ABM Onsite Services-West, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 21, 2016 Decided March 7, 2017

No. 15-1299

ABM ONSITE SERVICES - WEST, INC.,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

INTERNATIONAL ASSOCIATION OF MACHINISTS AND

AEROSPACE WORKERS, DISTRICT LODGE W24 AND LOCAL

LODGE 1005,

INTERVENOR

Consolidated with 15-1347

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

Douglas W. Hall argued the cause and filed the briefs for

petitioner.

2

Amy H. Ginn, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the brief were

Richard F. Griffin, Jr., General Counsel, John H. Ferguson,

Associate General Counsel, Linda Dreeben, Deputy Associate

General Counsel, and Usha Dheenan, Supervisory Attorney.

David L. Neigus argued the cause and filed the brief for

intervenor International Association of Machinists and

Aerospace Workers, District Lodge W24 and Local Lodge

1005 in support of respondent. Mark D. Schneider and William

H. Haller entered appearances.

Before: GRIFFITH, SRINIVASAN, and MILLETT, Circuit

Judges.

Opinion for the court filed by Circuit Judge GRIFFITH.

GRIFFITH, Circuit Judge: This petition for review

challenges the determination of the National Labor Relations

Board that a union’s effort to represent the workers who handle

airline baggage is governed by the National Labor Relations

Act and not the Railway Labor Act. In reaching its conclusion,

the Board departed from its precedent without offering a

rationale for its new approach. We therefore vacate the Board’s

order and remand the matter for further proceedings.

I

A

The National Labor Relations Act, 29 U.S.C. §§ 151 et

seq., regulates most private-sector labor relations. Concerned,

however, that labor strife in the railway and airline industries

could disrupt commerce nationwide, Congress expressly

carved out these industries, which were already covered by the

3

Railway Labor Act, from coverage under the NLRA

framework when it passed the NLRA. See id. § 152; see also

Tex. & New Orleans R.R. v. Bhd. of Ry. & S.S. Clerks, 281 U.S.

548, 565 (1930) (remarking that “the major purpose of

Congress in passing the Railway Labor Act was to provide a

machinery to prevent strikes”). 1 The Act creates a “special

scheme” for the railway and airline industries, premised on

“their unique role in serving the traveling and shipping public

in interstate commerce.” Verrett v. SABRE Grp., Inc., 70 F.

Supp. 2d 1277, 1281 (N.D. Okla. 1999). Under this separate

regulatory scheme, various mediation and arbitration boards

work to resolve airline and railway labor disputes that could

interrupt interstate commerce. See id.

The question of which labor scheme governs has

meaningful consequences for both employers and employees.

Chief among them are the different powers Congress has given

the agencies that administer the relevant statutes. For example,

the NLRB can initiate unfair-labor-practice proceedings and

issue orders to employers, but the National Mediation Board

(NMB), which administers the RLA, performs no law-

enforcement function. The NMB’s role is limited mainly to

determining whether employees in the airline and railway

industries have chosen union representation and then mediating

collective bargaining. In addition, under the RLA, both

employers and employees must exhaust an extended

negotiation and mediation process before they can lawfully

resort to self-help measures, such as unilaterally altering

working conditions or calling a strike. This prolonged process

1

Although the RLA initially applied only to rail carriers, “[a]ir

carriers and their employees were made subject to the . . . Act in

1936.” Bhd. of R.R. Trainmen v. Jacksonville Terminal Co., 394 U.S.

369, 381 n.16 (1969) (citing 45 U.S.C. §§ 181-182).

4

is designed to avoid strikes and “keep transportation moving”

in the specific subset of the American economy that concerns

the RLA. Pan Am. World Airways, Inc. v. United Bhd. of

Carpenters & Joiners of Am., 324 F.2d 217, 220 (9th Cir.

1963). Under the NLRA, by contrast, employers and

employees have much more latitude to engage in self-help.

Employees often prefer to organize under the NLRA, as it

protects a wider array of “concerted activity” by employees

than does the RLA. See Beckett v. Atlas Air, Inc., 968 F. Supp.

814, 820 (E.D.N.Y. 1997) (citing cases).

