National Labor Relations Board v. FedEx Freight, Inc.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________

No. 15-2585
___________

NATIONAL LABOR RELATIONS BOARD,
Petitioner

v.

FEDEX FREIGHT, INC.,
Respondent

____________

No. 15-2712
____________

FEDEX FREIGHT, INC.,
Petitioner

v.

NATIONAL LABOR RELATIONS BOARD,
Respondent
_______________________
 On Application for Enforcement and Cross Petition for
Review of an Order of the National Labor Relations Board
(NLRB Docket No. 22-CA-146653)
______________

Argued: March 1, 2016

Before: AMBRO, JORDAN, and SCIRICA, Circuit Judges.

(Filed: August 9, 2016)

Linda Dreeben
Jill A. Griffin
Milakshmi V. Rajapakse [ARGUED]
National Labor Relations Board
1015 Half Street, SE
Washington, DC 20570
Counsel for National Labor Relations Board

Brett M. Anders
Jackson Lewis
220 Headquarters Plaza
East Tower, 7th Floor
Morristown, NJ 07960

David A. Prather
Ivan Rich, Jr. [ARGUED]
FedEx Freight Corp
1715 Aaron Brenner Drive
Suite 600
Memphis, TN 38120
Counsel for FedEx Freight, Inc.

2
 ____________________

OPINION
____________________

SCIRICA, Circuit Judge

The National Labor Relations Board certified a
collective-bargaining unit comprised of FedEx Freight, Inc.
drivers at FedEx’s South Brunswick Terminal in Monmouth
Junction, New Jersey. To test the appropriateness of the unit,
FedEx refused to bargain with the unit’s certified bargaining
representative, Local 701, contending the terminal’s
dockworkers must also be included in the unit.1 The Regional
Director issued an unfair labor practices order against FedEx,
and the Board granted summary judgment in favor of the
union. FedEx filed a petition for review, contending the
Board (having adopted the Regional Director’s reasoning)
abused its discretion in certifying the unit because it applied a
unit-determination standard from Specialty Healthcare &

1
“[T]o challenge the union’s certification the employer must
refuse to bargain, triggering unfair labor practice proceedings
under Section 8(a)(5).” Wellman Indus., Inc. v. NLRB, 490
F.2d 427, 430 (4th Cir. 1974); see also St. Margaret Mem’l
Hosp. v. NLRB, 991 F.2d 1146, 1151 n.5 (3d Cir. 1993)
(“Because certification orders are not final appealable orders,
St. Margaret had to expose itself to unfair labor practice
charges in order to challenge the validity of the certification
in the courts.” (internal citations omitted)).

3
Rehabilitation Center, 357 N.L.R.B. No. 83 (2011), enforced
sub nom. Kindred Nursing Centers East, LLC v. NLRB, 727
F.3d 552 (6th Cir. 2013). It contends this decision violated
Board precedent, the National Labor Relations Act, and the
Administrative Procedure Act. Alternatively, FedEx contends
that even if the Specialty Healthcare standard applies, the
Board abused its discretion by failing to properly apply it
here.2

Because the Board’s interpretation of the legal
standard to apply in unit-determination cases in Specialty
Healthcare was reasonable, and the Board properly applied
that standard here, we will deny the petition for review and
grant the Board’s cross-petition for enforcement of its order
to bargain.

I.

FedEx provides pick-up and delivery services to
customers throughout the United States and has a service
center, or “terminal”—the South Brunswick Terminal—in
Monmouth Junction, New Jersey. This terminal has an
administrative building and a dock where freight is loaded
and unloaded onto FedEx trucks by FedEx dockworkers.
There is also a yard surrounding the office building and dock
where these dockworkers move and store vehicles and
equipment.

2
The Board had jurisdiction under 29 U.S.C. § 160(a) of the
NLRA. We have jurisdiction over this appeal from the
Board’s decision under 29 U.S.C. § 160(e) because FedEx
conducts business in New Jersey.

4
 The FedEx employees at issue here are city and road
drivers and dockworkers.3 City drivers transport freight
locally, and road drivers transport freight over longer
distances. The petitioned-for unit is comprised of all drivers,
both city and road, but excludes all dockworkers. FedEx’s
South Brunswick Terminal employs eighty-one city drivers,
thirty-three road drivers, and fifty-two dockworkers. All
drivers are full-time employees, and twenty of the fifty-two
dockworkers are full-time employees—the other thirty-two
dockworkers are part-time.

The basic requirements for city and road drivers are
the same—all drivers must have a commercial driver’s
license, at least one year of relevant driving experience (or
have gone through FedEx’s one-year dock-to-driver program,
see infra), and have acceptable motor-vehicle reports. They
must also submit to random drug testing and wear company-
issued uniforms. All drivers spend most of their working time
away from the dock and are supervised remotely by
dispatchers—operational supervisors who rotate between
dock and dispatch supervision. In addition, either type of
driver “[m]ay be required to perform job duties of [the other
type of driver] or [of] a dock employee where operationally
necessary.” J.A. 72, 74–75.

The differences between city and road drivers
primarily relate to compensation. Although all drivers’ wages
are based on their years of experience, city drivers are paid
between $20.63 and $24.93 per hour, whether or not they are
driving or working on the dock. Road drivers make the same

3
Neither party contends the South Brunswick Terminal’s
administrative employees should be part of the unit.

5
as city drivers when working on the dock or driving locally,
but make between $0.53 and $0.62 per mile when driving
longer distances.

Unlike drivers, dockworkers work only in the yard or
on the dock. Dockworkers load freight onto outbound trailers
and unload freight from inbound trailers. They may
occasionally drive forklifts and other vehicles within the yard
to move equipment from place to place (“hostling”),4 but this
driving does not require a commercial driver’s license nor
involve the types of vehicles city and road drivers use.

Moreover—unlike the requirements for drivers—no
relevant work experience is required to be a dockworker.
Dockworkers are also not required to wear uniforms nor are
they subject to random drug testing. Full-time dockworkers,
like drivers, select their schedules based on seniority. But
part-time dockworkers do not—FedEx assigns part-time
dockworkers to a shift when they are hired.

Dockworkers also earn considerably less than drivers.
Full-time dockworkers earn an average of $20.13 an hour—
fifty cents per hour less than the average city driver—and
part-time dockworkers make only between $16.31 and $18.31
per hour. Dockworkers have an opportunity to become drivers
through the “dock-to-driver” program,5 but only about 19

4
FedEx describes hostling as “staging trailers in the yard by
moving an empty trailer to a specific door on the dock for
loading, or moving a trailer that was just unloaded away from
the dock.” J.A. 188 n.6.
5
This program allows dockworkers to train to become drivers
with FedEx, and includes a five-week training course to help

6
percent of FedEx’s drivers at the South Brunswick Terminal
(24 percent of the road drivers and 16 percent of the city
drivers) graduated from the program. No employee has
moved in the opposite direction—from driver to dockworker.

Because drivers and dockworkers are employed by
FedEx, they unsurprisingly have some common conditions of
employment. All drivers and dockworkers are eligible for the
same retirement, healthcare benefits, and personal days off
(although part-time dockworkers do not receive paid holidays
and cannot accrue paid vacation time). In addition, all drivers
and dockworkers share the same break room and locker
rooms and must abide by the “General Responsibilities”
handbook for all FedEx employees. And, as noted, drivers
spend a small amount of their time doing dock work. In 2012,
about 3.5 percent of city drivers’ time and 10 percent of road
drivers’ time was spent performing dock work at the South
Brunswick Terminal.6

II.

We first address whether FedEx preserved its
challenges to Specialty Healthcare. In this case, FedEx
incorporated the arguments from its previous request for
review of the Regional Director’s unit determination in its
Response to Notice to Show Cause. Parties often incorporate,
rather than restate, prior arguments because of the Board’s

dockworkers get a commercial driver’s license. Dockworkers
work full-time as dockworkers while participating in the
program.
6
In 2012, this represented 14 percent of all dock work
performed at the South Brunswick Terminal.

7
“no-relitigation rule.” Nathan Katz Realty, LLC v. NLRB, 251
F.3d 981, 987 (D.C. Cir. 2001). Under this rule, “[d]enial of a
request for review [by the Board of the Regional Director’s
decision] shall . . . preclude relitigating any such issues in any
related subsequent unfair labor practice proceeding.” 29
C.F.R. § 102.67(g) (2015); see also Nathan Katz, 251 F.3d at
986 (explaining that under this rule an employer may
“incorporate[] by reference and reaffirm[] by reference its
post election objections”) (internal quotation marks and
citation omitted)). Here, FedEx incorporated in its Response
to Notice to Show Cause “the reasons and legal arguments set
forth in [its] Request for Review as the basis for its refusal to
recognize the Union.” J.A. 217. Therefore, we will consider
the arguments set forth in this prior proceeding.

