United States Court of Appeals, District of Columbia Circuit
Pennsylvania State Corrections Officers Association, Petitioner
National Labor Relations Board, Respondent
November 21, 2017
Petition for Review and Cross-Application for Enforcement of
an Order of the National Labor Relations Board
Michael McAuliffe Miller argued the cause for petitioner.
With him on the briefs was Edward R. Noonan.
P.S. Jost, Attorney, National Labor Relations Board, argued
the cause for respondent. With him on the brief were Richard
F. Griffin, Jr., General Counsel, John H. Ferguson, Associate
General Counsel, Linda Dreeben, Deputy Associate General
Counsel, and Robert J. Englehart, Supervisory Attorney. Ruth
E. Burdick, Deputy Assistant General Counsel, entered an
Before: Henderson, Circuit Judge, and Williams and Ginsburg,
Senior Circuit Judges.
Ginsburg, Senior Circuit Judge
Pennsylvania State Corrections Officers' Association (the
Employer) petitions for review of an order of the National
Labor Relations Board holding it had committed an unfair
labor practice by failing to bargain with the Business Agents
Representing State Union Employees Association (the Union)
before terminating five employees. The Board therefore
ordered the Employer to bargain with the Union over the
effects of the discharge and to pay back wages to the
employees. The parties bargained over the effects to an
impasse, but the Board subsequently held it was not a lawful
impasse because the Employer sought to bargain about, and
reduce, the back pay amount set by the Board. The Board
therefore held the Employer was liable for a substantially
longer period of back pay. The Employer contends (1) the
Board lacks substantial evidence that it failed to bargain
over the effects to a lawful impasse, (2) the back pay
requirement is arbitrary, capricious, and contrary to law,
and (3) one of the five employees is not eligible to receive
back pay. The Board cross-appeals for enforcement of the
order. We hold the order is not supported by substantial
evidence and therefore grant the petition for review, vacate
the order, and remand the case to the Board to re-determine
the back pay due to each employee.
Employer is a union representing approximately 11, 000
corrections officers. It deploys a number of corrections
officers, on leave from their jobs with the Commonwealth of
Pennsylvania, as "business agents" to represent it
in disciplinary matters involving members. The business
agents remain employees of the Commonwealth, which pays their
salaries and receives reimbursement from the Employer. In
June 2010, several of the business agents organized their own
union (the Union), which then negotiated a collective
bargaining agreement with the Employer.
reasons not relevant here, later in 2010 the Employer
terminated five of the business agents. Four of them returned
to the corrections officer positions from which they were on
leave during their tenure at the Employer. The Employer gave
each terminated employee one week of severance pay. The Union
filed a complaint with the NLRB alleging the Employer's
action violated the National Labor Relations Act because the
Employer did not first bargain with the Union over the
effects of the terminations.
Administrative Law Judge conducted a hearing and issued a
recommended decision holding the failure to bargain was an
unfair labor practice. Pa. State Corrections Officers
Ass'n and Bus. Agents Representing State Union Emps.
Ass'n (PSCOA I), 358 NLRB 108, 115 (2011). He
ordered what the Board calls a Transmarine remedy,
after Transmarine Navigation Corp., 170 NLRB 389
(1968), which required the Employer to do two things. First,
upon request, it had to engage in effects bargaining with the
Union. PSCOA I, 358 NLRB at 115. Second, it had to
pay the employees an amount of back pay tied to the pace of
the negotiations. Back pay would begin to accrue "5 days
after the date of [the] order" and run until the
Employer and the Union reached "a bona fide impasse in
bargaining." Id. The ALJ also imposed minimum
and maximum amounts; regardless of the amount due under the
formula he prescribed, in no event could back pay be
"less than the employees would have earned for a 2-week
period at the rate of their normal wages when last in [the
Employer's] employ" or more than "the amount
they would have earned as wages from the date they were
discharged to the time they secured equivalent employment
elsewhere." Id. The remedy also provided that
the back pay award was subject to reduction in the amount of
"any net interim earnings" the employee received
from other work during that period. Id. On March 23,
2012 the Board summarily affirmed and issued an order (the
"Initial Order") adopting the remedies recommended
by the ALJ. Pa. State Corrections Officers Ass'n and
Bus. Agents Representing State Union Emps. Ass'n (PSCOA
II), 358 NLRB 108, 108-09 (2012).
