Local Joint Executive Board v. National Labor Relations Board

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LOCAL JOINT EXECUTIVE BOARD OF 

LAS VEGAS; CULINARY WORKERS

UNION LOCAL #226; BARTENDERS

No. 10-72981

UNION LOCAL 165,

Petitioners,

 NLRB Nos.

28-CA-13274/75

v.

OPINION

NATIONAL LABOR RELATIONS

BOARD,

Respondent.



On Petition for Review of an Order of the

National Labor Relations Board

Argued and Submitted

June 7, 2011—Portland, Oregon

Filed September 13, 2011

Before: William C. Canby, Jr., Susan P. Graber, and

Richard A. Paez, Circuit Judges.

Opinion by Judge Paez

17423

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17427

COUNSEL

Richard G. McCracken, Andrew J. Kahn, and Barry J. Jelli-

son, Davis, Cowell & Bowe LLP, San Francisco, California,

for petitioners Local Joint Executive Board of Las Vegas,

Culinary Workers Union Local 226 and Bartenders Union

Local 165.

Usha Dheenan and Greg P. Lauro, National Labor Relations

Board, Washington, D.C., for respondent National Labor

Relations Board.

OPINION

PAEZ, Circuit Judge:

We review a petition by the Local Joint Executive Board of

Las Vegas, Culinary Workers Union Local 226 and Bartend-

ers Union Local 165 (the “Union”) from an order of the

National Labor Relations Board (“NLRB” or the “Board”)

dismissing a complaint alleging unfair labor practices by

Hacienda Resort Hotel and Casino and Sahara Hotel and

Casino (the “Employers”). This dispute between the Union

and the Employers is now more than 15 years old, and this is

the third petition brought by the Union challenging a ruling by

the Board. The Union alleges that the Employers violated sec-

17428 LOCAL JOINT EXECUTIVE BOARD v. NLRB

tions 8(a)(1) and 8(a)(5) of the National Labor Relations Act

(“NLRA”), 29 U.S.C. §§ 151-169, when the Employers uni-

laterally terminated union dues-checkoff before bargaining to

agreement or impasse.

On remand from this court for the second time, the Board

deadlocked on the merits with one of five members recused.

Hacienda Hotel, Inc. Gaming Corp. (Hacienda III), ___

N.L.R.B. ___, 355 NLRB No. 154, 2010 WL 3446120, at *1

(Aug. 27, 2010). Unable to form a majority in support of a

different rule, the Board followed its prior rulings in Bethle-

hem Steel Co., 136 N.L.R.B. 1500 (1962), and Tampa Sheet

Metal Co., 288 N.L.R.B. 322 (1988), in concluding that termi-

nation of dues-checkoff is an exception to the rule articulated

in NLRB v. Katz, 369 U.S. 736 (1962), that unilateral changes

to mandatory subjects of bargaining violate the duty to bar-

gain collectively under the NLRA. Hacienda III, 2010 WL

3446120, at *1. The Board affirmed the ruling of an adminis-

trative law judge (ALJ) dismissing the Union’s complaint.

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

the Board’s ruling. As we explain below, we conclude that the

Board’s decision in Hacienda III is arbitrary and capricious

because the Board provides no explanation for the rule it fol-

lows in dismissing the Union’s complaint. We further con-

clude that, although we must show deference to the Board in

its promulgation of labor policy, a third open remand is inap-

propriate in this case because the Board, after more than fif-

teen years, has reached a deadlock on the merits and

continues to be unable to form a reasoned analysis in support

of its ruling. Last, upon consideration of the merits, we con-

clude that the Employers violated section 8(a)(5) of the

NLRA when they unilaterally ceased dues-checkoff before

bargaining to impasse. We therefore grant the Union’s peti-

tion, vacate the Board’s ruling, and remand to the Board so

that it can determine what relief is appropriate in light of our

opinion.

