Tamosiunas v. Nat'l Labor Relations Bd.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued January 8, 2018 Decided June 15, 2018

No. 16-1338

MARK TAMOSIUNAS, ET AL.,

PETITIONERS

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITE HERE!, LOCAL 5,

INTERVENOR

On Petition for Review of an Order

of the National Labor Relations Board

Glenn M. Taubman argued the cause for petitioners.

With him on the briefs were Sarah E. Hartsfield and Aaron B.

Solem.

Valerie L. Collins, Attorney, National Labor Relations

Board, argued the cause for respondent. With her on the brief

were Richard F. Griffin, Jr., General Counsel at the time the

brief was filed, John H. Ferguson, Associate General Counsel,

Linda Dreeben, Deputy Associate General Counsel, and Julie

B. Broido, Supervisory Attorney.

2

Eric B. Myers argued the cause and filed the brief for

intervenor Unite Here!, Local 5.

Before: MILLETT and WILKINS, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge MILLETT.

MILLETT, Circuit Judge: Several Hyatt Regency Hotel

employees in Hawaii objected to and formally declined full

membership in their union. Nonetheless, they received a

letter from the union requiring immediate payment of full

union dues—that is, dues owed by employees who chose to

join the union in full. The letter went on to inform the

employees that the Hyatt Regency Hotel would soon be

deducting the amounts necessary to pay full union dues from

future paychecks at the union’s behest. The Board concluded

that, in its view, the letter was an obvious mistake and no

reasonable employee reading it would have felt pressured to

pay the demanded full union membership dues. The union,

for its part, neither acknowledged that the letter was a mistake,

nor apologized for sending the dues demand to employees who

it knew had formally objected to joining the union.

The Board’s decision is legally unsupportable on this

record. The letter demanded payment from individuals the

union knew had rejected full membership, and it

simultaneously initiated the garnishment process to collect the

full dues. That letter reasonably tended to coerce or restrain

the objecting Hyatt employees in the exercise of their statutory

right to limit their association with the union. Accordingly,

we grant the employees’ petition, vacate the Board’s decision,

and remand for further proceedings consistent with this

opinion.

3

I

A

The National Labor Relations Act (“the Act”) protects an

employee’s right to “bargain collectively through

representatives of [his or her] own choosing”—a guarantee that

is commonly referred to as a worker’s “Section 7” rights. 29

U.S.C. § 157 (codifying Section 7 of the Act). Importantly,

Section 7 equally protects the inverse right: the right to

abstain from unionization. Id. To enforce that right, the Act

prohibits both employers and labor unions from engaging in

“unfair labor practices,” including any behavior designed to

“interfere with, restrain, or coerce employees in the exercise of

the rights guaranteed in” Section 7. Id. § 158(a), (b)(1)(A)

(codifying Section 8 of the Act). In other words, restraining

an employee from exercising her right to abstain from union

membership constitutes an unfair labor practice. So does

coercing an employee not to exercise that right.

There are a few exceptions: the prohibition on unfair

labor practices does not preclude an employer from agreeing to

require union participation “as a condition of employment,”

assuming the relevant union meets certain statutory

prerequisites. 29 U.S.C. § 158(a)(3). And it does not impair

a union’s ability to prescribe its internal membership standards.

Id. § 158(b)(1).

When an employer requires union membership as a

mandatory condition of employment, the law allows

employees to choose between becoming full members or

“core” financial members. Unlike full members, “core”

members pay a reduced annual fee (“core fee”) to cover their

fair share of the union’s representative work that aims to

benefit all employees. NLRB v. General Motors Corp., 373

4

U.S. 734, 742 (1963) (“‘Membership’ as a condition of

employment is whittled down to its financial core.”).

The obligation to pay core fees applies to all employees,

even those opposed to union representation. That is because,

once a union becomes the collective bargaining agent for

employees in a work unit, the union is required by law to

represent the interests of all employees equally, even those that

do not support the union. Emporium Capwell Co. v. Western

Addition Cmty. Org., 420 U.S. 50, 64 (1975). That task

“entails the expenditure of considerable funds” and resources.