thereafter the Employer and the Union began bargaining over
the effects of the terminations. On April 4, 2012, the
Employer offered to pay each of the business agents two weeks
of back pay (i) without any reduction for other wages they
had earned but (ii) minus the one week of post-termination
severance pay each agent had already received and (iii)
subject to withholding the other week of back pay as a credit
to offset disputed automobile mileage expense payments for
which it had reimbursed several of the employees. The Union
counter offered on April 11, demanding "2 weeks'
severance pay and all unused leave paid back" for each
of the five and reimbursement of additional expenses that one
of them claimed. Later the same day the Employer rejected the
Union's counteroffer, disputed the vacation time and
expense requests, declared the parties at an impasse, and
said it would implement its April 4 offer. Thereafter neither
party contacted the other, the Employer made no payments to
the employees, and the Union's bargaining authority
lapsed when it became defunct on September 28, 2012.
2013 the General Counsel of the Board initiated compliance
proceedings against the Employer before the ALJ. The General
Counsel claimed the Employer's insistence on a credit
against disputed expenses was contrary to the Initial Order,
which allowed deductions from back pay only for net wages the
employees had earned in other employment. The General Counsel
therefore alleged that the Employer had insisted upon an
"illegal" topic of bargaining, to wit, offering
back pay below the minimum set by the Initial Order, that
undercut the validity of the April 11 impasse. The Employer
acknowledged that during the bargaining it had
"identified the sum which it intended to pay as a
Transmarine remedy and offset that against
previously improperly paid benefits." Nonetheless it
moved to dismiss the compliance proceeding on the ground that
it had complied with the Initial Order by bargaining to a
bona fide impasse with the Union. It also argued that one
employee, Mr. Bill Parke, was not entitled to any back pay
because he had decided not to return to his job as a
corrections officer, and therefore had failed to mitigate his
losses. While the compliance case was pending before the ALJ,
the parties stipulated that the Employer and Union reached an
impasse in bargaining on April 11, 2012.
a hearing, the ALJ issued a recommended decision concluding
the Employer had not complied with the Initial Order. Pa.
State Corrections Officers Ass'n and Bus. Agents
Representing State Union Emps. Ass'n (PSCOA III),
364 NLRB No. 108, 2014 WL 2194809 (May 23, 2014). He found
"the Board's order required a minimum of two weeks
of back pay," the Employer "offered two weeks of
back pay, but required that there be a set off against that
amount," thereby "[i]nsist[ing] to impasse on a
position that derogates from a specific Board remedy"
and was therefore "an illegal subject of
bargaining." Id. at 12. "At the least,
such a position does not constitute a mandatory subject,
about which the other party must bargain." Id.
He therefore concluded "that the impasse of April 11 was
not a valid impasse and the back pay period continued to run
thereafter" until September 28, 2012, when the Union
lost its bargaining authority; hence the back pay period was
26 weeks. Id. With regard to Parke, the ALJ found he
failed to mitigate his lost wages by not returning to his
position as a corrections officer, which the ALJ regarded as
equivalent to his position as a business agent because the
two were "intrinsically intertwined." Id.