The RLA originally covered only common carriers, but

Congress expanded the Act in 1934 to cover certain companies

that perform transportation-related services for those carriers.

As a result, a company is subject to the RLA and falls outside

the jurisdiction of the NLRB if it “is directly or indirectly

owned or controlled by or under common control with any

carrier” and “operates any equipment or facilities or performs

any service” related to transportation. 45 U.S.C. § 151.

Whether a company is controlled by a carrier, however, is often

unclear. Thus, “the NLRB and the NMB have, in the absence

of any statute addressing the point, jointly developed their own

method for determining their mutual jurisdictional question of

whether the NLRA or the RLA governs” in any given case.

United Parcel Serv., Inc. v. NLRB, 92 F.3d 1221, 1223 (D.C.

Cir. 1996).

The NLRB frequently refers the jurisdictional question to

the NMB for an advisory opinion and then defers to the NMB’s

view, based on the NMB’s expertise in administering the RLA.

See United Parcel Serv., Inc., 318 N.L.R.B. 778, 780 (1995)

(referring cases to the NMB “enables the [NLRB] to obtain the

NMB’s expertise on jurisdictional matters most familiar to it”),

aff’d, 93 F.3d 1221 (D.C. Cir. 1996); Pan Am. World Airways,

Inc., 115 N.L.R.B. 493, 495 (1956) (explaining the NLRB’s

5

view of the NMB’s primacy in resolving jurisdictional

questions that implicate the RLA). The NLRB follows this

accepted practice when a party raises a colorable claim that the

NLRB lacks jurisdiction. See Spartan Aviation Indus., 337

N.L.R.B. 708, 708 (2002) (“When a party raises a claim of

arguable jurisdiction under the RLA, the Board generally refers

the case to the National Mediation Board . . . for an advisory

opinion. . . .”). This practice dates back to at least 1956. See

Pan Am. World Airways, Inc., 115 N.L.R.B. at 495 (declining

to assert jurisdiction in a case over which the NMB claimed

jurisdiction). An exception exists to the general rule, however:

under “long-standing practice,” the NLRB will not refer

jurisdictional questions to the NMB in situations where NMB

precedent provides a clear answer. United Parcel Serv., Inc.,

92 F.3d at 1228.

B

The airlines that fly into and out of the Portland

International Airport formed the Portland Airlines Consortium

(“PAC” or “the Consortium”) to operate the airport’s baggage-

handling system. Since 2011, the Consortium has retained

ABM Onsite Services – West (“ABM” or “the Company”), an

independent contractor, to run the system. 2 The issue in this

case is whether ABM is a “carrier” under the RLA and thus

falls outside the NLRB’s jurisdiction. The answer turns on the

degree of control that the Consortium exercises over the

Company. To assess that control, it is important to understand

the extent of the Consortium’s contractual and practical

involvement in a number of areas: how ABM employees do

2

These facts are drawn from the findings made by the NLRB’s

regional director or come directly from the contract.

6

their jobs, how they are trained, what equipment they use, and

even how they dress.

Most notably, the contract allows the Consortium to

establish all standard operating procedures and provide all

operating manuals for ABM. These manuals serve as the basis

for ABM employee training. The contract also allows the

Consortium to keep a close eye on the performance of ABM

and its employees. For example, the Company is required to

provide the Consortium with access to documents dealing with

its operations, its compliance with non-discrimination laws, its

operations and maintenance safety plans, and reports of on-the-

job accidents.

In addition, the contract enables the Consortium to

exercise influence over the Company’s personnel decisions.

All of the Company’s staffing plans, for instance, must be

approved by the Consortium before taking effect, and the

Consortium’s general manager must approve overtime work by

ABM employees. Importantly, the Consortium also has the

right to approve any changes in the Company’s “key

personnel,” and to direct the company to remove employees

from the contract. The contract does not, however, authorize

the Consortium to discipline the Company’s employees

directly or require the Company to consult with it about

discipline.

Furthermore, the contract specifies that the Consortium is

to provide the Company with certain equipment, such as

electric vehicles to move baggage and industrial bicycles to get

around the baggage-handling system. The Consortium also

must provide, free of charge, office space for the Company at

the airport. Finally, the contract dictates that ABM employees

meet certain appearance standards and wear uniforms that

display the Consortium’s logo, rather than the logo of ABM.