International Ass’n of Machinists v. Street, 367 U.S. 740, 760

(1961). Also, the benefits obtained by the union in

negotiating with the employer—such as pay, work

opportunities, vacation and sick leave—redound to the benefit

of core members just as much as full union members. For

those reasons, requiring core members to pay their fair share of

union expenses incurred on behalf of the entire workforce best

accommodates the associational rights of all employees while

preventing freeloading by employees and providing unions

with the resources necessary to perform effectively their

representative duties to all employees. See International

Ass’n of Machinists, 367 U.S. at 750, 760–764 (“Activities of

labor organizations resulting in the procurement of employee

benefits are costly * * *. We believe that it is essentially

unfair for nonmembers to participate in the benefits of those

activities without contributing anything to the cost.”).

In short, though full union members pay a higher rate and,

in exchange, receive the right to participate in internal union

affairs and benefit programs, “core” members still qualify as

union “members” for purposes of retaining their contractual

right to “continued employment” by paying their fair share of

union activity undertaken on behalf of all employees.

5

B

Mark Tamosiunas, Steven Taona, Agnes Demarke, and

Wayne Young (collectively, the Objecting Employees) provide

hospitality services for the Hyatt Regency Hotel in Waikiki,

Hawaii. Since at least 2006, “Unite Here!,” Local 5, a labor

union, has represented hotel hospitality workers in Hawaii,

including those at the Hyatt Regency Hotel.

Between July 1, 2006 and June 30, 2010, a collective

bargaining agreement governed relations between Local 5 and

the Hyatt Regency Hotel. Among many other things, this

agreement included a “union security clause,” which required

all Hyatt employees to become or remain either full or core

members of Local 5 “as a condition of continued employment.”

J.A. 11.

From the start, the Objecting Employees have participated

in Local 5 solely as “core” members. They have consistently

objected to the payment of any additional fees for

“nonrepresentational activities.” J.A. 11.

When the Hyatt collective bargaining agreement

terminated at the end of the day on June 30, 2010, so did the

union security clause obligating Hyatt employees to maintain

at least core membership in Local 5. That left Hyatt’s

employees—both the core and full union members—free to

continue or abandon union membership as they pleased. The

Objecting Employees waited two years and then broke rank.

Each informed Local 5 in writing that they would no longer

allow the Hyatt to remit their core fees to the union. They

added, however, that should Local 5 “secure a compulsory dues

contract” in the future, they would recommence payment of the

“required amount of dues,” which the letters defined as the

“reduced fair share amount for financial core members.” J.A.

6

71–74.

In August 2013, the union secured just such an agreement.

That contract, like the one before it, contained a union security

clause. It read as follows:

Section 7. UNION SECURITY

7.01 Employees who are now members of the

Union shall, as a condition of continued

employment, remain members of the Union.

All other employees and all new employees

shall, as a condition of continued employment,

become members of the Union no later than the

thirty-first (31st) day following the execution of

this Agreement or their date of employment,

whichever is later.

7.02 Five (5) days after receipt of written

notice from the Union that an employee has

failed to tender his uniform dues and initiation

fees * * *, Hyatt shall suspend such employees

for seven (7) days pending termination. If

within the seven (7) day period of suspension

the Union notifies Hyatt that the employee has

complied with Section 7.1, the employee shall

be immediately reinstated to work without back

pay. If Hyatt is not so notified by the Union

the employee shall be discharged and shall not

have access to the grievance procedure as

provided in Section 18 of this Agreement.

J.A. 11.

Soon after securing this agreement, Local 5 sent letters to

7

each of the Objecting Employees entreating them to rejoin the

union as full members (the October 2013 letters). The letters

indicated that Local 5 was aware that the employees had

requested to pay only core fees in the past, but encouraged

them to reconsider the “benefits of full union membership” in

light of the favorable collective bargaining agreement that had

been obtained and to “make arrangements to pay the

arrearages” accrued to date. J.A. 75–78. The letters

concluded with a note identifying the specific amount of dues

outstanding that would need to be paid to reinstate full

membership privileges for the individual employee.

