United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 7, 2000 Decided December 12, 2000
No. 99-1450
Joe Jacoby,
Petitioner
v.
National Labor Relations Board,
Respondent
Steamfitters Local Union No. 342 of the
United Journeymen and Apprentices of the Plumbing and
Pipefitting Industry of the United States
and Canada, AFL-CIO
Intervenor
On Petition for Review of an Order of the
National Labor Relations Board
Dylan B. Carp argued the cause for petitioner. With him
on the briefs were Jeffrey L. Rhodes and Glenn M. Taubman.
Meredith L. Jason, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the
brief were Leonard R. Page, General Counsel, Linda Sher,
Associate General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel and Fred L. Cornnell, Supervisory
Attorney.
James B. Coppess argued the cause for intervenor. With
him on the brief were John L. Anderson and Laurence Gold.
Before: Williams, Sentelle and Rogers, Circuit Judges.
Opinion for the Court filed by Circuit Judge Williams.
Williams, Circuit Judge: Under a labor agreement govern-
ing construction work at a refinery jobsite in California,
Steamfitters Local Union No. 342 held an exclusive right to
dispatch workers to subcontractor Contra Costa Electric.
Petitioner Joe Jacoby, a member of the union for 27 years,
registered for employment through the union's hiring hall;
due to his skills and experience, his name was placed on the
highest priority "A" list. For a period the union mistakenly
dispatched several lower-priority individuals ahead of Jacoby.
On discovery of the error, it dispatched Jacoby. All parties
agree, for current purposes at least, that the priority mix-up
was merely negligent, and reflected no intentional wrongdo-
ing.
Jacoby filed an unfair labor practice charge with the Na-
tional Labor Relations Board, and the Board's General Coun-
sel issued a complaint. After a hearing an administrative law
judge found that the union's negligent deviation from estab-
lished hiring hall rules breached its duty of fair representa-
tion and thereby violated ss 8(b)(1)(A) & (2) of the National
Labor Relations Act as amended (the "NLRA"), 29 U.S.C.
s 158(b)(1)(A) & (2). Steamfitters Local No. 342 (Contra
Costa Electric), 329 N.L.R.B. No. 65, slip op. at 10-12 (Dec. 5,
1995). The Board reversed, ruling that the union's negli-
gence violated neither the duty of fair representation nor the
Act. Steamfitters Local No. 342 (Contra Costa Electric), 329
N.L.R.B. No. 65 (Sept. 30, 1999) ("Board Decision"). Al-
though the Board agreed that the ALJ had correctly applied
the Board's previous decision in Iron Workers Local 118
(California Erectors), 309 N.L.R.B. 808 (1992), it reasoned
that that decision, as well as the ALJ's findings, were incon-
sistent with the Supreme Court's pronouncements about the
duty of fair representation in United Steelworkers of America
v. Rawson, 495 U.S. 362 (1990), and Air Line Pilots Ass'n,
Int'l v. O'Neill, 499 U.S. 65 (1991). Board Decision, 329
N.L.R.B. No. 65, slip op. at 2-4. In addition, the Board found
that the union's negligent conduct did not, apart from the fair
representation issue, independently violate the Act. Id. at 4.
We have held that the Board's interpretation of the duty of
fair representation is entitled to deference under Chevron,
U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984), when the Board
enforces that duty as part of its jurisdiction to identify and
remedy unfair labor practices. Ferriso v. NLRB, 125 F.3d
865, 869 (D.C. Cir. 1997); Finerty v. NLRB, 113 F.3d 1288,
1291 (D.C. Cir. 1997). We shall explain why this is so despite
the fact that the duty also exists as a judge-made, court-
enforced duty. But Chevron does not help an agency that
rests its decision on a misinterpretation of Supreme Court
precedent, as the Board did here. Accordingly, we reverse
and remand the case to the Board for it to address the duty
of fair representation anew.
In addition, the Board's conclusion that the union's negli-
gence did not independently violate the Act is, as we explain
below, intertwined with the issue of the duty of fair represen-
tation. Accordingly, we find that it would be premature to
rule on it before the Board has had an opportunity to revisit
the question on remand.
* * *
The duty of fair representation originated in the context of
the Railway Labor Act, judicially inferred from that statute
and enforceable in the courts. See Steele v. Louisville &
Nashville R.R. Co., 323 U.S. 192 (1944). The Supreme Court
extended the Steele principle to the NLRA in Ford Motor Co.
v. Huffman, 345 U.S. 330 (1952), finding that the statutory
authority of unions as exclusive bargaining representatives
under Sec. 9(a) of the NLRA, 29 U.S.C. s 159(a), also gave
rise to a duty of fair representation, requiring unions to
"make an honest effort to serve the interests of all [bargain-
ing unit] members, without hostility to any." Id. at 337. A
union breaches this duty when its actions are "arbitrary,
discriminatory, or in bad faith." Vaca v. Sipes, 386 U.S. 171,
190 (1967).
