NLRB v. Advanced Disposal Ser East Inc , 820 F.3d 592 ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________________________
Nos. 15-2229 and 15-2321
__________________________
ADVANCED DISPOSAL SERVICES EAST, INC.,
Petitioner in 15-2229
v.
NATIONAL LABOR RELATIONS BOARD,
Petitioner in 15-2321
_____________
On Petition for Review and Cross-Application
for enforcement of an Order of
the National Labor Relations Board
(NLRB No. 04-CA-145936)
_____________
Argued March 2, 2016
Before: SMITH and HARDIMAN, Circuit Judges*
*
The Honorable Dolores K. Sloviter assumed inactive status
on April 4, 2016, after the argument and conference in this
(Filed: April 21, 2016)
Daniel D. Barker, Esquire [ARGUED]
Jackson Lewis
1 South Pinckney Street
Suite 930
Madison, WI 53703
John E. MacDonald, Esquire
Constangy Brooks Smith & Prophete
939 Lenox Drive
Suite 206
Lawrenceville, NJ 08648
Counsel for Petitioner
Linda Dreeben, Esquire
Kellie Isbell, Esquire [ARGUED]
Kira D. Vol, Esquire
Eric Weitz, Esquire
National Labor Relations Board
Appellate and Supreme Court Litigation Branch
case, but before filing of the opinion. This opinion is filed by
a quorum of the panel pursuant to 28 U.S.C. § 46(d) and
Third Circuit I.O.P. Chapter 12.
2
1015 Half Street, S.E.
Washington, DC 20570
Counsel for Respondent
_____________
OPINION
_____________
SMITH, Circuit Judge.
Advanced Disposal Services East, Inc.
(“Advanced”) petitions for review of an order of the
National Labor Relations Board (“NLRB” or “the
Board”) which held that Advanced violated sections
8(a)(1) and 8(a)(5) of the National Labor Relations Act
(“NLRA”), by “refus[ing] to bargain collectively with the
representatives of [its] employees.” 29 U.S.C.
§ 158(a)(5). Before this Court, Advanced not only
challenges the merits of the NLRB’s determination but
also argues that the NLRB Regional Director who
facilitated the contested election lacked the authority to
do so. Advanced claims that because Director Dennis
Walsh was appointed at a time when the Board lacked a
valid quorum, his actions were ultra vires. See generally
NLRB v. Noel Canning, 134 S. Ct. 2550 (2014).1 The
1
In Noel Canning, the Supreme Court held that the January 4,
2012, recess appointments of NLRB Members Block, Griffin,
and Flynn were invalid. NLRB v. Noel Canning, 134 S. Ct.
3
NLRB cross-applies for enforcement of its order.
Precisely because the Supreme Court’s decision in
Noel Canning was so “rare and remarkable,” Bryan J.
Leitch, NLRB v. Noel Canning: The Separation-of-
Powers Dialogue Continues, 2014 Cato Sup. Ct. Rev.
221, 259, the litigation it has spawned raises novel
questions that have yet to be addressed by this Court.
This case, in particular, requires us to consider several
issues which, while not directly related to Noel Canning,
arose only because the invalid recess appointments of
several NLRB members created a situation in which the
validity of hundreds of NLRB orders and other official
actions were cast into doubt. See, e.g., Ben James, Noel
Canning Ruling Casts Doubt on Regional Directors,
Law360 (June 27, 2014, 9:11 PM),
http://www.law360.com/articles/552592/noel-canning-
ruling-casts-doubt-on-regional-directors.
Specifically, we will consider three questions.
2550, 2573 (2014). As a result, the Board was not properly
constituted until August 12, 2013, when three new members
were sworn in. Accordingly, all NLRB decisions in the
interim violated the quorum and three-member-composition
requirements of 29 U.S.C. § 153(b). See New Process Steel,
L.P. v. NLRB, 560 U.S. 674, 687-88 (2010); NLRB v. New
Vista Nursing & Rehab., 719 F.3d 203, 208-09 (3d Cir.
2013), reh’g granted, 2014 U.S. App. LEXIS 15360 (3d Cir.
Aug. 11, 2014).
4
First, did Advanced forfeit its right to challenge Director
Walsh’s authority by not raising the issue prior to the
representation election? Second, did Advanced’s
execution of a Stipulated Election Agreement constitute
an accession to Director Walsh’s authority, preventing
Advanced from now challenging that authority? Third, if
we conclude that Director Walsh originally lacked
authority to oversee the election, were his and the
Board’s attempts to ratify their unauthorized conduct
sufficient?
After considering the arguments put forward by
both sides, we conclude that Advanced did not lose the
ability to challenge Director Walsh’s authority by failing
to raise this issue during the representation proceeding,
nor did the Stipulated Election Agreement constitute an
implied accession to Director Walsh’s authority. We also
hold that Director Walsh and the Board both properly
ratified their previously unauthorized actions.
We must next address the merits of Advanced’s
Petition for Review. In doing so, we ask whether
substantial evidence supported the Board’s determination
that certain allegedly disruptive conduct did not
“destroy[] the laboratory conditions of the election” and
“render[] a free expression of choice of representation
impossible.” Zeiglers Refuse Collectors, Inc. v. NLRB,
639 F.2d 1000, 1011 (3d Cir. 1981). Upon careful
review of the record, we hold that substantial evidence
supports the Board’s determination and the Hearing
5
Officer’s findings. We will therefore deny the petition
for review and will grant the NLRB’s cross-application
for enforcement.
I. Procedural History
On March 5, 2014, the Teamsters Local Union No.