Since the Objecting Employees’ views of the Union had

not warmed, they chose to remain only as core members.

Nevertheless, on March 31, 2014, they each received a billing

letter from Local 5, demanding payment of full membership

dues (“Dues Letter”). Aside from the names and amounts

due, the Dues Letters were identical:

THIS IS A STATEMENT OF YOUR

ACCOUNT AS OF THE ABOVE DATE.

Your dues must be made current. To facilitate

this we have billed your employer for the

balance listed below. A deduction will be

reflected on an upcoming pay stub. If your

employer doesn’t deduct arrearages, you are

responsible for paying this balance directly to

Local 5.

Please be advised that the International

Constitution Rules affirmed by Local Union 5

Bylaws must suspend any Member whose Dues

are more than TWO Months in arrears.

ATTENTION FOOD SERVERS: Please note

8

that if there are insufficient funds available in

your weekly paycheck to cover dues

deductions, then you are responsible for

sending your union dues directly to Local 5.

PLEASE REMIT THE BALANCE STATED.

Your prompt payment is appreciated.

J.A. 79.

The Dues Letter also contained an individualized chart

itemizing the amount of dues owed, along with a final line item

denoted “Total Balance due.” J.A. 79–86.

The same day it sent those letters, Local 5 also contacted

Hyatt. In an email, Local 5 informed Hyatt that it had sent

out the Dues Letters and advised Hyatt that it would be

“submitting a billing report for March” identifying the amount

of union fees individual employees owed. J.A. 87–89.

Local 5 requested that Hyatt process this billing—that is,

garnish the unpaid fees from employees’ paychecks—in the

upcoming pay period. J.A. 89.

Consistent with that request, on April 11, 2014, Hyatt

deducted up to the maximum amount of $62.50 from the

paychecks of the Objecting Employees and other core

members. Hyatt soon learned of the error, and it promptly

sent a letter to the Objecting Employees and other affected

workers, acknowledging the mistaken garnishment and

assuring that it would credit their upcoming paychecks for the

amount improperly remitted to the Union.

Local 5, for its part, remained silent.

Unsatisfied, the Objecting Employees filed a complaint

with the National Labor Relations Board on April 28, 2014,

9

charging Local 5 with a variety of unfair labor practices

prohibited by the National Labor Relations Act. More

specifically, the Objecting Employees alleged that the Union’s

demand for retroactive full union dues and promised

garnishment of their wages represented an effort both to

restrain them from exercising their Section 7 right not to join

the union in full and to coerce them not to exercise that right.

J.A. 59–60. The charge also claimed that Local 5 had

endeavored to apply the August 2013 union security provision

retroactively to collect dues for a period not governed by the

collective bargaining agreement.

With charges pending, Local 5 took some action of its

own. On May 13, 2014, the Union sent a letter only to the

Objecting Employees who had filed the charges (but for some

unexplained reason, not to all of the other core employees who

had also wrongly received the Dues Letter). The Union’s

May 2014 letters “clarif[ied] the March 31, 2014 [Dues] letter,”

stating that the billing amounts contained in the letters just

identified “the amount of dues [needed] to become a member

in good standing with the Union,” not the smaller amount of

core fees needed to retain one’s employment. J.A. 136.

Local 5’s May 2014 letter stressed that the Dues Letter did “not

refer to the union security clause” or otherwise “threaten [any

employee’s] continued employment.” Id. Rather, the Letter

raised only the specter of a suspension in “Union membership.”

Id. (emphasis in original).

An administrative law judge concluded that the Dues

Letter did not expressly or impliedly threaten the employees

beyond threatening to suspend union membership, a matter of

internal self-governance. On that basis, the administrative

law judge found no unlawful coercion of the Objecting

Employees’ Section 7 rights. The administrative law judge

did not address whether the letters also “restrained” the

10

employees in their exercise of Section 7 rights, framing the

issue in terms of threats and coercion alone. J.A. 149.

