KFC National Management Corp., ordered by the National Labor Relations Board (204 N.L.R.B. No. 69) to bargain with a union certified as representative of its employees petitions for review of the order and the Board cross-petitions for enforcement. Review granted. Cross-petition for enforcement denied.

This petition for review of an unfair labor practice decision raises the troublesome question of delegation of authority in administrative decision making. The genesis of the petition, was a representation election contested by the employer, KFC, on grounds of pro-union activity of supervisory employees. The NLRB Regional Director, to whom KFC protested, conducted an ex parte investigation into the company's claims and concluded that they had 'no merit' and that therefore the union should be certified as the duly-elected bargaining representative.

Dissatisfied with both the Director's findings and his failure to conduct an adversary hearing, KFC petitioned the Board for review. On September 7, 1972-- approximately two weeks after the petition was filed-- KFC's counsel received a brief telegram informing him that the request had been denied 'as it raises no substantial issues warranting review.' The telegram was signed, 'By direction of the Board.' A further petition for reconsideration was similarly telegraphically denied, 'as lacking in merit'-- again 'By direction of the Board.'

When KFC continued to refuse to bargain, this unfair practice charge was filed. In its answer to the complaint, KFC again pressed its objections to the election and asked for a full hearing on its claims. In addition, the company for the first time challenged the denials of review and reconsideration on the grounds that the 'Board' had in fact been composed of but one Board member and two staff assistants.1

In its decision on the unfair practice charge, the Board-- now concededly composed of three official members-- refused to reconsider the Director's decision relying on its 'no relitigation' rule, and categorically rejected KFC's procedural objection as an unjustified intrusion into its decision-making process.2

As part of this petition for review of the Board's unfair practice order, KFC made a motion for a supplemental list of materials including,

All documents, papers and records, including agenda memos, case summaries, etc. of the National Labor Relations Board and particularly members Miller, Fanning, and Jenkins, their agents, employees, attorneys and assistants, and in particular any such documents, papers and records in the Review Section of the Board under the supervision of Gilbert Rosenberg, relating to consideration of the Employer's Request for Review.

. . . .pap

On October 17, 1973, this court denied the motion, except 'to the limited extent' of requiring 'that the Board shall serve and file a detailed statement showing the extent and date of the participation of members Miller, Fanning and Jenkins in the consideration of the Employer's request and motion . . ..' The Board responded with an affidavit from its Executive Secretary stating:

Member Jenkins was personally present and Chairman Miller and Member Fanning were each represented by an attorney assistant employed on his respective staff who had been authorized to cast a vote for him at the said agenda. The vote at the agenda was unanimous to deny review.

From its own argument-- both written and oral-- we have further learned that the authorizations referred to were quite general in nature: In the normal course of events, Board members seldom discuss individual cases with their assistants prior to these voting sessions. There is, apparently, a one-day period between the votes and the filing of decisions, but there is no evidence that the members normally review the votes cast by their staff assistants. The Board has represented-- and we have no reason to doubt-- that particularly difficult or significant cases receive the individual attention of the members either before or after their votes are cast by their proxies. But there is no suggestion that such was the case here: Indeed it is the Board's position that this case-- like the vast majority of review petitions3 -- was so routine that it was well suited to this general delegation approach.4

The question then is whether this virtually complete delegation comports with the requirements of the National Labor Relations Act and of administrative due process in general.

Inquiry into the statutory requirements of the National Labor Relations Act should begin with a bit of legislative history. Until the Landrum-Griffin Act of 1959, the Board was directly responsible for each and every representation decision. This tremendous burden-- over 10,000 cases in 19595 -- prompted Congress to amend the Act to permit delegation of those decisions to the Board's Regional Directors-- subject to discretionary review by the Board:

The Board is also authorized to delegate to its regional directors its powers under section 159 of this title to . . . certify the results (of bargaining elections), except that upon the filing of a request therefor with the Board by any interested person, the Board may review any action of a regional director delegated to him under this paragraph . . ..