384 filed a representation petition with Director Walsh
seeking to represent a unit of workers at three of
Advanced’s facilities. The proposed unit consisted of
approximately 120 full-time and regular part-time
drivers, helpers, and mechanics. The Union and
Advanced entered into a Stipulated Election Agreement
on March 13, 2014. On April 16 and 17, 2014, secret
ballot elections were held at all three of Advanced’s
facilities, with sixty voters supporting unionization and
fifty-eight opposing it.2 Advanced challenged the
election outcome and was granted a hearing on May 19,
2014, before Hearing Officer Devin Grosh. On July 3,
2014, Grosh issued his report, recommending that
Advanced’s objections be overruled. On December 16,
2014, a three-member panel of the NLRB affirmed
Grosh’s report and overruled all of Advanced’s
additional objections to Grosh’s report.
In order to preserve its right to appeal, Advanced
refused to bargain with the now-certified bargaining unit.
Am. Fed’n of Labor v. NLRB, 308 U.S. 401, 404 (1940);
2
There was also one contested ballot which was not counted.
6
United Fed’n of Coll. Teachers, Local 1460 v. Miller,
479 F.2d 1074, 1075 (2d Cir. 1973) (“It has long been
held that N.L.R.B. certification proceedings do not result
in reviewable final orders.”). Director Walsh thus filed a
Complaint and Notice of Hearing on February 19, 2015,
seeking to enforce the Union’s certification and force the
company to bargain. Ultimately, a three-member panel
of the NLRB issued a Decision and Order on May 8,
2015, concluding that Advanced had violated § 158(a)(5)
by refusing “to bargain collectively with the
representatives of [its] employees.” 29 U.S.C.
§ 158(a)(5). Advanced filed a petition for review on May
15, 2015, and the NLRB cross-applied, seeking
enforcement of its order. 3
II. Forfeiture
We must determine whether Advanced forfeited
the right to challenge Director Walsh’s authority to
conduct the election by failing to properly raise the issue
before the Board. The NLRB argues that if Advanced
had timely raised this issue, it could have “correct[ed] the
flaw before the election.” The NLRB also cites
precedent suggesting that belated challenges like this are
3
We have jurisdiction to review the Board’s Order under 29
U.S.C. § 160(e), (f). “The Board’s legal determinations are
subject to plenary review, but we will uphold the Board’s
interpretations of the Act if they are reasonable.” MCPC Inc.
v. N.L.R.B., 813 F.3d 475, 482 (3d Cir. 2016).
7
untimely and thus are forfeited on appeal.
We disagree with the Board’s conclusion that a
belated attack on Director Walsh’s authority can be
forfeited. Even though this challenge was not properly
preserved below,4 we hold that a challenge like this one,
which goes to the authority of the Board to act,
constitutes an “extraordinary circumstance” under
§ 160(e) and can thus be raised for the first time on
appeal. See Noel Canning v. NLRB, 705 F.3d 490, 497
(D.C. Cir. 2013), aff’d on other grounds 134 S. Ct. 2550(2014).
Turning to § 160(e),5 we recognize that “a court of
appeals has no power, sua sponte, to find objectionable a
portion of any NLRB order, if no objection was raised
before the Board and failure to object was not excused by
any ‘extraordinary circumstances.’” Oldwick Materials,
Inc. v. NLRB, 732 F.2d 339, 342 (3d Cir. 1984). This is
so because § 160(e) is a jurisdictional administrative
exhaustion requirement designed to ensure that any issue
4
Even though Advanced raised this challenge before the
Board, it was not raised prior to the election, as required by
the Board.
5
29 U.S.C. § 160(e) states in relevant part: “No objection that
has not been urged before the Board, its member, agent, or
agency, shall be considered by the court, unless the failure or
neglect to urge such objection shall be excused because of
extraordinary circumstances.”
8
raised on appeal was first presented to the Board, absent
“extraordinary circumstances.” See 29 U.S.C. § 160(e);
Oldwick Materials, 732 F.2d at 341 (“Application of
section 10(e) is mandatory, not discretionary. . . .
[P]etitioner’s failure to object or to urge ‘extraordinary
circumstances’ before both the Board and this court
requires foreclosure of any judicial consideration of
objections in the enforcement proceeding.”).
Section 160(e)’s status as a jurisdictional limitation on
our authority is nothing new. As the Supreme Court held
in Woelke & Romero Framing, Inc. v. NLRB, if an issue
was not raised during the proceedings before the Board,
“judicial review is barred by § 10(e) of the Act, 29
U.S.C. § 160(e).” 456 U.S. 645, 665 (1982). The Court
then explained that failure to satisfy § 160(e) meant that
“the Court of Appeals lack[ed] jurisdiction to review
objections that were not urged before the Board.” Id. at
666 (emphasis added). Because Advanced did not raise
its objection to Director Walsh’s authority at the proper
time, we must decide whether its challenge constitutes an
“extraordinary circumstance” under § 160(e).
In making this determination, we are cognizant of
competing authority on this issue. In Noel Canning, the
D.C. Circuit noted that “the objections before us
concerning lack of a quorum raise questions that go to
the very power of the Board to act and implicate
fundamental separation of powers concerns.” 705 F.3d at
497. Thus, “they are governed by the ‘extraordinary
9
circumstances’ exception to the 29 U.S.C. § 160(e)
requirement and therefore are properly before us for
review.” Id. In other words, the D.C. Circuit held that a
challenge which goes to the very power of the Board to
act is by definition an extraordinary circumstance.
The D.C. Circuit has since re-affirmed this
conclusion, holding in SSC Mystic Operating Co., LLC v.
