Workplace Labor Update - D.C. Circuit Admonishes NLRB for Bargaining Order – October 1998

The federal court of appeals for the District of Columbia recently issued another in a growing number of decisions admonishing the National Labor Relations Board for its failure to provide an adequate explanation to support a decision. Flamingo Hilton-Laughlin v. National Labor Relations Board, 148 F.3d 1166 (D.C. Cir. 1998). In January 1993, the United Steelworkers of America began an organizing campaign at the Flamingo's hotel and casino in Laughlin, Nevada. In response, Flamingo engaged in a vigorous counter-campaign. On July 6, 1993, the NLRB supervised an election among 1,000 Flamingo employees. The employees rejected union representation by a vote of 495 to 389. In response, the union filed a series of charges with the NLRB challenging the election results, and the NLRB issued a complaint against the hotel alleging the commission of more than 70 unfair labor practices. Over two years later, an administrative law judge found that Flamingo had committed more than 40 of the charged unfair labor practices and, rather than running a new election, ordered the hotel to bargain with the union as the representative of its employees under the U.S. Supreme Court's Gissel doctrine. In NLRB v. Gissel Packing Co., the Court held that, as a remedy for the commission of unfair labor practices, the NLRB can order an employer to recognize and bargain with a union as the representative of its employees. 395 U.S. 575, 613-15 (1969). The Supreme Court said the extreme remedy of imposing a bargaining order should be limited to two categories of cases: category I cases in which the employer committed "'outrageous' and 'pervasive' unfair labor practices," and category II cases in which the employer has committed less pervasive unfair labor practices, "which nonetheless still have the tendency to undermine majority strength and impede the election processes." The ALJ found that, as a result of the Flamingo's unlawful provision of new or improved benefits to employees during the pre-election period and institution of a new application screening process designed to "weed out" applicants with union ties, the case fit within category II. Because of the possible long-term effects of these unfair labor practices, the ALJ found that a bargaining order was justified. In July 1997, nearly four years after the election, the NLRB affirmed the ALJ's decision. The court has now overturned that decision, holding that the ALJ and the NLRB had unjustifiably ignored its repeated statements describing the limited circumstances under which a Gissel order, which it termed an "extreme remedy," would be appropriate. The D.C. Circuit has repeatedly instructed the NLRB to consider the passage of time since the unfair labor practices were committed, the amount of employee turnover since the election, and the changes in managerial personnel before issuing a bargaining order. The court found that, despite its prior holdings, the NLRB had improperly focused on circumstances existing at the time the unfair labor practices were committed. The court again criticized this approach, explaining that it ignores the representation desires of those most affected by a Gissel order-the employer's current employees. In this case, the court found that during the four years since the election, employee turnover had exceeded 50% and 14 of the 21 supervisors who committed unfair labor practices were no longer hotel employees. Given the high turnover rate and the lack of evidence that the unfair labor practices would have any lasting effect, the court held that a bargaining order severely and unnecessarily undercut the rights of current employees to determine for themselves whether they wanted union representation. Although the court's decision marks another in a series of rulings criticizing the NLRB's failure to adhere to court precedent or to explain its departures from it, the likelihood that this decision will restrict the NLRB's liberal use of the Gissel order is slight.