The Board, in a divided opinion, agreed with the

administrative law judge. The Board acknowledged that the

administrative law judge had phrased his inquiry as whether

the letter amounted to a “threat or coercion,” J.A. 140 n.1

(emphasis added), while the statutory language referred to

“conduct that restrain[s] or coerce[s]” employees, 29

U.S.C. § 158(b)(1)(A) (emphasis added). But the Board

ruled that this “use of different terminology did not affect [the]

analysis.” J.A. 140 n.1.

The Board also ruled that “the only objectively reasonable

view of the letter, in context, was that it was mistakenly

directed” to the Objecting Employees. J.A. 141. In support

of that conclusion, the Board reasoned that the letter (i) sought

full membership dues (not just core fee arrearages); (ii) relied

on internal board rules and regulations (not a union security

clause or other contractual requirement); (iii) suggested a

suspension in union membership (and not employment) would

occur if dues went unpaid; and (iv) did not incorporate or imply

any other adverse consequences in the event of non-payment.

The Board added that Local 5 had indicated in its initial

October 2013 letter that the union dues obligation fell only

upon “full” union members. Id. 140–141.

Member McFerran dissented. In her view, the Union’s

demand of “dues from employees who did not owe them” by

itself constituted an unfair labor practice. J.A. 141. “To be

told that you are delinquent in paying a bill,” she concluded,

“and that steps to collect will be taken, obviously has a

reasonable tendency to coerce payment from you—which was

precisely the point of the [Union’s] letter, on its face.” Id.

142. Member McFerran also pointed out that the garnishment

11

of dues from an upcoming paycheck was itself an adverse

consequence with which the Board and judge had failed to

grapple. Finally, she concluded that the October 2013 letter,

even if relevant, did “not preclude an alternative, reasonable,

and coercive construction—all that [the Board] requires to find

a violation.” Id. 143.

II

A

The Board has primary responsibility for applying “the

general provisions of the [National Labor Relations] Act to the

complexities of industrial life.” Pattern Makers’ League of

North America, AFL-CIO v. NLRB, 473 U.S. 95, 114 (1985)

(internal quotation marks and citations omitted). When the

Board’s construction of the Act is reasonable, it cannot be

rejected “merely because the courts might prefer another view

of the statute.” Ford Motor Co. v. NLRB, 441 U.S. 488, 497

(1979). But when the Board’s findings are not supported by

substantial evidence, the Board has acted arbitrarily, or the

Board has otherwise erred in applying established law, the

court must intervene. Weigand v. NLRB, 783 F.3d 889, 894–

895 (D.C. Cir. 2015).

This case demands our intervention. The Board’s

decision falls far short of the substantial evidence needed to

satisfy its own governing legal standard: that no reasonable

employee could interpret the March 2013 Dues Letter as an

effort to restrain her from exercising her right not to pay the

dues for full union membership or to coerce her into paying

such dues. See Service Employees Int’l Union, Nurses

Alliance, Local 121RN (Pomona Valley Hosp.), 355 N.L.R.B.

234, 235 (2010).

12

Heavy-handed threats and sanctions will, of course, rise to

the level of coercing or restraining the exercise of Section 7

rights and so will readily qualify as unfair labor practices

prohibited by Section 8 of the National Labor Relations Act,

29 U.S.C. § 158. See NLRB. v. Allis-Chalmers Mfg. Co., 388

U.S. 175, 186 (1967) (describing the legislative purpose behind

Section 8(b) as addressing “threats of reprisal against

employees and their families”); see also International Union of

Dist. 50, UMW (Ruberoid Co.), 173 N.L.R.B. 87, 87 (1968)

(“[T]he Respondents violated Section 8(b)(1)(A) of the Act by

threatening employees with discharge or with loss of

retroactive contract benefits if they refused to sign an

authorization for checkoff of dues[.]”).