29 U.S.C. 153(b).

In 1961 the Board exercised this authority by delegating representation matters subject to review by the Board on four different grounds:

(c) The Board will grant a request for review only where compelling reasons exist therefor. Accordingly, a request for review may be granted only upon one or more of the following grounds:

(1) That a substantial question of law or policy is raised because of (i) the absence of, or (ii) a departure from, officially reported Board precedent.

(2) That the regional director's decision on a substantial factual issue is clearly erroneous on the record and such error prejudicially affects the rights of a party.

(3) That the conduct of the hearing or any ruling made in connection with the proceeding has resulted in prejudicial error.

( 4) That there are compelling reasons for reconsideration of an important Board rule or policy.

29 C.F.R. 102.67(c).

Section 102.67 makes it clear that the decision on whether or not to grant such review is also to be made by the Board. See 29 C.F.R. 102.67 (e, f). While there is a provision for automatic consideration of cases referred to the Board by the Regional Directors, 29 C.F.R. 102.67(h), there is no converse language in either the statute or regulations suggesting that the Regional Director, or any other non-member, can preclude Board review.

Thus as the Board concedes, it, and it alone, had to rule on KFC's review petition. And as is further undisputed, such Board action could be taken by no fewer than two members acting as a quorum of a three-member panel. 29 U.S.C. 153(b). Thus the real question is whether the two absent members here could legally authorize their staff assistants to vote in their place.

Here again legislative history is somewhat instructive. In 1947 a Congress concerned with excessive 'institutional' decision making by the NLRB-- and particularly the rather intimate relationship between the trial examiners initially deciding cases and the corps of staff attorneys advising the Board members on their review-- amended the National Labor Relations Act to provide for more independent, personal adjudication.6

The Board, undoubtedly aware that this portion of the Taft-Hartley Act expressed Congress' general distrust of review attorneys,7 nevertheless argues that in making each assistant responsible to but one Board member, congress intended to foster even greater delegations from member to assistant. We cannot agree. Rather we believe that the authors of Taft-Hartley were only prepared to permit the staff assistants to aid the members who were themselves to be responsible for the Board's actions. Davis, Administrative Law Treatise 11.13 (1958). For example, while the allocation of the Board's administrative, prosecutorial, and adjudicative functions is well discussed in the Taft-Hartley conference report, there is no suggestion that the Board members could or should delegate their 'quasi-judicial' function to their staff assistants beyond that of reviewing transcripts or preparing draft opinions. 1947 U.S.Code Congressional Service pp. 1135, 1142-1143 (1947).

Here, of course, the staff assistants of two members did far more and, more importantly, they did so without guidance from the members themselves. They did not merely assist the members; they acted in their stead. In view of the rather clear congressional distrust of staff assistants-- who are, of course, neither appointed by the President nor approved by the Senate, as are the Board members, 29 U.S.C. 153(a)-- we cannot say that Congress intended, or would have approved, the general proxies issued here. We hold, therefore, that the 'Board's' votes in this case fail to satisfy the two-member quorum and three-member panel requirements of the Act. 29 U.S.C. 153(b).

The Board nevertheless argues that such delegation is supported by the law of administrative decision making, most notably United States v. Morgan, 313 U.S. 409, 61 S. Ct. 999, 85 L. Ed. 1429 (1941). In order to assess this claim, we must consider the rather tortured history of that decision. We begin with the first of no less than four Morgan decisions, Morgan v. United States, 298 U.S. 468, 56 S. Ct. 906, 80 L. Ed. 1288 (1936). There Chief Justice Hughes-- writing for a unanimous Court-- examined the essentials of a valid administrative decision-making process:

The requirement of a 'full hearing' has obvious reference to the tradition of judicial proceedings in which evidence is received and weighed by the trier of the facts. The 'hearing' is designed to afford the safeguard that the one who decides shall be bound in good conscience to consider the evidence, to be guided by that alone, and to reach his conclusion uninfluenced by extraneous considerations which in other fields might have play in determining purely executive action. The 'hearing' is the hearing of evidence and argument. If the one who determines the facts which underlie the order has not considered evidence or argument, it is manifest that the hearing has not been given.

