International Organization of Masters, Mates & Pilots, ILA, AFL-CIO v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 14, 2022 Decided March 3, 2023

No. 21-1249

INTERNATIONAL ORGANIZATION OF MASTERS, MATES &

PILOTS, ILA, AFL-CIO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

SUNRISE OPERATIONS, LLC,

INTERVENOR

On Petition for Review of an Order

of the National Labor Relations Board

Lisa C. Demidovich argued the cause for petitioner. With

her on the briefs were Jason Wojciechowski and Luke Taylor.

Catherine L. Fisk was on the brief for amici curiae Labor

Law Professors in support of petitioner.

Kellie Isbell, Senior Attorney, National Labor Relations

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

were Jennifer A. Abruzzo, General Counsel, Ruth E. Burdick,

Deputy Associate General Counsel, David Habenstreit,

2

Assistant General Counsel, and Elizabeth Heaney, Supervisory

Attorney.

Kara E. Cooper argued the cause for intervenor Sunrise

Operations, LLC in support of respondent. With her on the

brief was William G. Miossi.

Before: HENDERSON and PILLARD, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

EDWARDS.

EDWARDS, Senior Circuit Judge: Since 1981, the

International Organization of Masters, Mates & Pilots, ILA,

AFL-CIO (“the Union” or “IOM”), has been the lawful

bargaining agent for the Licensed Deck Officers (“LDOs”) on

four container ships that carry goods between ports in

California and Hawaii. The LDOs are licensed by the Coast

Guard and they include a master, first (or “chief”), second, and

third officers (also called “mates”) on each of the four ships.

For four decades, the Union has negotiated with a series of

successor companies that have owned the vessels to reach

collective bargaining agreements covering the LDOs. In 2015,

The Pasha Group purchased the ships, and its wholly owned

subsidiary, Sunrise Operations, LLC (“Sunrise”), now operates

the vessels and is the most recent successor employer of the

LDOs.

In 2017 and 2018, the Union sought information from

Sunrise regarding the LDOs on the four vessels. Sunrise

refused to provide the information sought by the Union and

then refused to participate in arbitration at the Union’s

headquarters in Maryland, as required by the parties’ collective

bargaining agreement. The Union filed unfair labor practice

3

(“ulp”) charges with the National Labor Relations Board

(“Board” or “NLRB”). The Board’s General Counsel then filed

a complaint alleging that Sunrise had violated sections 8(a)(1)

and 8(a)(5) of the National Labor Relations Act (“NLRA” or

“Act”), 29 U.S.C. § 158(a)(1), (5), when it failed to provide

information to the Union and declined to participate in

arbitration proceedings in Maryland.

A hearing on the ulp charges was held before an

Administrative Law Judge (“ALJ”). The judge found, inter

alia, that the Union was the LDOs’ exclusive bargaining

representative; that Sunrise had admitted that it recognized the

Union as such, as had three predecessor employers who owned

the vessels before Pasha and Sunshine; and that because the

LDOs who were second and third mates were employees, not

supervisors under Section 2(11) of the NLRA, 29 U.S.C. §

152(11), the LDOs’ bargaining unit was an appropriate

“mixed” unit of statutory employees and supervisors. The ALJ

thus rejected Sunrise’s claim that it had no duty to bargain with

the Union under Section 8(a)(5) of the NLRA because the LDO

unit consisted entirely of supervisors. Given that Sunrise and

its predecessors had recognized and bargained with the Union

on behalf of the LDOs, and that the Union retained majority

support among the bargaining unit employees, the ALJ

concluded that Sunrise had violated the NLRA by refusing to

provide the Union with the information that it had sought and

by failing to abide by an agreement requiring the parties to meet

for arbitration proceedings in Maryland.

Sunrise filed exceptions with the NLRB to contest the

ALJ’s decision. The employer’s principal argument before the

ALJ was that all of the LDOs were in fact supervisors and,

therefore, the LDOs did not constitute an appropriate

bargaining unit under the Act. Sunrise pressed this same

argument in its exceptions to the Board. A 2-1 majority of the

4

Board ruled against the Union, but it never addressed the issue

raised by Sunrise, i.e., whether the Board lacked jurisdiction

because all of the LDOs were in fact supervisors. Instead, the

Board majority held that it had no jurisdiction to hear the case

because, as the Board saw it, Sunrise believed that all of the

LDOs were supervisors. In the majority’s view, it did not

matter whether, as the ALJ found, the second and third mates

were not supervisors. According to the majority, what mattered

was that when Sunrise and its predecessors voluntarily

recognized the Union as the unit’s bargaining representative,

they did not believe that the LDO unit was a “mixed” unit.