NLRB, 801 F.3d 302, 308 (D.C. Cir. 2015), and UC
Health v. NLRB, 803 F.3d 669, 672-73 (D.C. Cir. 2015),
that challenges to a Regional Director’s authority also
implicate the very power of the Board to act and thus
constitute extraordinary circumstances. As the D.C.
Circuit made clear, “[b]ecause this challenge and the
argument that Regional Directors may not conduct
elections while the Board lacks a quorum are both
premised on the Board’s lack of authority to act, we
believe both are properly before us no matter when they
were first raised.” SSC Mystic, 801 F.3d at 308. The
factual similarities between Advanced’s claim and both
SSC Mystic and UC Health further support our
conclusion. In both of the above cases, an employer
challenged the ability of a Regional Director to conduct
the election in question because, at the time of the
election, the NLRB lacked a valid quorum as a result of
the Supreme Court’s decision in Noel Canning. This was
deemed a challenge that “directly involves the question
of whether the Board’s lack of a quorum stripped the
Regional Directors of power” and thus “can be raised on
10
review even when . . . not raised before the agency.” UC
Health, 803 F.3d at 672-73.
But the similarity does not stop there. In SSC
Mystic, the employer made one additional argument that
had not been raised in UC Health. First, the employer
noted that even though the NLRB’s Regional Director
was initially validly appointed, when the NLRB
reorganized its regions in 2012, his jurisdiction expanded
to cover additional territory. This occurred at a time
when the NLRB did not have a proper quorum. Thus,
“Mystic insists that because the Board had no quorum in
2012, it could not validly appoint Kreisburg to his new
post as the Regional Director of new Region 1.” SSC
Mystic, 801 F.3d at 308. Again, rebuffing the NLRB’s
suggestion that this argument was waived, the D.C.
Circuit held that this challenge was “premised on the
Board’s lack of authority to act” and was thus properly
before the court “no matter when [it was] first raised.”
Id.
In contrast to the cases just described, the Eighth
Circuit in NLRB v. RELCO Locomotives, Inc. held that
the validity of the Board’s composition is not an
extraordinary circumstance under § 160(e). 734 F.3d 764(8th Cir. 2013). Before parsing out the differences
between RELCO and SSC Mystic, however, we note one
similarity. The Eighth Circuit agrees that § 160(e)
constitutes an “explicit jurisdictional exhaustion
requirement” and recognizes that absent satisfaction of
11
§ 160(e), courts are not permitted to entertain challenges
not properly raised before the Board. Id. at 798. Beyond
this point of agreement, however, the Eighth Circuit parts
ways with the D.C. Circuit, concluding that a challenge
to the Board’s quorum requirement is not an
extraordinary circumstance as defined by prior Eighth
Circuit precedent. In particular, the court notes that its
case law has “identified only two situations that qualify
as ‘extraordinary circumstances’ under § 160(e).” Id. at
796. First, if the Board’s decision is “nakedly void under
the statute” and, second, if “a new development of fact or
law occurs after the Board’s decision or was otherwise
unavailable to the party at the original hearing.” Id.
Applying this interpretation of “extraordinary
circumstances,” the Eighth Circuit concluded that
challenges to the composition of the NLRB fall into
neither category. In addition, the court explained that a
“challenge to the legal composition of an agency” should
be characterized as an “affirmative defense that can be
waived if it is not timely raised.” Id. at 797. Thus, the
court “decline[d] to disturb the Board’s decision on the
basis of RELCO’s appointments clause challenge.” Id. at
798.
Having assessed both approaches, we consider the
D.C. Circuit’s analysis more persuasive for two reasons.
First, a challenge to § 153(b) goes to the authority of the
Board to act; it is not a mere procedural technicality.
This suggests that § 153(b) is more than just an
12
affirmative defense, as the Eighth Circuit determined.
Indeed, it strains credulity to conclude that a situation in
which the Board lacks a valid quorum yet still attempts to
issue binding orders is not “extraordinary.”6
6
While not necessary to our holding in this case, we also
believe that § 153(b)’s quorum requirement (the provision
that was violated when Director Walsh was appointed) is a
statutory limitation on the Board’s authority to act, and thus
can be considered “jurisdictional” in the sense that a
challenge brought under it cannot be forfeited by failure to
raise it before the agency. In light of the Supreme Court’s
holding in Noel Canning, the unambiguous terms of § 153(b)
were violated when the NLRB appointed Director Walsh
without a quorum—the statute’s clarity on this point
precludes any deference under Chevron v. U.S.A. v. Natural
Resources Defense Council, Inc., 467 U.S. 837, 842-43
(1984). We therefore take the late Justice Scalia’s words in
City of Arlington to heart and “rigorously apply” the
“statutory limits on agencies’ authority” that Congress has
drawn. City of Arlington v. FCC, 133 S. Ct. 1863, 1874
(2013). In doing so, we note that any interpretation of
§ 153(b) in which the NLRB can act without a valid quorum
would not be “a permissible construction of the statute.” Id.
We, therefore, believe that a violation of § 153(b) would put
any contingent agency action outside the scope of that
agency’s authority; holding otherwise would be “leaving the
fox in charge of the henhouse,” as the late Justice Scalia put
it. In other words, Congress has established “a clear line,
13
Second, and relatedly, we note that as a policy
matter “it would be passing strange for an ultra vires
agency action to be . . . insulated from judicial review.”
Teamsters Local Union No. 455 v. NLRB, 765 F.3d 1198,
1201 (10th Cir. 2014).7 If we were to conclude, as the
Eighth Circuit presumably would, that Advanced has
forfeited its challenge, we would ultimately be
overlooking and “insulating from review” the actions of
an improperly constituted, quorum-less Board issuing
ultra vires orders. In other words, we would be
foreclosing a challenge to the Board’s statutory authority
because it was not raised before the Board—which does
seem “passing strange.” Id.; see also Bender v.
