Manhattan Center Studios, Inc. v. National Labor Relations Board

KAREN LECRAFT HENDERSON, Circuit Judge,

dissenting.

I dissent from the remand because I believe the Board erred as a matter of law in concluding that an employer without notice of management misconduct that tainted an election is not excusably ignorant under the due diligence test. Accordingly, I would grant MCS’s petition for review and vacate the Board’s order.

If a Board decision is contrary to law, we are well within our authority to grant a petition for review. See Int’l Alliance of Theatrical and Stage Employees v. NLRB, 334 F.3d 27, 34 (D.C.Cir.2003) (International Alliance) (granting petition for review and vacating unfair labor practice finding because Board interpretation of “any employee who engages in a strike” under section 8(d) of Act was “in conflict with both interpretive precedent and the statute’s structure” and produced “internal inconsistency” and “irrational results in practice”); see also Detroit Typographical Union v. NLRB, 216 F.3d 109, 122 (D.C.Cir.2000) (granting petition for review because Board conclusion constituted legal error). Legal error can take the form of an inconsistent application of relevant precedent, see BB & L, Inc. v. NLRB, 52 F.3d 366, 369 (D.C.Cir.1995), an unreasonable interpretation of the agency’s enabling statute, see Jacoby v. NLRB, 325 F.3d 301, 308 (D.C.Cir.2003) (citing Chevron U.S.A. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)), or an “unreasoned” extension of a standard to the facts of a particular case, see Detroit Typographical Union, 216 F.3d at 118 (Board committed legal error in applying doctrine disallowing employer’s implementation of standardless merit pay plan after impasse to case where merit pay plan standard was known to union).

I believe the Board erred if, as it appears, it applied the “conducted investigation” version of the due diligence standard here. The “conducted investigation” iteration cannot apply if the employer had no reason to know of any impropriety — including any rumors that might have spurred it to investigate any impropriety — and, for that reason, did not exercise due diligence. To conclude that MCS must have conducted a far-flung investigation into any irregularity in order to use the newly discovered evidence rule directly contradicts the Johnnie’s Poultry Co. line of eases, see maj. op. at 818 note 7, which authorizes an employer to conduct *446an investigation only if it has cause to inquire. The Board should have found MCS excusably ignorant due to lack of notice regarding Garces’s conduct. Whether this resolution fits under the “hypothetical investigation” label fashioned by the majority I do not know but, because I believe remand is unwarranted in view of the Board’s error of law, I see no need to tell the Board anything other than “you got it wrong.” Here MCS has explained why the evidence “could not have been discovered” — it had no notice of the existence of the facts on which the evidence it now seeks to submit as new are based and therefore did not investigate. It has established its excusable ignorance of the existence of those facts and should now be permitted to introduce evidence based on them as newly discovered.

Like the Board’s decision in International Alliance, its decision here is “in conflict with both interpretive precedent and the [Actj’s structure,” “set[s] a standard that could never be met” on these facts, and leads to “irrational results in practice,” International Alliance, 334 F.3d at 34-35, 37. Accordingly, because I would grant MCS’s petition for review and deny the Board’s cross-petition for enforcement, I respectfully dissent.