It is clear that the majority opinion for the Board purports

to decide this case without regard to the parties’ principal

claims presented to the ALJ, and it rests on a position that was

never advanced by Sunrise either before the ALJ or in its

exceptions to the Board. Sunrise never argued that the

disposition of this case should turn on the employer’s

subjective beliefs about whether the LDOs were supervisors.

And we can find no case in which the Board or a reviewing

court has held that an employer’s unannounced beliefs about

workers’ supervisory status determines whether the Board has

jurisdiction to enforce the NLRA.

For the reasons explained below, we find that the Board’s

holding in this case lacks support in the record, defies

established law, and creates a new rule without reasoned

justification. It thus fails substantial evidence review and is

arbitrary and capricious for want of reasoned decision making.

We therefore grant the petition for review, vacate the Board’s

decision, and remand the case for reconsideration consistent

with this opinion.

5

I. BACKGROUND

A. Statutory and Regulatory Background

Under the NLRA, labor organizations like IOM “can

achieve the status of a majority collective bargaining

representative through either Board certification or voluntary

recognition by the employer[.]” Raymond F. Kravis Ctr. for

Performing Arts, Inc. v. NLRB, 550 F.3d 1183, 1188 (D.C. Cir.

2008). Section 8(d) of the Act requires an employer and a

recognized union representative “to meet at reasonable times

and confer in good faith with respect to wages, hours, and other

terms and conditions of employment, or the negotiation of an

agreement, or any question arising thereunder, and the

execution of a written contract incorporating any agreement

reached if requested by either party.” 29 U.S.C. § 158(d). This

means that the employer and the union bargaining agent have

a mutual obligation to “confer in good faith with respect to any

question arising under [the parties’ collective bargaining

agreement].” NLRB v. Acme Indus. Co., 385 U.S. 432, 436-37

(1967) (cleaned up). The duty to bargain also requires an

employer to provide information that is needed by a recognized

union for the proper performance of its duties as the

employees’ bargaining agent. Id. at 435-36.

A “supervisor” is not an “employee” entitled to

protection under the NLRA. 29 U.S.C. § 152(3) (excluding

“supervisor[s]” from definition of employee). Statutory

supervisors are those with authority to act “in the interest of the

employer” to carry out or “effectively to recommend” at least

one of twelve enumerated activities, provided that the exercise

of that authority requires “the use of independent

judgment.” 29 U.S.C. § 152(11); see NLRB v. Health Care &

Ret. Corp., 511 U.S. 571, 573-74 (1994). The twelve activities

are: “to hire, transfer, suspend, lay off, recall, promote,

6

discharge, assign, reward, or discipline other employees, or

responsibly to direct them, or to adjust their grievances, or

effectively to recommend such action.” 29 U.S.C. § 152(11).

The Board looks beyond mere labels or job descriptions to

determine supervisory status. See, e.g., G4S Regulated Sec.

Sols, 362 NLRB 1072, 1073, 1074 n.9 (2015); Dole Fresh

Vegetables, Inc., 339 NLRB 785, 785 (2003). And the party

asserting supervisory status bears the burden of proof on the

point. See NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706,

710-12 (2001).

B. The Parties’ Dispute

In 1981, the Union on behalf of the LDOs who were

working aboard the four container ships signed a collective

bargaining agreement (“CBA”) with one of the companies that

was a predecessor to Sunrise. The CBA describes LDOs as

follows:

The Master is the [LDO] in command of the vessel at

all times, subject to the lawful directives of the

Company.

The Chief Officer is the Head of the Deck Department

and as such, performs supervisory duties outlined in

this agreement. In addition, he performs the duties of

the Master as necessary in the Master’s absence.

The Second Officer is the Navigating Officer and,

subject to the direction of the Master, is in charge of all

navigational equipment, and is responsible for

maintaining charts, publications, and navigational

equipment, in accordance with all pertinent navigation

regulations and statutes . . . .

7

The Third Officers stand a regular navigation watch at

sea and assist in the normal operation of the vessel as

directed by the Department Head.

Joint Appendix (“J.A.”) 369. The CBA explains, inter alia, that

“[t]he Parties agree that the duties of the [LDOs] . . . shall be

maintained as supervisory and professional” and notes that

LDOs are tasked with “the shipboard supervision” of certain

maintenance and cargo activity. J.A. 369, 370.

The Pasha Group purchased the four ships in 2015,

retaining a majority of the Union-represented LDOs who were

employed aboard the ships. The Pasha Group assured the

Union that it would assume and abide by the 1981 CBA and

recognize the Union as the LDOs’ exclusive bargaining

representative. It agreed that it would “not engage in activities

. . . calculated to undermine” the Union’s status. J.A. 362.