The Board contends FedEx waived any challenges to
Specialty Healthcare because, in its request for review,
FedEx applied the overwhelming-community-of-interest
standard described in Specialty Healthcare rather than argue
Specialty Healthcare was wrongly decided. FedEx stated its
disapproval of the Specialty Healthcare decision in a
footnote.

Under 29 U.S.C. § 160(e), “[n]o 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.” 29 U.S.C. § 160(e). The crucial
question in a section 160(e) analysis is whether the Board
“‘received adequate notice of the basis for the objection.’”
FedEx Freight, Inc. v. NLRB, 816 F.3d 515, 521 (8th Cir.
2016) (quoting Nathan Katz, 251 F.3d at 985); see also NLRB
v. FES, 301 F.3d 83, 89 (3d Cir. 2002) (holding that because

8
the “tenor of FES’s challenge before the Board raised a
purely factual question” and did not “provide[] the basis for
its challenge,” FES failed to raise the issue before the Board);
Nathan Katz, 251 F.3d at 986 (explaining a petitioner “has
forfeited its right to challenge the Board’s disposition” when
the petitioner “completely fails to raise an issue during an
unfair labor practice proceeding” (internal citation and
quotation marks omitted)).

Despite the Board’s arguments to the contrary,
FedEx’s footnote in its petition for review provided sufficient
notice. The footnote reads:

[FedEx] posits that Specialty Healthcare was decided
erroneously, largely for the reasons cited in Member
Hayes’ dissent therein. However, on the assumption
that [the] Board will not now revisit its decision there,
[FedEx] alternatively contends that the case at bar was
decided incorrectly even under the rule of Specialty
Healthcare and its progeny.

J.A. 183 n.4. As indicated, the footnote states clearly “that
Specialty Healthcare was decided erroneously,” and gives as
the basis for its challenge “the reasons cited in Member
[Brian] Hayes’[s] dissent therein.” Id. The footnote also states
that FedEx’s argument under Specialty Healthcare’s
overwhelming-community-of-interest test was an alternative
argument. Its primary argument was that “Specialty
Healthcare was decided erroneously.” But, “on the
assumption that [the] Board [would] not now revisit its
decision,” FedEx focused its briefing under the alternative

9
theory. Id.7

Board Member Harry Johnson’s concurrence in the
Board’s summary affirmance of the Regional Director’s unit
determination indicates this footnote provided sufficient
notice of FedEx’s Specialty Healthcare challenge. Johnson
declined to apply the Specialty Healthcare test, finding the
unit appropriate under the traditional community-of-interests
test. But he recognized the employer’s argument that the
Specialty Healthcare standard was misapplied and
“acknowledge[d] the well-argued points of the Employer in
this case and [in] recent cases” that the Board’s holding in
Specialty Healthcare was incorrect. J.A. 4 n.1.

Johnson’s concurrence reflects the Board’s acute
awareness of recent and active challenges to Specialty
Healthcare. See Macy’s, Inc. v. NLRB, No. 15-60022, ----
f.3d----, 2016 WL 3124847, at *6–*9 (5th Cir. Jun 2, 2016)
(addressing challenges to the unit-determination test
described in Specialty Healthcare); Nestle Dreyer’s Ice
Cream Co. v. NLRB, 821 F.3d 489, 498–502 (4th Cir. 2016)

7
In a parallel case, the Eighth Circuit also held FedEx did not
waive the Specialty Healthcare argument. See FedEx Freight,
816 F.3d at 521 (“FedEx stated in a footnote in each of its
requests for review of the determinations by the regional
director that ‘Specialty Healthcare was decided erroneously’
for the reasons stated in Board member Hayes’ dissent. . . .
The Board was aware of the FedEx challenge to Specialty
Healthcare . . . . This gave the Board adequate notice that
FedEx was objecting to the regional director’s use of the
Specialty Healthcare framework. We therefore have
jurisdiction to review the FedEx claims.”).

10
(same); FedEx Freight, 816 F.3d at 521–26 (same). The facts
at issue and legal standards used in these cases parallel those
here. It seems impossible, therefore, that the Board was not
on notice FedEx would challenge the Board’s Specialty
Healthcare decision.

Moreover, because the Board has refused to reconsider
its holding in Specialty Healthcare, employers have chosen to
challenge the validity and validation method of unit
certifications by refusing to bargain with the union, and
appealing these determinations to the relevant federal court of
appeals. Accordingly, it is not surprising that FedEx did not
pursue its challenge to Specialty Healthcare more vigorously
in its request for review before the Board, opting instead to
preserve its challenge for this appeal. See also FedEx Freight,
816 F.3d at 521.

Because the Board in this case had adequate notice of
FedEx’s challenges to Specialty Healthcare, there was no
waiver of these challenges, and we have jurisdiction to review
them.

III.

The primary issue before us is whether the Specialty
Healthcare Board’s clarification of its unit-determination
analysis is reconcilable with prior Board precedent, the
NLRA, and the APA. FedEx presses us to overrule Specialty
Healthcare, contending it misapplied the initial community-
of-interest test and improperly created a new heightened
standard—the overwhelming-community-of-interest test.
Section 9(a) of the NLRA provides for the designation
or selection of an exclusive representative for the purposes of

11
collective bargaining “by the majority of the employees in a
unit appropriate for such purposes.” 29 U.S.C. § 159(a). The
Supreme Court has held that section 9(a) “implies that the
initiative in selecting an appropriate unit resides with the
employees” and that “employees may seek to organize ‘a
unit’ that is ‘appropriate’—not necessarily the single most
appropriate unit.” Am. Hosp. Ass’n v. NLRB, 499 U.S. 606,
610 (1991) (emphasis in original). Accordingly, a union need
not be representative of all employees at a company, but
might only include employees “in a particular craft, or
perhaps just a portion thereof.” Id.8

To guide its resolution of unit determinations, the
Board may craft rules through rulemaking or adjudication. Id.
at 611–13. Because these rules interpret the NLRA, they are
subject to the principles of Chevron, U.S.A., Inc. v. Nat. Res.
Def. Council, Inc., 467 U.S. 837, 843 (1984). See NLRB v.
United Food & Commercial Workers Union, Local 23, 484
U.S. 112, 123–24 (1987) (hereinafter “UFCW”). Under
Chevron, if Congress has not “spoken to the precise question
at issue” and “the statute is silent or ambiguous with respect
to the specific issue, the question for the [reviewing] court is
whether the agency’s answer is based on a permissible
construction of the statute.” Chevron, 467 U.S. at 842–43.
Reviewing courts must “respect the judgment of the agency
empowered to apply the law to varying fact patterns, even if
the issue with nearly equal reason might be resolved one way
rather than another.” Holly Farms Corp. v. NLRB, 517 U.S.
392, 399 (1996) (internal citation and formatting omitted); see
also UFCW, 484 U.S. at 123 (explaining we “accord[] the

8
Section 9(b) of the NLRA grants the Board the authority to
determine whether a unit is appropriate. 29 U.S.C. § 159(b).

12
Board deference with regard to its interpretation of the NLRA
as long as its interpretation is rational and consistent with the
statute”); NLRB v. N.J. Bell Tel. Co., 936 F.2d 144, 147 (3d
Cir. 1991).

A Board decision may be unreasonable if it
incorporates new law but fails to “clearly announce[]” the
law, as this inhibits appellate courts’ “review [of the legal
changes] for their reasonableness and their compatibility with
the Act.” Allentown Mack Sales & Serv., Inc. v. NLRB, 522
U.S. 359, 378 (1988); see also Comite’ De Apoyo a Los
Trabajadores Agricolas v. Perez, 774 F.3d 173, 190 (3d Cir.
2014) (“Failure to consider relevant factors or provide an
adequate explanation for an agency action are indeed among
the wide range of reasons why agency action may be
judicially branded as arbitrary and capricious.” (internal
citation and quotation marks omitted)).

In Specialty Healthcare, the Board articulated a two-
step unit-determination test. First, under the initial
community-of-interest test, the Board determines whether the
unit is an appropriate unit, applying relevant traditional
factors. 357 N.L.R.B. No. 83, at *15. And second, if
notwithstanding this finding, a party contends additional
employees should be added, the Board looks at whether the
“employees in the more encompassing unit share ‘an
overwhelming community of interest’ such that there ‘is no
legitimate basis upon which to exclude certain employees
from it.’” Id. at *16 (quoting Blue Man Vegas, LLC v. NLRB,
529 F.3d 417, 421 (D.C. Cir. 2008)).