Williamsport Area Sch. Dist., 475 U.S. 534, 541 (1986)
(explaining that “every federal appellate court has a
special obligation to ‘satisfy itself not only of its own
jurisdiction, but also that of the lower courts in a cause
under review,’ even though the parties are prepared to
concede it” (quoting Mitchell v. Maurer, 293 U.S. 237,
244 (1934))).
We hold, therefore, that a challenge which goes to
the composition of the NLRB, and thus implicates its
authority to act, constitutes an “extraordinary
circumstance” under § 160(e). We are thus satisfied that
[and] the agency cannot go beyond it.” Id. Any attempt to do
so is ultra vires and outside the Board’s statutory jurisdiction.
7
While the Tenth Circuit made this argument in a different
context, we believe similar logic applies here.
14
we have jurisdiction to entertain Advanced’s challenge to
the authority of Director Walsh and accordingly exercise
our discretion to reach the question of whether the
actions of the Board and Director Walsh are proper
despite Director Walsh’s invalid appointment. See
Bullock v. Dressel, 435 F.3d 294, 300 (3d Cir. 2006)
(“[W]e have the discretion to consider an issue that was
waived where refusal to reach it would result in a
miscarriage of justice or where the issue’s resolution is of
public importance. We have such a situation here.”
(internal citations and quotation marks omitted)).
III. Stipulated Election Agreement
The Board also claims that Advanced
“affirmatively acceded to Walsh’s authority” by signing
the Stipulated Election Agreement, which the Board
describes as a binding contract. The Agreement lays out
the election-day procedure, stating when and where the
election will be held, where and for how long notice of
the election will be posted, and who is eligible to vote. It
also explains that the Regional Director “in his
discretion” will decide (1) what language(s) will be used
on the ballot and the notice of election, and (2) when and
where to reschedule the election if it is postponed.
Even assuming that the Agreement binds both
parties as the Board alleges, nothing in it constitutes
“explicit acceptance of the agency’s authority to act.”
UC Health, 803 F.3d at 673. Despite its claims to the
15
contrary, the Board cannot point to any language in the
Agreement stating that Advanced “affirmatively acceded
to Walsh’s authority,” as there is none. The only
language in the Agreement referencing the Regional
Director relates to his duty to supervise the election and
his discretionary authority to decide procedural issues not
otherwise spelled out in the Agreement. Thus, as the
D.C. Circuit also concluded in UC Health, Advanced
“did not expressly give up [its challenge to the authority
of the Regional Director] when it executed the
[Stipulated Election] Agreement; it merely signed a form
agreement providing that the Board’s regulations would
govern the election.” Id.; see also SSC Mystic, 801 F.3d
at 308 (same). Accordingly, we hold that by signing the
Stipulated Election Agreement, Advanced “did not
expressly abandon anything.” UC Health, 803 F.3d at
673.
We also reject the Board’s attempt to distinguish
this case from UC Health and SSC Mystic. The Board
relies on the uncertainty surrounding the status of the
Board’s authority, explaining that the D.C. Circuit
specifically mentioned the fact that the quorum issue
might have been obviated by the time of the election.
We find this unpersuasive for two reasons. First, based
on the language in UC Health, which is cited in SSC
Mystic, it appears that this was not a key factor in the
court’s decision, but merely an additional reason for
rejecting the Board’s claim. See id. at 673. Second, even
16
taking this argument at face value, there is no principled
basis for distinguishing the two situations. As the D.C.
Circuit noted,
Indeed, when UC Health entered the
Stipulated Election Agreement, . . . UC
Health could not have known with any
certainty that the Board had no quorum even
without Senate approval for the President’s
appointments until the Supreme Court
handed down its decision in Noel Canning
fourteen months after the election. We will
not hold UC Health responsible for failing to
see the future.
Id. In just the same way, when Advanced entered into
the Agreement on March 13, 2014, it had no way of
knowing how the Supreme Court would rule in Noel
Canning on June 26, 2014. Finally, we note that the only
authority the Board relies on for the claim that a party “is
estopped from attacking the propriety of an election to
which it has expressly agreed” is its own, and that this
authority itself is currently on review in the D.C. Circuit.
See ManorCare of Kingston, PA LLC, 361 NLRB No. 17,
2014 WL 3919913 (Aug. 11, 2014), petition for review
filed, Nos. 14-1166 & 14-1200, (argued Oct. 23, 2015).8
8
We note that the same arguments regarding estoppel and
accession, with citations to the Board’s opinion in
ManorCare of Kingston, were made before the D.C. Circuit
17
We thus see no reason to defer to the Board’s position in
Kingston.
IV. Ratification
Having concluded that this belated challenge to
Director Walsh’s authority is permissible, we turn to
whether ratification by the Board and Director Walsh
was sufficient to cure the quorum violation which
stripped the Board, and by extension Director Walsh, of
the authority to oversee the Union election.9 We
conclude that both ratifications were sufficient.
On July 18, 2014, all five members of a properly
constituted Board “confirm[ed], adopt[ed], and ratif[ied]
nunc pro tunc all administrative, personnel, and
procurement matters approved by the Board or taken by
or on behalf of the Board from January 4, 2012, to
August 5, 2013, inclusive.” Next, “having considered the
relevant supporting materials,” the Board, “[i]n a further
abundance of caution,” chose to “expressly authorize[]
in both UC Health and SSC Mystic. We thus find the Board’s
attempt to distinguish UC Health and SSC Mystic, while
relying on the same arguments it presented before the D.C.
Circuit in those cases, unavailing.
