Sands v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 18, 2016 Decided June 17, 2016

No. 14-1185

LAURA SANDS,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITED FOOD AND COMMERCIAL WORKERS INTERNATIONAL

UNION, LOCAL 700,

INTERVENOR

On Petition for Review of an Order

of the National Labor Relations Board

Aaron B. Solem argued the cause for petitioner. With him

on the briefs was Glenn M. Taubman.

Robert J. Englehart, Supervisory Attorney, National

Labor Relations Board, argued the cause for respondent.

With him on the brief were Richard F. Griffin, General

Counsel, John H. Ferguson, Associate General Counsel,

Linda Dreeben, Deputy Associate General Counsel, and Doug

Callahan, Attorney.

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James B. Coppess argued the cause for intervenor. With

him on the brief was Laurence Gold.

Before: TATEL, GRIFFITH, and KAVANAUGH, Circuit

Judges.

GRIFFITH, Circuit Judge: In this matter, the National

Labor Relations Board held that a union does not commit an

unfair labor practice by failing to tell a prospective member

how much money she will save in reduced dues should she

choose not to join. But we cannot reach the merits of that

decision. Actions undertaken by the union since the filing of

this petition for review have rendered the matter moot. For

that reason, we dismiss the petition for review as moot and

vacate the Board’s order under our equitable authority.

I

In 2004, petitioner Laura Sands began working at a

Kroger grocery store in Crawfordsville, Indiana, whose

employees had been organized by the United Food and

Commercial Workers International Union, Local 700. The

collective-bargaining agreement between Kroger and the

union included a “union-security clause,” which provided that

all grocery department employees—even those who did not

join the union—had to pay dues to the union to cover the

costs of representational activities.

When Sands began her job at the store, the union sent her

a letter and membership application explaining to her what

rights and obligations she had under the union-security clause.

The application explained that, whether she joined the union

or not, she was required to pay dues to the union to

compensate it for acting as her collective-bargaining agent.

The application was also careful to explain that she need not

3

join the union, and that if she did not, she could refuse to pay

for the union’s activities that were unrelated to collective

bargaining. Important for this case, however, neither the letter

nor the application told her how much money she would save

if she did not join the union, which for Sands was about $3.50

per month.

Sands decided to join the union and paid all her dues until

she quit work at the store in 2005. At that time, she sent the

union a letter claiming that she “never wanted to join [the

union] in the first place,” and that the union had “deliberately

misled” her about her obligations under the union-security

clause.1 Shortly thereafter, Sands filed an unfair labor practice

charge with the Board, and the General Counsel issued a

complaint against the union. According to the complaint, the

union violated section 8 of the National Labor Relations Act

(NLRA) by failing to tell Sands when she began work at

Kroger how much less in dues she would have to pay if she

did not join the union. See 29 U.S.C. § 158(b)(1)(A). Before

the administrative law judge (ALJ), the union argued that

Sands was not entitled to that information until after she

chose not to join the union. The General Counsel and Sands

argued that she was entitled to the information at the same

time that she was told about the union-security clause. The

ALJ recommended dismissing the complaint based on prior

Board decisions supporting the union’s position.

1

Letter from Laura Sands to the Secretary-Treasurer, United

Food and Commercial Workers International Union, Local 700

(June 25, 2005). Although Sands’s letter to the union and her

charge filed with the Board claimed that she received inadequate

notice regarding both her right not to join the union generally as

well as the amount she would save in monthly dues were she not to

join, the General Counsel’s complaint focused exclusively on the

union’s failure to adequately explain the financial implications of

not joining.

4

Both the General Counsel and Sands filed exceptions

with the Board, arguing that the Board decisions on which the

ALJ relied conflicted with D.C. Circuit case law. In

particular, they cited our decision in Penrod v. NLRB, 203

F.3d 41 (D.C. Cir. 2000), where we held that new employees

must be given “sufficient information” to decide whether to

join the union, including “the percentage of union dues that

would be chargeable” should they not join. Id. at 47 (applying

Abrams v. Commc’ns Workers of Am., 59 F.3d 1373 (D.C.