He therefore ordered the Employer to pay Parke the minimum
two weeks of back pay. Id. at 13.
the Employer and the General Counsel of the Board filed
exceptions to the recommended decision. The Employer
challenged all the ALJ's findings and conclusions save
those related to Parke, which the General Counsel challenged.
the Board issued, over Commissioner Miscimarra's partial
dissent, a Supplemental Decision and Order adjudicating the
compliance case. Pa. State Corrections Officers Ass'n
and Bus. Agents Representing State Union Emps. Ass'n
(PSCOA IV), 364 NLRB No. 108, 2016 WL 4582492 (Aug. 26,
2016). The Board and the dissenter agreed the
Transmarine remedy was mandated by the Board, and
therefore a topic over which the parties could not bargain.
Id. at 3; id. at 6 (Miscimarra, Comm'r,
dissenting). The Board found the Employer had attempted to
"bargain about the Transmarine backpay
remedy"; because "from the outset, the [Employer
had] proposed reducing the Transmarine amount,"
it "in effect demanded a modification of the
Transmarine remedy." Id. at 3-4. From
these facts the Board concluded the Employer "never made
a proposal that met its effects- bargaining obligation"
and therefore did not reach a lawful impasse. Id. at
3-4. It also held that, "even if the [Employer] was
permitted to bargain over the Board's
Transmarine back pay remedy," its
"insistence to impasse on treating 1 week of
Transmarine back pay as a credit ... was
impermissible" because "the Transmarine
remedy ... requires the [Employer] to pay employees a minimum
of 2 weeks' back pay minus only interim earnings."
Id. at 4. "In sum, in the effects bargaining,
the [Employer] was not entitled to demand that the
Transmarine remedy be reduced from 2 weeks of
backpay to 1 by claiming the second week as a credit."
Miscimarra interpreted the Employer's offer as being more
generous than required by Transmarine, wherefore he
would have held the impasse was reached lawfully.
Id. at 6-9. He did so in part because "the
Transmarine backpay order provided that 'net
interim earnings would be deducted from the gross amount of
backpay'" whereas the Employer "offered the
affected employees 'two weeks pay without deductions
for interim earnings.'" Id. at 9
(quoting the record). He also would have credited the
parties' stipulation that the Employer and the Union had
bargained to impasse. Id. at 7-8.
Board unanimously reversed the ALJ's findings and
conclusions regarding Parke. Applying Board precedents under
which the equivalence of two jobs is determined by comparing
pay, working conditions, and duties, the Board found
Parke's blue collar corrections officer position was not
equivalent to his white collar union job, citing in
particular the differences in pay and in the duties of the
jobs. Id. at 5. The Board therefore held Parke had
not failed to mitigate and was entitled to the same back pay
award - 26 weeks of pay minus net interim earnings - as the
other employees. Id.
court "will uphold a decision of the Board unless it
relied upon findings that are not supported by substantial
evidence, failed to apply the proper legal standard, or
departed from its precedent without providing a reasoned
justification for doing so." E.I. DuPont de Nemours
& Co. v. NLRB, 682 F.3d 65, 67 (D.C. Cir. 2012);
see 29 U.S.C. § 160(f). When reviewing the
Board's factual findings, we must determine whether
"the evidence supporting that decision is substantial,
when viewed in the light that the record in its entirety
furnishes." Universal Camera Corp. v. NLRB, 340
U.S. 474, 488 (1951). We will affirm the legal conclusions of
the Board so long as they are not arbitrary and capricious.
See Mail Contractors of Am. v. NLRB, 514 F.3d 27,
31, 34-36 (D.C. Cir. 2008).
Employer challenges three aspects of the Supplemental Order.
First, it argues there is not substantial evidence to support
the Board finding that the parties did not reach a lawful
impasse on April 11. Second, it argues the Supplemental Order
is arbitrary and capricious because it impermissibly intrudes
into the substantive aspects of the bargaining, confuses the
procedural requirement to bargain with a substantive
requirement to offer specific terms, and constitutes a fine
that exceeds the Board's remedial authority under Section
10(c) of the Act, 29 U.S.C. § 160(c). Third, it argues
the Board erred when it found Parke eligible to receive the
full award of back pay, which we interpret as an argument
that there is not substantial evidence to support that
Employer argues there is not substantial evidence to support
the Board's findings concerning the validity of the
impasse and the associated Transmarine remedy. The
Board argues preliminarily that we lack jurisdiction to hear
the argument because it "did not appear in the
[Employer's] filings with the Board." It argues in
the alternative that it "reasonably found" the
parties did not reach a lawful impasse.
