Verizon New England Inc. v. NLRB , 826 F.3d 480 ( 2016 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 11, 2016 Decided June 21, 2016
No. 15-1062
VERIZON NEW ENGLAND INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
LOCAL 2324, INTERNATIONAL BROTHERHOOD OF ELECTRICAL
WORKERS, AFL-CIO,
INTERVENOR
Consolidated with 15-1087
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Arthur G. Telegen argued the cause for petitioner. With
him on the briefs was Sarah K. Hamilton.
Joel A. Heller, Attorney, National Labor Relations Board,
argued the cause for petitioner. With him on the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
2
General Counsel, and Kira Dellinger Vol, Supervisory
Attorney.
Alfred Gordon O’Connell argued the cause and filed the
brief for intervenor.
Before: HENDERSON, KAVANAUGH, and SRINIVASAN,
Circuit Judges.
Opinion for the Court filed by Circuit Judge
KAVANAUGH, with whom Circuit Judge HENDERSON joins as
to all but Parts II-A and II-C-1 and with whom Circuit Judge
SRINIVASAN joins as to Parts I, II-A, II-B, and II-C-1.
Opinion concurring in part and concurring in the
judgment filed by Circuit Judge HENDERSON.
Opinion concurring in part and dissenting in part filed by
Circuit Judge SRINIVASAN.
KAVANAUGH, Circuit Judge: When a union and an
employer enter into a collective bargaining agreement, each
party may waive certain rights they otherwise would possess
under the National Labor Relations Act – for example, the
union members’ right to picket. In a collective bargaining
agreement, the union and employer also may (and often do)
agree to have an arbitrator decide disputes arising out of that
agreement. The National Labor Relations Board may still
review an arbitration decision in certain circumstances when
the losing party says it has been deprived of a right otherwise
guaranteed by the National Labor Relations Act. But
consistent with the national labor policy favoring arbitration,
the Board reviews arbitration decisions under a highly
deferential standard, known as the Spielberg-Olin standard.
3
This case concerns a collective bargaining agreement
between a union and Verizon New England. In the
agreement, the union waived its members’ right to picket, a
right the members otherwise would possess under the
National Labor Relations Act. During a subsequent labor
dispute, Verizon employees visibly displayed pro-union signs
in cars that were parked on Verizon property and lined up so
that passers-by would see the signs. Verizon ordered the
employees to stop displaying the signs. The union challenged
Verizon’s action. The legal question was this: Did the
collective bargaining agreement’s waiver of the union
members’ right to picket also waive their right to visibly
display pro-union signs in cars that were parked on Verizon
property and lined up so that passers-by would see the signs?
The collective bargaining agreement between the union
and Verizon provided for arbitration of disputes arising out of
that agreement. Verizon and the union therefore proceeded to
arbitration to resolve their dispute about the signs in the cars.
An arbitration panel interpreted the collective bargaining
agreement in Verizon’s favor. Not satisfied, the union then
took the matter to the NLRB. An administrative law judge
again ruled in favor of Verizon. The union appealed the
matter to the Board. Although the Board reviews arbitration
decisions under a highly deferential standard, the Board in a
2-1 ruling overturned this arbitration decision. The Board
determined that the union’s waiver of its members’ right to
picket did not waive their right to visibly display pro-union
signs in cars on Verizon property.
We conclude that the Board misapplied its highly
deferential standard for reviewing arbitration decisions.
Under that standard, the Board should have upheld the
arbitration decision in this case. The Board acted
unreasonably by overturning the arbitration decision.
4
Therefore, we grant Verizon’s petition for review and deny
the Board’s cross-application for enforcement.
I
A
Section 7 of the National Labor Relations Act guarantees
employees the right to engage in certain “concerted activities
for the purpose of collective bargaining or other mutual aid or
protection.” 29 U.S.C. § 157. 1 Included among the concerted
activities protected by Section 7 is the right of employees to
visibly display pro-union signs in employees’ personal
vehicles parked on an employer’s property. See, e.g.,
International Business Machines Corp., 333 N.L.R.B. 215,
219-21 (2001), enforced, 31 Fed. Appx. 744 (2d Cir. 2002);
District Lodge 91, International Association of Machinists &
Aerospace Workers, AFL-CIO v. NLRB, 814 F.2d 876, 879
(2d Cir. 1987).