9
The Board does not attempt to argue that Walsh had the
authority to act at the time of the election. Instead, the Board
only claims that his later actions constituted a ratification or
affirmation of his earlier conduct, thus curing what the Board
seems to admit was a “defect in Walsh’s appointment.”
18
the . . . selection of Dennis Walsh as Regional Director
for Region 4.” This alleged ratification was followed
closely by that of Director Walsh, who, on July 30, 2014,
“affirm[ed] and ratif[ied] any and all actions taken by me
or on my behalf during that period, including all
personnel and administrative decisions . . . .” Director
Walsh, however, did not go on to specifically address any
of the particular decisions he made when acting ultra
vires.
We must, therefore, decide whether this “remedy
adequately addressed the prejudice” to Advanced
stemming from Walsh’s unauthorized conduct. Federal
Election Comm’n v. Legi-Tech, 75 F.3d 704, 708 (D.C.
Cir. 1996). If so, “dismissal is neither necessary nor
appropriate.” Id. “[T]he general rule [is] that the
ratification of an act purported to be done for a principal
by an agent is treated as effective at the time the act was
done. In other words, . . . the ratification ‘relates back’ in
time to the date of the act by the agent.” In re E. Supply
Co., 267 F.2d 776, 778 (3d Cir. 1959); see also
Depenbrock v. CIGNA Corp., 389 F.3d 78, 83 (3d Cir.
2004) (same).
Ratification of previously unauthorized agency
action, however, presents a unique situation that has not
been specifically dealt with by this Court. Unlike most
instances of ratification, here the same party is both the
principal and the agent, simply acting at different points
in time. That fact alone distinguishes this case from most
19
other ratification cases, but does not mean that we cannot
glean some insight into this situation from our prior
precedent. Indeed, we find that past precedent suggests
there are three general requirements for ratification.
First, the ratifier must, at the time of ratification, still
have the authority to take the action to be ratified.
Second, the ratifier must have full knowledge of the
decision to be ratified. Third, the ratifier must make a
detached and considered affirmation of the earlier
decision. These last two requirements are intended to
ensure that the ratifier does not blindly affirm the earlier
decision without due consideration. These requirements,
of course, must also be adapted to the unique situation we
are confronted with here.
We turn to the first requirement, the continuing
authority to act. In Federal Election Commission v. NRA
Political Victory Fund, the Supreme Court had to
determine whether belated authorization by the Solicitor
General which would have permitted the Federal Election
Commission to file a petition for certiorari “relates back
to the date of the FEC’s unauthorized filing so as to make
it timely.” 513 U.S. 88, 98 (1994). Ultimately, the
Supreme Court held that ratification was not appropriate
because the deadline by which the FEC could seek
certiorari had passed, preventing ratification. Or to put it
another way, “it is essential that the party ratifying
should be able not merely to do the act ratified at the time
the act was done, but also at the time the ratification was
20
made.” Id. This “timing problem” has since been read to
require that the ratifier have the “power” to reconsider
the earlier decision at the time of ratification. See Doolin
Sec. Sav. Bank, F.S.B. v. Office of Thrift Supervision, 139
F.3d 203, 213-14 (D.C. Cir. 1998); Intercollegiate Broad.
Sys., Inc. v. Copyright Royalty Bd., 796 F.3d 111, 117
(D.C. Cir. 2015).
The second requirement is that the ratifier must
have “knowledge of all the material facts” relating to the
decision they are making. Bauman v. Eschallier, 184 F.
710, 711 (3d Cir. 1911) (“No one can be held to have
ratified the unauthorized act of an agent, unless he has
knowledge of all the material facts.”); Toebelman v.
Missouri-Kansas Pipe Line Co., 130 F.2d 1016, 1022 (3d
Cir. 1942) (“Ratification to be effective imports
knowledge of all material facts on the part of those
ratifying.”). This requirement is intended to protect the
ratifier from unknowingly ratifying conduct of which he
or she was unaware. Cf. Villanueva v. Brown, 103 F.3d
1128, 1139 (3d Cir. 1997) (“Her act of signing the
Investment Agreement clearly does not ratify an event
which had not yet occurred. She cannot ratify an action
that she is not aware of.”).
Finally, the ratifier must make a “detached and
considered judgment,” not simply rubberstamp the earlier
action. See Doolin, 139 F.3d at 213 (“We have no doubt
that [the ratifier] made a detached and considered
judgment in deciding the merits.”). We also note,
21
however, that evidence of this requirement can either
come from acts of “express ratification,” Standard Roller
Bearing Co. v. Hess-Bright Mfg. Co., 275 F. 916, 921 (3d
Cir. 1921), in which the ratifier “conduct[s] an
independent evaluation of the merits,” Intercollegiate,
796 F.3d at 117, or can be “implied from subsequent
conduct,” Hess-Bright, 275 F. at 921, such as when a
later act is “necessarily an affirmation of” an earlier act,
Doolin, 139 F.3d at 213.
All that being said, we are quick to note that as an
equitable remedy, ratification has been applied flexibly
and has often been adapted to deal with unique and
unusual circumstances. We believe that Doolin provides
a good example both of this adaptability and how
ratification can apply in the context of administrative
agency action. In this case, the D.C. Circuit had to
determine whether the actions of the properly appointed
Director Retsinas ratified the earlier filing of a Notice of
Charges against Doolin Bank by the improperly
appointed Director Fiechter. The court began its analysis
by looking to NRA Political Victory Fund. Id. at 212. In
so doing, it noted that no statute of limitations would
prevent Retsinas from “starting the administrative
proceedings over again.” Id. at 213. Thus, the court
concluded that the “timing problem posed in NRA is not
present here.” Id.