Originally, the duty was the exclusive province of the
courts, falling within the federal courts' general federal ques-
tion jurisdiction. See Syres v. Oil, Chemical and Atomic
Workers Local 23, 350 U.S. 892 (1955)(mem.), rev'g 223 F.2d
739 (5th Cir. 1955). Beginning with its decision in Miranda
Fuel Co., 140 N.L.R.B. 181 (1962), however, the NLRB has
enforced the duty of fair representation itself as part of its
authority to identify and remedy unfair labor practices. We
have upheld this branch of the Board's unfair labor practice
jurisdiction. See Plumbers & Pipe Fitters Local Union No.
32 v. NLRB, 50 F.3d 29, 31-32 (D.C. Cir. 1995); Truck
Drivers and Helpers, Local Union 568 v. NLRB, 379 F.2d
137, 141-42 (D.C. Cir. 1967).
At the same time, the Supreme Court refused to find that
the Board's enforcement of the duty of fair representation
preempted judicial jurisdiction over the duty of fair represen-
tation inferred from the NLRA. Vaca v. Sipes, 386 U.S. 171,
183, 188 (1967). See also Marquez v. Screen Actors Guild,
Inc., 525 U.S. 33, 49 (1998); Breininger v. Sheet Metal
Workers Int'l Ass'n Local No. 6, 493 U.S. 67, 74-75 (1989).
As a result the duty is subject to a kind of dyarchy. The
Board is entitled to Chevron deference when it interprets the
duty as part of its unfair labor practice jurisdiction, yet many
cases involving the duty continue to originate in the courts.
See, e.g., Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65
(1991); United Steelworkers of America v. Rawson, 495 U.S.
362 (1990).
And it is important to emphasize that for these court-
adjudicated cases the Board's definition of the duty of fair
representation for purposes of adjudicating unfair labor prac-
tices appears only marginally relevant. The Supreme Court
in Breininger explicitly "reject[ed] the proposition that the
duty of fair representation should be defined in terms of what
is an unfair labor practice." 493 U.S. at 86. "[T]here is no
reason to equate breaches of the duty of fair representation
with unfair labor practices." Id. Thus, for cases arising in
the courts, NLRB interpretations are relevant for what they
may contribute on their intellectual merits, enjoying defer-
ence to the extent of their "power to persuade." Skidmore v.
Swift & Co., 323 U.S. 134, 140 (1944). Nonetheless, as we
explained, the Board's decision here is reviewable under the
Chevron doctrine.
The duty of fair representation clearly extends to a union's
operation of an exclusive hiring hall. See Breininger, 493
U.S. at 87-88 (1989). Prior decisions of the Board described
the duty, in the hiring hall context, in rather demanding
terms. Ruling in favor of the Board in such a case, we said:
[A]ny departure from established exclusive hiring hall
procedures which results in a denial of employment to an
applicant falls within that class of discrimination which
inherently encourages union membership, breaches the
duty of fair representation owed to all hiring hall users,
and violates Section 8(b)(1)(A) and (2) [of the NLRA],
unless the union demonstrates that its interference with
employment was pursuant to a valid union-security
clause or was necessary to the effective performance of
its representative function.
Boilermakers Local No. 374 v. NLRB, 852 F.2d 1353, 1358
(D.C. Cir. 1988) (quoting Teamsters Local 519 (Rust Engi-
neering), 276 N.L.R.B. 898, 908 (1985)). And we also said
that breach of the duty required no evidence of intent to
discriminate:
No specific intent to discriminate on the basis of union
membership or activity is required; a union commits an
unfair labor practice if it administers the exclusive hall
arbitrarily or without reference to objective criteria and
thereby affects the employment status of those it is
expected to represent. "By wielding its power arbitrari-
ly, the Union gives notice that its favor must be curried,
thereby encouraging membership and unquestioned
adherence to its policies."
Id. (quoting NLRB v. International Ass'n of Bridge, Struc-
tural & Ornamental Iron Workers, Local 433, 600 F.2d 770,
777 (9th Cir. 1979)).