7

C

In January 2015, the International Association of

Machinists (the Union) filed a petition with the NLRB seeking

to represent ABM’s “jammer technicians,” who ensure that

passenger bags get from the airlines’ ticket counters to the

aircraft, and its dispatchers, who take calls from airline

employees regarding baggage issues and are the primary point

of contact with the airlines. The Company protested that the

NLRB lacked jurisdiction over the matter because the

Company was subject to the RLA, not the NLRA. In the

alternative, the Company argued, the NLRB should refer the

jurisdictional question to the NMB for an advisory opinion. To

resolve that jurisdictional question, the NLRB’s regional

director held a hearing at which the Company’s facility

manager and branch manager testified, along with two

dispatchers. The regional director found that the Consortium

did not exercise control over the Company and its employees

within the meaning of the RLA and concluded that the NLRB

thus had jurisdiction over the matter. The Company sought

review of the order by the NLRB itself, which summarily

denied the Company’s request and affirmed its own jurisdiction

in a 2-to-1 decision. The majority determined that the petition

raised “no substantial issues warranting review.” J.A. 608. The

dissenting member, however, was not satisfied that the Board

had jurisdiction, writing that “substantial evidence [exists] that

the Portland Airlines Consortium is involved in [the

Company]’s personnel decisions and operations, which may

have been afforded insufficient weight by the Regional

Director.” J.A. 608.

That same day, a majority of ABM’s participating

employees voted in favor of union representation. The NLRB

certified the Union as the employees’ collective-bargaining

representative. To challenge to the Board’s jurisdictional

8

ruling, the Company refused to bargain with the Union, which

drew an unfair-labor-practice charge from the Union and a

complaint from the regional director of the NLRB. The NLRB

granted summary judgment against the Company, which then

filed this petition for review. The NLRB cross-applied for

enforcement of its order, and the Union subsequently

intervened.

We have jurisdiction under 29 U.S.C. §§ 160(f) and

160(e).

II

This case turns on the fundamental principle that an

agency may not act in a manner that is “arbitrary, capricious,

an abuse of discretion, or otherwise not in accordance with

law.” 5 U.S.C. § 706(2)(a). The NLRB has violated that

cardinal rule here by applying a new test to determine whether

the RLA applies, without explaining its reasons for doing so.

Because an agency’s unexplained departure from precedent is

arbitrary and capricious, we must vacate the Board’s order.

Comcast Corp. v. FCC, 526 F.3d 763, 769 (D.C. Cir. 2008)

(citing Pontchartrain Broad. Co. v. FCC, 15 F.3d 183, 185

(D.C. Cir. 1994)).

A

Any company that is “directly or indirectly owned or

controlled by” an airline is governed by the RLA, 45 U.S.C.

§ 151, provided that the company’s employees do work “that

is traditionally performed by employees of . . . air carriers,” Air

Serv Corp., 33 N.M.B. 272, 284 (2006). No party takes issue

with the NMB’s interpretation on that latter point or disputes

that ABM employees do work that is traditionally performed

by employees of air carriers. As a result, because ABM is not

9

owned by air carriers, the only question in this case is whether

it is controlled by them.

In 1980, the NMB began “an extensive evaluation of its

jurisdictional standards,” including on the issue of control, “in

light of changing corporate relationships and increasing use of

contractors to perform work integral to rail and air

transportation.” Bhd. Ry. Carmen of the U.S. & Can., 8 N.M.B.

58, 61 (1980). Over the ensuing years, the NMB developed a

list of six factors to guide it in determining whether a company

is controlled by an air carrier. See, e.g., Miami Aircraft Support,

21 N.M.B. 78, 81 (1993). As stated most directly by the NMB

in 2006, the agency looked to (1) the extent of the carrier’s

control over the manner in which the company conducts its

business; (2) the carrier’s access to the company’s operations

and records; (3) the carrier’s role in the company’s personnel

decisions; (4) the degree of carrier supervision of the

company’s employees; (5) whether company employees are

held out to the public as carrier employees; and (6) the extent

of the carrier’s control over employee training. See Air Serv

Corp., 33 N.M.B. at 285.