298 U.S. 468, 480-481.

The Court then rejected a delegation theory not unlike the one advanced here:

In such a view, it would be possible, for example, for one official to hear the evidence and argument and arrive at certain conclusions of fact and another official who had not heard or considered either evidence or argument to overrule those conclusions and for reasons of policy to announce entirely different ones. It is no answer to say that the question for the court is whether the evidence supports the findings and the findings support the order. For the weight ascribed by the law to the findings-- their conclusiveness when made within the sphere of the authority conferred-- rests upon the assumption that the officer who makes the findings has addressed himself to the evidence, and upon that evidence has conscientiously reached the conclusions which he deems it to That duty cannot be performed by one who has not considered evidence or argument. It is not an impersonal obligation. It is a duty akin to that of a judge. The one who decides must hear.

298 U.S. 468, 481.

However, the Court was quick to add-- in a passage often forgotten by its critics-- that this principle did not preclude every delegation of adjudicatory responsibility:

This necessary rule does not preclude practicable administrative procedure in obtaining the aid of assistants in the department. Assistants may prosecute inquiries. Evidence may be taken by an examiner. Evidence thus taken may be sifted and analyzed by competent subordinates. Argument may be oral or written. The requirements are not technical. But there must be a hearing in a substantial sense. And to give the substance of a hearing, which is for the purpose of making determinations upon evidence, the officer who makes the determinations must consider and appraise the evidence which justifies them.

298 U.S. 468, 481-482.

Two years later in Morgan 11, 304 U.S. 1, 58 S. Ct. 773, 82 L. Ed. 1129 (1938), the Court-- again with Chief Justice Hughes writing for the majority-- clarified Morgan I in accepting the administrator's representations that he had made an independent review of the case:

In the light of this testimony there is no occasion to discuss the extent to which the Secretary examined the evidence, and we agree with the Government's contention that it was not the function of the court to probe the mental processes of the Secretary in reaching his conclusions if he gave the hearing which the law required.

304 U.S. 1, 18.

Finally, in Morgan IV, 313 U.S. 409, 61 S. Ct. 999, 85 L. Ed. 1429 (1941), a unanimous Court-- this time through Justice Frankfurter-- re-emphasized that once the threshold requirement of an individual decision is established, no further inquiry is justified:

(The Secretary's) testimony shows that he dealt with the enormous record in a manner not unlike the practice of judges in similar situations, and that he held various conferences with the examiner who heard the evidence. Much was made of his disregard of a memorandum from one of his officials who, on reading the proposed order, urged considerations favorable to the market agencies. But the short of the business is that the Secretary should never have been subjected to this examination. The proceeding before the Secretary 'has a quality resembling that of a judicial proceeding'. Morgan v. United States, 298 U.S. 468, 480, (56 S. Ct. 906, 911, 80 L. Ed. 1288). Such an examination of a judge would be destructive of judicial responsibility. We have explicitly held in this very litigation that 'it was not the function of the court to probe the mental processes of the Secretary'. 304 U.S. 1, 18 (58 S. Ct. 773, 776, 82 L. Ed. 1129). Just as a judge cannot be subjected to such a scrutiny, compare Fayerweather v. Ritch, 195 U.S. 276, 306-307 (25 S. Ct. 58, 67, 49 L. Ed. 193), so the integrity of the administrative process must be equally respected. See Chicago, B & Q. Ry. Co. v. Babcock, 204 U.S. 585, 593, (27 S. Ct. 326, 327, 51 L. Ed. 636). 313 U.S. 409, 422.

Thus what emerges from the Morgan quartet is the principle that those legally responsible for a decision must in fact make it, but that their method of doing so-- their thought processes, their reliance on their staffs-- is largely beyond judicial scrutiny.

