United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 1, 2001 Decided April 12, 2002
No. 00-1443
Chelsea Industries, Inc.,
Petitioner
v.
National Labor Relations Board,
Respondent
International Union, United Automobile, Aerospace and
Agricultural Implement Workers of America, UAW,
Intervenor for Respondent
Petition for Review and Cross-Application
for Enforcement of an Order of the
National Labor Relations Board
Donald H. Scharg argued the cause for petitioner. On the
briefs were Steven J. Fishman and Thomas A. Pinch.
Aileen A. Armstrong, Deputy Associate General Counsel,
National Labor Relations Board, argued the cause for respon-
dent. With her on the brief were Arthur F. Rosenfeld,
General Counsel, John H. Ferguson, Associate General Coun-
sel, and Joan E. Hoyte-Hayes, Attorney. Frederick Havard,
Supervisory Attorney, entered an appearance.
James B. Coppess argued the cause for intervenor. With
him on the brief was Laurence Gold.
Before: Ginsburg, Chief Judge, Sentelle and Randolph,
Circuit Judges.
Opinion for the court filed by Chief Judge Ginsburg.
Ginsburg, Chief Judge: Under longstanding precedent of
the National Labor Relations Board, an employer may not,
for a year after a union is certified as the bargaining repre-
sentative of its employees, withdraw recognition of the union
on the ground that it has lost its majority support among the
employees. Chelsea Industries, Inc. petitions for review of
the Board's decision extending this rule to prohibit an em-
ployer from withdrawing recognition after the certification
year based upon evidence of less than majority support for
the union that the employer acquired during the certification
year. We uphold the Board's new policy because it is both
rational and consistent with the National Labor Relations
Act.
I. Background
In April, 1993 the Board certified the United Auto Workers
as the exclusive collective bargaining representative of Chel-
sea's employees, and the two parties began to negotiate a
collective bargaining agreement in February, 1994, which
therefore marked the start of the Union's "certification year."
In November, with negotiations still on-going, Chelsea's man-
agement received a petition subscribed by 57 of the Compa-
ny's 89 employees declaring that the "UNDERSIGNED EM-
PLOYEES ... DO NOT WANT TO BE REPRESENTED
BY THE UAW." Neither Chelsea nor the employees in-
formed the UAW of the petition, and the Company continued
to negotiate with the Union--from all that appears, in good
faith--until February, 1995. The certification year then hav-
ing ended, Chelsea notified the Union that, based upon the
November petition, it would no longer recognize the UAW as
the bargaining representative of its employees.
At the time that Chelsea withdrew recognition from the
Union, 51 of the 57 signatories of the petition still worked
there and constituted a majority of Chelsea's employees. No
outstanding allegations of unfair labor practices tainted Chel-
sea's withdrawal of recognition.
Immediately after the withdrawal the UAW charged that
Chelsea had violated ss 8(a)(1) and (5) of the Act, 29 U.S.C.
s 158(a)(1) & (5). In March, 1995, when Chelsea increased
its employees' wages, the UAW filed another unfair labor
practice charge because the Company acted without first
having bargained with the Union. The General Counsel
issued a complaint encompassing both charges.
An Administrative Law Judge dismissed the complaint,
rejecting the General Counsel's and the Union's argument
that "an antiunion petition secured within the certification
year can never be utilized to withdraw recognition outside the
certification year." Chelsea Indus., Inc., 331 N.L.R.B. No.
184, slip op. at 7 (Aug. 31, 2001) (ALJ Decision). The ALJ
drew upon a line of cases in which the Board had suggested
that an employer with evidence the union no longer has the
support of a majority of the employees in the bargaining unit
lawfully may declare in advance its intention to withdraw
recognition from the union at the end of the certification year.
See, e.g., Rock-Tenn Co., 315 N.L.R.B. 670, 672 (1994). The
ALJ inferred that such cases also establish the lesser and
seemingly included right of an employer with such evidence
to withdraw recognition after the certification year without
having made an announcement during the year, and that
therefore Chelsea lawfully had withdrawn recognition of the
UAW. See Chelsea, slip op. at 7-8 (ALJ Decision).