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17429

I. Background

The Employers operate resorts and casinos in the state of

Nevada. The Union maintained collective bargaining relation-

ships with the Employers for more than thirty years, and each

union had a substantially identical collective bargaining

agreement (“CBA”) in place with the Employers. Nevada is

a “right-to-work” state where union security clauses condi-

tioning employment upon membership in a union are prohib-

ited. Nev. Rev. Stat. § 613.250;1 see also 29 U.S.C. § 164(b)

(providing that federal law does not authorize union security

provisions in right-to-work states). Although the CBAs

between the Union and the Employers therefore did not

include a union security clause, the Union successfully nego-

tiated for automatic union membership dues deductions from

employees’s wages, or “dues-checkoff.”

Under the dues-checkoff provision, the Employers, upon

written authorization by a union-member employee, were

required to deduct union dues automatically from the work-

er’s paycheck and submit that amount directly to the Union.2

1

Nev. Rev. Stat. § 613.250 reads in full:

“No person shall be denied the opportunity to obtain or retain

employment because of nonmembership in a labor organization,

nor shall the State, or any subdivision thereof or any corporation,

individual or association of any kind enter into any agreement,

written or oral, which excludes any person from employment or

continuation of employment because of nonmembership in a

labor organization.”

2

The dues checkoff provision reads:

3.03. Check-Off

The Check-Off Agreement and system heretofore entered into

and established by the Employer and the Union for the check-off

of Union dues by voluntary authorization, as set forth in Exhibit

2, attached to and made part of this Agreement, shall be contin-

ued in effect for the term of the Agreement.

Exhibit 2 reads:

17430 LOCAL JOINT EXECUTIVE BOARD v. NLRB

Thus, although the Union could not require that all workers

become dues-paying members of the Union because of

Nevada’s right-to-work law, it was guaranteed timely, accu-

rate payment of dues by the workers who chose to join the

Union and authorize a checkoff. The dues-checkoff provision

also benefitted participating employees, who did not incur the

cost and effort of submitting dues to the Union themselves.

The CBAs expired in May 1994, and the parties unsuccess-

fully negotiated for new agreements through the end of 1994.

Despite the expiration of the CBAs, the Employers initially

continued to deduct union dues from workers’ paychecks

under the dues-checkoff clause in the expired CBAs. In June

1995, however, the Employers informed the Union that they

intended to cease checking off dues, and they in fact stopped

deducting dues from employees’ paychecks shortly thereafter.

A. Hacienda I and LJEB I

In response to the Employers’ unilateral cessation of dues-

checkoffs, the Union filed unfair labor practice charges

against the Employers. The Union alleged that the Employers’

cessation of dues-checkoffs violated the unilateral change

doctrine affirmed by the Supreme Court in Katz. Under that

doctrine, “an employer’s unilateral change in conditions of

employment under negotiation is . . . a violation of § 8(a)(5)

[of the NLRA], for it is a circumvention of the duty to negoti-

ate which frustrates the objectives of § 8(a)(5) much as does

flat refusal.” Katz, 369 U.S. at 743.

General Counsel for the NLRB consolidated the charges

Pursuant to the Union Security provision of the Agreement . . .

the Employer, during the term of the agreement, agrees to deduct

each month Union membership dues . . . from the pay of those

employees who have authorized such deductions in writing as

provided in this Check-Off Agreement.

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17431

and issued complaints against the Employers. An ALJ dis-

missed the complaints. Upon review of the ALJ’s decision,

the NLRB affirmed the dismissal in a 3-2 decision,3 relying

on the “well-established precedent [of Bethlehem Steel and its

progeny] that an employer’s obligation to continue a dues-

checkoff arrangement expires with the contract that created

the obligation.” Hacienda Hotel, Inc. Gaming Corp. (Haci-

enda I), 331 N.L.R.B. 665, 666 (2000).4 The Board ruled that,

although this line of precedent “initially developed in the con-

text of a contract containing both union security and dues

checkoff, it has clearly come to stand for the general rule that

an employer’s dues-checkoff obligation terminates at contract

expiration.” Id. at 667. The Board ruled that the exception to

the unilateral change doctrine first stated in Bethlehem Steel

had been applied in a right-to-work context in Tampa Sheet

Metal, 288 N.L.R.B. 322, and this extension of the exception

to contracts not involving union security had been relied on

in numerous Board decisions. Hacienda I, 331 N.L.R.B. at

668-69.

