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Summary: Case: 18-60522 Document: 00515356718 Page: 1 Date Filed: 03/24/2020 REVISED March 24, 2020 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 18-60522 FILED March 20, 2020 Lyle W. Cayce DISH NETWORK CORPORATION, Clerk Petitioner / Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent / Cross-Petitioner. On Petition for Review and Cross-Petition for Enforcement of an Order of the National Labor Relations Board Before SOUTHWICK, W
Summary: Case: 18-60522 Document: 00515356718 Page: 1 Date Filed: 03/24/2020 REVISED March 24, 2020 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit No. 18-60522 FILED March 20, 2020 Lyle W. Cayce DISH NETWORK CORPORATION, Clerk Petitioner / Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent / Cross-Petitioner. On Petition for Review and Cross-Petition for Enforcement of an Order of the National Labor Relations Board Before SOUTHWICK, WI..
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Case: 18-60522 Document: 00515356718 Page: 1 Date Filed: 03/24/2020
REVISED March 24, 2020
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
No. 18-60522 FILED
March 20, 2020
Lyle W. Cayce
DISH NETWORK CORPORATION, Clerk
Petitioner / Cross-Respondent,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent / Cross-Petitioner.
On Petition for Review and Cross-Petition
for Enforcement of an Order of the
National Labor Relations Board
Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.
ANDREW S. OLDHAM, Circuit Judge:
DISH negotiated with a labor union for more than four years.
Eventually, DISH got tired and determined the parties were at an impasse.
The question presented is whether the National Labor Relations Board had
substantial evidence to gainsay DISH’s impasse determination and penalize
the employer for refusing still more years of negotiation. It did not.
I.
It’s easy to see how the parties tired of this years-long negotiation. We
do our best to summarize the events that turned a relatively simple dispute
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No. 18-60522
into a contentious multi-round National Labor Relations Board (“NLRB” or
“Board”) proceeding and cross-petitions for review in federal court.
A.
DISH Network Corporation (“DISH”) provides its customers with
satellite TV. Local branches serve as hubs for technicians who conduct
installations and repairs. Before 2009, DISH generally paid its employees by
the hour with minor incentives.
In 2009, DISH experimented with a new compensation scheme for
employees at two of its Dallas-Fort Worth locations: Farmers Branch and
North Richland Hills. Under the Quality Performance Compensation (“QPC”)
payment scheme, employees were paid a lower hourly wage with greater
performance-based incentives. DISH’s employees hated QPC. They hated it so
much that they unionized to oppose it at both of the affected branches. The
Communication Workers of America, AFL-CIO (“the Union”), became the
designated collective bargaining representative of the affected employees.
Bargaining over an initial contract began in July of 2010. For a time, it
appeared the parties might agree to eliminate QPC and replace it with a
different incentive-based payment plan (known as “Pi”). According to one of the
negotiators, as of March 22, 2013, “We were at Pi—they were at Pi.”
Things went haywire in July 2013. That’s when the Union changed its
position on QPC. Instead of opposing the QPC compensation scheme—which
was the entire basis for the Union’s existence—the union now demanded to
keep it. Why, you might wonder? In a word: Technology. As the district court
explained in a related case:
QPC paid employees based on performance metrics that DISH was
unable to adjust due to collective bargaining. As DISH improved
its processes and technologies, DISH technicians were able to
complete tasks more quickly and thus earn more under the QPC
incentive program. As a result, the wages of unit technicians
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increased by about $17,000 between 2013 and 2015. In 2015,
Union members were making, on average, $19,000 more than their
non-unionized peers.
Kinard ex rel. NLRB v. DISH Network Co., 228 F. Supp. 3d 771, 775 (N.D. Tex.
2017) (quotation omitted). As the district court noted, 1 the gap between Union
employees and others grew over time. Union technicians working under QPC
made 14 percent more than their non-union peers in 2013, then 41 percent
more in 2014, and 43 percent more in 2015. Eventually, the technicians who
were making more under QPC were working less than their non-union peers.
By 2015, the gap was about 200 hours on average.
In addition to creating these horizontal disparities, QPC also produced
vertical anomalies. One high-earning technician with an interest in
management acknowledged that moving up the company ladder would have
decreased his pay. So, as one might imagine, the Union fought hard to keep
QPC. DISH tried to get rid of it. After the Union’s change of heart, the parties
made progress on some other issues. But on QPC, they made little headway.