This heightened showing is required because “the
statute requires only an appropriate unit” and “it cannot be

13
that the mere fact that they also share a community of interest
with additional employees renders the smaller unit
inappropriate.” Id. at *15 (citing Blue Man Vegas, 529 F.3d at
421; Dunbar Armored, Inc. v. NLRB, 186 F.3d 844, 847 (7th
Cir. 1999); and Montgomery Ward & Co., 150 N.L.R.B. 598,
601 (1964)). The Board explained that although it “has
sometimes used different words to describe this
[overwhelming-community-of-interest] standard and has
sometimes decided cases such as this without articulating any
clear standard,” its evaluation of Board and appellate court
precedent showed it had consistently applied a heightened
standard in such situations. Id. at *17.

A.

We hold the initial community-of-interest test
described and applied by the Board in Specialty Healthcare
was in line with Board precedent. In Specialty Healthcare, the
Board explained that for a bargaining unit to be appropriate,
its members must share a community of interest. This
determination requires an analysis and weighing of
“traditional” relevant criteria or factors. Specialty Healthcare,
357 N.L.R.B. No. 83, at *15. These factors may include:

“[W]hether the employees are organized into a
separate department; have distinct skills and training;
have distinct job functions and perform distinct work .
. . [have] job overlap . . . ; are functionally integrated
with the Employer’s other employees; have frequent
contact with other employees; interchange with other
employees; have distinct terms and conditions of
employment; and are separately supervised.”

14
Id. (quoting United Operations, Inc., 338 N.L.R.B. No. 18,
2002 WL 3125799, at *1 (2002)); see also NLRB v. Saint
Francis Coll., 562 F.2d 246, 249 (3d Cir. 1977); Bartlett
Collins Co., 334 N.L.R.B. 484, 484 (2001) (“In determining
whether the employees possess a separate community of
interest, the Board examines such factors as mutuality of
interest in wages, hours, and other working conditions;
commonality of supervision; degree of skill and common
functions; frequency of contact and interchange with other
employees; and functional integration.”).

Applying this standard, the Specialty Healthcare
Board noted similarities among the employees within the
petitioned-for unit, and distinctions between them and
excluded employees. See Specialty Healthcare, 357 N.L.R.B.
No. 83, at *14. (“[Included employees] wear distinctive
[uniforms],” have “separate and distinct” supervision, have
“distinct wage scale,” and there was limited interaction
between the groups). The Board also found “no evidence of
significant functional interchange or overlapping job duties”
between included and excluded employees, id., and
emphasized the importance of departmental structure as an
organizing principle, see id. at *17.

This initial community-of-interest test—and its
application—reflects the standard used by the Board in prior
decisions. See Macy’s, 2016 WL 3124847, at *7 (“The
community of interest test articulated in Specialty Healthcare
and applied in this case was taken from the Board’s 2002
decision in United Operations . . . [and] does not look only at
the commonalities within the petitioned-for unit” but asks
“‘whether the employees are organized into a separate
department . . . [and] have distinct skills and training . . . .’”

15
(emphasis in original) (quoting Specialty Healthcare, 357
N.L.R.B. No. 83, at *14)). Accordingly, the Board’s initial
community-of-interest analysis in Specialty Healthcare was
not an abuse of discretion.9

B.

FedEx next contends the Specialty Healthcare Board
abused its discretion by standardizing the heightened
“overwhelming-community-of-interest” test it applies when
an interested party claims “the smallest appropriate unit

9
The Specialty Healthcare Board’s analysis under the initial
community-of-interest test is also in line with our precedent.
We have described twelve factors the Board often considers
in unit determinations:
(1) similarity in the scale and manner of determining
earnings; (2) similarity in employment benefits, hours
of work and other terms and conditions of
employment; (3) similarity in the kind of work
performed; (4) similarity in the qualifications, skills
and training of the employees; (5) frequency of contact
or interchange among the employees; (6) geographic
proximity; (7) continuity or integration of production
processes; (8) common supervision and determination
of labor-relations policy; (9) relationship to the
administrative organization of the employer; (10)
history of collective bargaining; (11) desires of the
affected employees; [and] (12) extent of union
organization.
Saint Francis Coll., 562 F.2d at 249 (quoting Robert A.
Gorman, Labor Law: Unionization and Collective Bargaining
69 (1976)).

16
contains additional employees.” Specialty Healthcare, 357
N.L.R.B. No. 83, at *15. FedEx offers three reasons for its
conclusion. First, it contends Board precedent does not
support the test; second, it claims the test violates section
9(c)(5) of the NLRA; and third, it argues the test is a rule of
general application and should have been created through
rulemaking, rather than through adjudication. We find none
of these reasons persuasive.

1. The Board’s Unit-Determination Precedent

FedEx contends the Specialty Healthcare Board failed
to provide a reasoned explanation for the “adoption” of the
overwhelming-community-of interest test. Like our sister
circuits, we believe FedEx “overstates the changes the Board
made in Specialty Healthcare. . . . [T]he Board clarified—
rather than overhauled—its unit-determination analysis.”
Nestle Dreyer’s, 821 F.3d at 500; see also Macy’s, Inc., 2016
WL 3124847, at *6 (quoting Nestle Dreyer’s, 821 F.3d at
500); FedEx Freight, 816 F.3d at 525 (“We conclude that the
overwhelming community of interest standard articulated in
Specialty Healthcare is not a material departure from past
precedent . . .”); Kindred Nursing Ctrs., LLC v. NLRB, 727
F.3d 552, 561 (6th Cir. 2013) (“The Board has used the
overwhelming-community-of-interest standard before, so its
adoption in Specialty Healthcare . . . is not new.”); Blue Man
Vegas, 529 F.3d at 421 (explaining the Board’s unit-
determination cases “generally conform to a consistent
analytic framework” in which, to challenge a unit that is
“prima facie appropriate”—i.e., a unit in which the
employees share a community of interest—the employer must
make a heightened showing that the unit is “truly

17
inappropriate”) (internal citation and quotation marks
omitted)).

As the Specialty Healthcare Board explained, although
it has used different words to describe the heightened
standard, it has long required “a showing that the included
and excluded employees share an overwhelming community
of interest.” 357 N.L.R.B. No. 83, at *16; see also FedEx
Freight, 816 F.3d at 523–24. For example, in United Rentals,
341 N.L.R.B. 540, 541 (2004), cited by the Board in Specialty
Healthcare, the Board reversed the Regional Director’s
approval of the unit because “the overwhelming and
undisputed evidence of overlapping duties and interchange
between the excluded employees and the petitioned-for
employees” demonstrated the excluded employees “share[d] .
. . a substantial community of interest with the petitioned-for
employees.” 341 N.L.R.B. at 541–42. And in Lanco
Construction Systems, Inc., 339 N.L.R.B. 1048 (2003), as
here, the Board considered and rejected the employer’s
argument that additional employees shared an “overwhelming
community of interests with its solely-employed carpenters
and helpers” requiring their inclusion in the unit. 339
N.L.R.B. at 1049; see also Overnite Transp. Co., 322
N.L.R.B. 723, 726 (1996) (explaining that the excluded
employees would “constitute a separate appropriate unit and
do not share such a close community of interest . . . as would
mandate their inclusion in the petitioned-for unit” (emphasis
omitted)).

The Specialty Healthcare Board also cited the D.C.
Circuit’s opinion in Blue Man Vegas, decided three years
earlier, as an accurate reflection of the Board’s historic use of
a heightened, overwhelming-community-of-interest standard

18
in such circumstances. 357 N.L.R.B. No. 83, at *16. Citing
various Board decisions, the D.C. Circuit explained that the
Board’s “unit determination cases generally conform to a
consistent analytic framework” in which, under the initial
community-of-interest test, the Board determines whether the
unit is “prima facie appropriate,” and then, because there can
be more than one appropriate bargaining unit, the person
challenging the unit must show the appropriate unit is “truly
inappropriate.” Blue Man Vegas, 529 F.3d at 421 (internal
quotation marks and citation omitted). The Board finds a unit
is truly inappropriate, the D.C. Circuit explained, if the
excluded employees “share an overwhelming community of
interest with the included employees” such that there is “no
legitimate basis upon which to exclude them.” Id. The
Board’s citation to and approval of the D.C. Circuit’s
understanding of Board precedent was not an adoption of new
law, but an attempt to standardize the phrasing of its
“consistent analytic framework.”