The Union filed a petition for review of the Board’s deci-

sion with this court, and we granted the petition, vacated the

Board’s ruling, and remanded for further proceedings. Local

Joint Exec. Bd. of Las Vegas v. NLRB (LJEB I), 309 F.3d 578,

580 (9th Cir. 2002). We explained that “[w]e are unable to

discern the Board’s rationale for excluding dues-checkoff

from the unilateral change doctrine in the absence of union

security.” Id. at 582. We rejected as inadequate the Board’s

3

The full board participated in the decision. Chairman Truesdale and

Members Hurtgen and Brame were in the majority. Members Liebman

and Fox dissented.

4

In Bethlehem Steel, the Board held that a union security clause making

union membership a condition of employment was lawful only under a

contract complying with § 8(a)(3) of the NLRA, and therefore could not

remain effective after the expiration of that contract. 136 N.L.R.B. at

1502. The Board also held that a checkoff provision, mandatory in that

instance, was subject to “similar considerations” because it “implemented

the union-security provisions.” Id.

17432 LOCAL JOINT EXECUTIVE BOARD v. NLRB

conclusion that the rule of Bethlehem Steel, a case concerning

dues-checkoff in the context of a union security agreement,

was equally valid in right-to-work states merely because such

a rule had been assumed without explanation in Tampa Sheet

Metal and was subsequently repeated in several prior NLRB

decisions. Id. We remanded the case “so that the Board

c[ould] either articulate a reasoned explanation for its rule or

adopt a different rule with a reasoned explanation to support

it.” Id.

B. Hacienda II and LJEB II

On remand, the Board abandoned its reliance on Bethlehem

Steel but again affirmed the ALJ’s dismissal, in another split

decision, on the ground that the CBAs contained an express

waiver of the right to continued dues-checkoff past the expira-

tion of the CBA. Hacienda Hotel, Inc. Gaming Corp. (Haci-

enda II), 351 N.L.R.B. 504, 505 (2007).5 The Union

petitioned for review and we concluded that there was “sim-

ply no clear and unmistakable waiver.” Local Joint Exec. Bd.

of Las Vegas v. NLRB (LJEB II), 540 F.3d 1072, 1075 (9th

Cir. 2008). We granted the Union’s petition, vacated the

Board’s decision, and remanded the case to the Board for a

second time. Id. Noting that “[t]he Board is the appropriate

body for developing and applying national labor policy,” we

directed the Board to either “explain the rule it adopted in

Hacienda I, or abandon Hacienda I to adopt a different rule

and present a reasoned explanation to support it.” Id. at 1082.

We explained that “the question squarely in front of the Board

is whether dues-checkoff in right-to-work states is subject to

unilateral change, or whether, under such circumstances,

dues-checkoff is a mandatory subject of bargaining.” Id.

5

The full board participated in the second decision as well. Chairman

Battista and Members Schaumber and Kirsanow were in the majority.

Members Liebman and Walsh dissented.

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17433

C. Hacienda III

On the second remand, the Board deadlocked on the merits

of the Union’s claim. Hacienda III, 2010 WL 3446120, at *1.

Two members of the Board, Liebman and Pearce, voted in

favor of overturning the Board’s rule in Bethlehem Steel and

argued that the Hotel had engaged in an unfair labor practice.

Id. at *2 (Liebman & Pearce, concurring). Two other mem-

bers, Schaumber and Hayes, voted in favor of upholding the

ALJ’s decision and dismissing the Union’s complaints. Id. at

*6 (Schaumber & Hayes, concurring). Member Becker

recused himself, a decision that we are not called on to

review.

Despite their split on the merits, the Board unanimously

agreed that existing NLRB precedent established in Bethle-

hem Steel and Tampa Sheet Metal compelled the conclusion

that the Employers did not violate the NLRA by unilaterally

ceasing dues-checkoff. Hacienda III, 2010 WL 3446120, at

*1. The Board also unanimously agreed that Board tradition

required a three-member majority to overrule existing prece-

dent. Id. at *3, 6. Purportedly following its precedent and tra-

dition, the Board therefore dismissed the Union’s complaint.

Id. at *1.

The Union again petitioned for review of the Board’s rul-

ing.