B.
By November 2014, the parties had conducted approximately 25 face-to-
face bargaining sessions over the course of more than four years. And they were
no closer to an agreement on QPC than when they started. So, at a meeting on
November 18, 2014, DISH made a “final proposal” that included the
elimination of QPC. The final proposal said, “[DISH] rejects continuation of
QPC.” Not surprisingly, that session also adjourned without an agreement.
More bargaining sessions had been scheduled for early December, but the
Union had to cancel those meetings. The Union asked to reschedule, and
1 The parties’ first appearances in federal court concerned injunctive relief granted
during the NLRB’s adjudication of unfair labor charges against DISH. See Kinard ex rel.
NRLB v. DISH Network Corp., 890 F.3d 608, 610 (5th Cir. 2018).
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DISH’s lead negotiator responded by saying that DISH had “provided a final
offer for [the Union] to accept or reject.” DISH further emphasized that, if the
Union couldn’t meet as scheduled or offer a counterproposal, DISH would
“consider the bargaining to be at an impasse.”
The Union responded with a counterproposal. Under the terms of the
counterproposal, all technicians employed by DISH at the time would retain
QPC for the length of the contract. So everyone who had QPC would keep QPC
going forward. Any new hires, however, would be paid according to a different
plan.
DISH rejected the Union’s counterproposal and insisted that its final
offer was indeed its “last, best[,] and final offer.” After finding out that the
Union’s lead negotiator was unavailable for the rest of December, DISH’s lead
negotiator asked the Union to take DISH’s final offer to its members for a vote.
He stated, “Once we know whether DISH’s final offer is accepted or rejected,
we can discuss if further bargaining is warranted.” The Union refused to take
the final offer to its members and asked for another bargaining session. The
next day, December 31, 2014, DISH’s lead negotiator replied and explained
that his partner would take over for the rest of the negotiations. He also said
that DISH’s new representative would “be getting back to [the Union]
sometime after the new year.”
C.
A year’s silence ensued—there was no contact between the parties until
after the next new year. In January 2016, DISH’s new lead negotiator sent a
letter to ask whether the Union would accept DISH’s final offer. The letter also
stated that since that final offer was indeed “[DISH’s] final offer, it does not
appear at this point that further bargaining would be productive.”
In response, the Union again asked for yet another bargaining session.
DISH’s replacement negotiator said he understood the Union’s response as a
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rejection of DISH’s final offer. He also observed that the parties had been
bargaining since 2011, and that in his view, DISH and the Union were “at a
standstill.” He asked the Union to explain whether it disagreed; otherwise,
DISH would “implement its last, best[,] and final proposal.” In response, the
Union demanded another meeting. In early April 2016, DISH said that
“further bargaining would be futile,” and DISH would implement its final
offer—and nix QPC—no later than April 23, 2016.
On April 23, 2016, DISH did exactly that. With QPC gone, unit
technicians saw their wages drop significantly. Seventeen employees quit.
D.
The Union brought a complaint to the NLRB and alleged that DISH
committed unfair labor practices. An administrative law judge (“ALJ”)
determined DISH unlawfully declared an impasse. In the ALJ’s view, the
Union’s November 2014 counterproposal—that existing employees could keep
QPC but new hires could not—constituted a “white flag.” The ALJ asserted
that DISH’s technicians had a “very high [annual] attrition rate” that ranged
from 116 percent to 13 percent. The ALJ repeatedly cited the 116 percent figure
to support his premise that the relevant attrition rate was “very high.” Given
such high attrition rates, the ALJ surmised that under the Union’s
counterproposal, DISH “would have attained most of what it wanted on wages
in the short term,” and “eventually abolishing QPC would have become an
easier selling point.” That is, if a high percentage of employees left and were
replaced by new employees who didn’t receive QPC, then QPC would quickly
become less expensive for DISH and less important to the Union. According to
the ALJ, the Union’s counterproposal to phase out QPC prevented impasse.
And because there was no impasse, the ALJ said, DISH violated Section 8(a)(5)
of the National Labor Relations Act (“the Act” or “NLRA”) by eliminating QPC.
The ALJ also found that DISH violated Section 8(a)(3) of the Act when it
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constructively discharged 17 employees. On his theory, DISH did so by
presenting the employees with a Hobson’s Choice of quitting or “continuing to
work under greatly diminished conditions that flowed from the violation of [the
employees’] rights.”