It is important to note, as the Fourth Circuit has, that
some statements in Specialty Healthcare might indicate
significant changes in Board policy. Of most importance, the
Board seems to suggest that “whether employees are
appropriately excluded from the petitioned-for unit is
addressed only in step two, the overwhelming-community-of-
interest analysis, not in step one, the traditional community-
of-interest analysis.” Nestle, 821 F.3d at 500 (emphasis in
original). This would constitute a significant change. But, as
noted supra, under the initial community-of-interest test, the
Specialty Healthcare Board did not look “solely and in
isolation, [at] the question [of] whether the employees in the
unit sought have interests in common with one another.”
Newton–Wellesley Hosp., 250 N.L.R.B. 409, 411 (1980).

19
Rather, it looked at similarities between the employees in the
petitioned-for unit and whether their interests were
sufficiently distinct from other employees. Because we find
the ultimate holdings of Specialty Healthcare, with respect to
the unit-determination standards, were not departures from
Board precedent, we conclude the Board’s interpretation and
clarification of the NLRA was reasonable and not an abuse of
discretion.

2. Violation of NLRA Section 9(c)(5)

FedEx also contends the Specialty Healthcare Board’s
overwhelming-community-of-interest test violates section
9(c)(5) of the NLRA because it ensures the union’s choice is
almost always the controlling factor.

Section 9(c)(5) states that “the extent to which the
employees have organized shall not be controlling.” 29
U.S.C. § 159(c)(5). But the extent to which employees have
organized can still be considered. Although Congress
“intended to overrule Board decisions where the unit
determined could only be supported on the basis of the extent
of organization,” it is clear from “both the language and
legislative history of § 9(c)(5) . . . that the provision was not
intended to prohibit the Board from considering the extent [to
which employees have organized] as one factor, though not
the controlling factor, in its unit determination.” NLRB v.
Metro. Life Ins. Co., 380 U.S. 438, 441–42 (1965) (emphasis
added) (internal footnote omitted).
FedEx contends that under Specialty Healthcare, the
union’s initial burden to show the proposed unit is appropriate
has been truncated—instead of showing the employees are
similar to one another and distinct from other employees, the

20
union now only has to show the employees in the proposed
unit are readily identifiable as a group. As discussed supra,
this is not the test. The union must first show the employees
comprise a readily identifiable group and share a community
of interest under the traditional test. Then, following a finding
of appropriateness, if a party wants to add additional
employees, it must show the additional employees share an
overwhelming community of interest with those in the
original unit. See Specialty Healthcare, 357 N.L.R.B. No. 83,
at *15. Therefore, we agree with the Fourth, Fifth, Sixth,
Eighth, and D.C. Circuits that “so long as the overwhelming
community of interest test is applied ‘only after the proposed
unit has been shown to be prima facie appropriate, the Board
does not run afoul of the statutory injunction that the extent of
the union’s organization not be given controlling weight.’”
FedEx Freight, 816 F.3d at 525 (emphasis in original) (quoting
Kindred Nursing, 727 F.3d at 565); see also Blue Man Vegas,
529 F.3d at 423.

In accordance with the Fourth Circuit’s recent
interpretation of its own precedent in Nestle Dreyer’s, the
Fourth Circuit’s reasoning in NLRB v. Lundy, 68 F.3d 1577
(4th Cir. 1995), does not persuade us otherwise. In Lundy, the
Board presumed the union-proposed unit was appropriate,
and then applied an overwhelming community-of-interest
standard. In other words, the Board never determined whether
the unit was appropriate under the traditional community-of-
interest test, but assumed it was and skipped to the question
of whether there was an overwhelming community of interest
between the employees. The Fourth Circuit found this method
effectively excluded employees suggested by the employer in
violation of section 9(c)(5). Lundy, 68 F.3d at 1581.

21
 The facts of Lundy distinguish it from Specialty
Healthcare. As the Fourth Circuit recently explained in Nestle
Dreyer’s:

Lundy does not establish that the overwhelming-
community-of-interest test as later applied in Specialty
Healthcare fails to comport with the NLRA. Instead,
Lundy prohibits the overwhelming-community-of-
interest test where the Board first conducts a deficient
community-of-interest analysis . . . . But in Lundy we
had no occasion to determine whether the
overwhelming-community-of-interest test would
offend the NLRA in a case where the Board properly
conducts Specialty Healthcare’s step-one analysis by
determining that the members of the petitioned-for unit
share a distinct community of interest. With such a
case now before us, we find Lundy distinguishable.

Nestle Dreyer’s, 821 F.3d at 499. Each circuit court to hear
this issue has found likewise.10

10
See Macy’s, Inc., 2016 WL 3124847, at *7 (“Where the
Board ‘rigorously weigh[s] the traditional community-of-
interest factors to ensure that the proposed unit was proper
under the NLRA . . . the overwhelming community of
interest’ [test] does not conflict with the Act. . . . That is
precisely what the Board did in the instant case. As a result,
the test and its application do not violate Section 9(c).”
(quoting Nestle Dreyer’s, 821 F.3d at 499)); FedEx Freight,
816 F.3d at 525–26 (“The Lundy court did not hold that any
heightened standard violates section 9(c)(5) . . . . We agree
with the D.C. Circuit that the use of an overwhelming
community of interest test at the second step of the Board’s

22
 Finally, FedEx contends that even if the
overwhelming-community-of-interest standard is not a de
jure violation of section 9(c)(5), recent Board decisions
suggest the test creates such an impossible standard for
employers to meet that as applied, it will always privilege the
employees’ proposed unit.11 This privileging occurs, FedEx
argues, because the Board promotes the departmental or
administrative form over all commonly shared factors,
making the appropriateness of the unit a foregone conclusion
in almost all circumstances.

analysis does not violate section 9(c)(5) because the Board
‘did not presume the union’s proposed unit was valid, as it
had done in Lundy.’” (quoting Blue Man Vegas, 529 F.3d at
423)); Kindred Nursing, 727 F.3d at 564–65 (“[T]he Board
did not [violate section 9(c)(5) by] assum[ing] that the CNA-
only unit was appropriate. Instead, it applied the community-
of-interest test . . . to find that there were substantial factors
establishing that the CNAs shared a community of interest
and therefore constituted an appropriate unit. . . . Nor does the
overwhelming-community-of-interest test violate section
9(c)(5) . . . ‘as long as the Board applies the overwhelming
community of interest standard only after the proposed unit
has been shown to be prima facie appropriate . . . .’” (internal
formatting omitted) (emphasis in original) (quoting Blue Man
Vegas, 529 F.3d at 423)).
11
Some of the cases cited by FedEx include: DPI Secuprint,
Inc., 362 N.L.R.B. No. 172, 2015 WL 5001021 (2015); Guide
Dogs for the Blind, Inc., 359 N.L.R.B. No. 151, 2013 WL
3365658 (2013); Fraser Eng’g, 359 N.L.R.B. No. 80, 2013
WL 1181583 (2013); and DTG Operations, Inc., 357
N.L.R.B. No. 175, 2011 WL 7052275 (2011).

23
 This argument is unconvincing. Even if the Board has
approved more units organized along departmental lines—
lines often created by the employer—it does not follow that
the Board privileges the unit determinations of the employees,
and FedEx has not shown otherwise. Moreover, the Board has
been clear that it will not approve “fractured” units or
arbitrary segments of employees. See Odwalla, Inc., 357
N.L.R.B. No. 132, at *5 (2011) (using the overwhelming-
community-of-interest test to find additional employees
should be included in the otherwise appropriate unit because
the recommended unit was a fractured unit—an “arbitrary
segment” with no rational basis); see also Neiman Marcus
Grp., Inc., 361 N.L.R.B. No. 11, 2014 WL 3724884, at *4
(2014) (finding there was no community of interest because
“[t]he boundaries of the petitioned-for unit [did] not resemble
any administrative or operational lines drawn by the
Employer,” but not reaching the overwhelming-community-
of-interest test).

Accordingly, we conclude the overwhelming-
community-of-interest test clarified in Specialty Healthcare
does not conflict with section 9(c)(5).12

12
FedEx also argues the Specialty Healthcare Board
improperly imported the overwhelming-community-of-
interest test from accretion cases, in which “new employees
are added to an existing bargaining unit without a
representation election; therefore, the showing of shared
characteristics must be higher to protect employee interests.”
Lundy, 68 F.3d at 1581 (emphasis in original). This argument
is not persuasive. Although the “overwhelming-community-
of-interest” language from the Specialty Healthcare test is the
same language used in accretion cases, the frameworks of the

24
3. Rulemaking Versus Adjudication

Finally, FedEx contends Specialty Healthcare was
wrongly decided because the overwhelming-community-of-
interest test was a new policy and should have been
promulgated through rulemaking rather than adjudication.