The Board reversed the ALJ's ruling, holding that an
employer "may not withdraw recognition from a union outside
of the certification year based on evidence received within the
certification year." Chelsea, slip op. at 4. Accordingly, the
Board held that Chelsea unlawfully had refused to bargain
with the Union, from which it followed that its subsequent
unilateral wage increase was unlawful as well. Chelsea now
petitions for review of that decision, and the Board cross-
applies for enforcement.
II. Analysis
The Board has long held, with exceptions not applicable
here, that an employer may not withdraw recognition from a
union for at least a year following the union's certification.
See, e.g., Kimberly-Clark Corp., 61 N.L.R.B. 90, 92 (1945)
("Board election and certification must be treated as identify-
ing the statutory bargaining agent with certainty and finality
for a reasonable period of time--about a year, under ordinary
circumstances"). After bargaining for a year an employer
may withdraw recognition based upon actual evidence that a
majority of its employees no longer support the union; a
petition signed by a majority is such evidence. See Sullivan
Indus. v. NLRB, 957 F.2d 890, 898 (D.C. Cir. 1992). The
issue in this case, then, is whether the Board reasonably
could hold, consistent with the Act, that an employer may not
withdraw recognition based upon evidence secured during the
certification year.
We defer to the Board's interpretation of the Act if it is
reasonable, see Holly Farms Corp. v. NLRB, 517 U.S. 392,
401 (1996), and "if the Board's 'explication is not inadequate,
irrational, or arbitrary.' " Allentown Mack Sales & Serv. v.
NLRB, 522 U.S. 359, 364 (1998). The agency acts unreason-
ably if it departs from established policy without giving a
reasoned explanation for the change, see ConAgra, Inc. v.
NLRB, 117 F.3d 1435, 1443-44 (D.C. Cir. 1997), as Chelsea
claims the Board did in this case.
Fifteen years ago the Board ruled that an employer may
not withdraw recognition from a union based upon evidence
acquired during the certification year. See United Super-
markets, 287 N.L.R.B. 119, 120 (1987) (just as anti-union
petition could not "be acted upon by [employer] within the
certification year, [employer] cannot subsequently rely on it
to justify a more timely withdrawal of recognition"), aff'd,
United Supermarkets v. NLRB, 862 F.2d 549 (5th Cir. 1989).
The ALJ declined for two reasons to recognize United Super-
markets as controlling here. First, in that case the Board
had faulted the employer not only for having withdrawn
recognition from the union based upon evidence acquired
during the certification year, but also for having acted upon
an anti-union petition that was unreliable owing to the em-
ployer's outstanding unfair labor practices, see Chelsea, slip
op. at 8 (ALJ Decision); indeed, in United Supermarkets the
Board had described the unremedied unfair labor practices as
the "[m]ore significant" problem, 287 N.L.R.B. at 120. There
were no such allegations pending against Chelsea. See Chel-
sea, slip op. at 8 (ALJ Decision).
Second, the ALJ concluded that the Board's more recent
decision in Rock-Tenn had undermined United Supermarkets.
See id. at 7. After all, an employer's right to announce in
advance that it intended to withdraw recognition at the end of
the certification year would seem to imply that the employer
could simply withdraw recognition at the year's end without
having issued such an anticipatory announcement. The ALJ
recognized that to allow an employer to act upon evidence
acquired during the year "had the potential of rendering
further bargaining within the year meaningless," id. at 8, but
he was "not authorized" to depart from what he perceived to
be a binding precedent of the Board, id.