As framed by the NMB in that case, the “standard for

satisfying” this test was “the degree of influence that a carrier

has over discharge, discipline, wages, working conditions and

operations,” as opposed to any kind of requirement “that a

carrier hire, fire, set wages, hours and working conditions of

contractor employees.” Id. (emphasis added); see also Roca v.

Alphatech Aviation Servs., Inc., 961 F. Supp. 2d 1234, 1240

(S.D. Fla. 2013) (explaining that control under the RLA would

exist under the “NMB’s . . . test [when the] ‘carrier controls the

details of the day-to-day process by which the contractor

provides services—for example, the number of employees

assigned to particular tasks, the employees’ attire, the length of

their shifts, and the methods they use in their work.’” (quoting

10

Cunningham v. Elec. Data Sys. Corp., No. 06-cv-3530 (RJH),

2010 WL 1223084, at *6 (S.D.N.Y. Mar. 30, 2010))). In other

words, for the NMB to find the type of control that would

trigger the jurisdiction of the RLA, an air carrier did not have

to dictate decisions over employee discharge, discipline,

wages, working conditions, and operations; it simply had to

exercise some significant influence over those aspects of the

employment relationship.

Under this test, ABM would plainly fall under the control

of air carriers. The NLRB does not even attempt to argue

otherwise. Indeed, the NMB previously found control and

jurisdiction with facts similar to these for many airline-services

contractors. In fact, according to one commentator, the NMB

“found RLA jurisdiction in all but one of over thirty [such]

airline-control cases” it considered between the mid-1990s and

2011. Brent Garren, NLRA and RLA Jurisdiction over Airline

Independent Contractors: Back on Course, 31 ABA J. LAB. &

EMP. L. 77, 93 (2015).

Air Serv Corp. is an especially clear example of how that

agency used to find carrier control over contractors like ABM.

With apologies to the reader for the lengthy excerpt, the

NMB’s discussion of the key facts in Air Serv shows that there

is little daylight between that contractor’s situation and

ABM’s:

United’s flight schedules affect the work

schedules of Air Serv employees. United

establishes a minimum level of staffing. United

provides and repairs the equipment used by Air

Serv to service the Carrier’s aircraft. United

provides many of the supplies Air Serv uses to

service the aircraft. United specifies the

cleaning supplies which must be used to clean

11

its aircraft. In order to perform periodic security

and safety audits, United has access to Air

Serv’s records regarding personnel,

maintenance, and training. United’s [internal]

regulations appear, by reference, to be an

extensive set of regulations and standards that

must be adhered to under the terms of the

Services Agreement. Through [its internal]

regulations[,] United dictates the cleaning

guidelines and procedures for servicing the

aircraft. Air Serv has very little discretion

concerning how or when to provide service.

Although Air Serv supervises its own

employees, United exercises a great deal of

control over Air Serv employees through its

comprehensive monitoring of the contract’s

performance. This monitoring includes:

monetary performance penalties, minimum

staffing levels, daily vendor meetings, detailed

. . . regulations and regular audits.

Air Serv Corp., 33 N.M.B. at 285-86.

Indeed, there is no meaningful distinction between the

control United exercised over Air Serv and the control carriers

exercise over ABM. Here, the carriers’ flight schedules

determine the work schedules of the Company’s employees.

The Consortium decides when, where, and how many

employees work at a time. It provides much of the equipment

the Company uses, along with office space. The Consortium

specifies the exact procedures by which ABM employees do

their jobs, and it has access to ABM employee-training and

qualifications records. The Consortium’s general manager

directly trains ABM employees on bag hygiene, and when the

12

general manager does not do the training himself, the

Consortium still provides the training materials and dictates the

procedures to be followed. And even though ABM supervises

its own employees, the Consortium wields a great deal of

influence in practice through its comprehensive monitoring of

the contract’s performance. If anything, carriers appear to

exercise more control over ABM than United did over Air

Serv, given the Consortium’s contractual right to approve

changes in key ABM personnel, its control over the appearance

of ABM employees, and the fact that the Consortium places its

own logo on ABM employees’ uniforms.