We recognize that “the choice made between
proceeding by general rule or by individual, ad hoc litigation
is one that lies primarily in the informed discretion of the
administrative agency.” SEC v. Chenery Corp., 332 U.S. 194,
203 (1947).13 But as previously explained, the overwhelming-
community-of-interest test described in Specialty Healthcare
was not new policy, but a consolidation and clarification of
the heightened standard used by the Board in prior similar
situations. Therefore, we need not address whether the Board
abused its sound discretion in this regard.

tests are different. Unlike in accretion cases, in unit-
determination cases like Specialty Healthcare and this case,
the Board applies the “overwhelming-community-of-interest”
test only after conducting an initial community-of-interest
analysis and finding the employee-proposed unit appropriate.
13
Moreover, the Board, “uniquely among major federal
administrative agencies, has chosen to promulgate virtually
all the legal rules in its field through adjudication rather than
[through] rulemaking.” Allentown, 522 U.S. at 374; see also
Charlotte Garden, Toward Politically Stable NLRB
Lawmaking: Rulemaking vs. Adjudication, 64 Emory L.J.
1469, 1471 (2015) (explaining the Board generally creates
policies through adjudication rather than through
rulemaking).

25
 IV.

Having found the Board’s clarification of the unit-
determination standard in Specialty Healthcare reasonable,
we consider whether the Board properly applied this two-step
framework here.

In this case, the Regional Director, as confirmed by the
Board, found (1) the petitioned-for unit of FedEx drivers was
an appropriate unit under the initial community-of-interest
test; and (2) the dockworkers did not share an overwhelming
community of interest with the drivers such that they must be
included in the unit.

To reiterate, under the initial community-of-interest
test, the Board weighs a variety of factors—selected based on
their relevance to the unit at hand—to determine whether the
employees in the petitioned-for unit share a community of
interest. These factors may include whether the employees in
the unit are “organized into a separate department; have
distinct skills and training; have distinct job functions and
perform distinct work[;] . . . are functionally integrated with
the Employer’s other employees; . . . have distinct terms and
conditions of employment; and are separately supervised.”
United Operations, 338 N.L.R.B., at *1. Applying this test,
the Regional Director first looked at whether the union had
shown the petitioned-for unit comprised a “clearly
identifiable group”—i.e., whether the employees in the unit
were internally similar or made up a fractured unit—and then
at whether this group shared a community of interest. He
found the group was “clearly identifiable because . . . ‘it
track[ed] a dividing line drawn by the Employer.’” J.A. 12

26
(citing Macy’s Inc., 361 N.L.R.B. No. 4, 2014 WL 3613065,
at *12 (2014)). Specifically, “[t]he petitioned-for unit [was]
structured along the lines of classification, job function, and
skills,” and although the dockworkers and drivers were not in
separate departments, “there [was] no question that the
Employer treat[ed] the driver classification differently in
almost every operational and administrative sense.” Id. The
Regional Director also found the drivers distinguishable from
the dockworkers because of their uniform requirements,
commercial driver’s license requirements, and driver-specific
job descriptions. Id.

For many of the same reasons, the Regional Director
found the drivers in the petitioned-for unit shared a
community of interest. They “engaged in virtually the same
task—moving freight from place to place,” were “distinctly
qualified and skilled because of their licensure requirements,
and use[d] the same type of equipment.” Id. at 13. Moreover,
all drivers were full-time employees with the same benefits
and similar compensation, experienced similar working
conditions, were subjected to random drug testing, and
applied for shifts based on seniority.

We find the Regional Director’s application of the
initial community-of-interest test (which was adopted by the
Board) was not an abuse of discretion. He weighed relevant
factors to determine whether the union had shown the
petitioned-for unit was an appropriate unit—looking not only
at whether the employees in the petitioned-for unit were
similar and comprised a readily identifiable group, but also at
whether these employees were sufficiently distinct from other
employees.

27
 The Regional Director also properly applied the
overwhelming-community-of-interest analysis. Under this
test, the burden switched to FedEx to show that an otherwise
appropriate unit of drivers was inappropriate because
dockworkers shared an overwhelming community of interest
with them. The Regional Director agreed with the union,
finding sufficient distinctions between the employees. He
noted that dockworkers have no prerequisites for
employment, whereas drivers must have a Class A
commercial driver’s license with various certifications, and
that, unlike dockworkers, drivers are subject to random drug
testing because of the nature of their work. The Regional
Director also noted the disparity in wages between
dockworkers (including part-time dockworkers) and drivers,
and the distinct work locations of the employees—
dockworkers “work almost exclusively within the Terminal,”
while drivers work outside the terminal. J.A. 13. He also
observed that dockworkers and drivers do not frequently
interact with one another, and that there is only a one-way
interchange between positions—from dockworker to driver
through the dock-to-driver program.

The Regional Director did recognize “a few areas of
commonality between the three classifications, chiefly in
common supervision,” but he concluded that “these areas
[fell] far short of establishing the overwhelming community
of interest between the Dockworkers and the employees in the
petitioned-for unit that would be necessary to require the
Dockworkers’ inclusion.” Id.
Given the Board’s discretion to find an appropriate
unit—not necessarily the most appropriate unit—and our
deferential standard of review, we hold the Board’s
conclusion that there was no overwhelming community of

28
interest was not an abuse of discretion.

V.

For the foregoing reasons, we will deny FedEx’s
petition for review and grant the Board’s cross-petition for
enforcement of its order.

29
JORDAN, Circuit Judge, concurring in part and concurring in
the judgment:

We have routinely held that a single passing reference
to an issue in a footnote, without squarely arguing it, is
insufficient to preserve that issue for our review on appeal.
See, e.g., Prometheus Radio Project v. FCC, 2016 WL
3003675, at *15 (3d Cir. May 25, 2016); John Wyeth & Bro.
Ltd. v. CIGNA Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir.
1997) (Alito, J.). Our sister circuits also decline to consider
issues raised in such perfunctory fashion.1 There is good
reason for this unanimous position. Brief, casual references
to arguments do not put the opposing party on adequate

1
“Federal courts of appeals refuse to take cognizance
of arguments that are made in passing without proper
development.” Johnson v. Williams, 133 S. Ct. 1088, 1095
(2013); see also Therrien v. Target Corp., 617 F.3d 1242,
1253 (10th Cir. 2010); Carmichael v. Kellogg, Brown & Root
Servs., Inc., 572 F.3d 1271, 1283 (11th Cir. 2009);
Minneapolis Taxi Owners Coal., Inc. v. City of Minneapolis,
572 F.3d 502, 506 n.2 (8th Cir. 2009); United States v.
Strong, 489 F.3d 1055, 1060 n.4 (9th Cir. 2007); City of
Syracuse v. Onondaga Cty., 464 F.3d 297, 308 (2d Cir.
2006); Smithkline Beecham Corp. v. Apotex Corp., 439 F.3d
1312, 1320 (Fed. Cir. 2006); United States v. Dairy Farmers
of Am., Inc., 426 F.3d 850, 856 (6th Cir. 2005); IGEN Int’l,
Inc. v. Roche Diagnostics GmbH, 335 F.3d 303, 309 n.3 (4th
Cir. 2003); Sugarcane Growers Coop. of Fla. v. Veneman,
289 F.3d 89, 93 n.3 (D.C. Cir. 2002); Beazley v. Johnson, 242
F.3d 248, 270 (5th Cir. 2001); Nat’l Foreign Trade Council v.
Natsios, 181 F.3d 38, 60 n.17 (1st Cir. 1999); Bakalis v.
Golembeski, 35 F.3d 318, 326 n.8 (7th Cir. 1994).