II. Standard of Review

The unilateral change doctrine—and the exclusion of dues-

checkoff from that doctrine under Bethlehem Steel—

“represent[s] the Board’s interpretation of the NLRA require-

ment that parties bargain in good faith.” Litton Fin. Printing

Div., Inc. v. NLRB, 501 U.S. 190, 200 (1991). Under the

Administrative Procedure Act, we may hold unlawful and set

aside only “agency action, findings, and conclusions found to

be . . . arbitrary, capricious, an abuse of discretion, or other-

17434 LOCAL JOINT EXECUTIVE BOARD v. NLRB

wise not in accordance with law.” 5 U.S.C. § 706(2)(A).

Under Chevron USA, Inc. v. Natural Res. Def. Council, Inc.,

467 U.S. 837 (1984), we defer to the Board’s interpretation of

the NLRA if its interpretation is rational and consistent with

the Act. United Food & Commercial Workers Union, Local

1036 v. NLRB, 307 F.3d 760, 766 (9th Cir. 2002) (en banc).

“Where the statute is ambiguous, Chevron dictates that ‘a

court may not substitute its own construction of [the] statutory

provision for a reasonable interpretation made by . . . an agen-

cy.’ ” Id. at 767 (alteration in original) (quoting Chevron, 467

U.S. at 844). We may ignore the views of the Board only

where the intent of Congress is clear on the face of the statute.

Id.

We also review the Board’s decision-making process, and

“[i]t is well-established that an agency’s action must be

upheld, if at all, on the basis articulated by the agency itself.”

Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.

Auto. Ins. Co., 463 U.S. 29, 50 (1983). We therefore defer to

a rule adopted by the Board only if its “ ‘explication is not

inadequate, irrational or arbitrary.’ ” Allentown Mack Sales &

Serv. v. NLRB, 522 U.S. 359, 364 (1998) (quoting NLRB v.

Erie Resistor Corp., 373 U.S. 221, 236 (1963)).

III. Discussion

In LJEB I, we vacated the Board’s order in Hacienda I

because we were not able to discern the Board’s rationale for

the exclusion of dues-checkoff from the unilateral change

doctrine in the absence of a union security agreement. 309

F.3d at 585. We concluded that nothing in Bethlehem Steel or

Tampa Sheet Metal provided a reasoned explanation for such

a rule. Id. On this point, the four voting members of the Board

who participated in Hacienda III agree. See Hacienda III,

2010 WL 3446120, at *2 (Liebman & Pearce, concurring)

(“[T]he Board has never provided a reasoned analysis for

applying the holding in Bethlehem Steel in a right-to-work

context where dues checkoff could not lawfully be linked

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17435

with union-security arrangements.”); id. at *6 (Schaumber &

Hayes, concurring) (conceding that “we may have failed to

adequately explain previously” the reasons for the rule of

Bethlehem Steel and Tampa Sheet Metal).6

Hacienda III, however, does not respond to our direction

that the Board either offer a reasoned explanation for its rule

or abandon it. Instead, the Board perfunctorily ruled that the

dismissal of the Union’s complaint “was compelled by [its]

decisions in Bethlehem Steel . . . and Tampa Sheet Metal.”

Hacienda III, 2010 WL 3446120, at *1. The Board character-

ized its conclusory ruling as “follow[ing] existing precedent.”

Id. at *2.

A. The Board’s ruling in Hacienda III is

arbitrary and capricious

[1] The Board’s most recent ruling in Hacienda III rests on

essentially the same reasoning it provided in Hacienda I.

Namely, the Board insists that the exception to the unilateral

change doctrine for dues-checkoff, even in right-to-work

states, is the rule the Board must follow in this case simply

because it is the rule that the Board has followed in the past.

We rejected this very reasoning in LJEB I, 309 F.3d at 583,

and we reject it again here. As we have explained, “Although

a Board rule may become ‘well-established’ through repeti-

tion, it may ‘come to stand for’ a legal rule only through rea-

6

The Seventh Circuit criticized our conclusion in LJEB I, stating that it

had “no similar problem understanding the basis of the Board’s rule.”