Cir. 1995)). The Board agreed that Penrod and Abrams, the

case on which Penrod relied, would answer the question at

hand against the union, but quite remarkably dismissed the

complaint anyway. The Board asserted that it was not bound

to follow Penrod and Abrams because our decisions there had

failed to account for a policy that underlay the Board’s

position. UFCW, Local 700 (Kroger), 361 N.L.R.B. No. 39

(2014). Before us, the Board recognizes again, as it did below,

that our prior decisions would compel us to vacate the

Board’s order on the merits. The Board hopes that we will

revisit those decisions en banc.

Sands petitions for review of the Board’s order and

asserts jurisdiction under 29 U.S.C. § 160(f). But this case is

moot, and we do not have jurisdiction to reach the merits of

the petition.

II

All the time that Sands worked at Kroger, she paid full

dues as a union member. It was her claim to a refund of at

least a portion of those dues that gave her a personal interest

in this case. But that interest has disappeared. In 2014, about

two months after Sands petitioned this court for review of the

Board’s decision rejecting her claims, the union refunded the

dues she had paid by sending her a check for $350, claiming

that those funds equaled the total dues Sands had paid plus

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interest.2 With a refund of her dues in hand, Sands can no

longer claim her payment of dues as the basis for her interest

in this matter.

Sands expressly waived any argument to the contrary.

See Defs. of Wildlife v. Jewell, 815 F.3d 1, 8 (D.C. Cir. 2016)

(refusing to reach arguments that were “affirmatively

waived”). In fact, she conceded in her reply brief that “she

now lacks [a refund] remedy” because the union “has

refunded her all of her dues.” Reply Br. 21. We will not

therefore consider whether—as counsel first suggested in a

supplemental filing just two days before oral argument—her

failure to cash the refund check has any legal significance.

We have jurisdiction only over live cases or

controversies. U.S. CONST. art. III, § 2, cl. 1. We cannot

“retain jurisdiction over cases in which one or both of the

parties plainly lack a continuing interest, as when the parties

have settled.” Friends of the Earth, Inc. v. Laidlaw Envtl.

Servs. (TOC), Inc., 528 U.S. 167, 192 (2000). In the labor law

context, this means that if the parties have already

“completely resolved the dispute” between them “and cured

any unfair labor practice” that may have occurred, it is “the

court’s duty to dismiss th[e] case as moot.” Am. Fed’n of

Gov’t Emps., AFL-CIO, Local 3090 v. FLRA, 777 F.2d 751,

753 n.13 (D.C. Cir. 1985); see also Calderon v. Moore, 518

U.S. 149, 150 (1996) (per curiam) (“[A]n appeal should . . .

be dismissed as moot when, by virtue of an intervening event,

a court of appeals cannot grant ‘any effectual relief whatever’

in favor of the appellant.” (citation omitted)). The Board

2

Although Sands would have avoided paying only about $3.50

per month in partial union expenses had she never joined the union,

the union refunded Sands the significantly larger amount of $350.

The union explained that it did so “in an unsuccessful attempt to

avoid wasting resources in litigation.” Union Br. 5 n.1.

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carries the burden to show mootness, Friends of the Earth,

528 U.S. at 189, and it has done so here.

In her briefs, Sands argues against mootness by invoking

theories of relief unrelated to her claim for a refund of a

portion of the dues she has paid, but none of them establishes

her personal interest in what remains of this dispute. First,

Sands asks that the union be ordered to post a notice at the

grocery store where she worked announcing to the public that

the union violated the NLRA. As Sands points out, the

possibility of such a remedial notice usually keeps an unfair

labor practice case from becoming moot, even if the parties

resolve the underlying dispute. See Am. Fed’n of Gov’t Emps.,

777 F.2d at 753 n.13.

But the cases on which Sands relies, in which the interest

of a particular affected employee had disappeared, assume an

ongoing relationship between the petitioner and the company

or union that committed a labor violation. Only then can the

posting of a remedial notice address the petitioner’s injury.