1
notice of the issue, nor do they develop it sufficiently to aid
our review. That is particularly true “where important and
complex issues of law are presented, [so] a far more detailed
exposition of [an] argument is required to preserve an issue”
in that context. Frank v. Colt Indus., Inc., 910 F.2d 90, 100
(3d Cir. 1990). Despite this well-recognized rule, my
colleagues in the Majority conclude that a one-sentence
statement incorporating a two-sentence footnote – which
itself only incorporates the views briefly expressed in a
dissenting opinion – is adequate to preserve FedEx’s
arguments before the NLRB. Were such a tenuous
“argument” made before this Court, we would never consider
it. See United States v. Joseph, 730 F.3d 336, 341 (3d Cir.
2013) (“[R]aising an issue in the District Court is insufficient
to preserve for appeal all arguments bearing on that issue”
(emphasis added).). No reason has been suggested why the
rule for raising arguments before the NLRB should be more
relaxed than the rule that applies in this and every other court
of appeals, and, as explained later, there is good reason to
believe that the rule for arguments to the NLRB should be
even more rigorous. I therefore respectfully disagree with
Part II of the Majority opinion, and would conclude that
FedEx’s arguments challenging the standard set forth in
Specialty Healthcare & Rehabilitation Center, 357 NLRB
934 (2011), see infra note 5, were inadequately raised to the
Board, leaving us without jurisdiction to consider them,
pursuant to 29 U.S.C. § 160(e).2

2
Because I regard FedEx’s challenge to the Specialty
Healthcare standard as waived, I would only review whether
the Board properly applied that standard. As to that question,
I join Part IV of the Majority’s opinion – I agree that the
Regional Director’s application of Specialty Healthcare in

2
 As the Majority correctly recognizes, when we
consider petitions from NLRB decisions, our jurisdiction is
limited by statute only to a review of issues raised before the
Board. “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.”3

this case (which was adopted by the Board) was a proper
exercise of its discretion. I therefore also concur in the
judgment denying the petition for review and granting the
petition for enforcement.
3
FedEx has not alleged that any “extraordinary
circumstances” are present in this case to excuse its failure to
make its arguments before the Board. And even if it had,

[a] review of the cases shows that the
“extraordinary circumstances” provision of
Section 10(e) (29 U.S.C. § 160(e)) (excusing
the losing party’s failure to make objections to
the Board) has been applied only in rare cases,
as when a snow storm closes the Board’s
offices, or when a telephone and taxi strike
prevent delivery of the objections, or when an
unusually early mail pickup delays delivery.

NLRB v. STR, Inc., 549 F.2d 641, 642 (9th Cir. 1977) (per
curiam) (citations omitted); see also 1621 Route 22 West
Operating Co., LLC v. NLRB, Nos. 15-2466 & 15-2586, 2016
WL 3146014, at *7 (3d Cir. June 6, 2016) (noting that a
misapplication of the National Labor Relations Act by the
Board does not constitute an “extraordinary circumstance”);

3
29 U.S.C. § 160(e);4 see Woelke & Romero Framing, Inc. v.
NLRB, 456 U.S. 645, 666 (1982) (“[T]he Court of Appeals
lacks jurisdiction to review objections that were not urged
before the Board … .”). “The Supreme Court has construed
this rule strictly,” NLRB v. Konig, 79 F.3d 354, 359 (3d Cir.
1996), and we have likewise “shown unusual unanimity in
labor cases in strictly adhering to the requirement,” NLRB v.
Wolff & Munier, Inc., 747 F.2d 156, 166 (3d Cir. 1984)
(Sloviter, J., dissenting). “[T]o effectively preserve an issue,
the respondent’s exception must apprise the Board of the
issue that the responding party intends to press on review
sufficiently enough that the Board may consider the exception
on the merits.” Cast North America (Trucking) Ltd. v. NLRB,
207 F.3d 994, 1000 (7th Cir. 2000) (internal quotation marks
omitted). The Board’s rules similarly require parties to “set
forth specifically the questions of procedure, fact, law, or
policy to which exception is taken,” “concisely state the
grounds for the exception,” and “specifically urge[]” any

Advanced Disposal Servs. East, Inc. v. NLRB, 820 F.3d 592,
600 (3d Cir. 2016) (holding that “a challenge which goes to
the composition of the NLRB, and thus implicates its
authority to act, constitutes an ‘extraordinary circumstance’
under § 160(e)”).
4
Although our jurisdiction in this case arises under
both 29 U.S.C. §§ 160(e) and (f), as the parties petitioned for
both review and enforcement of the underlying order, the
requirement that an issue be presented to the Board for us to
have jurisdiction “applies to both enforcement and review
proceedings.” Oldwick Materials, Inc. v. NLRB, 732 F.2d
339, 341 (3d Cir. 1984).

4
exception, or risk having the argument “be deemed to have
been waived.” 29 C.F.R. § 102.46(b).

Because the preservation requirement of § 160(e) goes
to our jurisdiction, its application is “mandatory, not
discretionary.” Oldwick Materials, Inc. v. NLRB, 732 F.2d
339, 341 (3d Cir. 1984). “Th[at] rule serves a sound purpose
… [and] we are bound by it.” Detroit Edison Co. v. NLRB,
440 U.S. 301, 311 n.10 (1979). The jurisdictional bar is
“designed to allow the NLRB the first opportunity to consider
objections and to ensure that reviewing courts receive the full
benefit of the NLRB’s expertise.” Cast North America, 207
F.3d at 1000.

Here, FedEx provided two submissions to the Board.
First, the company sought review of the regional director’s
decision in the underlying representation proceeding. In that
submission, it generally argued that the regional director had
misapplied the Specialty Healthcare standard – laying out an
extensive factual argument about the integrated work of
dockworkers and drivers – with, in the following footnote,
only one brief reference to a possible legal challenge to the
overall standard:

The Employer posits that Specialty Healthcare
was decided erroneously, largely for the reasons
cited in Member Hayes’[s] dissent therein.
However, on the assumption that [the] Board
will not now revisit its decision there, the
Employer alternatively contends that the case at
bar was decided incorrectly even under the rule
of Specialty Healthcare and its progeny.

5
(JA at 183 n.4.) In the remaining twenty-three pages of its
brief, FedEx made no other objection to the Specialty
Healthcare standard, arguing only its proper application. It
also stated at the end of its brief that “[t]he Board has made
clear that the decision in Specialty Healthcare did not create a
new community of interest test.” (JA at 204.) And it said that
without comment or quarrel. FedEx’s first submission to the
Board is also notable for never actually applying any standard
but the one from Specialty Healthcare. The omission of any
effort to apply the more “traditional” analysis is telling5 – if

5
As explained in the Majority opinion, Specialty
Healthcare set out the “overwhelming community of
interests” test, in which an employer seeking to expand a
petitioned-for unit composed of a readily identifiable group
that shares a community of interest must demonstrate that the
employees it seeks to add “share an overwhelming
community of interest with those in the petitioned-for unit.”
Specialty Healthcare, 357 NLRB 934, 946 (2011) (emphasis
added). In dissent, Member Hayes noted that, “in a correct
application of the traditional community of interest test, the
Board never addresses, solely and in isolation, the question
whether the employees in the unit sought have interests in
common with one another.” Id. at 951 (internal quotation
marks omitted). In other words, the Specialty Healthcare test
starts by looking exclusively at the commonalities of the
petitioned-for unit, whereas the “traditional” analysis
contrasts the employees in that unit with other employees to
determine “whether the interests of the group sought are
sufficiently distinct from those of other employees to warrant
the establishment of a separate unit.” Id. (internal quotation
marks omitted). In Member Hayes’s view, “[t]he
‘overwhelming community of interest’ test [the Board

6
FedEx really was arguing that the Board should apply the
traditional analysis, it should have done so itself.

Thereafter, FedEx filed its second submission to the
Board in response to a notice to show cause in the subsequent
unfair labor practice proceeding. With no specificity, it
incorporated its previous submission by reference, saying
simply, “[t]he Employer continues to rely upon the reasons
and legal arguments set forth in the Employer’s Request For
Review as the basis for its refusal to recognize the Union.”
(JA at 217.) In the balance of its argument, FedEx again
challenged only the proper application of the Specialty
Healthcare standard.

Now, however, FedEx has made the strategic decision
to change its argument into a direct challenge of that standard.
If it had persevered in challenging only the proper application
of Specialty Healthcare, principles of deference that bind us
would have placed it in a difficult position. FedEx would
have had “to show that the Board abused its discretion in
determining the appropriateness of the bargaining unit in
question.” Presbyterian Univ. Hosp. v. NLRB, 88 F.3d 1300,
1303 (3d Cir. 1996) (internal quotation marks omitted). That
would have been an “uphill battle.” Id. Likely recognizing as
much, the company chose a different fight. So, in its opening
brief before us, FedEx made no argument whatsoever about
the proper application of the Specialty Healthcare standard.
None. Instead, it dedicated the entire twenty-five pages of
argument to a legal challenge to the existence of the Specialty

majority] endorse[d] cannot be reconciled with the traditional
appropriate unit test.” Id.