The Board itself, applying the standard that we upheld in
Boilermakers, found a breach of the duty (and an unfair labor
practice) in circumstances virtually identical to the present
ones. In Iron Workers Local 118 (California Erectors), 309
N.L.R.B. 808 (1992), it ruled that union officials breached
their duty of representation when, "through mistake and
inadvertence," they failed to dispatch a worker to a job to
which he should have been referred under exclusive hiring
hall procedures. Id. at 812. Unsurprisingly, the ALJ applied
California Erectors in its decision below.
In reversing the ALJ, the Board here acknowledged that
her reading of that case was "correct," but found that contin-
ued application of California Erectors would be inconsistent
with the Supreme Court decisions in United Steelworkers of
America v. Rawson, 495 U.S. 362 (1990), and Air Line Pilots
Ass'n, Int'l v. O'Neill, 499 U.S. 65 (1991). Board Decision,
329 N.L.R.B. No. 65, slip op. at 2.
There is undoubtedly language in these Supreme Court
decisions supporting the Board's view. Both explicate the
standard earlier laid down by the Court in Vaca v. Sipes, 386
U.S. 171 (1967), which said that a union breached the duty of
fair representation when its actions were "arbitrary, discrimi-
natory, or in bad faith." Id. at 190. In Rawson, the Court
rejected a claim that a union breached the duty when it
negligently performed mine-safety related duties pursuant to
a collective bargaining agreement. The Court observed that
"[t]he courts have in general assumed that mere negligence,
even in the enforcement of a collective-bargaining agreement,
would not state a claim for breach of the duty of fair
representation, and we endorse that view today." 495 U.S. at
372-73.
O'Neill involved a claim that the Air Line Pilots Association
breached its duty of fair representation in its negotiation and
acceptance of a strike settlement. The Court held that the
Vaca standard "applies to all union activity, including contract
negotiation." 499 U.S. at 67. Moreover, it explained that "a
union's actions are arbitrary only if, in light of the factual and
legal landscape at the time of the union's actions, the union's
behavior is so far outside a 'wide range of reasonableness' as
to be irrational." Id. (quoting Ford Motor Co. v. Huffman,
345 U.S. 330, 338 (1953)) (internal citation omitted).
Neither Rawson nor O'Neill specifically concerned the duty
owed by a union when it operates an exclusive hiring hall. In
its decision here, however, the Board reasons that the two
cases, read together, mandate that merely negligent conduct
can never breach the duty of representation in any context,
including that of the hiring hall. See Board Decision, 329
N.L.R.B. No. 65, slip op. at 2.
But as Jacoby points out, the Board's reading of Rawson
and O'Neill cannot be reconciled with our decision in Plumb-
ers & Pipe Fitters. There we considered and rejected the
argument that O'Neill undermined the standard governing a
union's operation of an exclusive hiring hall--specifically the
principle that a union operate a hiring hall by "reference to
objective criteria." 50 F.3d at 32-33. We acknowledged that
fragments from O'Neill such as the passage quoted above
might, if read in isolation, support the contention that a
"highly deferential" standard must be applied to the evalua-
tion of union's actions operating a hiring hall. 50 F.3d at 33.
But we concluded that the "Court did not intend to weaken
the standard of review applied to a union's operation of a
hiring hall." Id.
In support of this conclusion we relied on the drastic
difference in context. In O'Neill the Court's focus was on
"protecting the content of negotiated agreements from judi-
cial second-guessing." Id. The operation of a hiring hall, by
contrast, was one "where the union has assumed the role of
employer, as well as representative, and where the risk of
judicial second-guessing of a negotiated agreement that was
of such concern to the Court in O'Neill is simply not present."
Id. We also relied on the Supreme Court's decision in
Breininger, issued only one year before Rawson and two
years before O'Neill, where the Court said that the imbalance
of power and possibilities for abuse created by union opera-
tion of a hiring hall were such that "if a union does wield
additional power in a hiring hall by assuming the employer's
role, its responsibility to exercise that power fairly increases
rather than decreases." Breininger, 493 U.S. at 89 (quoted in
Plumbers & Pipe Fitters, 50 F.3d at 34). Thus, we wound
up, "[w]e remain confident that unions that operate hiring
halls without objective criteria violate their duty of fair
representation. This was the standard we approved in Boil-
ermakers and that the ALJ properly applied in this case.
Absent clear instructions from the Supreme Court, we decline
to weaken this principle." 50 F.3d at 34.
In its decision here, the Board sought to reconcile Brein-
inger's statement that "additional power" entailed increased
responsibility with its interpretation of Rawson and O'Neill.