Office & Prof’l Emps. Int’l Union v. Wood Cnty. Tel. Co., 408 F.3d 314,

317 (7th Cir. 2005). The Seventh Circuit, however, mischaracterized our

opinion in LJEB I as holding “that the rule of [Katz] . . . applies to dues

checkoffs as well as wages and fringe benefits.” Id. First, in LJEB I, we

expressly declined to adopt any such broad rule out of deference to the

NLRB. 309 F.3d at 585. Second, our ruling rested on the Board’s failure

to distinguish between dues-checkoff in the context of a union security

agreement and dues-checkoff in a right-to-work state, id. at 585-86, a con-

sideration wholly absent in the Seventh Circuit’s analysis.

17436 LOCAL JOINT EXECUTIVE BOARD v. NLRB

soned decisionmaking.” Id. (quoting Allentown Mack, 522

U.S. at 374).

[2] We also reject the Board’s attempt to veil its familiar

argument in procedural formalities. The Board asks us to

leave its ruling in place out of deference to an NLRB tradition

that requires a three-member majority to overturn existing

precedent. The Board cites Vermont Yankee Nuclear Power

Corp. v. Natural Resource Defense Council, Inc., 435 U.S.

519 (1978), and FCC v. Pottsville Broadcasting Co., 309 U.S.

134 (1940), in support of its argument that agencies are enti-

tled to independence and deference in developing their proce-

dures. In Pottsville, the Supreme Court ruled that agencies

“should be free to fashion their own rules of procedure and to

pursue methods of inquiry capable of permitting them to dis-

charge their multitudinous duties.” 309 U.S. at 143. In Ver-

mont Yankee, the Court reaffirmed that “the formulation of

procedures [is] basically to be left within the discretion of the

agencies to which Congress had confided the responsibility

for substantive judgments.” 435 U.S. at 524. We agree that we

generally must defer to the Board’s choice of particular proce-

dures that it has decided are best suited to the adjudication of

labor disputes, but this deference does not free the Board to

ignore our mandate to explain the rule it chooses to adopt.

[3] The question presented here is not whether the NLRB’s

chosen procedures are adequate, but rather whether the expli-

cation of its ruling is adequate. See LJEB I, 309 F.3d at 583

(citing NLRB v. Erie Resistor Corp., 373 U.S. at 236). Potts-

ville and Vermont Yankee do not hold that the Board’s adher-

ence to its traditional practices eliminates the Board’s

responsibility to provide an adequate, rational, non-arbitrary

rule that is consistent with the NLRA. The fact that the Board

offers only a procedural justification for its substantive ruling

only highlights that the ruling is substantively arbitrary. We

will not defer to an agency’s procedures or traditional prac-

tices when they result in arbitrary substantive rules.

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17437

We recognize the Board’s interest in protecting the stability

of its legal precedent. Unlike other federal agencies, the

NLRB promulgates nearly all of its legal rules through adjudi-

cation rather than rulemaking. Allentown Mack, 522 U.S. at

374. Under such a scheme, the Board’s rules would be of little

assistance to employers and unions in following the NLRA if

the Board’s rules interpreting the Act were subject to routine,

frequent change. The Board reasonably has decided that

requiring a three-member majority to overturn precedent pro-

vides for the necessary stability of its rules, and we defer to

that judgment.

[4] Reasoned decisionmaking, however, is paramount to

consistent decisionmaking. Where the Board breaches its duty

to provide any rational and logical explanation for its rules,

“the consistent repetition of that breach can hardly mend it.”

Id. In their concurrence to Hacienda III, Members Shaumber

and Hayes argue that abandoning the rule of Bethlehem Steel

and Tampa Sheet Metal “would have a destabilizing impact

on bargaining relationships” because “[t]he rule is well-

known, well-understood, and practitioners have relied upon it

in doing business on behalf of their clients.” 2010 WL

3446120 at *8. A pattern of obedience to an arbitrary rule,

however, does not by itself support the rule’s continued appli-

cation. Our responsibility is to ensure that the Board’s rules

are consistent with the NLRA. Stability in labor relations

must arise from reasoned rules promulgated by the Board, not

from our willful ignorance of the Board’s arbitrary decision-

making in an effort to avoid rocking the boat.