7
Healthcare standard, laying out the arguments that the
Majority addresses in Part III of its opinion.

Perhaps it is not coincidental that we “exercise plenary
review over questions of law and the Board’s application of
legal precepts.” NLRB v. Attleboro Assocs., Ltd., 176 F.3d
154, 160 (3d Cir. 1999). We have previously held that a party
cannot turn factual arguments raised before the Board into
legal arguments before our Court, which is exactly what
FedEx has done here. See NLRB v. FES, a Div. of Thermo
Power, 301 F.3d 83, 89 (3d Cir. 2002) (holding that because
“[t]he tenor of [the employer’s] challenge before the Board
raised a purely factual question,” a related legal challenge
was jurisdictionally barred). But, curiously, the Majority is
satisfied with that shape shifting. By my colleagues’
reckoning, FedEx legitimately changed its argument from one
that would have required strict deference to the Board into
one that permitted plenary review of the Board’s legal
conclusions. Although FedEx has lost its challenge to the
applicable standard – and, as I note at the end of this
discussion, see infra note 12, I too question the legitimacy of
the standard – we should not be entertaining the challenge at
all.

FedEx says that its footnote was sufficient to preserve
for our review its attack on Specialty Healthcare because

the General Counsel has suffered no prejudice
from FedEx Freight’s purported failure to raise
the Specialty Healthcare issue during the unfair
labor practice proceeding, unless of course the
General Counsel is contending that the Board
might have overturned Specialty Healthcare

8
 had FedEx Freight decided to pursue its
argument more vigorously. That, however, was
simply not going to happen.

(Reply Br. at 5-6.) Its attorney echoed that point at oral
argument: “It would have been fruitless for us to argue this
below. The Board was going to do what it was going to do.”
Oral Argument at 05:30, available at http://www2.ca3.
uscourts.gov/oralargument/audio/15-2585NLRBv.FEDEX
FreightINC.mp3 (argued March 1, 2016). The Majority
agrees, saying that “it is not surprising that FedEx did not
pursue its challenge to Specialty Healthcare more vigorously
in its request for review before the Board” because the Board
had already “refused to reconsider its holding in Specialty
Healthcare.” (Majority Op. at 11.) But there is an obvious
difference between a strategic lack of vigor and the outright
omission of an argument. FedEx is, of course, free to make
strategic decisions about which arguments to emphasize and
which to discuss only briefly, but it must at least make an
argument to the Board for us to have jurisdiction to review it.
Cf. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 125
(2007) (holding that a “futile” argument to overrule a circuit
precedent was preserved for further consideration when the
argument was limited only “to a few pages of [an] appellate
brief” (emphasis added)). That FedEx likely would not have
prevailed before the Board in challenging Specialty
Healthcare is irrelevant. The jurisdictional bar of § 160(e)
does not vary based upon the likelihood of success of the
waived argument. Indeed, the Supreme Court has already
rejected the idea that a party can avoid waiver if it had “no
practical reason” to raise a particular argument before the
Board. Detroit Edison, 440 U.S. at 311 n.10 (“If this ground
were accepted as an ‘extraordinary circumstance’ … little

9
would be left of the statutory exception.”). Section 160(e) is
straightforward: If an issue is not adequately raised before the
Board, we may not consider it.

The Majority says that “FedEx’s footnote in its
petition for review provided sufficient notice” because it gave
“as the basis for its challenge the reasons cited in Member
[Brian] Hayes’[s] dissent” in Specialty Healthcare. (Majority
Op. at 9 (alteration in original) (internal quotation marks
omitted).) I cannot agree. For starters, FedEx’s footnote is
not even phrased as an argument that the Board should
overrule Specialty Healthcare; it simply “posits” the
company’s disagreement with Specialty Healthcare for
“largely” the reasons in Hayes’s dissent. (JA at 183 n.4.)
Which reasons? The footnote does not specify, opting instead
to merely reference Member Hayes’s dissent and leaving it to
the reader to guess which reasons FedEx likes.6 But my
larger concern is that such wholesale incorporation of

6
Notably, the Majority does not examine the
dissenting opinion from Specialty Healthcare that FedEx
purported to incorporate by reference in its first submission to
the NLRB, which is odd since that is the only place any legal
arguments against the Specialty Healthcare standard were
raised at all. And, when parsed in detail, Member Hayes’s
dissent actually makes few references to the three legal
arguments that FedEx now advances before us. Hayes,
however, certainly did criticize the Board majority’s adoption
of the “overwhelming community of interest test,” saying that
it had “fundamentally change[d] the standard for determining
whether a petitioned-for unit is appropriate in any industry
subject to the Board’s jurisdiction.” Specialty Healthcare,
357 NLRB at 948.

10
arguments embodied elsewhere – without any elaboration of
those issues directly to the Board – simply cannot be adequate
to satisfy § 160(e). Were it otherwise, parties before the
Board would be free to repeatedly drop such footnotes and
incorporate by reference any argument that could conceivably
(if tangentially) be related to the proceeding in question. That
would effectively nullify any word or page limits that apply
to Board proceedings and needlessly complicate the task of
the NLRB and its members. Indeed, there would be no
practical limit to the ability of parties to incorporate a variety
of arguments, from a variety of sources, entirely by reference
in their submissions to the Board. For similar reasons, courts
of appeals do not permit parties to incorporate their district
court submissions by reference. See, e.g., Gaines-Tabb v. ICI
Explosives, USA, Inc., 160 F.3d 613, 624 (10th Cir. 1998)
(emphasizing that “[a]llowing litigants to adopt district court
filings would provide an effective means of circumventing
the page limitations on briefs,” and collecting cases to that
effect).

In my estimation, this case is akin to Marshall Field &
Co. v. NLRB, in which the Supreme Court held that an
objection to the Board that the agency had erred “in making
each and every recommendation” was insufficient to grant
jurisdiction for judicial review of a more particularized
challenge. 318 U.S. 253, 255 (1943) (per curiam). A
“general objection” presented to the Board is insufficient to
preserve more specific, subsidiary issues later brought to
court, as it “d[oes] not apprise the Board that [the party]
intend[s] to press the question now presented, and may well
account for the Board’s failure to consider th[e] question in
its decision and to make findings with respect to it.” Id. Like
the objection in Marshall Field, FedEx’s footnoted aside was

11
far too general to pass this test. FedEx offered no specific
basis for its disagreement with Specialty Healthcare. See
Pub. Serv. Co. of N.M. v. NLRB, 692 F.3d 1068, 1073 (10th
Cir. 2012) (“To determine whether § 160(e)’s ‘objection’
requirement is satisfied, we ask this question: was the matter
the petitioner seeks to raise here pressed before the Board
with ‘sufficient specificity and clarity’ so the tribunal was
aware it needed to be addressed and could become the subject
of litigation in this court?” (citation omitted)). In fact, it
qualified what little it did say, with the hedge that it “largely”
agreed with the Specialty Healthcare dissent. The
jurisdictional bar of § 160(e) forecloses our review of any
such vague argument-by-reference.7

The Majority hangs much of its contrary conclusion on
the existence of Member Johnson’s concurrence in FedEx’s

7
I do agree with the Majority’s conclusion that
FedEx’s second submission was sufficient to incorporate the
arguments of its first. Because the NLRB has a fairly strict
“no relitigation” rule (see Majority Op. at 7-8), parties to a
follow-on unfair labor practice proceeding in these
circumstances may incorporate by reference their earlier
submission to the Board in the representation proceeding.
The issue in this case, however, is not the adequacy of
FedEx’s incorporation by reference in its second submission.
The problem, rather, is that the first submission’s footnote
was inadequate to bring FedEx’s arguments against the
Specialty Healthcare standard before the Board. I would not
view the issue as waived if FedEx had made a fully-
developed argument in the representation proceeding and then
incorporated that argument by reference in the unfair labor
practice proceeding. But that is not what happened here.

12
representation proceeding. He declined to apply the Specialty
Healthcare test for approving a bargaining unit and instead
found the unit appropriate under the “traditional” approach.
As a consequence, Johnson found “no need to express a view
whether the Board correctly decided Specialty Healthcare …
and whether the Regional Director correctly applied it here.”
(JA at 4 n.1.) To my colleagues in the Majority, “Johnson’s
concurrence … indicates [that FedEx’s] footnote provided
sufficient notice of [its] Specialty Healthcare challenge.”
(Majority Op. at 10.)