Just as surely as Section 7 protects employees’ right to
picket and display pro-union signs in their cars, unions may
waive that right in a collective bargaining agreement. See,
e.g., American Freight System Inc. v. NLRB, 722 F.2d 828,
832 (D.C. Cir. 1983) (“It is well settled that a union may
1
That provision provides in full: “Employees shall have the
right to self-organization, to form, join, or assist labor
organizations, to bargain collectively through representatives of
their own choosing, and to engage in other concerted activities for
the purpose of collective bargaining or other mutual aid or
protection, and shall also have the right to refrain from any or all of
such activities except to the extent that such right may be affected
by an agreement requiring membership in a labor organization as a
condition of employment as authorized in section 158(a)(3) of this
title.” 29 U.S.C. § 157.
5
lawfully waive statutory rights of represented employees in a
collective bargaining agreement.”). Absent a waiver,
however, Section 8 of the Act makes an employer’s violation
of a Section 7 right an “unfair labor practice.” 29 U.S.C.
§ 158(a).
B
Verizon New England is a well-known
telecommunications provider that services Massachusetts and
Rhode Island. It maintains facilities in three towns in
Massachusetts: Westfield, Springfield, and Hatfield.
Employees at those facilities are represented by the
International Brotherhood of Electrical Workers, Local 2324.
Verizon New England and Local 2324 were parties to a
collective bargaining agreement valid from August 3, 2003, to
August 2, 2008.
The parties’ collective bargaining agreement provided for
arbitration – at the union’s option – of disputes arising out of
the contract. The agreement stated: “If the Union contends
that the intent and meaning of one or more of the Articles of
[the] Agreement . . . has been violated by the Company, it
may demand arbitration.” Joint Appendix at 38. Pursuant to
the agreement, arbitration was to be conducted by a three-
member Arbitration Board consisting of one representative
selected by each party, as well as a mutually agreed-upon
neutral arbitrator. The agreement provided that a decision of
the Arbitration Board would be “final and binding on the
Union and the Company.” Joint Appendix at 39.
As relevant here, the collective bargaining agreement
also contained a waiver of the union members’ right to picket:
“The Union agrees that during the term of this Agreement, or
any extension thereof, it will not cause or permit its members
6
to cause, nor will any member of the Union take part in, any
strike of or other interference with any of the Company’s
operations or picketing of any of the Company’s premises.”
Joint Appendix at 42.
In early 2008, a few months before the collective
bargaining agreement was to expire, Local 2324 planned to
picket Verizon’s Westfield, Springfield, and Hatfield
facilities. In March 2008, the union prepared for the picketing
campaign by distributing pro-union picket signs to employees
at those Verizon facilities. The signs were 22 inches by 28
inches and bore pro-union slogans such as “Verizon, Honor
Our Existing Contract” and “Honor Our Contract.”
Employees at the three locations visibly displayed the
signs in the windshields of their cars while the cars were
parked on Verizon property. In response, Verizon directed
the employees to stop visibly displaying the signs in their cars
while on Verizon property. The employees complied. But
after Verizon’s order to stop displaying the signs, the union
filed unfair labor practice charges with the National Labor
Relations Board. The union alleged that Verizon had violated
its members’ Section 7 right to display pro-union signs in
their cars.
The Board’s Regional Director declined to rule on the
charges. The Regional Director did so because, in her view,
the dispute arose “from the contract between the parties,” and
“contractual grievance-arbitration procedures are available for
resolving the dispute.” Letter from Rosemary Pye, NLRB
Regional Director, to Local 2324 (June 18, 2008), Joint
Appendix at 56.
The union then submitted to arbitration the issue of
whether Verizon had violated the collective bargaining
7
agreement by requiring the employees to stop displaying the
signs in their parked cars.
The arbitration panel ruled for Verizon over the dissent of
the union-selected member of the panel. The arbitration panel
relied on the provision in the collective bargaining agreement
expressly waiving the union members’ right to picket. The
panel decided that the term “picketing” included the visible
display of pro-union signs in the windshields of employees’
cars.
Notwithstanding the arbitration panel’s reading of the
collective bargaining agreement, the Acting General Counsel
of the National Labor Relations Board issued a complaint
alleging that Verizon had committed an unfair labor practice.
The Acting General Counsel alleged that Verizon had violated
Section 8 of the National Labor Relations Act by ordering the
employees to stop displaying the pro-union signs in their cars.