For example, where the Board petitions to enforce its order

requiring a remedial notice to be posted, the Board has an

independent interest at stake even if the employee involved in

the suit quits the company or dies. See, e.g., Dep’t of Justice

v. FLRA, 144 F.3d 90, 95 (D.C. Cir. 1998); Dep’t of Justice v.

FLRA, 991 F.2d 285, 289 (5th Cir. 1993); NLRB v. Methodist

Hosp. of Gary, Inc., 733 F.2d 43, 48 (7th Cir. 1984). The

Board’s orders impose continuing obligations that do not

cease when the particular offending conduct ends. See NLRB

v. Raytheon Co., 398 U.S. 25, 27 (1970); see also Dep’t of

Justice, 144 F.3d at 95 (recognizing that resolution of the

underlying dispute generally does not moot the case “because

the Board is entitled to have the resumption of the unfair

practice barred by an enforcement decree” (quoting Dep’t of

Justice, 991 F.2d at 289) (internal quotation marks omitted)).

Similarly, where a union challenges a Board order in favor of

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a company, the union has an interest in the court overturning

the Board’s decision so that the company will be ordered to

post a remedial notice at the workplace where the union

operates. See, e.g., Am. Fed’n of Gov’t Emps., 777 F.2d at 753

n.13; Ass’n of Admin. Law Judges v. FLRA, 397 F.3d 957,

960 n.* (D.C. Cir. 2005). In both of these situations, the

petitioner, whether the Board or a union, has a concrete stake

in the litigation because of its interest in the posting of a

notice that a violation of the labor laws has occurred.

Our decision in American Federation of Government

Employees, Local 1941, AFL-CIO v. Federal Labor Relations

Authority, 837 F.2d 495 (D.C. Cir. 1988), is instructive. In

AFGE, an employer denied an employee’s request to have a

union representative with him at a disciplinary hearing.

Rather than contest that decision, the employee resigned from

work. After the employee died, the union pressed the

employee’s claim to the Federal Labor Relations Authority,

which concluded that no labor violation had occurred. The

union appealed that decision to us. We held that the case was

not moot, despite the employee’s death. The union, we

reasoned, had “a derivative right to be present, on the

employee’s request,” at the disciplinary hearing. This

derivative right gave the union a direct stake in the outcome—

standing to contest the denial of representation and to seek the

posting of a notice of a violation of labor law. Id. at 497 n.2.

The controversy did not survive the employee’s death because

of a free-floating right that anyone would have, whenever a

violation occurs, to the posting of a notice. Rather, the

controversy remained alive because the union had a personal

and particular ongoing interest in the posting.

Sands’s situation is much different. She ended her

relationship with the union when she quit her job at the

grocery store in 2005, and her counsel conceded at oral

argument that there is no reason to think she will work there

8

again. Thus, even if posting a notice about the labor violation

might affect a current store employee, it cannot redress

Sands’s injury.

Sands resists this conclusion, urging us to follow the

reasoning of the Sixth Circuit in Montague v. NLRB, 698 F.3d

307 (6th Cir. 2012). In Montague, a union and an employer

negotiated a preliminary agreement before employees had

recognized the union, but the Board found no violation of the

NLRA. Two employees petitioned for review of that decision.

At the time, the company operated about ninety facilities, but

the facility where the alleged violation took place was no

longer covered by the agreement or even owned by the

company. Accordingly, the company argued that the case was

moot. But the employees and the Board emphasized that

should the Board lose the appeal, the company and the union

would have to post notices, presumably at the company’s

other facilities, acknowledging their violation of law. Id. at

313. This requirement, they argued, kept the case from being

moot. The court accepted that position without further

reasoning.

To the extent the Sixth Circuit held that an employee

without a personal interest in the posting of a remedial notice

can pursue her case on the basis of that remedy, we disagree.

Instead, our approach is more like that of the Second Circuit,

which has also recognized under similar facts that an unfair

labor practice case is moot when the petitioner lacks an

ongoing personal interest in the proceedings. See Gally v.