The NLRB affirmed all of the ALJ’s findings and conclusions. But the
Board noted that the ALJ had not explicitly applied the proper test for impasse
analysis. So the Board applied that test and reached the same conclusion—
there was no impasse in negotiations. In its impasse analysis, the Board
acknowledged that by December 2014, the parties had bargained hard for four
years. Moreover, the Board recognized that QPC “remained the most
important issue of disagreement.” But according to the Board, “[e]ven if the
parties may have been near a valid impasse then,” the Union’s white flag
changed everything. As to constructive discharge, the Board’s decision simply
included a footnote adopting the ALJ’s rationale and finding.
One Board member dissented. He would have found that an impasse
existed at least by April 23, 2016, and that as a result of that impasse, DISH
“lawfully implemented the terms of its final offer.” Because that conduct was
lawful, he would have found “no support” for constructive discharge under the
theory proffered by the ALJ and accepted by the majority of the Board.
DISH petitioned for review of the Board’s conclusions on unlawful
implementation and constructive discharge. The Board cross-petitioned for
enforcement of its order. 2
2 The NLRB may be the only agency that needs a court’s imprimatur to render its
orders enforceable. NLRB v. Thill, Inc., 980 F.2d 1137, 1142 (7th Cir. 1992) (“Unlike the
orders of other agencies, the Board’s orders are not self-executing.”); see also Mitchellace, Inc.
v. NLRB,
90 F.3d 1150, 1159 (6th Cir. 1996) (similar); E.I. Du Pont De Nemours & Co. v.
NLRB,
682 F.3d 65, 71 (D.C. Cir. 2012) (Randolph, J., concurring in part and concurring in
the judgment) (same). Congress has long limited the Board’s powers in this way, though the
Board wasn’t always alone in being so limited. As the Seventh Circuit explained, “the curious
impotence of unenforced orders of the Board is the result of a decision by the Congress that
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II.
This case turns on the Board’s finding that DISH prematurely declared
an impasse. We hold the Board lacked substantial evidence to so find.
Ultimately, “[w]hether an impasse exists depends on whether, in view of
all the circumstances of the bargaining, further discussions would be futile.”
Gulf States Mfg. Inc. v. NLRB, 704 F.2d 1390, 1398 (5th Cir. 1983). That’s a
fact-specific inquiry. Carey Salt Co. v. NLRB,
736 F.3d 405, 411 (5th Cir. 2013).
We review the Board’s findings of fact for substantial evidence. Id. at
410. Congress has defined substantial evidence in terms of “the record
considered as a whole.” 29 U.S.C. § 160(e)–(f) (emphasis added). It follows,
then, that “a flawed reading of the record” provides no substantial evidence for
a finding. Carey
Salt, 736 F.3d at 420. And because the evidence must be
viewed in light of the whole record, “[t]he substantiality of evidence must take
into account whatever in the record fairly detracts from its weight.” Universal
Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951). Finally, the evidence “must
be substantial, not speculative, nor derived from inferences upon inferences.”
Brown & Root, Inc. v. NLRB,
333 F.3d 628, 639 (5th Cir. 2003). The Board’s
no-impasse finding flunks these standards.
enacted the Wagner Act to give the Board it was creating the same procedures as the Federal
Trade Commission then had.” NLRB v. P*I*E Nationwide, Inc.,
894 F.2d 887, 892 (7th Cir.
1990). And for “both agencies, the denial of teeth to the agency’s orders was a swap for
procedural informality.”
Ibid. The Administrative Procedure Act brought more formality to
administrative proceedings; thereafter, Congress gave the FTC enforcement power.
Ibid. But
Congress never did the same for the NLRB.
Ibid. Thus, what was true in 1938 remains true
today: “The Board is given no power of enforcement. Compliance is not obligatory until the
court, on petition of the Board or any party aggrieved, shall have entered a decree enforcing
the order as made, or as modified by the court.” In re NLRB,
304 U.S. 486, 495 (1938); see
also 29 U.S.C. § 160(e)–(f). And now, as then, when a court “enforces” an order, “[t]he order
issued by the court is an injunction, enforceable by contempt.” P*I*E Nationwide,
Inc., 894
F.2d at 893.