Under the Board’s highly deferential Spielberg-Olin
standard (as relevant here), the Board will defer to an
arbitration award unless the award is “clearly repugnant” to
the National Labor Relations Act. See Olin Corp., 268
N.L.R.B. 573, 574 (1984); Spielberg Manufacturing Co., 112
N.L.R.B. 1080, 1082 (1955).
Applying that standard, the Administrative Law Judge
upheld the arbitration decision in Verizon’s favor. According
to the Administrative Law Judge, the arbitration decision was
not clearly repugnant to the Act because the contractual term
“picketing” could be read to cover the union activities in
question here.
The union appealed to the National Labor Relations
Board. In a divided 2-1 decision, the Board ruled against
8
Verizon. Applying the Spielberg-Olin standard, the Board
concluded that the arbitration decision was “clearly
repugnant” to the National Labor Relations Act. The Board
stated that the arbitration panel incorrectly concluded that the
union’s contractual waiver of the right to picket encompassed
the right to display pro-union signs in cars. The Board
accepted that a union could waive its members’ Section 7
right to display pro-union signs. But the Board stated that the
union did not do so in the collective bargaining agreement at
issue here.
The Board ordered Verizon to allow employees to
display pro-union signs in their cars. Verizon petitioned this
Court for review of the Board’s order. The Board cross-
applied for enforcement of its order.
Our review is deferential, not de novo. We review the
Board’s decision for reasonableness, which in this context is
sometimes referred to as abuse of discretion review. Put
succinctly, the Board’s decision must be reasonable and
reasonably explained. See Plumbers & Pipefitters Local
Union No. 520 v. NLRB, 955 F.2d 744, 750 (D.C. Cir. 1992).
II
A
Congress has established that labor arbitration agreed
upon by a union and an employer is “the desirable method for
settlement of grievance disputes arising over the application
or interpretation of an existing collective-bargaining
agreement.” 29 U.S.C. § 173(d). At the same time, Section
10 of the National Labor Relations Act authorizes the Board
to prevent the commission of “any unfair labor practice”
notwithstanding “any other means of adjustment or
9
prevention that has been or may be established by agreement,
law, or otherwise.” 29 U.S.C. § 160(a). The NLRB therefore
may review labor arbitration proceedings in cases where
determining whether an unfair labor practice occurred
depends in part on whether a party waived a statutorily
protected right in the collective bargaining agreement, which
in turn depends on an interpretation of the collective
bargaining agreement that the arbitrator previously
interpreted.
Under Section 10 of the Act, the Board possesses
discretion over how much to defer to arbitration decisions.
The standard the Board has long used to review arbitration
decisions – the Spielberg-Olin standard – is highly deferential
to the arbitrator. The Board adopted that highly deferential
standard to further the “national policy strongly favor[ing] the
voluntary arbitration of disputes.” Olin Corp., 268 N.L.R.B.
573, 574 (1984); see also 29 U.S.C. § 173(d).
The Spielberg-Olin standard calls for Board deference to
the arbitrator’s decision so long as the following conditions
are met: (1) the arbitration proceedings appear to have been
fair and regular; (2) all parties agreed to be bound by the
arbitration decision; (3) the arbitrator has adequately
considered the unfair labor practice at issue; and (4) the
arbitrator’s decision is not “clearly repugnant” to the National
Labor Relations Act. See Olin Corp., 268 N.L.R.B. at 574;
Spielberg Manufacturing Co., 112 N.L.R.B. 1080, 1082
(1955); see also Ralphs Grocery Co., 361 N.L.R.B. No. 9,
2014-2015 N.L.R.B. Dec. ¶ 15,843 (July 31, 2014); Roadway
Express, Inc., 355 N.L.R.B. 197, 210 (2010); Turner
10
Construction Co., 339 N.L.R.B. 451, 455 (2003); Mt. Sinai
Hospital, 331 N.L.R.B. 895, 898 (2000). 2
The only question in this case concerns the fourth
Spielberg-Olin factor: whether the arbitration decision was
“clearly repugnant” to the National Labor Relations Act.
In Olin, the Board explained that an arbitrator’s decision
is not “clearly repugnant” unless the decision is “palpably
wrong, i.e., unless the arbitrator’s decision is not susceptible
to an interpretation consistent with the Act.” Olin Corp., 268
N.L.R.B. at 574 (internal quotation marks and footnote
omitted). That language in Olin is not especially clear, and it
has caused some confusion in past cases. The “i.e.” in the
sentence appears to be the source of the confusion, because
what comes after the “i.e.” describes a separate way to
overturn the arbitrator’s decision, not simply an example or
another way to describe what comes before the “i.e.”