But Section 8’s protective cloak sweeps far more broadly,

proscribing any action by an employer or union that “has a

reasonable tendency” to coerce or restrain employees in the

exercise of their Section 7 rights. See Enterprise Leasing Co.

of Florida v. NLRB, 831 F.3d 534, 543 (D.C. Cir. 2016)

(interpreting Section 158(a)(1), the analogous employer

provision); see also Helton v. NLRB, 656 F.2d 883, 889 (D.C.

Cir. 1981) (concluding that any textual differences between the

provisions governing employer and union conduct were “not

intended to indicate that union conduct should be measured

against a less demanding standard than employer conduct”);

see also NLRB v. Service Employees Int’l Union, Local 254,

AFL-CIO, 535 F.2d 1335, 1337–1338 (1st Cir. 1976) (applying

the “reasonably tend to coerce” test to an allegation of union

misconduct).

Accordingly, implied threats may run afoul of Sections 7

and 8. See Helton, 656 F.2d at 887 (holding that Section

8(b)(1)(A) “is not limited to union conduct involving threats of

violence or economic coercion”); International Bhd. of Elec.

Workers, AFL-CIO v. NLRB, 487 F.2d 1113, 1119 (D.C. Cir.

13

1972) (holding that the National Labor Relations Act

“prohibits indirect union restraint or coercion of an employer”

in addition to direct coercion or restraint); Pomona Valley

Hosp., 355 N.L.R.B. at 235 (same). For example, threats to

“refer claims * * * to a collection agency” or to “institute court

action” to recover unpaid union dues from objecting employees

constitute unlawful coercion. International Bhd. of Elec.

Workers, Local No. 396 (Central Tel. Co.), 229 N.L.R.B. 469,

469–470 (1977) (“[W]e view [the union’s] efforts to collect

dues from nonmembers * * * as coercive and in violation of

Section 8(b)(1)(A).”).

The Board goes further still. Under its precedent,

whether a communication will be restraining or coercive turns

on “whether the words could reasonably be construed as

coercive,” even if that is not the “only reasonable

construction.” Pomona Valley Hosp., 355 N.L.R.B. at 235

(emphasis added). Under that standard, if any reasonable

employee could view the communication as coercive or

restraining, the union (or employer) has violated the law. 1

Given how jealously the Board’s decisions protect

employees’ Section 7 rights, the Board’s decision in this case

makes no sense. Directly requiring the Objecting Employees

to pay full-membership dues would collide head-on with their

Section 7 rights. That much is not disputed. Yet the text of

the Dues Letter reads very much like a payment demand.

Each Objecting Employee’s letter included an individualized

1

Because the parties do not contest this standard, we take no

position on whether the Board’s “any reasonable employee”

framework provides the proper lens through which to view a Section

8 violation. In any case, if the Board deviated from its own

standard without explanation, it has acted arbitrarily. FCC v. Fox

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

14

accounting of the amount purportedly outstanding, and then

said that the employee “must” come current with those dues.

J.A. 79–86. Each letter also said that the employee was

personally “responsible” for the overdue amounts. Id. And

each advised that the employee “please remit the balance

stated” “prompt[ly].” Id.

If the employee retained any lingering hope of choice in

the matter, the letter disabused her of it by advising that failure

to pay would result in the garnishment of her wages. That

was no idle threat either. The Dues Letter was explicit that

Local 5 had already set the forced-collection wheels in motion

by “bill[ing] [the] employer for the balance listed” so that a

“deduction will be reflected on an upcoming pay stub.” J.A.

79 (emphasis added). And that is exactly what happened.

At the Union’s urging, Hyatt extracted dues payments from

each Objecting Employee’s next paycheck.

The Union, in short, tried to fulfill through the back door

of employer garnishment the same direct demand for employee

payment that Section 8 forbids on the front end. The only

choice about paying full union dues that was left to the

employee was, in effect: “We can do this the easy way, or we

can do this the hard way.” Either way, the employee’s

Section 7 choice to pay only core fees evaporated. That is the

very definition of coercion and restraint. Or at least a

reasonable employee could think so.

