Advanced Disposal Services East, Inc. v. National Labor Relations Board

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