To be clear, therefore, the fourth Spielberg-Olin factor
establishes two ways in which the Board may overturn an
arbitrator’s decision as “clearly repugnant to the Act”: (i) if
the arbitrator interpreted the contract to mean that one party
waived a right that may not be waived under the National
Labor Relations Act, in which case the “arbitrator’s decision”
is deemed “not susceptible to an interpretation consistent with
the Act”; or (ii) if the arbitrator interpreted the contract in a
“palpably wrong” manner and thereby deprived the losing
party of a right otherwise guaranteed under the Act.
2
In December 2014, the Board announced a new, less
deferential standard of review to be applied prospectively only. See
Babcock & Wilcox Construction Co., 361 N.L.R.B. No. 132, 201
L.R.R.M. (BNA) 2057 (Dec. 15, 2014). Because this case was
pending when the new policy was announced, the Board applied its
Spielberg-Olin deference standard rather than the new standard.
11
B
An arbitration decision is “not susceptible to an
interpretation consistent with the Act” when an arbitrator
interprets a contract to mean that one party waived a right that
may not be waived under the National Labor Relations Act.
See, e.g., I.R.S. v. Federal Labor Relations Authority, 963
F.2d 429, 440 & n.13 (D.C. Cir. 1992); Plumbers &
Pipefitters Local Union No. 520 v. NLRB, 955 F.2d 744, 754,
756 (D.C. Cir. 1992); see also Harry T. Edwards, Deferral to
Arbitration and Waiver of the Duty to Bargain: A Possible
Way Out of Everlasting Confusion at the NLRB, 46 OHIO ST.
L.J. 23, 30 (1985).
Put the other way, an arbitration decision finding waiver
of a right protected by the Act is deemed “susceptible to an
interpretation consistent with the Act” so long as the right at
issue in the arbitration proceeding may be waived under the
Act. See Plumbers & Pipefitters, 955 F.2d at 756 (“[W]here
the statutory right implicated by a grievance settlement is
within the category of waivable rights . . . then it is unclear
why the Board would ever have any choice but to give
deference, at least so long as the grievance procedures
through which the settlement is reached are fair and regular
and the union has not breached its duty of fair
representation.”) (emphasis and internal quotation marks
omitted).
Therefore, to determine whether an arbitration decision is
“susceptible to an interpretation consistent with the Act,” the
Board’s task is straightforward: The Board must ask only
whether the Act permits the Section 7 right at issue to be
waived in a collective bargaining agreement. If the answer to
that question is yes, then an arbitrator’s conclusion that the
12
parties to a contract had, in fact, waived that Section 7 right is
necessarily “susceptible to an interpretation consistent with
the Act.”
In this case, that inquiry is simple. All agree that the
National Labor Relations Act allows a union to waive its
members’ Section 7 right to display pro-union signs in
vehicles parked on company property. Here, the arbitration
panel determined that the union did in fact waive that right.
The arbitration decision, therefore, was susceptible to an
interpretation consistent with the Act.
C
1
Verizon claims that this conclusion – namely, that the
union waived a waivable statutory right – is the end of the
inquiry under the “clearly repugnant” prong of the Spielberg-
Olin standard. We disagree. As we read the Board’s
precedents, the Spielberg-Olin standard allows another (albeit
narrow) way to show that an arbitration decision is “clearly
repugnant to the Act”: if the arbitrator interpreted the contract
in a “palpably wrong” manner and thereby deprived the losing
party of a right otherwise guaranteed under the Act.
What does “palpably wrong” mean? The phrase means
what it suggests. Wrong is not enough. The adverb matters.
Egregiously wrong, clearly erroneous, badly flawed, totally
wrong, jumping the rails. Whatever the exact verbal
formulation – we will use “egregiously wrong” – the basic
idea remains the same: The Board must afford great
deference to the arbitrator’s interpretation of the contract.
See, e.g., Motor Convoy, Inc., 303 N.L.R.B. 135, 137 (1991);
U.S. Postal Service, 275 N.L.R.B. 430, 432 (1985)
13
(arbitration decision that does not comport precisely with
Board precedent is not “palpably wrong”). 3
To state the obvious, the fact that the Board might read a
contract term differently than the arbitrator read it does not
suffice to make an arbitration decision “palpably wrong.”