I disagree. For one, the concurrence in question
reflected the position of only a single member and not the
entire Board. The Board opinion stated that FedEx’s
challenge “raise[d] no substantial issues warranting review.”
(JA at 4.) Had the Board perceived that FedEx was mounting
a challenge to the applicable standard, that certainly would
count as a “substantial issue.” Also, and more importantly,
the Supreme Court has held that the jurisdictional bar of
§ 160(e) “applies even though the Board” has addressed and
decided an issue. Woelke & Romero Framing, Inc., 456 U.S.
at 666 (holding that even where the Board raises an issue sua
sponte, the aggrieved party must seek reconsideration to the
Board before seeking judicial review); see also Int’l Ladies’
Garment Workers’ Union v. Quality Mfg. Co., 420 U.S. 276,
281 n. 3 (1975) (imposing the same requirement); Alwin Mfg.
Co. v. NLRB, 192 F.3d 133, 143 (D.C. Cir. 1999) (“The
Supreme Court has indicated that section [160(e)]8 bars

8
In many cases, courts have referred to § 160(e) as
“§ 10(e),” which is its section number in the National Labor
Relations Act. I have changed any such section numbers in
quotations throughout this concurrence to “§ 160(e)” for the

13
review of any issue not presented to the Board, even where
the Board has discussed and decided the issue.”). “[T]he
statute requires objection to the Board, and not discussion by
the Board, before an issue may be presented in court.” Local
900, Int’l Union of Elec., Radio & Mach. Workers v. NLRB,
727 F.2d 1184, 1191 (D.C. Cir. 1984).9 In the past, “[c]ases
interpreting section [160(e)] look[ed] to whether a party’s
exceptions are sufficiently specific to apprise the Board that
an issue might be pursued on appeal.” Consol. Freightways
v. NLRB, 669 F.2d 790, 793 (D.C. Cir. 1981). Accordingly,
we should look only to the adequacy of the objection brought
to the Board, not the content of the Board’s opinion (or, as
here, a one-member concurrence), to decide whether we have
jurisdiction under § 160(e). “[T]he fact that the Board has or

sake of consistency, but the two sections are one and the
same.
9
In an analogous context, the D.C. Circuit recently
declined to address an argument that a party had not made
before the NLRB. See HealthBridge Mgmt., LLC v. NLRB,
798 F.3d 1059, 1069 (D.C. Cir. 2015). The court
acknowledged that a “dissenting member [had] explicitly”
addressed the argument that the party was advancing, but
concluded that “even if this gave the [Board] majority notice
the [rule] itself was at issue, it [was] insufficient to invoke our
jurisdiction.” Id. The D.C. Circuit rightly recognized that the
jurisdictional bar turns on whether an issue is adequately
presented to the Board by the parties, not on whether the
Board (or any of its members) has discussed the issue in an
opinion. The aggrieved party had simply “failed to put this
issue before the Board,” so the court “lack[ed] jurisdiction
over th[at] aspect of its petition.” Id.

14
has not discussed an issue raises no necessary inferences with
respect to section [160(e)].” Local 900, 727 F.2d at 1192.10

The Majority also points out “the Board’s acute
awareness of recent and active challenges to Specialty

10
Were that not enough, the circumstances of this case
make Johnson’s concurrence particularly insignificant to any
assessment of the adequacy of FedEx’s submissions to the
Board. It appears that, around the time of the Board’s
decision in this case, certain members of the Board
(particularly then-Members Hayes and Johnson) applied the
more traditional analysis in every case involving the Specialty
Healthcare standard. See, e.g., Odwalla, Inc., 357 NLRB
1608, 1611 (2011) (Hayes concurring under traditional
analysis). In other words, Johnson wrote this same
concurrence regularly. So the Majority cannot say that
FedEx’s two-sentence footnote was what put this issue on
Johnson’s radar, as his concurrence was a pro forma opinion
that he used in each case that applied Specialty Healthcare,
even, as here, when he agreed with the ultimate outcome. In
all, it appears he wrote at least twenty-five such footnoted
concurrences in the period from when Specialty Healthcare
was decided until August 20, 2015, when he ultimately
dissented and expressed his disagreement with that standard.
See DPI Secuprint, Inc., 362 NLRB No. 172, at *9 (2015).
The mere fact that he included a footnoted concurrence in this
case – a concurrence that had been replicated (often almost
verbatim) in every other case that called for application of
Specialty Healthcare – does not suggest that it was FedEx’s
buried footnote that brought the issue to anyone’s attention on
the Board. Quite the contrary: Member Johnson would have
included that concurrence regardless.

15
Healthcare” in other cases, making it “impossible” that it was
not on notice of FedEx’s challenge to the standard. (Majority
Op. at 10-11.) Perhaps the Majority is suggesting that FedEx
did not even need to include its footnote to preserve the issue
for our review – that it was enough that there was an ongoing
debate in the ether. But that very loose approach is not what
§ 160(e) allows. The statute requires that an argument be
adequately presented to the Board, and that principle does not
vary depending upon what issue is involved, even if the issue
is otherwise well known. “Simple fairness to those who are
engaged in the tasks of administration, and to litigants,
requires as a general rule that courts should not topple over
administrative decisions unless the administrative body not
only has erred but has erred against objection made at the
time appropriate under its practice.” United States v. L.A.
Tucker Truck Lines, Inc., 344 U.S. 33, 37 (1952).
Section 160(e) places an obligation solely on the parties, and
they must meet that obligation before we can exercise
jurisdiction over their claims, regardless of any ongoing
debates within the Board. The statute means what it says, and
we are not free to relax its jurisdictional requirement just
because the particular unpreserved issue happens to be
especially timely or of interest to particular Board members.
Section 160(e) applies uniformly to all issues and to all
parties.

Real damage is done by permitting the kind of
sandbagging that FedEx has gotten away with here. Despite
the strictures of § 160(e), the Board will now have to be
concerned about addressing barely mentioned legal issues.
And, by our blessing as legitimate argument FedEx’s “I
incorporate what I incorporated when I said I largely agreed
with a dissent” statement, we only encourage such improper

16
practice in future cases. This is particularly troubling because
it may be said to broaden the scope of our own appellate
review. After all, why should the requirements for issue
preservation be any different for practice before the Board
than before us?11 I cannot think of a good reason. But, if
there were, an argument could be made that the rules should
be stricter before the Board. Section 160(e) imposes a non-
waivable statutory bar on further review, grounded in
jurisdiction rather than discretion, whereas waiver in our
Court is a prudential doctrine to which we may choose to
make exceptions. Compare Advanced Disposal Servs. East,
Inc. v. NLRB, 820 F.3d 592, 598 (3d Cir. 2016), with Wright
v. Corning, 679 F.3d 101, 105 (3d Cir. 2012). Rigid
adherence to § 160(e) is also important because “[t]his
statutory provision affords the Board the opportunity to bring

11
The Fourth Circuit, for example, applies a similar
rule for preservation of arguments before the Board as it
applies for preservation of arguments before it – “the
objection process would have no worth” if “a passing
reference [were] sufficient to preserve an objection.”
Elizabethtown Gas Co. v. NLRB, 212 F.3d 257, 265 (4th Cir.
2000). A claim of error to that court must be “grounded in an
appropriately specific objection” that was also raised before
the Board. Id. In our Circuit, however, it will apparently be
the NLRB’s job to ferret out, and fully consider, any possible
argument that might be buried in a corner of a brief. And if
that rule applies to the Board, one might assume that it would
also apply to us. If so, parties are now free to drop footnotes
that incorporate by reference arguments found somewhere
else entirely – perhaps in court opinions, law review articles,
or law blogs – and we should be willing to consider them.
That has never been our job before, but it may be now.

17
its labor relations expertise to bear on the problem so that we
may have the benefit of its opinion when we review its
determinations.” NLRB v. Allied Prods. Corp., 548 F.2d 644,
653 (6th Cir. 1977). Our application of § 160(e) should
therefore strongly encourage parties to make full arguments
to the Board in the first instance. That, unfortunately, is not
the incentive provided by today’s Majority opinion.12

For the foregoing reasons, I regard FedEx’s challenge
to the Specialty Healthcare standard as waived. I would thus
proceed directly to the application of that standard, as does
the Majority in Part IV of its opinion. I concur in that part of
the Majority’s opinion, and therefore concur in the judgment.

12
Were FedEx’s challenge to Specialty Healthcare
properly before us, I would agree with the Majority’s
understated observation “that some statements in Specialty
Healthcare might indicate significant changes in Board
policy.” (Majority Op. at 19.) In light of those changes, I
have serious misgivings about the Board’s choice to adopt
that standard in an adjudicative proceeding rather than by
rulemaking. I am also concerned that the changed standard
seems to put a thumb on the scale in favor of the union’s
choice of unit, thus perhaps running afoul of NLRA § 9(c)(5),
codified at 29 U.S.C. § 159(c)(5), and encouraging the
fragmentation of bargaining units. But, interesting as those
issues are, they do not give us license to issue an advisory
opinion about arguments outside of our jurisdiction. As
FedEx did before the Board, I will content myself by noting
that my concerns are largely those expressed in Member
Hayes’s dissent.

18