[5] We conclude, as we did in Hacienda I, that the Board

has yet to provide a reasoned explanation for its rule exclud-

ing dues-checkoff from the unilateral change doctrine in right-

to-work states. The Board’s purported adherence to its proce-

dural rules does nothing to correct this inadequacy, and we

therefore vacate the ruling in Hacienda III as arbitrary and

capricious.

17438 LOCAL JOINT EXECUTIVE BOARD v. NLRB

B. Judicial interpretation of the NLRA

[6] Next, we must decide how we should proceed, taking

into account that this controversy is more than fifteen years

old and that the Board is deadlocked on the merits. Were we

to remand this case with the same instructions that we have

given to the Board twice before, it would likely mean that a

case long overdue for a final decision on the merits would

continue to remain without one. Without a change in the com-

position of the Board,7 the Board will continue to be unable

to form a majority that can provide a reasoned explanation for

a rule either extending or limiting a dues-checkoff exception

in right-to-work states.

Despite these concerns, we also remain mindful of the def-

erence due the NLRB. The Board “has the primary responsi-

bility for developing and applying national labor policy.”

NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786

(1990). Indeed, the Supreme Court has cautioned:

If the record before the agency does not support

the agency action, if the agency has not considered

all relevant factors, or if the reviewing court simply

cannot evaluate the challenged agency action on the

basis of the record before it, the proper course,

except in rare circumstances, is to remand to the

agency for additional investigation or explanation.

The reviewing court is not generally empowered to

conduct a de novo inquiry into the matter being

reviewed and to reach its own conclusions based on

such an inquiry.

7

Currently the NLRB is composed of three members: Mark G. Pearce,

Chair; Craig Becker; and Brian Hayes. Member Becker is serving a recess

appointment; if the Senate does not act on his renomination, his term will

expire when the Senate adjourns later this year. There is a pending nomi-

nation for Terence F. Flynn and one open seat for which no person has

been nominated. See NLRB, The Board, https://www.nlrb.gov/who-we-

are/board (last visited Sept. 2, 2011).

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17439

Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744 (1985)

(emphasis added). The court of appeals’ role is thus normally

limited to evaluating whether the Board’s rules are rational

and consistent with the Act. See United Food & Commercial

Workers Union, 307 F.3d at 766.

Accordingly, only in rare circumstances will we address the

merits of a case where the agency has failed to do so. See

Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007)

(vacating a finding of “no adverse impact” by the National

Oceanic and Atmospheric Administration (“NOAA”) where

the agency had failed twice to perform statutorily-required

environmental studies); Sierra Club v. EPA, 346 F.3d 955

(9th Cir. 2003) (vacating an order by the Environmental Pro-

tection Agency and ordering a specific finding where the

administrative record was fully developed and conclusions

following from the record were clear); Ariz. Electric Power

Coop., Inc. v. United States, 816 F.2d 1366, 1376 (9th Cir.

1987) (vacating a decision of the Interstate Commerce Com-

mission (“ICC”) and remanding with specific instructions

“[b]ecause of the history of recalcitrance displayed by the

ICC”).

Our cases directing agency action have often responded to

an agency’s stubborn refusal to follow our mandate or statu-

tory provisions. For instance, in Earth Island, we vacated an

environmental finding by the NOAA rather than remand for

further study because of the agency’s “intransigence” in twice

failing to conduct statutorily required studies. 494 F.3d at 770.

Similarly, in Arizona Electric Power Cooperative, we ordered

the ICC to review power rates under Coal Rate Guidelines

when the agency’s prior refusal to do so demonstrated a “his-

tory of recalcitrance” including the ICC’s failure to abide by

representations the agency made to this court and reliance on

a mistaken interpretation of applicable statutes. 816 F.2d at

1376. While we cannot say that the NLRB has been guilty of

similar practices in this case, the Board’s inability to resolve

the issue repeatedly presented to it and its failure to produce

17440 LOCAL JOINT EXECUTIVE BOARD v. NLRB

a reasoned ruling is no less frustrating to the timely, final dis-

position of the dispute between the Employers and the Union.

