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Local Joint Executive Board of Las Vegas v. National Labor Relations Board

United States Court of Appeals, Ninth Circuit

February 27, 2018

Local Joint Executive Board of Las Vegas; Culinary Workers Union Local #226; Bartenders Union Local 165, Petitioners,
v.
National Labor Relations Board, Respondent, Archon Corporation, Respondent-Intervenor.

          Argued and Submitted November 14, 2017 San Francisco, California

         On Petition for Review of an Order of the National Labor Relations Board NLRB No. 28-CA-013274

          Kimberley C.Weber (argued) and Richard G. McCracken, McCracken Stemerman & Holsberry LLP, San Francisco, California, for Petitioners.

          Greg P. Lauro (argued), Attorney; Julie B. Broido, Supervisory Attorney; Linda Dreeben, Deputy Associate General Counsel; John H. Ferguson, Associate General Counsel; Jennifer Abruzzo, Deputy General Counsel; Richard F. Griffin Jr., General Counsel; National Labor Relations Board, Washington, D.C.; for Respondent.

          Stephen R. Lueke (argued) and Stefan H. Black, Ford & Harrison LLP, Los Angeles, California, for Respondent-Intervenor.

          Before: William C. Canby, Susan P. Graber, and Richard A. Paez, Circuit Judges.

         SUMMARY [*]

         National Labor Relations Act

         The panel granted a Union's petition for review, vacated an order of the National Labor Relations Board, and remanded for the Board to award standard make-whole relief, in a case arising when the now-defunct Hacienda Resort Hotel and Casino and Sahara Hotel and Casino in Las Vegas violated section 8(a)(5) of the National Labor Relations Act ("NLRA") by unilaterally terminating the Local Joint Executive Board, Culinary Workers Union Local 226 and Bartenders Union Local 165's dues-checkoff without bargaining to agreement or impasse.

         In a prior case, this court determined that there was a violation of the NLRA and remanded to the Board to determine what relief was warranted. The Board declined to award make-whole relief, the standard remedy when an employer unlawfully ceases union dues-checkoff. Instead, the Board awarded the Union prospective-only relief.

         The panel held that the Union's arguments were not premature.

         The panel held that the Board clearly abused its discretion in declining to award the standard remedy of make-whole relief.

          First, the panel held that the Board did not provide a valid explanation for departing from its standard remedy in dues-checkoff cases. Specifically, the panel held that the Board's reliance-based explanation was improper, because it was unreasonable for the employers to rely on Board precedent that had never been applied in a reasoned manner in the absence of a union security clause, and because the Board's other explanations were similarly erroneous.

         Second, the panel held that by ordering prospective-only relief against defunct entities, the Board effectively ordered no relief at all, and therefore did not effectuate the policies of the NLRA.

          OPINION

          PAEZ, CIRCUIT JUDGE

         The Local Joint Executive Board, Culinary Workers Union Local 226 and Bartenders Union Local 165 (the "Union") petitions for review of an order of the National Labor Relations Board ("NLRB" or the "Board") for the fourth time in this dispute that has now spanned more than two decades. When this case was last before the court, we determined that the operators of the now-defunct Hacienda Resort Hotel and Casino and Sahara Hotel and Casino in Las Vegas (the "Employers")[1] violated section 8(a)(5) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(a)(5), by unilaterally terminating the Union's dues-checkoff without bargaining to agreement or impasse. Local Joint Exec. Bd. v. NLRB (LJEB III), 657 F.3d 865, 876 (9th Cir. 2011). In light of that violation, we remanded for the Board to determine what relief was warranted.

         On remand, the Board declined to award make-whole relief, the standard remedy when an employer unlawfully ceases union dues-checkoff. The Board reasoned that make-whole relief was not warranted because, inter alia, the Employers had relied on a Board rule providing that dues-checkoff is not subject to mandatory bargaining. Instead, the Board awarded the Union prospective-only relief against the defunct Employers and their unidentified successors.

         We conclude, for two reasons, that the Board clearly abused its discretion in declining to award the standard remedy of make-whole relief. First, the Board did not provide a valid explanation for departing from its standard remedy in dues-checkoff cases. In particular, the Board's reliance-based explanation was improper, as it was unreasonable for the Employers to rely on Board precedent that had never been applied in a reasoned manner in the absence of a union security clause, and the Board's other explanations were similarly erroneous. Second, by ordering prospective-only relief against defunct entities, the Board effectively ordered no relief at all and therefore did not "effectuate the policies of [the NLRA]." 29 U.S.C. § 160(c). Accordingly, we grant the Union's petition, vacate the Board's order, and remand for the Board to award standard make-whole relief.

         I.[2]

         The Employers maintained collective bargaining agreements ("CBAs") with the Union until 1994. The CBAs did not contain union security clauses-clauses that condition employment upon union membership-as these clauses are prohibited in Nevada, a "right-to-work" state. Nev. Rev. Stat. § 613.250; see also 29 U.S.C. § 164(b) (providing that federal law does not authorize union security clauses in right-to-work states). The CBAs did, however, require the Employers to deduct union dues from the paychecks of employees who had authorized such deductions. After the final CBA expired in May 1994, the Employers continued to honor these "dues-checkoff" authorizations until June 1995. At that time, the Employers unilaterally terminated the Union's dues-checkoff.

         The Union filed unfair labor practice charges against the Employers in August 1995, and the General Counsel for the NLRB subsequently issued consolidated complaints. The Union alleged that the Employers' cessation of dues-checkoff violated the "unilateral change" doctrine articulated in NLRB v. Katz, 369 U.S. 736 (1962). Under that doctrine, "an employer's unilateral change in conditions of employment under negotiation is . . . a violation of ยง 8(a)(5) [of the NLRA], for it is a ...


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