NLRB, 487 F. App’x 661 (2d Cir. 2012) (unpublished)

(dismissing as moot an employee’s petition for review

because the employee was no longer a union member subject

to a disputed requirement and the union had refunded dues);

Orce v. NLRB, 133 F.3d 907 (2d Cir. 1997) (unpublished)

(dismissing as moot an employee’s petition for review

because the employee had “no ‘personal stake’ in the

9

requested refund” of union dues and the employer was out of

business). This approach adheres to the basic requirement that

our jurisdiction depends on all parties having a “continuing

interest” in the case before us. Friends of the Earth, 528 U.S.

at 192.

Sands next argues that the case is not moot because she

seeks relief on behalf of those still employed by the grocery

store whose rights the union also violated. But Sands cannot

avoid mootness by asserting the rights of third parties when

she herself fails to meet Article III’s requirements. See

Lepelletier v. FDIC, 164 F.3d 37, 42 (D.C. Cir. 1999)

(“Because [the appellant] seeks to raise the rights of third

parties . . . he must show that he has standing under Article

III, and that he satisfies third party, or jus tertii, standing

requirements.”). Sands argues that the Eighth Circuit has

allowed an employee to seek judicial review on behalf of

other employees, but that case does not help her because

unlike Sands, that petitioner satisfied Article III standing. See

Bloom v. NLRB, 153 F.3d 844 (8th Cir. 1998), vacated on

other grounds, 525 U.S. 1133 (1999). In Bloom, a union and

an employer had entered into a voluntary settlement of a case

involving inadequate notice to employees about their right not

to join the union. The settlement created a forward-looking

remedy to notify employees about their rights, but the union

had not agreed to compensate employees for past violations.

When the Board dismissed an employee’s complaint based on

that settlement, the employee petitioned for review, even

though he had since left his job. The Eighth Circuit concluded

that the petitioner “himself satisfie[d] the minimum

requirements for Article III standing” because he, unlike

Sands, had not yet been refunded his union dues plus interest.

Id. at 848-49.

Finally, Sands warns that if we dismiss the petition as

moot, the union could resume its illegal conduct. To be sure,

10

ordinarily that would be our concern as well. In Knox v.

Service Employees International Union, Local 1000, 132 S.

Ct. 2277 (2012), a union similarly attempted to moot a case

by offering to refund dues after certiorari was granted. The

Supreme Court stressed that “[s]uch postcertiorari maneuvers

designed to insulate a decision from review . . . must be

viewed with a critical eye.” Id. at 2287. The Court applies a

“stringent” standard in such cases: “A case might become

moot if subsequent events made it absolutely clear that the

allegedly wrongful behavior could not reasonably be expected

to recur.” Friends of the Earth, 528 U.S. at 189 (quoting

United States v. Concentrated Phosphate Export Ass’n, 393

U.S. 199, 203 (1968)). Because the union mooted this case

after Sands petitioned for review, the Board and the union

face an uphill battle to show that it is “absolutely clear” that

the labor violation at issue cannot “reasonably be expected” to

happen again. Id.

The Board and the union have met this “heavy burden.”

Friends of the Earth, 528 U.S. at 189. As Sands conceded at

oral argument, there is no reason to think she will ever return

to work at the grocery store, and thus she cannot reasonably

be expected to suffer another labor violation at the hands of

this union. Add to that a recent change in Indiana law

prohibiting the use of a union-security clause in a collective-

bargaining agreement. See IND. CODE § 22-6-6-8 (“A person

may not require an individual” to “pay dues, fees,

assessments, or other charges of any kind or amount to a labor

organization.”). Because the union operates only in Indiana

and it can no longer use any union-security clause there, it

cannot reasonably be expected to resume sending employees

inadequate information about their rights under such clauses.

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III

Although this case is moot, our inquiry does not end

there. Instead, we must consider whether to vacate the

Board’s order rejecting Sands’s position. “[T]he established

practice . . . in the federal system . . . is to reverse or vacate

the judgment below” when a civil case becomes moot while

awaiting appellate review. Humane Soc’y of U.S. v.

