local 2850, Intervenor

          Argued February 7, 2017

         On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

          Diane Aqui argued the cause and filed briefs for the petitioner.

          Heather S. Beard, Attorney, National Labor Relations Board, argued the cause for the respondent. Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Jill A. Griffin, Supervisory Attorney, were with her on brief.

          Before: Henderson, Circuit Judge, and Edwards and Sentelle, Senior Circuit Judges.

          OPINION

          KAREN LECRAFT HENDERSON, CIRCUIT JUDGE.

         Scomas of Sausalito (Scomas) operates a seafood restaurant in northern California.[1] From 2000 to 2013, it recognized UNITE HERE! Local 2850 (Union) as the exclusive collective-bargaining representative for the restaurant's bartenders, bussers, cooks, dishwashers, hostesses and servers. In 2013, 29 of the bargaining unit's 54 employees signed a decertification petition asking Scomas to "withdraw recognition from [the Union] immediately" if the petitioners "make up 50% or more of the bargaining unit." Joint Appendix (JA) 131-32. One of the employees gave the petition to Scomas. Another filed it with the National Labor Relations Board (NLRB or Board) because the petition asked the Board to conduct a decertification election if the petitioners "make up 30% or more (and less than 50%) of the bargaining unit." Id. Without telling Scomas, the Union persuaded six of the petitioners to revoke their signatures. Two days later, still unaware that six employees had a change of heart, Scomas withdrew recognition from the Union. The remaining petitioners, apparently believing they were free of the Union, withdrew the decertification petition from the Board. Only then did the Union spring back into action: it filed an unfair labor practice (ULP) charge with the Board, claiming that Scomas had violated the National Labor Relations Act (Act), 29 U.S.C. §§ 151 et seq., by withdrawing recognition from the Union when it in fact had majority support.

         The Board sided with the Union and ordered Scomas to recognize and bargain with it. The bargaining order includes a "bar to raising a question concerning the Union's continuing majority status for a reasonable time, " on the theory that such delay is "necessary" to "dissipate[]" the "taint" of Scomas's violation. 362 NLRB No. 174, at 7 (Aug. 21, 2015).

         Scomas petitions for review of the Board's order. The Board cross-petitions for enforcement. We grant the former petition and deny the latter. Under Board law, "an employer with objective evidence that the union has lost majority support-for example, a petition signed by a majority of the employees in the bargaining unit-withdraws recognition at its peril" and can stave off a ULP charge only by establishing that "the union had, in fact, lost majority support at the time the employer withdrew recognition." Levitz Furniture Co., 333 NLRB 717, 725 (2001). Applying Levitz, the Board concluded that the six revocation signatures prevented Scomas from proving the Union lacked majority support at the time of withdrawal. Although we do not disturb that conclusion, the Board's remedy does not follow from it. A bargaining order is an extraordinary remedy that, on these facts, is out of keeping with the Act's purposes. It rewards the Union for sitting on its hands. It punishes Scomas for acting unwarily but in good faith. And it "give[s] no credence whatsoever to employee free choice, " Skyline Distribs. v. NLRB, 99 F.3d 403, 411 (D.C. Cir. 1996) (internal quotation omitted), unduly delaying an election to determine majority status. We therefore vacate the bargaining order and remand to the Board for further proceedings.

         I. BACKGROUND

         Before recounting why and how Scomas withdrew recognition from the Union, we summarize the legal context of its actions.

         A. The Law Of Withdrawal

         "The Act's twin pillars" are "freedom of choice and majority rule in employee selection of representatives." Conair Corp. v. NLRB, 721 F.2d 1355, 1381 (D.C. Cir. 1983). Section 1 declares a policy of "protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection." 29 U.S.C. § 151. Under section 9, a "majority of the employees in a unit appropriate for" collective bargaining selects an exclusive bargaining representative. 29 U.S.C. § 159(a). Once an employee unit has selected a union to represent it, the law presumes the union enjoys "continuing majority support." NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 794 (1990). The presumption fosters "industrial peace" and "stability in collective-bargaining relationships, without impairing the free choice of employees." Id. (internal quotation omitted).

         The presumption, however, is only that: except during certain periods not at issue here, employees are not bound to be represented by a union they no longer want. Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 786 (1996) (presumption is "rebuttable" except for one year following union's initial certification and when any collective-bargaining agreement is in effect for up to three years). Employees have two ways of severing union representation. First, if 30 per cent of the unit employees agree, they can obtain an election by filing a decertification petition with the Board, which decides majority status based on the election. See 29 U.S.C. § 159(c)(1)(A)(ii); NLRB Casehandling Manual, Pt. 2, Representation Proceedings § 11023.1 (Jan. 2017). Or, second, the employees can go directly to the employer, presenting it with a petition or other evidence that the union has lost majority support. See, e.g., Pac. Coast Supply, LLC v. NLRB, 801 F.3d 321, 324, 326 (D.C. Cir. 2015); Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 730 (D.C. Cir. 2000).

         When presented with evidence that the union no longer has majority backing, the employer "has three options: to request a formal, Board-supervised election, to withdraw recognition from the union and refuse to bargain, or to conduct an internal poll of employee support for the union." Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 361 (1998). Only the first two options are relevant here. If the employer opts for an election, it must file a petition with the Board. NLRB Casehandling Manual, supra, § 11042; cf. Parkwood Dev. Ctr., Inc. v. NLRB, 521 F.3d 404, 406 & n.1 (D.C. Cir. 2008). Election is the "preferred" method of determining majority status, Levitz, 333 NLRB at 723, 725-27, because an employer's unilateral withdrawal of recognition is more subjective and less precise, NLRB v. Cornerstone Builders, Inc., 963 F.2d 1075, 1078 (8th Cir. 1992). Levitz bears out this preference. Under Levitz, "an employer may rebut the continuing presumption of an incumbent union's majority status, and unilaterally withdraw recognition, only on a showing that the union has, in fact, lost the support of a majority of the employees in the bargaining unit." 333 NLRB at 725. As a corollary, the employer acts "at its peril" when it withdraws recognition, even when presented with "a petition signed by a majority of the employees in the bargaining unit." Id. By contrast, an employer obtains an election under a "more lenient standard, " "by demonstrating reasonable good-faith uncertainty as to [an] incumbent union['s] continued majority status." Id. at 723 (emphasis omitted).

         B. Scomas's Withdrawal

         The Union is the exclusive collective-bargaining representative of Scomas's service staff. From 2000 until September 2012, Scomas operated under a series of collective-bargaining agreements with the Union. For more than one year after the last agreement expired in 2012, the Union did not request bargaining. Also, according to employee Georgina Canche, the Union for years held no meetings and gave its members no information, despite collecting dues all the while.

         "[F]rustrated, " Canche researched decertification procedures online and obtained a standard-form decertification petition. JA 58. Between September 26 and October 28, 2013, she collected 29 signatures from the 54 employees in the bargaining unit. A fellow employee delivered the petition to Roland Gotti, Scomas's general manager, on October 28. The next day, Canche filed the petition with the Board. The petition asked Scomas to "withdraw recognition from [the Union] immediately" if the petitioners "make up 50% or more of the bargaining unit." JA 131-32. In the alternative, it asked the Board to conduct a decertification election if the petitioners "make up 30% or more (and less than 50%) of the bargaining unit." Id.

         Lian Alan, the Union's lead organizer, heard about the petition before it was filed. He emailed Gotti late in the evening on October 28, 2013, to "request bargaining dates to begin the negotiations for a collective bargaining agreement." JA 53. The email said nothing about the petition, ...


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