[7] Weighing the Board’s consistent failure to provide a

reasoned disposition against the deference we owe the NLRB

in dictating labor policy, we conclude that this case presents

the “rare circumstance” in which another remand would be

inappropriate. Fla. Power & Light, 470 U.S. at 744. The

Board conceded at oral argument that we can only speculate

whether the Board would be able to break its deadlock and

reach a different decision were we to remand the case for a

third time. Therefore, given the amount of time that this case

has been pending before the Board and the Board’s continued

inability to provide a rational justification for the rule it pro-

poses, we are convinced that a third remand would be futile,

or at least that the likelihood of continued deadlock outweighs

the speculative benefit of providing the Board with one more

opportunity to comply with our prior orders.

[8] We therefore turn finally to the question we put to the

Board in LJEB II, namely, “whether dues-checkoff in right-to-

work states is subject to unilateral change, or whether, under

such circumstances, dues-checkoff is a mandatory subject of

bargaining.” 540 F.3d at 1082. We note first that section

8(a)(5) of the NLRA, providing that it is an unfair labor prac-

tice for an employer to refuse to bargain collectively with a

union, is silent regarding the treatment of dues-checkoff in

right-to-work states after the expiration of a CBA. Section

8(d), governing the obligation to bargain collectively “in good

faith with respect to wages, hours, and other terms and condi-

tions of employment” is also silent as to dues-checkoff. The

text of the statute is therefore ambiguous regarding whether

dues-checkoff is a mandatory subject of bargaining in right-

to-work states.

[9] As we have said, when a statute is ambiguous, we may

not substitute our own interpretation of the statute for that of

the Board. See United Food & Commercial Workers Union,

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17441

307 F.3d at 767. Therefore, had the Board provided a rea-

soned analysis for a rule excluding dues-checkoff from the

unilateral change doctrine in the absence of union security, we

would be required to defer to that rule so long as it was ratio-

nal and consistent with the NLRA. Id. Because the Board was

unable to provide a reasoned explanation for the rule, how-

ever, we are forced to interpret the statute as if the Board had

not spoken at all.8

[10] In comparing this case to the facts of Bethlehem Steel,

we conclude that there is no justification for carving out an

exception to the unilateral change doctrine for dues-checkoff

in the absence of union security. The Supreme Court has long

recognized that automatic dues-checkoff is a powerful tool

under a union security agreement for a union to combat the

problem of “ ‘free riders,’ i.e., employees who receive the

benefits of union representation but are unwilling to contrib-

ute their fair share of financial support to such union.” NLRB

v. Gen. Motors Corp., 373 U.S. 734, 742-43 (1963). Where a

union security agreement is present, as in Bethlehem Steel,

automatic dues-checkoff is forced upon all employees

whether they wish to be part of the union or not. This arrange-

ment serves to keep a union funded even though individual

workers might otherwise choose to enjoy the benefits of a

union-negotiated CBA without paying union dues. In a right-

to-work state, on the other hand, dues are deducted from an

employee’s paycheck only if the employee specifically

requests the employer to do so. Dues-checkoff is thus not a

8

We recognize that even if an agency has not formally interpreted a stat-

ute, the agency’s interpretation may merit some deference whatever its

form, in light of the “ ‘specialized experience and broader investigations

and information’ available to the agency.” United States v. Mead Corp.,

533 U.S. 218, 234 (2001) (quoting Skidmore v. Swift & Co., 323 U.S. 134,

139 (1944)). Counsel for the NLRB stated at oral argument, however, that

neither of the concurrences to Hacienda III represent the view of the

Board, which is limited to the procedural justification we discussed above

in Section III(A). There is thus no substantive position to which we must,

or even may, defer.

17442 LOCAL JOINT EXECUTIVE BOARD v. NLRB

benefit to the union forced upon employees, but rather is a

benefit to those employees who choose to be part of the union

and also choose a checkoff.

[11] This distinction is crucial. In Bethlehem Steel, the

dues-checkoff arrangement was compelled under the terms of

the CBA just as the employees’ membership in the union had

been compelled pursuant to the union security agreement in

the CBA. In this case, however, union membership was not

a condition of employment, and each employee whose dues

were being checked off signed a request that the Employers

deduct dues from their pay and submit the dues to the Union.