The Board concluded that no sensible employee would

have read the Dues Letter as compelling or coercing a payment

of full union dues. The Board found it relevant that the Letter

(1) only sought arrearages for unpaid full union dues, not core

representational fees; (2) relied solely on internal membership

rules as authority for collection; (3) referenced suspension in

union membership; (4) threatened no other adverse

15

consequence of non-payment; and (5) the October 2013 letter

makes clear that union knew the protesting employees were

core members with no obligation to pay full union dues.

The Board is, of course, right that the factors it identified

provided good reason to believe that Local 5 aimed to extract

“full” membership dues, but hardly anything tipped off core

employees that the Union did so by mistake and that the

demanded payment and promised garnishment were not to be

taken seriously. That is where the Board’s rationale comes up

woefully short. Indeed, the Dues Letter’s terms make it just

as (if not more) likely that Local 5 hoped to obtain—by

garnishment or a pressured voluntary payment—the very dues

it sought: full membership dues.

In addition, the fact that, just five months earlier in

October 2013, Local 5 had solicited these same employees to

switch from core to full membership undermines rather than

supports the Board’s decision. Because the Objecting

Employees knew the Union’s records fully documented their

core status, it was eminently sensible for them to take the Dues

Letter at face value as an effort to wring full membership dues

out of them notwithstanding that the Union well knew their

core-only status.

The proof is seemingly in the pudding in that Local 5 has

never claimed that its letter was a mistake or apologized for it.

Perhaps that is why the Board contorted itself to conclude that

no reasonable employee would view the letter as anything but

a mistake, while withholding judgment on whether the letter

was, in actuality, sent by mistake. Surely it is reasonable for

the Objecting Employees to have been as confused about the

Letter’s intent as the Board seemed to be.

Finally, the Board is wrong that the Dues Letter did not

16

warn of any adverse consequence beyond suspension. The

Letter included a substantial second threat—actually, a

promise—of garnishment that the Letter advised was already

underway. And that garnishment actually happened. So

whether coercion or restraint is measured from the vantage

point of the employee receiving the Dues Letter or the

employee receiving a smaller paycheck because the

forewarned garnishment materialized two weeks later, the

Objecting Employees’ exercise of their right not to pay full

dues was forcibly restrained by the Dues Letter and the

garnishment it expressly set in motion.

The Board’s effort to backhand the impact of the Dues

Letter’s garnishment threat ignores the significant practical

consequences that docking a paycheck could inflict on the

many wage earners who rely on their weekly income to make

ends meet. In fact, the Board acknowledged at oral argument

that the actual garnishment could be “a separate violation of

the Act.” Oral Arg. 21:05–21:16. Given that, the Board

was obligated to factor the promise of forthcoming

garnishment and the Letter’s role in setting the actual

garnishment process into motion in its analysis of coercion or

restraint.

As for the Union, it argues that even a theft by union

officials would fall outside the Act unless accompanied by a

threat of termination. Oral Arg. 21:05–21:16. Thankfully,

that is not the law.

*****

The Board has provided no rational basis for concluding

that the Dues Letter’s garnishment threat and the garnishment

process it triggered did not “reasonably tend[] to restrain or

coerce employees” in the exercise of their Section 7 right not

17

to pay full union membership dues. Pomona Valley Hosp.,

355 N.L.R.B. at 235; Enterprise Leasing Co. of Florida, 831

F.3d at 543. Nor could the Board plausibly conclude that no

reasonable employee could construe the Dues Letter’s multiple

demands for an illegitimate payment, combined with a promise

of forced withholding, as coercive. Pomona Valley Hosp.,

355 N.L.R.B. at 235. 2

Accordingly, we grant the Objecting Employees’ petition

for review, vacate the Board’s decision, and remand for further

proceedings on the charge that the Local 5 engaged in unfair

labor practices.

So ordered.

2

The Board did not reach the question of proper remediation for

Local 5’s overreach, so that issue is not before us. It remains open

for the Board to address on remand.