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A.
First, it’s a long- and well-settled proposition of substantial-evidence
review that the NLRB cannot build its decision on a foundational error of fact.
For example, in Carey Salt, we addressed an ALJ’s misreading of the record
and stated that the “ALJ’s flawed factual findings regarding the company’s
‘movement’ do not provide substantial evidence in support of the Board’s no-
impasse finding.” 736 F.3d at 421. We went on to note that the Board’s
analysis, built on the ALJ’s flawed factual foundation, “was erroneous, and,
therefore, no substantial evidence therein can support the Board’s no-impasse
finding.”
Id. at 421 n.16.
So here. The Board’s decision rested on its determination that the
Union’s November 2014 counterproposal was a “white flag” of surrender. But
the “white flag” characterization in turn rested on an unsound factual
foundation from the ALJ.
The ALJ found an attrition rate of 116 percent is “very high”—but that
rate occurred at a nonunionized, non-QPC branch. If the ALJ had considered
the relevant data, he would’ve found that unionized QPC technicians generally
had lower attrition rates than their non-union, non-QPC peers. And the
relevant data thus supported DISH: QPC workers had a marginal incentive
not to leave the company because they could make more money while working
less. The relevant data likewise undermined the “white flag” characterization
of the counterproposal: The comparatively low attrition at unionized QPC
branches meant that the Union wasn’t giving up all that much by agreeing to
phase out QPC for new employees.
The Board then built its no-impasse decision on the ALJ’s factual error.
In the Board’s view, “very high” attrition rates made the Union’s concession of
no QPC for new employees a “white flag” that warranted more negotiations:
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Particularly significant to our determination that impasse had not
been reached was the Union’s substantial movement on the QPC
issue and [DISH’s] refusal to meet and confer even once over this
meaningful counterproposal by the Union on the most important
issue separating the parties.
(Emphasis added). That characterization of the “meaningful counterproposal”
as “substantial movement” flows straight from the ALJ’s misreading of the
record. The ALJ erred, and the Board doubled down. Two wrongs can’t make
the Board right.
B.
Relatedly, “[t]he substantiality of evidence must take into account
whatever in the record fairly detracts from its weight.” Universal Camera, 340
U.S. at 488. To survive substantial evidence review, then, the Board has to
consider “contradictory evidence or evidence from which conflicting inferences
could be drawn.”
Id. at 487. Take Entergy Miss., Inc. v. NLRB,
810 F.3d 287
(5th Cir. 2015), for example. In that case, the NLRB concluded that certain
employees did not exercise independent judgment.
Id. at 296–97. Even if that
conclusion could be supported by the portions of the record cited by the Board,
we held the Board lacked substantial evidence merely because it failed to
grapple with countervailing portions of the record.
Id. at 297–98. After all, we
must review the Board’s decisions “on the record considered as a whole.” 29
U.S.C. § 160(e)–(f) (emphasis added).
Given that the Board’s white-flag theory depended on unit technicians
maintaining “a very high attrition rate,” the Board had an independent
obligation to consider evidence that those attrition rates were relatively low
and falling over time. 3 That’s especially true because unionized QPC
3 It’s no answer to say that the ALJ at one point cited the correct attrition rates for
the unit branches for 2014 and 2015 and also described those rates as “high.” That’s because
the ALJ’s white-flag theory depended on high attrition rates making it “probable that new
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employees were making more money while working fewer hours than their
non-union, non-QPC peers.
DISH presented evidence to explain why those factors contributed to
declining attrition rates at union branches. DISH’s Regional Director testified
that unit technicians had relatively lower attrition rates because “they were
making really good money and [so] they were staying because of that.” And
employees knew QPC was a good deal. One unit technician reckoned an
employee would thrive under Pi only if he could “sell[ ] ketchup popsicles to a
lady with white gloves.” Suffice it to say that QPC gave unit technicians plenty
of reason to stick around, and the evidence shows they did so.
And DISH gave the Board plenty of notice that the ALJ used the wrong
attrition data. DISH raised the problem in its briefing before the Board in
bolded, underlined, and italicized font. But DISH’s printed shout fell on deaf
ears. The Board’s decision simply didn’t address the mistake the ALJ made or
any of DISH’s arguments on that point. That oversight compounds the original
error. See Lord & Taylor v. NLRB, 703 F.2d 163, 169 (5th Cir. 1983).