Thus, unlike in Bethlehem Steel, where the unilateral cessa-

tion of dues-checkoff merely terminated a contractual

arrangement that individual employees and employers alike

were compelled to accept, the unilateral cessation of check-

off by the Employers in this case stripped employees of a con-

tractual right that they had expressly exercised by requesting

dues-checkoff.

Without expressing an opinion on the wisdom of the rule

of Bethlehem Steel, we see why the Board would treat dues-

checkoff in the same manner as union security where both are

present. As the Board has stated, “[t]he exception . . . permit-

ting unilateral abandonment of union-security and checkoff

arrangements after contract expiration is based on the fact,

noted in Bethlehem Steel, that ‘[t]he acquisition and mainte-

nance of union membership cannot be made a condition of

employment except under a contract which conforms to the

[NLRA].’ ” Ind. & Mich. Electric Co., 284 N.L.R.B. 53, 55

(1987) (quoting Bethlehem Steel, 136 N.L.R.B. at 1502). In

other words, if union security provisions are limited by statute

to the duration of an existing CBA, dues-checkoff provisions

that “implement[ ] the union-security provisions” are limited

in the same manner. Bethlehem Steel, 136 N.L.R.B. at 1502.

[12] Where the dues-checkoff provisions do not implement

union security, however, but instead exist as a free-standing,

LOCAL JOINT EXECUTIVE BOARD v. NLRB 17443

independent convenience to willingly participating employ-

ees, the reasoning of Bethlehem Steel loses its force. We see

nothing in the NLRA that limits the duration of dues-

checkoffs to the duration of a CBA in the absence of union

security. Moreover, other statutory provisions suggest the

opposite. For instance, the Labor-Management Relations Act

provides that “a written assignment [for dues-checkoff] shall

not be irrevocable . . . beyond the termination date of the

applicable collective agreement.” 29 U.S.C. § 186(c)(4). This

provision would be surplusage if Congress believed that dues-

checkoff automatically terminated upon the expiration of a

CBA. See Nw. Forest Res. v. Glickman, 82 F. 3d 825, 834

(9th Cir. 1996) (“We have long followed the principle that

‘[s]tatutes should not be construed to make surplusage of any

provision.’ ”) (citation omitted).

[13] Accordingly, we conclude that in a right-to-work

state, where dues-checkoff does not exist to implement union

security, dues-checkoff is akin to any other term of employ-

ment that is a mandatory subject of bargaining. Because each

affected employee individually requested dues-checkoff, the

Employers’ actions in this case were an unlawful termination

of a bargained benefit to employees, not merely the cessation

of a provision that automatically terminated along with the

CBA and union security. The Employers’ unilateral termina-

tion of dues-checkoff in this case was thus “in effect a refusal

to negotiate . . . which reflect[ed] a cast of mind against

reaching agreement.” Katz, 369 U.S. at 747. In ceasing dues-

checkoff without bargaining to impasse, the Employers there-

fore violated section 8(a)(5) of the NLRA.

IV. Conclusion

[14] In light of this violation, we remand to the Board to

determine what relief is warranted. We stress that, because the

NLRA is ambiguous on this issue, the Board may adopt a dif-

ferent rule in the future provided, of course, that such a rule

is rational and consistent with the NLRA. See Nat’l Cable &

17444 LOCAL JOINT EXECUTIVE BOARD v. NLRB

Telecom. Ass’n v. Brand X Internet Servs., 545 U.S. 967, 982-

83 (2005) (“Only a judicial precedent holding that the statute

unambiguously forecloses the agency’s interpretation, and

therefore contains no gap for the agency to fill, displaces a

conflicting agency construction.”); see also N. Cal. River

Watch v. Wilcox, 633 F.3d 766, 781 (9th Cir. 2011) (interpret-

ing an ambiguous provision of the Endangered Species Act,

but recognizing that the Forest and Wildlife Service could

adopt a different rule in the future). With regard to this case,

however, the Board has three times failed to provide a work-

able rule, and the parties cannot be expected to wait any lon-

ger.

PETITION GRANTED, and REMANDED.

Costs on appeal awarded to Petitioners.