The court then went on to examine the specific
evidence of ratification. It noted that while there was no
22
express ratification, Retsinas did not “simply writ[e] a
letter or memorandum adopting” the actions of the earlier
improperly appointed acting Director. Id. Instead, he
continued forward “in the normal course of agency
adjudication,” pursuing the claims Fiechter had initially
made. Id. Retsinas thus ultimately issued a final written
opinion and a cease and desist order against Doolin
Bank. This, the court noted, was “necessarily an
affirmation of the validity of [Fiechter’s earlier conduct],
and hence a ‘ratification,’ even though [Retsinas] did not
formally invoke the term.” Id. The court thus concluded,
“[w]e have no doubt Director Retsinas made a detached
and considered judgment in deciding the merits against
the Bank.” Id.
Finally, we note one additional consideration that
arises in the context of administrative agency ratification:
the presumption of regularity. This “doctrine thus allows
courts to presume that what appears regular is regular,
the burden shifting to the attacker to show the contrary.”
Butler v. Principi, 244 F.3d 1337, 1340 (Fed. Cir. 2001);
Kamara v. Att’y Gen. of U.S., 420 F.3d 202, 212 (3d Cir.
2005) (“Agency action is entitled to a presumption of
regularity, and it is the petitioner’s burden to show that
the [agency] did not review the record when it considered
the appeal.”). This presumption ensures that we give
proper deference and respect to the official actions of an
agency. Applying the presumption in our case, the
burden is on Advanced to produce evidence that casts
23
doubt on the agency’s claim that the Board and Director
Walsh properly ratified their earlier actions.
We thus turn to the two acts of ratification. First,
regarding the Board’s ratification, we begin by noting
that Advanced has not pointed to, nor could we find, any
statute or regulation that would prevent the Board from
restarting the administrative actions in question at the
time of ratification. Thus, “the timing problem posed in
NRA is not present here.” Doolin, 139 F.3d at 213. We
also note that the Board easily satisfies the second and
third ratification requirements. The Board claims that it
specifically considered the relevant supporting materials
before reauthorizing the selection of Walsh as Regional
Director. The Board also states that it “confirm[ed],
adopt[ed], and ratif[ied] nunc pro tunc” all its earlier
actions. Advanced does not present any evidence
suggesting otherwise. We can therefore presume that the
Board had full knowledge of, and appropriately
reconsidered, its earlier appointment of Director Walsh.
We thus conclude that the Board properly ratified its
selection of Director Walsh as a Regional Director.
We next look to Director Walsh’s ratification,
which raises some additional concerns. First, however,
we note that both the first and second requirements for
ratification are satisfied here. There is no statutory or
administrative limitation preventing Director Walsh from
re-running the Union election at the time he ratified it;
thus the NRA “timing issue” is not implicated here
24
either.10 Additionally, the knowledge requirement is
easily satisfied: Director Walsh is both the principal and
the agent. Thus, at the time of ratification, he, better than
anyone else, had full knowledge of his earlier actions.
The real question concerning Director Walsh’s
ratification arises from the fact that we are confronted
with a barebones, blanket affirmation, without any
specific mention of this case or the details of any
ratification process. That being said, the evidence of
ratification is stronger than it first appears. Despite a
mere blanket express ratification, Director Walsh also
implicitly affirmed his conduct by filing a Complaint and
Notice of Hearing on February 19, 2015. The allegations
in this filing, like in Doolin, were “necessarily an
10
Advanced points to § 88 of the Restatement (Second) of
Agency, suggesting that by objecting to the authority of
Director Walsh, ratification was no longer timely. This
argument attempts to shoehorn a mandatory agency
adjudication into the narrow scope of § 88, which deals with
“transactions” in which a party can “withdraw” his or her
“offer or agreement.” Unlike the situation that arises in a
typical business or personal transaction in which a party can
prevent ratification by terminating an offer before it is
accepted, here Advanced could not simply withdraw its
consent to the NLRB’s attempted bargaining and enforcement
actions. To put it another way, by objecting to the authority
of Director Walsh, Advance did not “terminate” the
“transaction” between the Board and Advanced; Advanced
could not merely walk away at that point.
25
affirmation of the validity” of his earlier actions in
conducting the election in April 2014, since they allege,
among other things, that the Union is the proper and
“exclusive collective bargaining representative” of
Advanced’s covered employees.
Lastly, we note that Advanced has not made any
claims which undermine the presumption of regularity
here either. Advanced only argues that Director Walsh’s
ratification is a “rubberstamp,” and that the blanket
ratification lacks evidence of independent consideration.
But mere lack of detail in Director Walsh’s express
ratification is not sufficient to overcome the presumption
of regularity.
Advanced also attempts to distinguish Doolin by
claiming that the court relied on the fact that “redoing the
administrative proceedings would bring about the same
outcome.” Doolin, 139 F.3d at 214. The court,
according to Advanced, therefore employed a harmless
error analysis, essentially concluding that even if
ratification were imperfect, the outcome of the
adjudication, if redone, would not change. This, they
argue, is not the case here. A union election is a
“dynamic and fluid situation,” in which the “whims of
the electorate” are constantly changing. Accordingly,
Advanced argues that “there is no certainty in this case,
as there was in Doolin.”
26
While we are uncertain as to the extent to which
the Doolin court actually relied on this harmless error
analysis,11 we find Advanced’s attempt to distinguish
Doolin unavailing. Advanced is correct that in a close
election, the whims of the electorate can easily change
the ultimate outcome, but Director Walsh is not ratifying
the conduct of every voter in the election; he is ratifying
his own conduct in facilitating the election. If we
recognize this distinction, it becomes clear that what
Advanced really wants is a second shot at convincing a
sufficient number of voters to oppose unionization.