C.
Even if we set aside the Board’s reliance on the wrong attrition rates, its
decision still would not rest on substantial evidence. That’s because
“[s]uspicion, conjecture, and theoretical speculation register no weight on the
substantial evidence scale.” NLRB v. Mini-Togs, Inc., 980 F.2d 1027, 1032 (5th
Cir. 1993). For example, in Brown & Root, an employer refused to hire 48
employees after a series of contentious meetings over their plans to unionize.
In finding the employer violated the NLRA, the Board pointed to specific
hires receiving non-QPC rates would soon become the majority . . . . [and] eventually
abolishing QPC would have become an easier selling point.” But the actual attrition rates at
the unit branches simply don’t suggest the same imminent change or easy elimination of
QPC.
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statements and specific meetings to show the employer acted with “anti-union
animus.” Brown & Root, 333 F.3d at 641. We nonetheless granted the
employer’s petition for review because the Board’s string of inferences and
speculation did not sum to substantial evidence. See
ibid. & n.10.
This case is easier. The ALJ’s speculation involved an inferential chain
that began with a flawed premise. First, in light of DISH’s “very high” attrition
rates, the ALJ asserted that DISH would have saved a lot money by accepting
the Union’s counterproposal. Next, the ALJ posited that those same “very high”
attrition rates “meant that in a short time, the majority of the [union workers]
would have likely . . . turned over and no longer earn[ed] QPC wages.” And
that, in turn, “would have likely set in motion the wholesale elimination of
QPC in future bargaining for a successor contract.” The ALJ’s musings on
potential cost savings and shifting intra-Union dynamics are ill-founded
speculation about what could have happened. It warrants “no weight on the
substantial evidence scale.”
Mini-Togs, 980 F.2d at 1032.
The same is true of the supposition that if DISH “had been willing to
meet about this substantial giveback, the give and take of bargaining might
have led everyone closer to an agreement.” (Emphasis added). The bare
possibility that something might have clicked during later negotiations does
not offer any support for the Board’s finding. Cf. TruServ Corp. v. NLRB, 254
F.3d 1105, 1116 (D.C. Cir. 2001) (rejecting Board’s reliance on “its intuitive
belief that, upon further bargaining, each side would have made additional
concessions”). As Judge Sentelle once put it, “ ‘You never know’ is no substitute
for substantial evidence.” Erie Brush & Mfg. Corp. v. NLRB,
700 F.3d 17, 23
(D.C. Cir. 2012).
III.
The NLRB offers several counterarguments. Some are properly before
us. Others are not. We reject them all.
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A.
We start with the Board’s procedurally proper arguments. The Board
contends that DISH acted in “bad faith” by refusing to negotiate after the
Union budged on QPC. It’s true that an employer cannot act in bad faith and
then pretend the parties are at an impasse. See 29 U.S.C. § 158(d). We so held
in Carey Salt, for example. There, we found that the employer’s bad faith
provided an independent basis for the Board’s conclusion that no impasse had
taken place. See Carey Salt, 736 F.3d at 413.
But to preclude impasse, bad faith must precede impasse. That’s because
once a good-faith impasse occurs, it suspends “the duty to bargain in good
faith.” Id. at 425; accord Serramonte Oldsmobile, Inc. v. NLRB,
86 F.3d 227,
232 (D.C. Cir. 1996). Here, there is no dispute that DISH bargained in good
faith right up to the point that the Union rejected DISH’s “final offer” and made
a counterproposal. Of course, “merely labeling an offer as ‘final’ is not
dispositive,” TruServ
Corp., 254 F.3d at 1115, since negotiators sometimes
engage in gamesmanship by deploying multiple “final offers.” See Chi.
Typographical Union No. 16 v. Chi. Sun-Times, Inc.,
935 F.2d 1501, 1508 (7th
Cir. 1991). But nothing in the record before us suggests that DISH’s final offer
was anything other than DISH’s “last, best, and final offer” made after years
of “the kind of good-faith, hard bargaining that characterizes impasse.”
TruServ
Corp., 254 F.3d at 1116. And the rejection of this kind of final offer is
a telltale sign of impasse.
Id. at 1115–16; cf. Carey
Salt, 736 F.3d at 416. All of
the Board’s allegations of bad faith come after DISH’s final offer was rejected.