Board's jurisdictional objection is that the Employer
never urged the substantial evidence argument before it.
Section 10(e) of the Act bars us from considering any
"objection that has not been urged before the Board ...
unless the failure or neglect to urge such objection shall be
excused because of extraordinary circumstances." 29
U.S.C. § 160(e); see Woelke & Romero Framing,
Inc. v. NLRB, 456 U.S. 645, 665-66 (1982).
Board argues, following Alden Leeds, Inc. v. NLRB,
812 F.3d 159, 167-68 (D.C. Cir. 2016), that "section
10(e) bars review of any issue not presented to the Board,
even where the Board has discussed and decided the
issue." It claims the Employer did not raise any of its
present arguments, including the substantial evidence
challenge, at any point before the Board. The Employer argues
it had properly raised the argument in its exceptions and
that, as in Trump Plaza Associates v. NLRB, 679 F.3d
822, 830 (D.C. Cir. 2012), these exceptions
"sufficiently apprised [the Board], for the purpose of
section 10(e)," of its objection that there is not
substantial evidence to support the Board's findings.
assessing a claim of forfeiture under § 10(e), "the
critical question is whether the Board received adequate
notice of the basis for the objection." Camelot
Terrace, Inc. v. NLRB, 824 F.3d 1085, 1090 (D.C. Cir.
2016) (cleaned up). "Although briefing and argument
before the Board are desirable ... section 10(e) does not
require such procedures." Local 900, Int'l Union
of Elec., Radio and Mach. Workers, AFL-CIO v. NLRB, 727
F.2d 1184, 1192 (D.C. Cir. 1984). An appellant may adequately
notify the Board of the basis for its objection by
"articulating [it] in its exceptions to the ALJ's
decision." Davis Supermarkets, Inc. v. NLRB, 2
F.3d 1162, 1175 (D.C. Cir. 1993); see Consol. Freightways
v. NLRB, 669 F.2d 790, 793 (D.C. Cir. 1981). That is
precisely what happened here. For the obverse situation, see
BPH & Co. v. NLRB, 333 F.3d 213, 219-220 (D.C.
Cir. 2003) (holding a petitioner satisfied § 10(e) by
briefing an argument before the Board despite it's not
having been in the petitioner's exceptions).
exceptions the Employer put before the Board are pertinent.
First, the Employer excepted "[t]o the ALJ's finding
that [its] position ... was contrary to the minimum back pay
remedy in the Board's [Initial] Order." Second, the
Employer excepted "[t]o the ALJ's failure to find
that ... the Board's [Initial] Order in the underlying
case tolled back pay at the point that the parties were at a
lawful impasse, e.g. on or before April 11, 2012." It
did not repeat either point in its brief before the Board.
not debate whether, in the abstract, these exceptions
provided adequate notice to the Board; we know they did
because the Board addressed them in the Supplemental Order.