This court and many others have consistently relied on Morgan to uphold the use of hearing examiners in developing evidence and forming preliminary decisions,8 the reliance on staff assistants for recommendations and draft opinions,9 and a variety of other procedures designed to apprise those legally responsible for administrative decisions with the critical issues and evidence in a case and to record their individual determinations.10 Concomitantly, the courts have consistently refused to issue subpoenas for the work product of such decision-making processes: Staff memos, expert reports, preliminary drafts, the oral testimony of the decision makers as to the basis for their opinions-- all have been held to be beyond the purview of the contesting parties and the reviewing courts.11

But even as the courts have upheld these various practices, they have derived from Morgan the corollary principle that once there has been a prima facie demonstration of impropriety the courts will inquire into the administrative process in order to insure that the decision making was informed, unbiased, and personal. See Citizens To Preserve Overton Park v. Volpe, 401 U.S. 402, 420, 91 S. Ct. 814, 28 L,Ed.2d 136 (1971); Singer Sewing Machine Co. v. NLRB, 329 F.2d 200, 206-208 (4th Cir. 1964); S. D. Warren Co. v. NLRB, 342 F.2d 814, 816-817 (1st Cir. 1965), cert. denied, 383 U.S. 958, 86 S. Ct. 1222, 16 L. Ed. 2d 300 (1966); NLRB v. Sun Drug Co., 359 F.2d 408, 413 (3rd Cir. 1966); National Nutritional Foods Association v. FDA,491 F.2d 1141, 1145 (2d Cir. 1974). See also, T.S.C. Motor Freight Lines, Inc. v. United States, 186 F. Supp. 777, 789-790 (S.D.Tex.1960), aff'd366 U.S. 419, 81 S. Ct. 1356, 6 L. Ed. 2d 387 (1961). Here, of course, the relevant facts have largely been admitted: The Board's counsel conceded at oral argument that there was no claim of proof that the individual members whose votes were cast by the assistants ever considered this case. Indeed the Board further admitted-- and Professor Murphy's account suggests-- that such individual consideration of routine cases is the exception rather than the rule.

Given these admissions, we believe the Board's reliance on our decision in Eastern Air Lines, Inc. v. CAB, 271 F.2d 752 (2d Cir. 1959), cert. denied, 362 U.S. 970, 80 S. Ct. 954, 4 L. Ed. 2d 901 (1959) is simply misplaced. It is true that Eastern Air Lines upheld the casting of members' votes by their assistants, but as the opinion makes clear, the vote there was after consideration by and pursuant to instructions of the agency members in contrast to the votes at issue here.12

Here there is no evidence that the Board members considered this case or instructed their assistants on how to vote. And, of course, the votes here were final, not mere tentative tallies for the purpose of issuing a press release.13

In this regard it should be noted that the Board's subsequent statement that the votes had been 'authorized' does not constitute a ratification of the prior proxies: The Board in no way suggests that it has reconsidered the merits of the review petition, but rather only that it issued the staff assistants' proxies. But it is the petitioner's contention-- and our holding-- that such proxies were themselves invalid and could not be issued under the National Labor Relations Act.

We hold no more than that the general proxies issued by the Board members to those not legally responsible for the review of representation decisions were invalid under both the statutory requirements of the National Labor Relations Act and the fundamental concepts of administrative due process. The members may, of course, continue to rely on their assistants for case summaries, legal memoranda, and draft opinions. And it may be that the Board as a whole may utilize its rule-making authority to restrict further-- in a general, principled manner-- its review of representation cases. If the members find the individual consideration of review petitions too burdensome, they may of course, petition Congress for further relief.14 So long as the Board's statutory basis and its own regulations provide for Board review of the Regional Director's decisions, however, it is the legally appointed and approved Board members, and not their staff assistants, who must make the final decisions on whether or not to grant review.15

We deny enforcement and remand for consideration of petitioner's request for Board review of the Regional Director's representation decision.