Advanced does not argue that Director Walsh’s improper
appointment in any way affected his own conduct and
thus prejudiced Advanced. Instead, Advanced asserts
that voters might change their minds. To put it bluntly,
Advanced hopes that the “whims of the electorate” will
favor it if the election is re-run. This argument,
therefore, does nothing to distinguish Doolin.
We accordingly hold that both the Board and
Director Walsh properly ratified their earlier actions.
11
The court noted that unlike the harmless error analysis used
in Legi-Tech, “[t]he situation here is somewhat different.”
Doolin, 139 F.3d at 213. Indeed, the court noted that “[w]e
have no doubt that Director Retsinas made a detached and
considered judgment.” Id. (emphasis added).
27
V. Election Day Conduct
We next address whether substantial evidence
supported the Board’s decision to overrule Advanced’s
objection and its refusal to grant a new election.
Advanced points to several incidents on the morning of
the election that it claims destroyed the “laboratory
conditions” necessary to ensure a free and fair election.
See General Shoe Corp., 77 N.L.R.B. 124, 127 (1948).
First, Advanced argues that the Board “inappropriately
minimized” the “chaotic scene” at the company’s
Norristown facility on the morning of the election. In
particular, Advanced points to an alleged confrontation
between a Union representative and one of Advanced’s
managers. Second, Advanced highlights the conduct of
one of its employees, Christopher Lyons, and argues that
the Board “drew unreasonable inferences in finding that”
Lyons’ actions were not threatening. Each incident will
be discussed in detail below.
A.
As this Court has consistently held, we will accept
the Board’s factual findings and the reasonable
inferences derived from those findings if they are
“supported by substantial evidence on the record
considered as a whole.” 29 U.S.C. § 160(f); see
Stardyne, Inc. v. NLRB, 41 F.3d 141, 151 (3d Cir. 1994).
“Substantial evidence is more than a scintilla. It means
such relevant evidence as a reasonable mind might accept
28
as adequate to support a conclusion.” Tri-State Truck
Serv., Inc. v. NLRB, 616 F.2d 65, 69 (3d Cir. 1980)
(internal quotation marks and citations omitted). The
substantiality of the evidence must also “take into
account whatever in the record fairly detracts from its
weight.” Id. (quoting Universal Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951)) (internal quotation marks
omitted). We will also “defer to the Board’s credibility
determinations,” and will reverse them “only if they are
inherently incredible or patently unreasonable.” Grane
Health Care v. NLRB, 712 F.3d 145, 149 (3d Cir. 2013)
(internal quotation marks omitted).
Because Advanced claims that allegedly disruptive
election-day conduct necessitates a new election, the key
question on appeal is whether the challenged conduct
destroyed the “laboratory conditions” which this Court
has held are “conducive to the sort of free and
untrammeled choice of representatives contemplated by
the [NLRA].” Zeiglers, 639 F.2d at 1004-05. In
Zeiglers, however, we were also quick to note that “the
goal of ‘laboratory conditions’ cannot always be
satisfied.” Id. at 1006. Accordingly, we held that “[n]ot
every election that fails to achieve perfection should be
set aside.” Id. Instead, we noted that we would uphold
“less-than-perfect” elections as long as “no coercive
conduct has poisoned the fair and free choice which
employees are entitled to make.” Id.29
B.
Advanced first alleges that on the morning of April
17, 2014, Union Business Agent Chris O’Donnell
engaged in conduct which interfered with employees’
exercise of free choice in the election.12 Advanced
explains that O’Donnell parked an eighteen-wheeler at
the bottom of Advanced’s driveway, creating a safety
hazard since only one vehicle at a time could pass by.
This made it difficult to see trucks entering or leaving the
Advanced facility. Advanced also alleges that when
Manager Ed Smith approached O’Donnell and asked him
to move the truck, he said he would only move his truck
if Advanced moved the five garbage trucks it had
positioned around the facility with “Vote No” signs on
them. Advanced then points out that the Union organizer
threatened to “create havoc” by bringing in additional
union demonstrators and starting a “brawl.” Advanced
further asserts that Union supporters “jumped out” and
waved “Vote Yes” signs at workers as they drove by.
This prompted Advanced’s managers to call the police,
who arrived at the facility and told both parties to move
12
When evaluating conduct-based objections like this, the
Board employs an objective standard to determine whether
the conduct had a reasonable tendency to interfere with the
employees’ exercise of their free choice. This analysis looks
to several factors including the number, severity, and
proximity of the incident(s) to the election. Trump Plaza
Hotel & Casino, 352 NLRB 628, 629, 632 (2008).
30
their vehicles. Even though this resolved the immediate
dispute, the police chose to remain on the scene.
The hearing officer, however, characterized this
incident a bit differently. First, he chose to credit the
testimony of O’Donnell—who stated that Smith’s
allegations were unfounded—because it “was more
logical and plausible. Second, the hearing officer pointed
out that, according to the police report, Advanced’s
garbage trucks also blocked part of the driveway, thus
contributing to the safety hazard. Third, the hearing
officer noted that police presence alone is not
objectionable at a Union election under prevailing
precedent. Nor was there any indication that the police
even talked to anyone at the scene besides Advanced
managers and the Union representatives. Fourth, even
assuming the facts were as Smith testified, the hearing
officer noted that there was no indication the alleged
threat was disseminated to any eligible voters—or to
anyone else for that matter. The hearing officer therefore
concluded that O’Donnell’s conduct did not “interfere[]
with employee’s exercise of free choice” in voting that
morning.