Rather, as the Board has previously stated, its highly
deferential standard of review “recognizes that the parties
have accepted the possibility that an arbitrator might decide a
particular set of facts differently than would the Board. This
possibility, however, is one which the parties have voluntarily
assumed through collective bargaining.” Andersen Sand &
Gravel Co., 277 N.L.R.B. 1204, 1205 n.6 (1985); see also
Dennison National Co., 296 N.L.R.B. 169, 170 (1989).
3
The Board’s “palpably wrong” standard is similar to
(although perhaps a notch less deferential to the arbitrator than) the
extraordinarily deferential standard applied by federal courts
reviewing arbitration decisions directly under Section 301(a) of the
Labor Management Relations Act. 29 U.S.C. § 185. Consistent
with the national policy favoring labor arbitration, a federal court
“presiding over a § 301 proceeding seeking enforcement of an
arbitrator’s award must give the award the greatest deference
imaginable – the award must be enforced so long as the arbitrator
purports to be interpreting the contract rather than dispensing ‘his
own brand of industrial justice.’” Utility Workers Union of
America, Local 246, AFL-CIO v. NLRB, 39 F.3d 1210, 1216 (D.C.
Cir. 1994) (quoting United Steelworkers v. Enterprise Wheel & Car
Corp., 363 U.S. 593, 597 (1960)); see also National Postal Mail
Handlers Union v. American Postal Workers Union, 589 F.3d 437,
441 (D.C. Cir. 2009) (The “question is whether the arbitrator was
even arguably construing or applying the contract.”) (internal
quotation marks omitted); National Football League Management
Council v. National Football League Players Association, No. 15-
2801, 2016 WL 1619883 (2d Cir. Apr. 25, 2016).
14
To be sure, we ourselves review the Board’s decision
under a deferential standard. We may overturn the Board’s
decision only if the Board abused its discretion (that is, acted
unreasonably) in failing to afford the required deference to the
arbitration decision. Plumbers & Pipefitters, 955 F.2d at 750;
American Freight System Inc. v. NLRB, 722 F.2d 828, 832
(D.C. Cir. 1983).
2
Here, the Board should have upheld the arbitration
decision. The arbitration decision was far from egregiously
wrong. No hard-and-fast definition of the term “picketing”
excludes the visible display of pro-union signs in employees’
cars rather than in employees’ hands, especially when the cars
are lined up in the employer’s parking lot and thus visible to
passers-by in the same way as a picket line. Indeed, the
Board’s own case law on picketing has concluded that the
term may, under certain circumstances, extend to the display
of stationary signs – whether in employees’ cars, positioned
near an entrance to a job site, or even planted in snowbanks –
on or near the employer’s property. See United Mine Workers
of America, District 2, 334 N.L.R.B. 677, 686 (2001);
Ironworkers District Council of the Pacific Northwest, 292
N.L.R.B. 562, 571-76 (1989); Construction & General
Laborers Union, Local 304, 260 N.L.R.B. 1311, 1316, 1319
(1982); Lawrence Typographical Union No. 570, 169
N.L.R.B. 279, 282-84 (1968); Local 182, International
Brotherhood of Teamsters, 135 N.L.R.B. 851, 856-57 (1962).
In short, there was nothing approaching egregious error
in the arbitration panel’s decision to interpret the ban on
picketing to encompass the visible display of picket signs in
employees’ cars on Verizon property. Under a reasonable
15
application of the Spielberg-Olin standard, the Board should
have upheld the arbitration panel’s decision.
* * *
Under the Spielberg-Olin standard, the arbitration panel’s
decision in this case was not clearly repugnant to the Act.
First, the arbitration panel’s decision was susceptible to an
interpretation consistent with the Act, because under the Act
unions may waive their members’ right to display signs in
cars on the employer’s premises. And second, the arbitration
panel’s decision was not a “palpably wrong” interpretation of
the collective bargaining agreement. The Board’s contrary
decision was unreasonable. We grant Verizon’s petition for
review and deny the Board’s cross-application for
enforcement.
So ordered.
KAREN LECRAFT HENDERSON, Circuit Judge, concurring
in part and concurring in the judgment: I join Judge
Kavanaugh in granting Verizon New England’s petition for
review but write separately to express my doubt about the
arbitration deferral standard of the National Labor Relations
Board (Board) as described in the majority opinion. For
several reasons, I do not agree that “what comes after the ‘i.e.’
describes a separate way to overturn the arbitrator’s decision”
instead of “simply an example or another way to describe
what comes before.” Maj Op. 10. To begin with, this
construction deviates from the term’s ordinary definition—
“i.e.” is short for the Latin id est, meaning “that is”; not “or”
or “alternatively” as my colleagues apparently have it.