Kempthorne, 527 F.3d 181, 184 (D.C. Cir. 2008) (quoting

Arizonans for Official English v. Arizona, 520 U.S. 43, 71

(1997)). Vacatur in the event of mootness applies equally to

unreviewed administrative orders. A. L. Mechling Barge

Lines, Inc. v. United States, 368 U.S. 324, 329 (1961); see

also Gally v. NLRB, 487 F. App’x 661, 663 (2d Cir. 2012)

(unpublished) (vacating a similarly mooted petition for

review). Its purpose is to “clear[] the path for future

relitigation of the issues” and “eliminate[] a judgment, review

of which was prevented through happenstance.” U.S. Bancorp

Mortg. Co. v. Bonner, 513 U.S. 18, 22-23 (1994) (quoting

United States v. Munsingwear, Inc., 340 U.S. 36, 40 (1950)).

Because vacatur is equitable in nature, we look to notions

of fairness when deciding whether to use the remedy. See id.

at 25; Kempthorne, 527 F.3d at 186-87. Courts usually vacate

a judgment “when mootness results from unilateral action of

the party who prevailed below” or from circumstances beyond

the control of the parties. Alvarez v. Smith, 558 U.S. 87, 98

(2009) (Stevens, J., concurring in part and dissenting in part)

(quoting Bancorp, 513 U.S. at 25). By contrast, in Bancorp

the Court announced that when a case becomes moot because

the parties reached a settlement—and the petitioner therefore

“voluntarily forfeited” a remedy in court—vacatur is typically

inappropriate. See 513 U.S. at 22-25. When deciding whether

to vacate, we also take the public interest into account. Id. at

26. We may not, however, consider the merits of the appeal.

12

We have no constitutional power to decide the merits in a

mooted case. Id. at 27.

The circumstances here counsel in favor of vacating the

Board’s order. First, at oral argument neither the Board nor

the union resisted Sands’s request for vacatur. Keeping in

mind that vacatur is an equitable remedy, we consider the

opposing side’s silence to be significant.

Second, the roles of the parties in mooting the case

counsel in favor of vacatur. The union prevailed below and

mooted the case by sending Sands a refund check after she

appealed, which can be reasonably seen as a “maneuver[]

designed to insulate a decision from review.” Knox, 132 S. Ct.

at 2287. Although Sands participated to some degree by

failing to return the check,3 there was no “settlement” of the

kind considered in Bancorp. The parties in Bancorp

“stipulated to a consensual plan” that, once accepted by the

bankruptcy court, “constituted a settlement that mooted the

case.” 513 U.S. at 20. There was no agreement of that type

between Sands and the union. See Kempthorne, 527 F.3d at

185 (“We have interpreted Bancorp narrowly.”). Furthermore,

one rationale underlying Bancorp is to prevent litigants from

“manipulat[ing] the judicial system by roll[ing] the dice”

below and then “wash[ing] away any unfavorable outcome

through use of settlement and vacatur.” Id. at 186 (quoting

Nat’l Black Police Ass’n v. District of Columbia, 108 F.3d

346, 351-52 (D.C. Cir. 1997) (internal quotation marks

omitted)). We have no such concern about any “manipulative

purpose” on Sands’s part that would caution against vacatur

here. Id.

3

After briefing in this case was complete, the Supreme Court

decided Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016),

which held that an unaccepted settlement offer does not moot a

case. Id. at 666.

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Finally, we recognize that vacatur would serve the public

interest by furthering the traditional purpose of the doctrine:

clearing the path for future relitigation of the issues. See

Bancorp, 513 U.S. at 22-23. The General Counsel has

withdrawn at least one pending complaint raising the same

issues as Sands on the basis of the Board’s decision below,

SEIU/District 1199 & Serv. Emps. Int’l Union (Rescare, Inc.),

NLRB No. 11-CB-003743 (2014), and the General Counsel’s

refusal to bring a complaint is unreviewable, NLRB v. Sears,

Roebuck & Co., 421 U.S. 132, 155 (1975). Vacatur will

prevent the General Counsel from further relying on the

Board’s unreviewed decision, thereby opening the door to

reconsideration of the merits of the legal issues in this case.

Accordingly, we exercise our equitable power to vacate the

Board’s order.

IV

We dismiss the petition for review as moot and vacate the

Board’s order.