We hold that substantial evidence in the record
supports this conclusion. Due to the minimal
dissemination of the alleged, and discredited, threat, as
well as the fact that the police report found both parties
contributed to the “chaos” that morning, there is nothing
to suggest that the Board inappropriately ignored or
31
minimized evidence of dissemination and failed to
“properly consider the totality of the circumstances”
surrounding the above incident, as Advanced argues.
The heart of Advanced’s complaint, however,
relates to the conduct of Christopher Lyons. Lyons was a
driver at Advanced and a Union supporter. He is also
described as being approximately six feet tall, two
hundred pounds, and “pretty built and stocky.”
Regarding his conduct on the morning of the election,
Advanced first notes that Smith testified to seeing Lyons
“c[o]me flying” through the parking lot that morning,
“tires squealing and everything.” Smith then testified
that Lyons and two other employees hung out for several
hours that morning in the small room where employees
clock in. This was unusual behavior, since “nobody
really congregates there.” All three employees were also
Union supporters and Advanced alleges that they
intimidated several of the employees who went to clock
in, noting testimony which stated that at least fifteen
eligible voters clocked in during that period. When
another employee, Ben Shackleford, came to clock in, a
heated discussion arose after Lyons found out that
Shackleford intended to vote (or already had voted, it is
unclear) against unionization. This argument lasted no
more than ten minutes and ended with Lyons dropping to
his knees and pounding the wall in frustration. Another
Advanced employee later testified that the argument was
32
loud enough to be heard outside and that other Advanced
employees could possibly have heard it.
Advanced argues that news of this incident spread
quickly throughout the facility and created an atmosphere
in which employees felt intimidated, undermining the
possibility of a fair election. Advanced also pointed to
the fact that the vote was incredibly close: sixty to fifty-
eight, with one contested vote. Thus, any employee who
changed his or her vote from a ‘yes’ to a ‘no’ would have
changed the outcome of the election. Finally, Advanced
challenges the hearing officer’s characterization of this
incident, claiming that he went to great lengths to
“discount the manager’s testimony” and downplay the
Lyons/Shackleford argument as simply a “personal
disagreement between two friends.”13
Looking first at the speeding incident in the
parking lot, the hearing officer noted that the details of
13
The hearing officer also concluded that Lyons was not an
official agent of the Union. This is not challenged on appeal.
Accordingly, the standard for third-party behavior is whether
it was “so aggravated as to create a general atmosphere of
fear and reprisal rendering a free election impossible.”
Robert Orr-Sysco Food Servs., LLC, 338 NLRB 614, 615
(2002); see also NLRB v. L & J Equip. Co., 745 F.2d 224, 239
(3d Cir. 1984) (“We recognize that acts attributable to third
parties are not subject to the same level of scrutiny as acts
attributable to the union or employer.”).
33
Lyons’ driving into the parking lot were a bit murky. No
one questioned Lyons about his conduct that morning, he
was not disciplined for it, and Smith (whose testimony
alone referenced it) was not found to be credible by the
hearing officer. Additionally, Smith later admitted that
he was not actually sure how fast Lyons was going (after
earlier stating that it was about 50 m.p.h.), and instead
said that he was going at least fast enough to make the
tires squeal. The hearing officer thus concluded that the
speeding incident was “unlikely,” and even if it did
occur, it did not create an atmosphere of fear and reprisal
at the facility, in part because “there is no evidence that
any employee witnessed or learned of this conduct during
the critical period.” We thus hold that these findings
were supported by substantial evidence in the record, and
that even if we credit the testimony of Smith, the conduct
as he described it is simply insufficient to create an
atmosphere of fear and reprisal that would influence an
election.
Regarding the Lyons and Shackelford interaction,
the hearing officer and the Board credited the testimony
of the Advanced managers who witnessed the incident,
finding that (1) Lyons and Shackleford got into a loud
and heated argument over the Union election, (2) Lyons
pounded the wall at least once in frustration, but (3) this
and any other conversations were limited to the area
around the room where employees clock in, which was as
far from the polling place as possible in the facility.
34
Even taking these facts in the light most favorable
to Advanced, the hearing officer concluded that Lyons’
conduct did not create a “general atmosphere of fear and
reprisal” necessary for finding that the election was no
longer free.14 The hearing officer also concluded that the
interaction, while loud, did not constitute a threat of
physical violence toward Shackleford. Further, the
hearing officer noted that the wall was not damaged,
Lyons had never gotten into a violent confrontation with
another employee, Lyons was named employee of the
month in August 2013, and the managers (who were only
a few feet away) chose not to intervene. Accordingly,
the incident was deemed insufficient to warrant setting
aside the election.
In reviewing the record on this issue, we also note
that the arguments Advanced puts forward turn largely
on questions of credibility and would require us to
reevaluate the weight that should be afforded to different
pieces of evidence. We are cognizant of our precedent
explaining that “we defer to the Board’s credibility
determinations,” and will reverse them “only if they are
inherently incredible or patently unreasonable.” Grane
Health Care, 712 F.3d at 149 (internal quotation marks
omitted). Quite simply, the credibility determinations
made by the hearing officer and adopted by the Board are
14
The hearing officer also properly acknowledged that this
conduct required additional scrutiny as the election was
extremely close.
35
not inherently incredible. Viewing the contested conduct
in this light, we conclude that substantial evidence
supported the Board’s decision.
We accordingly hold that the Board’s
determinations regarding the challenged election-day
conduct are supported by substantial evidence.
VI. Conclusion
Our review of this case convinces us that the
actions of the Board and Director Walsh were,
ultimately, both procedurally and substantively valid.
We will therefore deny Advanced’s petition for review
and grant the NLRB’s cross-application for enforcement
of its order.
36