Had the NLRB followed the NMB’s analysis in Air Serv,

there is no question that ABM would be covered by the RLA

and that the NLRB would have no jurisdiction over this labor

dispute. Indeed, even in prior cases where carrier influence

over personnel decisions was a factor weighing in favor of a

finding of control, the NMB never went so far as to hold that

the ability to discipline or discharge company personnel was

necessary or even that it was a factor to be given significantly

greater weight than the others. See, e.g., Complete Skycap

Servs., Inc., 31 N.M.B. 1, 5 (2003) (listing the fact that carriers

“may request removal of an employee” as merely one of the

many factors favoring a finding of control). Moreover, in the

past, the NMB had found control even where there was no

indication that an airline “ha[d] the right to request employee

discipline or removal” and where “there [was] no evidence that

[the airline] ha[d] []ever requested [the contractor] to discipline

or remove an employee.” Kanonn Serv. Enters. Corp., 31

N.M.B. 409, 417 (2004). 3 If the ability to dictate personnel

actions (especially negative ones) had been a necessary

3

The NMB has never directly overruled or even disavowed

these decisions. See Garren, supra, at 102-03.

13

condition for finding RLA-level control, the NMB would have

reached the opposite result in such cases. By the same token,

had the NLRB followed the reasoning used in those cases here,

it would have concluded that the RLA governed the dispute

with ABM even though the airlines cannot discipline or

effectively fire ABM’s employees.

In a clear departure from precedent, however, the NMB in

2013 began requiring that air carriers exercise a substantial

“degree of control over the firing[] and discipline of a

company’s employees” before it would find that company

subject to the RLA. Huntleigh USA Corp., 40 N.M.B. 130, 137

(2013); see also Aero Port Servs., Inc., 40 N.M.B. 139, 143

(2013) (finding that a cargo-screening company was not

subject to air-carrier control, based on a lack of direct

involvement by the airlines in employee discipline). 4 The

NMB made no effort to explain this change to its test for RLA

jurisdiction. The agency expanded on this approach later that

year in Bags, Inc., where it found especially relevant that the

employer made the final disciplinary decisions, even though

airlines could provide “input” into the process. See 40 N.M.B.

165, 170 (2013). The NMB determined that meaningful control

was lacking even though, in this line of cases, carriers provided

training and operating-procedure manuals, Menzies Aviation,

Inc., 42 N.M.B. 1, 2 (2014); determined staffing levels, id. at

4

The NMB also emphasized that Aero Port Services’ contract

involved “the type of control expected in nearly any contract for

services.” 40 N.M.B. 139, 143 (2013). Although the NMB did not

explain what a typical contract for services looks like, it subsequently

recited similar language in Bags, Inc., where it observed that “the

type of control exercised by the [airlines] over [the employer] is

found in almost any contract between a service provider and a

customer.” 40 N.M.B. 165, 170 (2013). The NMB has continued to

use this language ever since. See Menzies Aviation, Inc., 42 N.M.B.

1, 4, 7 (2014); Airway Cleaners, LLC, 41 N.M.B. 262, 268 (2014).

14

4; Aero Port Servs., 40 N.M.B. at 141; controlled scheduling,

Bags, Inc., 40 N.M.B. at 170; provided equipment and space,

id.; Menzies Aviation, 42 N.M.B. at 2; recommended

promotions, Airway Cleaners, LLC, 41 N.M.B. 262, 266

(2014); and possessed veto authority over material changes to

contractors’ staff, id. at 265.

We are not the first to remark on this shift in the NMB’s

analysis. In an order issued just two months before the NLRB

granted summary judgment against ABM, an NLRB member

observed “that in . . . recent cases, the National Mediation

Board . . . ha[d] issued advisory opinions to the NLRB

declining jurisdiction, despite air carriers providing detailed

specifications as to the employer’s performance of work

traditionally performed by carriers (and their auditing that

performance).” Primeflight Aviation Servs., Inc., 12-RC-

113687, 2015 WL 3814049, at *1 n.1 (June 18, 2015)

(describing the view of Board Member Harry I. Johnson, III).

In that member’s assessment, “these cases represent[ed] a shift

by the NMB from earlier opinions in which it had asserted

jurisdiction on similar grounds.” Id.