So the question is whether DISH had some additional obligation to continue
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negotiating in good faith after that point. We have never interpreted the NLRA
to impose such an obligation, and we refuse to do it today. 4
The NLRB next contends that the Union’s willingness to move a little on
QPC precludes impasse, since impasse requires both parties to be unwilling to
compromise. See Huck Mfg. Co. v. NLRB, 693 F.2d 1176, 1186 (5th Cir. 1982)
(“[F]or a deadlock to occur, neither party must be willing to compromise.”). Yet
not every concession precludes impasse. See Carey
Salt, 736 F.3d at 422 (noting
that it’s not true that “any kind of extended concession, despite rejection and
remote chances of fueling future talks, precludes impasse” (emphasis added));
Grinnell Fire Prot. Sys. Co. v. NLRB,
236 F.3d 187, 200 (4th Cir. 2000) (“The
Board has repeatedly held that inconsequential modifications that fail to
address the heart of the employer’s demands cannot forestall impasse.”); E. I.
Du Pont & Co.,
268 N.L.R.B. 1075, 1076 (1984). The Board’s contrary position
would allow one party to prolong negotiations by responding to every “final
offer” by conceding just a wee bit more. That would be particularly untenable
in a case like this one because every prolongation would give the Union
everything it wanted—namely, preservation of QPC—for the length of the
prolongation.
Lastly, the Board highlighted the Union’s repeated demands for another
bargaining session as a reason for finding no impasse. But “a vague request by
one party for additional meetings, if unaccompanied by an indication of the
areas in which that party foresees future concessions, is equally insufficient to
defeat an impasse where the other party has clearly announced that its
position is final.” TruServ Corp., 254 F.3d at 1117. In this case, DISH had long
4 For much the same reason, we reject the Board’s equivocal statement that “[t]o the
extent that [DISH] also conditioned further bargaining on the Union’s submitting [DISH’s]
offer to unit employees for a ratification vote . . . [DISH] also evinced a lack of good faith.”
Again, such conduct must precede impasse to preclude impasse.
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been clear that its final offer was indeed final. The Union’s repeated requests
for additional meetings did not suggest any change in its position on QPC.
Under the Act, parties are not required “to engage in fruitless marathon
discussions.” NLRB v. Am. Nat’l Ins. Co., 343 U.S. 395, 404 (1952). DISH was
not obligated to do so here.
B.
The rest of the NLRB’s arguments are barred by SEC v. Chenery Corp.,
332 U.S. 194 (1947). It’s “a simple but fundamental rule . . . that a reviewing
court, in dealing with a determination or judgment which an administrative
agency alone is authorized to make, must judge the propriety of such action
solely by the grounds invoked by the agency.”
Id. at 196. That means we look
to what the agency said, not what it might have said. And it means we “may
not accept appellate counsel’s post hoc rationalizations for agency action;
Chenery requires that an agency’s discretionary order be upheld, if at all, on
the same basis articulated in the order by the agency itself.” Burlington Truck
Lines, Inc. v. United States,
371 U.S. 156, 168–69 (1962).
We recognize that the NLRB, in particular, struggles with this rule. 5 In
this case, the NLRB’s brief used figures conspicuously absent from the actual
decision of the Board to support the Board’s view of the Union’s
counterproposal. “At an attrition rate of 30.5% . . . only 33.6% of unit employees
would still be under QPC at the expiration of the 3-year contract.” That’s
5 According to one professor who spent four years working in the NLRB’s Appellate
Court Branch, the frequency of the practice manifested itself in shorthand shoptalk: The
“Board’s appellate attorneys typically refer to a rationale not explicitly contained in a Board
decision as a ‘post hoc.’ ” Jeffrey M. Hirsch, Defending the NLRB: Improving the Agency’s
Success in the Federal Courts of Appeals, 5 FIU L. REV. 437, 448 n.45 (2010). Prof. Hirsch
also suggested several ways for the Board to improve its decisions so it would stop “forcing
the Board’s appellate attorneys to create justifications, which—as courts are often quick to
note—they are not supposed to do under Chenery.” Id. at 448.
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simply not what the Board or the ALJ said. So we can’t affirm on those grounds.
That’s one Chenery problem.
