Sixth Circuit Court Of Appeals Limits Enforcement of NLRB Special Remedies

The Sixth Circuit Court of Appeals has limited the use of “special remedies” by the National Labor Relations Board (NLRB or Board) in a 3-0 decision issued on Sept. 4, 2020.[1]

On April 4, 2019, the NLRB ordered the employer to remedy unfair labor practices committed during a union organizational drive.[2] As part of that decision, the Board refused to enforce a Gissel bargaining order that would have compelled the employer to recognize and bargain with the union. However, the NLRB ordered the employer to participate in a public reading of a notice issued by the Board listing the unfair labor practices the Board found, and the remedies ordered at all of the employer’s operations. The NLRB also ordered the employer to notify the union of any speech it intended to deliver to its employees regarding the union and provide an opportunity to union agents to rebut the content of any of those remarks to the employees (a so-called “equal time” ruling). The order also permitted the union to enter the employer’s facilities to use a bulletin board where it could post information it desired, and the employer would also be required to provide the union with the names of its current employees, their home addresses, phone numbers, and email addresses upon request for a period of two years.

The Sixth Circuit refused to enforce the remedies listed above. First, the court refused to require the employer to stand present for a public notice reading, determining that this was the equivalent of a mandatory  “confession of sins,” which conjures up “the system of ‘criticism-self-criticism’ devised by Stalin and adopted by Mao.” The court concluded this remedy violated the compelled speech protections under the First Amendment of the Constitution. Similarly, the court found the remedy was punitive and the NLRB had no authority to order “punishment” vis a vis a make-whole remedy.

The court also refused to require the employer to provide the union with access to its physical facilities and its employees’ private personnel information. The court held that none of the unfair labor practices found by the NLRB involved the prohibition of access to employees by the employer to the union. Absent a demonstration that the union had been prevented access to employees by illegal conduct, the court found the remedy could not be justified as “remedial” but could “only be explained as containing punitive measures.” The court also faulted the NLRB for failing to consider the fact there had been a significant period of time between the violations of the National Labor Relations Act and the order of the agency, such that there had been substantial turnover of both management and employees – “changed circumstances that the Board recognized undermined the need for a Gissel order.” The court concluded the access remedies constituted an impermissible punishment for this additional reason and was not an appropriate exercise of remedial power, noting, “…absent present effects from the violation at issue, the need for an extraordinary access order to remedy those effects evaporates.”

In a more nuanced but very important part of the decision, the court limited the application of the Section 10(e) defense raised by the NLRB. The NLRB almost universally argues an employer has waived an argument on appeal if it did not raise the argument before the NLRB immediately after the initial recommended decision by an administrative law judge under 29 USC Section 160(e). The NLRB takes the position that this defense is jurisdictional and the circuit courts must refuse to entertain petitions to review its decision that do not comply with Section 10(e). The court disagreed, noting the “jurisdictional” argument was akin to a ‘drive-by’ jurisdictional ruling and the exhaustion requirement under Section 10(e) impressed the court as a “nonjurisdictional claim-processing rule” that merely demanded the parties take certain procedural steps at certain specified times. The court found that the employer had put the agency on notice of all its claims and the Section 10(e) waiver defense had no application to the matter.

This Sixth Circuit decision is of significant importance. The NLRB frequently orders the “special remedies” of public notice reading and avails unions of access to an employer’s property and employees. Similarly, the NLRB almost universally defends appeals of its decisions by arguing employers have failed to preserve their arguments through application of Section 10(e). As a result of this decision, the NLRB may not order a public notice reading in the states comprising the Sixth Circuit. Further, the court has severely limited the grant of union access to employers’ facilities and employees. This is because in the majority of cases involving these remedies, the union has established it has had access to employees by virtue of securing a majority of representation cards in a union organizing drive. This fact demonstrates the union did have access to employees. In the future, employers who seek review over these special remedies in the Sixth Circuit will have a firm basis to prohibit the NLRB from exercising this unconstitutional and punitive authority. Similarly, all “special remedies” that involve illegal conduct from the past and where “changed circumstances” have occurred are suspect.

Mark Carter, the labor practice group chair for Dinsmore, along with Jacqueline Rau from Dinsmore’s Columbus, Ohio office, represented the employer in this case.