In 2014, a member of the NMB noted the same change:

“In recent cases where the [National Mediation] Board has

declined to find jurisdiction over similar companies, it [has]

generally relied on the absence of substantial control over ‘the

firing and discipline of a company’s employees . . . .’” Airway

Cleaners, 41 N.M.B. at 275-76 (2014) (Geale, Mem.,

concurring in part and dissenting in part) (quoting Huntleigh

USA Corp., 30 N.M.B. at 137). “Those cases,” Board Member

Nicholas Geale explains, “appear to overly emphasize that

aspect compared to [earlier] NMB precedent.” Id. Member

Geale reiterated those concerns later that year, dissenting from

another NMB advisory opinion. See Menzies Aviation, Inc., 42

N.M.B. at 8 (Geale, Mem., dissenting) (confessing “difficulty

15

understanding what, if any, evidence could convince [the

NMB] of coverage under our traditional . . . test”). The NMB’s

decision to find no control in Menzies Aviation is remarkable

in light of its prior decisions because, as Member Geale

observes, the airline in that case had the right to demand the

removal of particular vendor employees from the contract. See

id. (Geale, Mem., dissenting). These cases and commentary

from members of both boards demonstrate that, under the test

the NMB now applies, the NMB will not find control for RLA

purposes if the contractor is ultimately allowed “to determine

the appropriate discipline” for its own employees. See id. at 6

(majority opinion). That rule is impossible to square with cases

from just a few years earlier. Cf. Garren, supra, at 103 (noting

that the NMB’s decisions in Airway Cleaners and other recent

cases “seem[] inconsistent with [the] more than thirty decisions

from 1996-2011 that found RLA jurisdiction” under similar

facts).

In ABM’s case, the NLRB found “that the record did not

establish whether an employee’s removal from service” at the

airport—which the Consortium has the right to request or

require under certain circumstances—“would effectively result

in the employee’s discharge” from the company. J.A. 568. The

NLRB also emphasized that the Company “conducts its own

investigations of [its] employees” before doling out discipline.

J.A. 568. Under those facts, the most recent NMB precedent

(on its own) might justify the NLRB’s determination that

carriers exercise insufficient control over ABM for the RLA to

apply. See Menzies Aviation, 42 N.M.B. at 6 (explaining that

“the authority to remove employees” from a contract is relevant

only when “an employee has been terminated following a

carrier request that he or she be removed from the contract”

(emphasis added)). After all, it is far from clear that the

Consortium has the power to determine discipline for ABM

16

employees or to ensure that those employees are fired from the

Company (and not just removed from service at the airport).

And that is the very reasoning the NLRB used to conclude

that the RLA did not apply here. See J.A. 571 (citing Menzies

Aviation, Inc., 42 N.M.B. 1; Airway Cleaners, LLC, 41 N.M.B.

262; and Bags, Inc., 40 N.M.B. 165) (finding PAC’s ability to

discipline and discharge ABM employees lacking and

observing “that the degree of control that PAC has over [ABM]

is contractually no greater than the type of control exercised in

a typical subcontractor relationship”). Yet the NMB never

expressly disavowed its precedent that took all six factors into

account when determining whether a carrier controlled a

contractor. Nor did the NMB ever explain why it decided to

replace that traditional approach with an analysis that

emphasized carrier control of discipline and discharge. Given

the NLRB’s previous endorsement of the prior approach, see,

e.g., Aircraft Serv. Int’l Grp., 342 N.L.R.B. 977 (2004), it was

not enough for the NLRB simply to follow suit without an

explanation for why it, too, was leaving behind settled

precedent.

B

The NLRB claims that “the NMB has primary authority to

interpret the RLA,” Oral Arg. Tr. 30:6-7, and readily

acknowledges that its practice is “to apply the NMB’s test,” id.

at 26:22-23. Indeed, the NLRB has for years hitched its wagon

to the NMB’s star, including in formal, published opinions.

See, e.g., Aircraft Serv. Int’l Grp., 342 N.L.R.B. at 977. When

the NLRB first adopted and applied the NMB’s traditional test,

it bound itself to continue doing so; any deviation would

require a reasoned explanation. In finding that it had

jurisdiction over the Company, however, the NLRB relied

exclusively on the NMB’s most recent precedent—silently

17

elevating the airlines’ power over personnel decisions to

dispositive status.