Appellate counsel next defends the Board’s no-impasse finding by
pointing to DISH’s contemporaneous communications with the Union,
suggesting those show neither party thought impasse existed. But the Board’s
analysis of the parties’ contemporaneous understanding focused entirely on
the Union’s perspective. It’s too late in the game for the NLRB to add a gloss
to that part of its decision.
Likewise, Chenery precludes us from affirming on the basis of two
grounds suggested by the Union—the passage of time and presence of a new
negotiator for DISH. We’ve said those factors can be relevant to impasse
analysis. See Gulf States Mfg., 704 F.2d at 1399 (noting “the mere passage of
time may also be relevant” to a finding on impasse); Raven Servs. Corp. v.
NLRB,
315 F.3d 499, 505 (5th Cir. 2002) (noting a change in key personnel
may impact impasse analysis). Here, however, the passage of time weighed in
favor of impasse. First, the Board noted that as of December 2014, “the parties
had bargained in numerous sessions for more than 4 years over a first
collective-bargaining agreement,” and that suggested “the parties may have
been near a valid impasse . . . .” And at no point did the Board’s analysis
suggest the presence of a new negotiator weighed against finding impasse.
Maybe, if the Board’s decision had relied on the arguments now marshalled in
the briefs, “we would have a far different case to decide. But as it is, we cannot
accept appellate counsel’s post hoc rationalizations for agency action; for an
agency’s order must be upheld, if at all, on the same basis articulated in the
order by the agency itself.” Fed. Power Comm’n v. Texaco Inc.,
417 U.S. 380,
397 (1974) (quotation omitted).
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IV.
Having addressed the factual basis for the Board’s decision, we dispose
of its legal conclusions in short order. We begin with unlawful implementation
and turn next to constructive discharge.
A.
The Board says DISH violated § 8(a)(5) of the Act by unlawfully
implementing its final offer in the absence of a good-faith impasse. 6 But as we
said in Carey Salt, “when an employer and union bargain to impasse, the
employer may unilaterally implement changes in contract terms, so long as the
changes were previously offered during negotiations.” Carey Salt, 736 F.3d at
411. The Board’s finding that DISH acted unlawfully in implementing its final
offer depended on the Board’s finding that there was no impasse in
negotiations. Both fall together.
B.
Next, constructive discharge. On that issue, the Board purported to
“adopt, for the reasons stated by the judge, his finding that [DISH] violated
Sec. 8(a)(3) and (1) by constructively discharging 17 employees . . . .” 7 But as
the Board itself said, that conclusion relied on DISH’s “unlawful unilateral
reductions in [employees’] wages and health benefits.” So the Board’s
6 Another provision of the Act, § 8(a)(1), prohibits employers from interfering with
employees’ exercise of their rights under the Act. 29 U.S.C. § 158(a)(1). Such interference
constitutes an unfair labor practice. Ibid. As a result, “an employer who violates Section
8(a)(5) also commits a ‘derivative’ violation of Section 8(a)(1).” Sara Lee Bakery Grp., Inc. v.
NLRB,
514 F.3d 422, 427 n.3 (5th Cir. 2008). That’s why the Board found that DISH “violated
Section[s] 8(a)(5) and (1) by unilaterally changing unit employees’ terms and conditions of
employment.” (Emphasis added).
7 The ALJ framed his constructive discharge finding solely in terms of § 8(a)(3). But
the Supreme Court has explained that “[a]lthough §§ 8(a)(1) and (a)(3) are not coterminous,
a violation of § 8(a)(3) constitutes a derivative violation of § 8(a)(1).” Metro. Edison Co. v.
NLRB, 460 U.S. 693, 698 n.4 (1983). Because we reject the constructive discharge finding in
its entirety, this variation between the ALJ’s findings and the Board’s decision is immaterial.
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constructive discharge finding rested on its unlawful implementation finding,
which in turn rested on its no-impasse finding. Again, they all fall together. 8
* * *
DISH’s petition for review is GRANTED, and the corresponding portions
of the Board’s cross-petition for enforcement are DENIED. Those portions of
the Board’s order that DISH did not challenge are ENFORCED. See Sara Lee
Bakery, 514 F.3d at 429.
8Because the premise of the constructive discharge finding fails, we need not consider
whether the ALJ’s theory of a Hobson’s Choice constructive discharge conflicts with our
decision in Elec. Mach. Co. v. NLRB, 653 F.2d 958 (5th Cir. 1981).
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