Second, their construction does not comport with the court’s
ordinary usage, by which the term restates what is said before.
See, e.g., Puckett v. United States, 556 U.S. 129, 135 (2009)
(“intentionally relinquished or abandoned, i.e., affirmatively
waived”); United States v. Cotton, 535 U.S. 625, 630 (2002)
(“jurisdiction . . ., i.e., the courts’ statutory or constitutional
power to adjudicate the case” (internal quotations and
emphasis omitted)). Third—and, in my view, most salient—
we should not give our own interpretation of what Board
“orders do not say” when the Agency itself has not
subsequently done so. Phila. Gas Works v. FERC, 989 F.2d
1246, 1250–51 (D.C. Cir. 1993) (“FERC, not we (or FERC’s
appellate lawyers), must” perform task); see also SEC v.
Chenery Corp., 318 U.S. 80, 88 (1943). Tellingly, the
majority opinion cites no Board authority for its interpretation
of the Board’s use of “palpably wrong.” I submit that we
should ask only whether the arbitrator’s decision is
susceptible of an interpretation consistent with the National
Labor Relations Act (NLRA), 29 U.S.C. §§ 151 et seq. The
right to picket is a waivable right and we have no independent
reason to think waiver inconsistent with the NLRA; the
arbitrator’s conclusion that it was waived, then, passes muster
and our inquiry should be at an end.
2
But more importantly, my colleagues ignore the two-ton
elephant in the room, namely, what arbitration deferral
standard the Board may lawfully apply. May the Board, for
instance, reject the arbitrator’s interpretation of a collective
bargaining agreement (CBA) because the Board would not
have reached the same conclusion in the first instance? In the
past the Board said no, recognizing “that national policy
strongly favors the voluntary arbitration of disputes.” Olin
Corp., 268 N.L.R.B. 573, 574 (1984). Accordingly, it
rejected only “palpably wrong” or “clearly repugnant” arbitral
interpretations of a CBA. Id. (ALJ’s failure to defer to
arbitration award “frustrate[d] the declared purpose of [Board
policy] to recognize the arbitration process as an important
aspect of the national labor policy favoring private resolution
of labor disputes.”).
This standard—although nebulous—tracks our own
standard of review of arbitration decisions. See Maj. Op. 13
& n.3 (“The Board’s ‘palpably wrong’ standard is similar to
(although perhaps a notch less deferential to the arbitrator) the
extraordinarily deferential standard” we apply). When the
court is the forum of first review, it enforces the arbitrator’s
CBA interpretation “so long as the arbitrator purports to be
interpreting the contract rather than dispensing ‘his own brand
of industrial justice.’ ” Utility Workers Union of Am. v.
NLRB, 39 F.3d 1210, 1216 (D.C. Cir. 1994) (quoting United
Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593,
597 (1960)). Under that review, “whether the arbitrator
erred—or even seriously erred—in interpreting the contract”
is irrelevant. Nat’l Postal Mail Handlers Union v. Am. Postal
Workers Union, 589 F.3d 437, 441 (D.C. Cir. 2009). See also
Nat’l Football League Mgmt. Council v. Nat’l Football
League Players Ass’n, No. 15-2801, 2016 WL 1619883, at *6
(2d Cir. Apr. 25, 2016) (if arbitrator “misinterprets the
parties’ agreement,” court cannot “substitute [its] own”
3
interpretation (citing United Paperworkers Int’l Union v.
Misco, Inc., 484 U.S. 29, 37–38 (1987))).1 But the Board
has recently jettisoned this standard. It now appears to defer
to the arbitrator’s CBA interpretation only if “Board law
reasonably permits” it. Babcock & Wilcox Constr. Co., 361
N.L.R.B. No. 132, 2014 WL 7149039, at *11 (Dec. 15,
2014).2 If the “Board law” standard in fact replaces the old
one, it presents the paradox of a Board decision “against
deferring to an arbitrator’s award” in a setting “when a federal
court would have been obliged to enforce” it. See Utility
Workers, 39 F.3d at 1216 (forewarning of paradox). If the
Board applies its new standard, “both an arbitrator’s award
1
The standard also furthers one goal of the Labor Relations
Management Act (LRMA), 29 U.S.C. §§ 141 et seq., by which the
Congress established that “[f]inal adjustment by a method agreed
upon by the parties is declared to be the desirable method for
settlement of grievance disputes arising over the application or
interpretation of an existing collective bargaining agreement,” 29
U.S.C. § 173(d); see also United Steelworkers of Am. v. Warrior &
Gulf Navigation Co., 363 U.S. 574, 578 (1960) (“A major factor in
achieving [the federal policy of] industrial peace is the inclusion of
a provision for arbitration of grievances in the collective bargaining
agreement.”).