It reasoned that in Breininger the Court was merely reject-
ing the argument that the duty of fair representation did not
apply at all in the hiring hall context and had meant the
language about a union's increased responsibility not to refer
to any heightened degree of duty, but merely to the fact that
a union "takes on additional responsibilities" when it operates
a hiring hall. Board Decision, 329 N.L.R.B. No. 65, slip op.
at 2. Nothing in the surrounding language in Breininger
lends support to this theory.
The question before us today differs from that in Plumbers
& Pipe Fitters primarily with regard to two details, both
ultimately insignificant. First, this case turns on a different
aspect of the legal standard defined in Boilermakers.
Whereas Plumbers & Pipe Fitters involved the operation of a
hiring hall "without reference to objective criteria," see Boil-
ermakers, 852 F.2d at 1358, the facts here implicate the rule
precluding departures "from established exclusive hiring hall
procedures," id. But this distinction does nothing to help the
Board's position. That position is premised on the conclusion
that O'Neill generally precludes heightened scrutiny in the
hiring hall context, but in Plumbers & Pipe Fitters we
concluded that the "Court did not intend to weaken the
standard of review applied to a union's operation of a hiring
hall." 50 F.3d at 33. See also Radio-Electronics Officers
Union (Radio Officers Union) v. NLRB, 16 F.3d 1280, 1284-
85 (D.C. Cir 1994) (applying Boilermakers's "departure" stan-
dard).
In addition, one might argue that in the present context the
Boilermakers standard is more vulnerable to the claim of
erasure by O'Neill and Rawson, as this case involves a claim
of negligence, thus encountering Rawson's conclusion that
"mere negligence" did not violate the duty of fair representa-
tion in the contract administration context. But the Board's
application of Rawson relies exclusively on the type of "one-
size-fits-all" theory that Plumbers & Pipe Fitters rejected.
And, once again, Rawson is not a hiring hall case. It
concerned the specific question of whether a union violates
the duty of fair representation through negligent enforcement
of a collective bargaining agreement. Although the Court
endorsed what courts had "in general assumed," namely, that
negligence does not "state a claim for breach of the duty of
fair representation," 495 U.S. at 372-73, it never considered
the applicability of this principle to the hiring hall. Thus we
see no reason why Rawson's general statements on negli-
gence should be regarded as any less subject to qualification
than O'Neill's statements about "behavior so far outside a
range of reasonableness as to be irrational." 499 U.S. at 67.
The Board's decision here seems in effect to recognize its
contradiction of Plumbers & Pipe Fitters. Rather than try to
distinguish the case, the Board simply observed that "the
circuit court's assertion that the standard for operation of a
hiring hall can and should be different from the standard for
contract administration seems to us to be unsupportable."
Board Decision, 329 N.L.R.B. No. 65, slip op. at 3 n.19.
Intervenor's brief relies on two additional decisions issued
after Plumbers & Pipe Fitters, one from the Supreme Court,
Marquez v. Screen Actors Guild, Inc., 525 U.S. 33 (1998), and
one from this circuit, Thomas v. NLRB, 213 F.3d 651 (D.C.
Cir. 2000). As neither case concerned nor even mentioned
the hiring hall context, neither affects our analysis in Plumb-
ers & Pipe Fitters.
The Board's reliance on its mistaken analysis of O'Neill and
Rawson compels a remand. "An agency action, however
permissible as an exercise of discretion, cannot be sustained
'where it is based not on the agency's own judgment but on
an erroneous view of the law.' " Sea-Land Service, Inc. v.
Department of Transportation, 137 F.3d 640, 646 (D.C. Cir.
1998) (quoting Prill v. NLRB, 755 F.2d 941, 947 (D.C. Cir.
1985)). On remand, the Board must consider whether, given
the union's heightened duty of fair dealing in the context of a
hiring hall, the union's negligent failure to adhere to its
referral standards was an unfair labor practice. In remand-
ing, of course, we express no opinion on the validity of any
alternate grounds that the Board might use to overrule
California Erectors.
We now turn to the Board's second holding--that the
union's conduct did not, quite apart from any breach of the
duty of fair representation, violate ss 8(b)(1)(A) & 8(b)(2) of
the Act. The latter bars a union from causing an employer to
discriminate against an employee in violation of s 8(a)(3),
which in turn bars an employer's discrimination against an
employee "to encourage or discourage union membership."
A violation of s 8(b)(2) would derivatively violate
s 8(b)(1)(A)'s ban on union restraint of employees in the
exercise of their rights under s 7 of the Act. Board Deci-
sion, 329 N.L.R.B. No. 65, slip op. at 4; see also id. at 8
(Member Brame, dissenting); Radio Officers' Union of Com-
mercial Telegraphers Union v. NLRB, 347 U.S. 17, 42 (1954).