The Board labors under no such disability, of course, and it
resolved the tension between United Supermarkets and
Rock-Tenn by disavowing the later decision and ruling that
"an employer may not withdraw recognition from a union
outside of the certification year based on evidence received
within the certification year." Chelsea, slip op. at 4. The
Board justified its decision on the grounds that the rule
announced in United Supermarkets relieves a newly certified
union of "exigent pressures to produce hothouse results or be
turned out" and decreases an employer's incentive to engage
in surface bargaining, see id. at 3, the very grounds accepted
by the Supreme Court when it first reviewed the Board's
decision establishing the irrebuttable presumption that a un-
ion enjoys majority support during the certification year, see
Brooks v. NLRB, 348 U.S. 96, 100 (1954). These reasons are
equally applicable here: an employer that acquires evidence
its employees are dissatisfied with their union may well be
reluctant to negotiate, and tempted instead merely to run out
the certification year in the expectation that the employees
will then oust the union; and a union facing the threat of
derecognition based upon dissatisfaction among its members
during the certification year will again be under pressure to
generate "hothouse results." Therefore, we cannot conclude
that the Board's prophylactic rule is irrational.
Nor may we fault the Board for not following its own
precedent. The Board is at liberty to change its policies as
long as it justifies the change with a "reasoned explanation,"
Micro Pacific Dev., Inc. v. NLRB, 178 F.3d 1325, 1336 (D.C.
Cir. 1999), and, as we have seen, it has met that obligation
here. The Board recognized that a conflict had emerged in
its cases with regard to whether an employer may, after the
certification year, withdraw recognition from a union based
upon evidence the employer had acquired during the certifica-
tion year. Although not directly in conflict, Rock-Tenn--in
which the Board upheld an anticipatory withdrawal of recog-
nition--and United Supermarkets--in which the Board con-
demned a withdrawal of recognition deferred until the end of
the certification year--could not sensibly co-exist. The Board
took this opportunity to relieve the tension, and it did so in
favor of the Union rather than the Company. Because, as
described above, that resolution was itself reasonable, and the
Board gave a "reasoned explanation" for changing (or per-
haps merely clarifying) its policy, we reject Chelsea's conten-
tion that the Board impermissibly departed from precedent.
Equally unavailing is Chelsea's argument that the Board's
decision conflicts with s 7 of the Act because it limits the
employees' right "to bargain collectively through representa-
tives of their own choosing, and ... to refrain from any or all
of such activities." 29 U.S.C. s 157. (In this vein, Chelsea
asserts the decision forces its employees "to accept the UAW
as their bargaining representative simply because they did
not wait until February 3, 1995 to sign the petition.") But
that is the inevitable by-product of the Board's striking a
balance between stability and employee free choice in labor
relations, as it frequently must do. See, e.g., Terrace Gar-
dens Plaza, Inc. v. NLRB, 91 F.3d 222, 228 (D.C. Cir. 1996)
("contract bar rule"). Insofar as the decision makes it more
difficult for the employees to terminate their representation
by the Union, the burden is no greater than is entailed in the
Board's policy that an employer may not withdraw recogni-
tion during the certification year, which policy has been
recognized as valid under the Act for nearly fifty years. See
Brooks, 348 U.S. at 100.
Finally, we reject out of hand Chelsea's rather silly sugges-
tion that the Board's decision is unreasonable because it
conflicts with a memorandum issued by the General Counsel's
Division of Advice in response to an inquiry from a Regional
Director considering whether to pursue the complaint in a
similar case then pending. The General Counsel investigates
and prosecutes unfair labor practices before the Board, see 29
U.S.C. s 153(d); he must also defend the decisions of the
Board on review, regardless whether the Board adopted the
view he expressed as a party before it. See National Labor
Relations Bd., Organization & Functions s 202, 32 Fed Reg.
9588, 9588 (1967). It is of no moment, therefore, what was
the General Counsel's understanding of the case law before
the present decision issued, and the court will take no note of
it.
Because Chelsea's withdrawal of recognition was unlawful,
it necessarily follows that Chelsea violated the Act by unilat-
erally raising its employees' wages. As Chelsea implicitly
recognizes by its silence, an employer may not alter its
employees' wages without first having bargained with their
union and reached either an agreement or an impasse. See
29 U.S.C. s 158(d); Daily News of Los Angeles v. NLRB, 73
F.3d 406, 410 (D.C. Cir. 1996).
III. Conclusion
For the reasons stated above, we deny Chelsea's petition
for review and grant the Board's cross-application for en-
forcement.
So ordered.