2
Parenthetically, it is not plain what “Board law” in fact bears
on contract interpretation. See Litton Fin. Printing Div. v. NLRB,
501 U.S. 190, 201 (1991) (“[T]he Board is neither the sole nor the
primary source of authority in [contract interpretation]. Arbitrators
and courts are still the principal sources of contract interpretation.”
(internal quotation marks omitted)); Honeywell Int’l, Inc. v. NLRB,
253 F.3d 119, 124 (D.C. Cir. 2001) (“[T]he Board may interpret a
contract ‘only so far as necessary to determine’ what statutory
rights the party has given up by agreeing to a particular contract.”
(quoting NLRB v. C & C Plywood Corp., 385 U.S. 421, 428
(1967))).
4
and a conflicting Board order” could—inconsistently—be
“enforced simultaneously in the federal courts.” Id.
If the Board continues to second guess the substance of
the arbitrator’s CBA interpretation as opposed to, say, only
his choice of remedy, the paradox will become inevitable. To
me, it is plain that the Board’s inquiry whether “Board law
reasonably permits” an interpretation is irreconcilable with
our review of whether the arbitrator dispensed his “own brand
of industrial justice.” Id. When the time comes, I believe the
Board will have to explain why we should accord its decision
any deference when it fails to defer to an arbitrator’s
conclusion, to which our “extraordinarily deferential
standard,” Nat’l Postal, 589 F.3d at 441, must be applied. See
BP Amoco Corp. v. NLRB, 217 F.3d 869, 873 (D.C. Cir.
2000) (court applied de novo review to labor contract,
rejecting Board’s interpretation); accord Litton, 501 U.S. at
203 (“We would risk the development of conflicting
principles were we to defer to the Board in its interpretation
of the contract, as distinct from its devising a remedy for the
unfair labor practice that follows from a breach of contract.
We cannot accord deference in contract interpretation here
only to revert to our independent interpretation of collective-
bargaining agreements in a case arising under [the
LRMA].”).3
3
My colleagues conclude that we may “overturn the Board’s
decision only if the Board abused its discretion (that is, acted
unreasonably) in failing to afford the required deference.” Maj. Op.
14; see also Dissent Op. 1 (same). Granted, we ordinarily review
the Board’s application of its arbitration deferral standard in this
manner. See Am. Freight Sys. Inc. v. NLRB, 722 F.2d 828, 832
(D.C. Cir. 1983). But here the Board was engaged in contract
interpretation, see Maj. Op. 13 (discussing whether Board may
“read a contract term differently than the arbitrator read it.”), and
5
we have said time and again that we accord the Board no deference
when it is so engaged. See, e.g., McDonnell Douglas Corp. v.
NLRB, 59 F.3d 230, 234 (D.C. Cir 1995) (“courts owe no deference
to the Board in its interpretation” of CBA (internal quotations
omitted)); Int’l Union of Painters & Allied Trades v. NLRB, 309
F.3d 1, 3 (D.C. Cir. 2002) (“Board interpretations of the CBA . . .
receive no deference”). My colleagues make no attempt to
reconcile these conflicting standards; as we must ensure that
“[a]rbitrators and courts”—not the Board—remain “the principal
sources of contract interpretation,” Litton, 501 U.S. at 201,
however, it seems plain to me that “the normal deference we must
afford the Board’s policy choices does not apply in this context,”
Enloe Med. Ctr. v. NLRB, 433 F.3d 834, 837 (D.C. Cir. 2005)
(emphasis added), i.e., when the Board reinterprets a contract under
its arbitration deferral standard, our abuse of discretion approach
should yield.
SRINIVASAN, Circuit Judge, concurring in part and
dissenting in part: The underlying question in this case is
whether the union, in its collective bargaining agreement with
Verizon, waived the statutorily protected right of employees
to engage in the conduct at issue: to leave pro-union signs
displayed in the window of their cars in a company parking
lot while at work. The relevant provision of the collective
bargaining agreement waived the employees’ right to engage
in “picketing.” An arbitration panel, in a divided decision,
found that the unattended display of pro-union signs in parked
cars while at work constituted “picketing.” A dissenting
arbitrator strongly disagreed. The Board overturned the
arbitration majority’s decision, and we now assess whether
the Board acted permissibly in doing so.