The Board in effect has said that its rationale in Boiler-
makers is inapplicable to this context. There we upheld its
finding that "[a]ny departure from established exclusive hir-
ing hall procedures which results in a denial of employment to
an applicant falls within that class of discrimination which
inherently encourages union membership," and thereby vio-
lates ss 8(b)(1)(A) and (2) of the Act. 852 F.2d at 1358. And
we endorsed its underlying rationale: "By wielding its power
arbitrarily, the Union gives notice that its favor must be
curried, thereby encouraging membership and unquestioned
adherence to its policies." Id. Here the Board reasoned:
While this reasoning makes sense when applied to the
volitional actions of union officials, it is unpersuasive
when applied to simple mistakes. When as in this case, a
union officer in charge of referrals intends to follow the
prescribed procedures and thinks he has done so, his
inadvertent failure to do so, even to the detriment of an
applicant, simply does not carry the message that appli-
cants had better stay in the good graces of the union if
they want to ensure fair treatment in referrals.
Board Decision, 329 N.L.R.B. No. 65, slip op. at 4.
Given the focus of s 8(b)(2) on discrimination, we cannot
fault the Board's view that a purely negligent breach of the
rules would lack the signaling effect that the provision, and
the Board, sought to avoid. But the Board's analysis is
complicated by its additional holding that this approach does
not contradict any of its earlier decisions--a statement that, if
true, renders inapplicable the Board's duty to give a "rea-
soned justification for any departure from its prior policies or
practices." Pittsburgh Press Co. v. NLRB, 977 F.2d 652, 655
(D.C. Cir. 1992) (citing Motor Vehicles Mfrs. Ass'n v. State
Farm Mut. Ins. Co., 463 U.S. 29, 57 (1983)). Given that the
underlying theory in California Erectors (which the Board
does explicitly overrule) and other duty of fair representation
cases is that breaches of the duty are themselves violations of
ss 8(b)(1)(A) & (2), see, e.g., California Erectors, 309
N.L.R.B. at 811, 812 (treating duty of fair representation
breach as a violation of ss 8(b)(1)(A) and (2)), the Board in
essence argues that the standard for judging violations of the
same statutory provisions may depend upon whether or not a
complaint or ruling specifically invokes the magic words "duty
of fair representation." The Board does not cite, and we have
been unable to find, any evidence that in hiring hall cases the
Board has ever applied different standards depending on
whether the complaint invoked the duty of fair representation
or not. See, e.g., Laborers Local No. 135 (Bechtel Corp.), 271
N.L.R.B. 777, 780 (1984) (cited by the Board in the non-duty
of fair representation context, see Board Decision, 329
N.L.R.B. No. 65, slip op. at 4 & n.26, and holding that "[a]
departure from established exclusive hiring hall procedures
that results in a denial of employment to any applicant
inherently encourages union membership and therefore vio-
lates Section 8(b)(1)(A) and (2) without regard to the presence
of unlawful motivation.") Rather, the Board appears merely
to argue that in cases in which it has found a violation of
ss 8(b)(1)(A) & (2) without explicitly invoking the duty of fair
representation, the facts have never involved purely negligent
departures from exclusive hiring hall rules. See id.
At the time of the Board's decision, of course, the effect of
its holding regarding these "independent" violations of
ss 8(b)(1)(A) & (2) was to ensure that, in the relevant con-
text, the statute imposed no broader liability independent of
the duty of fair representation than as construed with that
duty. Our reversal on the duty of fair representation theory
now puts the question in a different light. If, on remand, the
Board again decides to overrule California Erectors, it will
need to provide a reasoned justification beyond its current
theory of compulsion by the Supreme Court--and any suc-
cessful justification is likely to support the Board's more
general interpretation of the relevant statutory provisions,
assuming that that interpretation does in fact depart from
prior Board precedent. So our remand on the Board's first
holding makes it, as a practical matter, premature to rule on
the sufficiency of its second one.
Similarly, we do not pass judgment on the theory proposed
by Member Brane in his dissent, to the effect that if Blevins's
individual negligence did not itself constitute an unfair labor
practice, then the union's subsequent failure to make Jacoby
whole did. Board Decision, 329 N.L.R.B. No. 65, slip op. at 7
(Member Brame, dissenting). The Board refused to consider
this theory on the grounds that it was raised neither in the
General Counsel's complaint nor during oral argument, see
Board Decision, 329 N.L.R.B. No. 65, slip op. at 4 n.27, and
Jacoby has not properly appealed this ruling.
For the reasons given we reverse and remand the case to
the Board.
So ordered.