It is well-settled that the NLRB—like any other agency—

cannot “turn[] its back on its own precedent and policy without

reasoned explanation.” Dupuy v. NLRB, 806 F.3d 556, 563

(D.C. Cir. 2015); see also E.I. Du Pont de Nemours & Co. v.

NLRB, 682 F.3d 65, 70 (D.C. Cir. 2012) (explaining that the

NLRB must “give a reasoned justification for departing from

its precedent”). Generally speaking, “the requirement that an

agency provide reasoned explanation for its action . . .

demand[s] that it display awareness that it is changing position.

An agency may not, for example, depart from a prior policy sub

silentio or simply disregard rules that are still on the books.”

FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009).

And if “a party makes a significant showing that analogous

cases have been decided differently, the agency must do more

than simply ignore that argument.” LeMoyne-Owen Coll. v.

NLRB, 357 F.3d 55, 61 (D.C. Cir. 2004). Thus, when the Board

fails to explain—or even acknowledge—its deviation from

established precedent, “its decision will be vacated as arbitrary

and capricious.” Manhattan Ctr. Studios, Inc., v. NLRB, 452

F.3d 813, 816 (D.C. Cir. 2006).

Because the NLRB follows the NMB’s lead in interpreting

and applying the RLA, the question becomes how to treat an

unacknowledged and unexplained deviation from precedent by

the NLRB that is precipitated by a likewise unacknowledged

and unexplained deviation from precedent by the NMB. We

hold that, under such circumstances, the NLRB is not free to

simply adopt the NMB’s new approach without offering a

reasoned explanation for that shift. Indeed, an agency cannot

avoid its duty to explain a departure from its own precedent

simply by pointing to another agency’s unexplained departure

from precedent. This is a corollary of the rule that an agency

18

cannot justify a departure from its precedent simply by pointing

to another one of its cases that departed from precedent, if that

other case does not itself announce the new standard or a

supporting rationale for it. See Ramaprakash v. FAA, 346 F.3d

1121, 1128-29 (D.C. Cir. 2003) (citing Hatch v. FERC, 654

F.2d 825, 834 (D.C. Cir. 1981)).

In short, the NLRB should have recognized that

longstanding NMB precedent—which the NLRB previously

followed—compelled a finding of control in this case. The

NLRB may have fairly read recent NMB opinions to require

greater carrier control over personnel matters than the record

evinced here. But rather than ignore the NMB’s earlier

precedent, which it had effectively adopted as its own, the

NLRB was obligated to consider that precedent and

acknowledge the conflict in this case. See Hatch, 654 F.2d at

834-35 (requiring “explicit recognition by [an agency] that the

standard has been changed” and a genuine “attempt to

forthrightly distinguish or outrightly reject apparently

inconsistent precedent”). At that point, the NLRB would have

had two options. First, it could have attempted to offer its own

reasoned explanation for effectively whittling down the

traditional six-factor test. It would have needed to explain why

such a change was appropriate, how the new test reasonably

interprets the RLA, and why the NLRB has decided to

determine for itself the appropriate test rather than keeping

with its past practice of referring such questions to the NMB

and deferring to their formulation of the test for RLA

jurisdiction. Or the NLRB could have simply referred this

matter to the NMB and asked that agency to explain its decision

to change course. If the NLRB were persuaded, it could then

have adopted the NMB’s explanation as its own. The NLRB,

however, followed neither path. As a result, we must vacate the

NLRB’s order as arbitrary and capricious.

19

At oral argument, counsel for the NLRB was asked what

the appropriate remedy would be if the Board had in fact

applied a new test without explanation. Counsel suggested that,

on remand, it would be up to the NLRB to provide some

explanation justifying the new test or to identify another

agency that could. See Oral Arg. Tr. 24:1-6. We agree. Either

scenario is preferable to the present state of affairs, in which

both employers and employees are caught in a web of

conflicting precedent on the issue of RLA jurisdiction.

III

We grant the Company’s petition for review and deny the

NLRB’s cross-application for enforcement. We vacate the

NLRB’s order and remand for further proceedings consistent

with this opinion.

So ordered.