I concur fully in the court’s explanation of the legal
standards under which the Board reviews an arbitration
decision’s interpretation of a collective bargaining agreement.
As the court sets out, one situation in which the Board may
set aside an arbitration decision is if an arbitrator reaches a
“palpably wrong” conclusion that the agreement waives
employees’ statutory right to engage in the conduct at issue.
Ante, at 12-13. The “palpably wrong” standard is self-
evidently a deferential one. But if the Board, applying that
deferential standard, concludes that an arbitrator’s
interpretation is palpably wrong, we in turn apply a
deferential standard in reviewing the Board’s decision. As the
court explains, we overturn the Board’s decision only if it is
an abuse of discretion—that is, only if it is unreasonable.
Ante, at 14.
My sole (and narrow) disagreement with the court
concerns the application of that deferential standard in the
specific circumstances of this case. In my respectful view, the
Board’s decision was not unreasonable in setting aside the
arbitration decision.
2
The arbitration majority determined that, when Verizon
employees left unattended signs in the windows of their cars
in company parking lots while they went about their workday,
the employees were engaged in “picketing.” According to the
arbitration majority, “placing signs in cars” amounts to
“picketing” because it “communicates a message.” J.A. 305.
The Board could reasonably conclude otherwise. As the
Supreme Court has explained, although written
communications “may convey the same information” as
workers “patrolling a picket line,” the “loyalties and
responses evoked and exacted by picket lines are unlike those
flowing from appeals by printed word.” Hughes v. Superior
Court, 339 U.S. 460, 465 (1950). Picketing thus is
“qualitatively different from other modes of communication.”
Edward J. DeBartolo Corp. v. Fla. Gulf Coast Bldg. & Const.
Trades Council, 485 U.S. 568, 580 (1987) (internal quotation
marks and quotation omitted).
The Board, for that reason, could find it wrong to deem
the unattended display of signs in parked cars to be
“picketing.” But could the Board find it palpably wrong to do
so? That is by definition a closer question. I think that, under
our deferential standard of review, it was at least reasonable
for the Board to find the arbitration majority’s interpretation
of “picketing” to be palpably wrong. In other words, it was at
least reasonable for the Board to find the dissenting arbitrator
to be palpably correct.
The Board has long held that a “necessary condition[] of
‘picketing’ is a confrontation in some form between union
members and [persons] trying to enter the employer’s
premises.” Chi. Typographical Union No. 16, 151 N.L.R.B.
1666, 1669 (1965) (quoting NLRB v. United Furniture
Workers of Am., 337 F.2d 936, 940 (2d Cir. 1964)). The
Board could reasonably conclude that, when union members
3
leave signs behind in their parked cars and enter the
workplace for the day, they plainly are not engaged in the sort
of personal “confrontation” with passersby in the parking lot
that could be considered “picketing.” See id. (finding that
patrolling while carrying placards in shopping centers and
public buildings lacked the “element of confrontation”
necessary to constitute picketing). To be sure, picketers
might occasionally set down their signs while taking a
temporary break or while sitting nearby in their cars to avoid
rainfall. See, e.g., Constr. & Gen. Laborers Local 304, 260
N.L.R.B. 1311, 1316 (1982); Gen. Serv. Emps. Union Local
73, 239 N.L.R.B. 295, 302 (1978); Lawrence Typographical
Union No. 570, 169 N.L.R.B. 279, 282-83 (1968); Local 182,
Int’l Bhd. of Teamsters, Chauffeurs, Warehousemen &
Helpers of Am., 135 N.L.R.B. 851, 856 & n.6 (1962). But
here, the employees left their signs entirely unattended in their
cars, and they then went to work. I am unaware of any
decision considering employees to be engaged in picketing
even while in the workplace carrying out their normal
functions.
In those circumstances, I believe the Board reasonably
found the arbitration majority’s interpretation of the
“picketing” prohibition to be palpably wrong. The Board may
not have been compelled to reach that conclusion, and the
Board perhaps also would have acted reasonably had it
sustained the arbitration decision rather than overturned it. In
adopting the latter course, though, the Board, in my respectful
view, did not abuse its discretion.