First, the Board said it "affirm[ed] the [ALJ's]
finding that the parties' April 11, 2012 impasse was not
a lawful impasse and therefore did not toll the back pay
period." PSCOA IV, 364 NLRB No. 108, at 3. It
explained that the Initial Order required the Employer to
"(1) bargain over the effects of the [termination], and
(2) give affected employees 'limited backpay' for a
period beginning 5 days after the date of the Board's
Order and ending at the earliest" of several enumerated
conditions. Id. It found the Employer had
"propos[ed] during effects bargaining that the parties
bargain about the Transmarine backpay remedy"
and "insist[ed] to impasse on its offer to the Union of
'backpay … for a 2-week period' with 1
week's pay deducted … and the other 1 weeks'
pay treated as a credit." Id. The Employer
"in effect demanded a modification of the
Transmarine remedy" because "from the
outset, the [Employer] proposed reducing the
Transmarine amount" and as such it "never
made a proposal that met its effects-bargaining
obligation." Id. at 3-4. Second, the Board said
the Employer's back pay proposal was
"impermissible" because "in the effects
bargaining, the [Employer] was not entitled to demand that
the Transmarine remedy be reduced from 2 weeks of
backpay to 1 by claiming the second week as a credit."
Id. at 4.
Board thus responded to - and thereby acknowledged its
awareness of - both the relevant exceptions. Under our
precedents, this is sufficient to satisfy Section 10(e).
See BPH & Co., 333 F.3d at 220 (holding
petitioner had "adequately apprised the Board" of
an argument, and therefore "compl[ied] with section
10(e)," because it had briefed the argument before the
Board and the Board had "acknowledged" as much in
the order under review). Moreover, because the arguments were
properly presented to the Board, Alden Leeds is
inapposite and the Board's reliance upon it is misplaced.
dissenting colleague would hold we do not have jurisdiction
to consider the Employer's substantial evidence argument
for two reasons. First, she would hold the Employer did not
use the words "gross" and "net" in its
exceptions before the Board, and therefore did not state its
objection with the necessary precision. Dissenting Op. at 8
("[T]he Employer nowise made the specific point that one
week's gross unearned wages exceeded two weeks of net pay
and ipso facto produced a lawful impasse.");
see id. at 1, 6, 9. Second, she would hold the
argument forfeit because it was not properly presented to us.
See id. at 9-11.
the former objection, we have never before required a
litigant to frame a challenge to a finding of the Board with
such precision. On the contrary, "we have not required
that the ground for the exception be stated explicitly in the
written exceptions filed with the Board" so long as
"the ground for the exception [is] evident by the
context in which the exception is raised." Trump
Plaza Assocs., 679 F.3d at 829 (Henderson, J.) (cleaned
up) (quoting Parsippany Hotel Mgmt. Co. v. NLRB, 99
F.3d 413, 417 (D.C. Cir. 1996)). Nor have we required a
litigant to state a substantial evidence objection with great
precision; for example, we have deemed sufficient an argument
merely implied by the arguments actually presented to the
Board. See id. at 830 (holding Section 10(e)
satisfied because the argument made before the Board
"necessarily includes" the argument made on
appeal); BPH & Co., 333 F.3d at 220 (Henderson,
J.) (holding a substantial evidence objection satisfied
Section 10(e) "notwithstanding its not being addressed
expressly to the conduct alleged" in a settlement
agreement the Board cited as evidence of an unfair labor
practice). Therefore under our precedents the Employer's
exception to the specific Board finding that it was not
"at a lawful impasse ... on or before April 11,"
for the specific reason that its bargaining position was not
"contrary to the minimum back pay remedy in the
Board's [Initial] Order," was more than sufficient.
the latter objection, our dissenting colleague scrutinizes
the Employer's brief and finds only two "bare
assertions" and no legal reasoning. Dissenting Op. at 9.
We find much more there: In a section that begins with the
heading "The NLRB's findings of fact are not
supported by substantial evidence on the record as a
whole," the Employer argues it "made a lawful
severance pay proposal during effects bargaining" and
"never attempted to negotiate downward the Board-ordered
backpay remedy." In the following three paragraphs, the
Employer argues "the Board majority's conclusion
that [the Employer] merely attempted to negotiate downward
the Board-ordered backpay remedy is not supported by
substantial evidence on the record as a whole,"
"the Union plainly did not view [the Employer's]
proposal as an attempt to negotiate down the Board-ordered
remedy," the Employer "complied [with] the effects