Although the employer has been variously described as The

Pasha Group, Pasha Hawaii, SR Holdings, and Sunrise, the

Union has routinely interacted with Sunrise. The ulp complaint

in this case asserts that Sunrise violated the NLRA by failing

or refusing to provide information to the Union, by delaying

the provision of such information, and by repudiating a CBA

provision that required arbitration to occur in Maryland.

Petitioner’s Br. 1-2, 9. And Sunrise has entered an appearance

as Intervenor before this court (as the employer of the LDOs).

C. Proceedings Before the ALJ

In response to the complaint filed by the Board’s General

Counsel, Sunrise raised several affirmative defenses. None of

the defenses rested on a claim that Sunrise or its predecessors

always believed that the LDOs in the bargaining unit included

only supervisors. Rather, Sunrise’s principal claim was that the

8

Board lacked jurisdiction over this case because all of the

LDOs in the bargaining unit are in fact supervisors. The NLRB

General Counsel and the Union countered that “the second and

third mate officers are employees, not supervisors under

Section 2(11).” J.A. 41 (emphasis added). A second and third

mate testified that they did not perform any NLRA Section

2(11) supervisory functions for Sunrise. J.A. 202-11, 227-32.

And Counsel for the Union testified that the Union had never

stipulated to the supervisory status of all LDOs in any of the

approximately 50 ulp charges it had filed in the last two

decades. J.A. 95-96.

The ALJ conducted a fact-intensive inquiry – including an

assessment of disciplinary records, on-board technological

advancements that had routinized the roles of second and third

mates, and other evidence – and found that the LDOs comprise

a mixed unit of statutory employees and supervisors. Sunrise

had not been compelled by law to recognize the mixed unit, but

the ALJ found that it was clear from the record that Sunrise

opted to do so. Accordingly, the ALJ concluded that the NLRB

had jurisdiction over the case. The ALJ additionally held that

Sunrise violated the NLRA by refusing to timely provide

relevant information to the Union, and by refusing to meet in

Maryland for arbitration proceedings as required by the parties’

CBA.

The ALJ also offered detailed responses to each of

Sunrise’s allegations regarding the supervisory status of second

and third mates. First, the ALJ rejected Sunrise’s claims that

certain LDO responsibilities transform all LDOs into

supervisors. Sunrise had argued that second and third mates are

supervisors “by law” when they serve as Officers of the Watch,

referring to a role outlined by the International Safety

Management Code. The ALJ disagreed, finding that in this

role, second and third mates’ “use of independent judgment and

9

discretion is circumscribed by the master’s standing orders, and

the Operating Regulations[.]’” J.A. 41 (quoting Chevron

Shipping Co., 317 NLRB 379, 381 (1995)). More broadly, the

ALJ found that in carrying out each of their responsibilities,

second and third mates must: “(1) follow the Master’s

established orders or seek clarification from the superior on

duty on handling any particular situation, or (2) adhere to the

established protocols found in [Sunrise’s] Safety Management

Administration policies.” J.A. 41. In no role did the second and

third mates perform “any supervisory functions as set forth in

Section 2(11) of the [NLRA]” over other employees. J.A. 42.

Second, the ALJ rejected Sunrise’s claim that all LDOs

evaluate unlicensed crew. The ALJ found that Sunrise failed to

proffer a single example of second and third mates asserting

disciplinary responsibilities over unlicensed crew. For

instance, the ALJ found no proof in the record that second and

third mates ever issued disciplinary letters to other employees.

The ALJ concluded that none of the responsibilities of second

and third mates in their relationships with unlicensed crew

required independent judgment or satisfied other indicia of

supervisory status.

Third, the ALJ rejected the testimony of a Sunrise Officer

as to his knowledge regarding whether Sunrise’s LDOs were

supervisors. The ALJ tellingly said: “I accord [the officer’s]

testimony very little weight since it constitutes mainly opinion

evidence. In fact, [he] has no independent or expert knowledge

regarding the supervisory status of [Sunrise’s] LDOs much less

Section 2(11)’s standards for evaluating one’s supervisory

status. Simply put, [Sunrise] has failed to show that its LDOs

are supervisors under the Act.” J.A. 42.

In sum, the ALJ concluded that Sunrise failed to meet its

“burden of proving [all LDOs’] supervisory status,” J.A. 41.

10

Instead, the ALJ found that “the evidence clearly shows that

[Sunrise]’s second and third mate officers perform duties that

are routine in nature and do not perform any supervisory

functions as set forth in Section 2(11) of the Act.” J.A. 42. As

explained below, the Board did not dispute any of the ALJ’s

findings.

Finally, the ALJ rejected Sunrise’s argument that the

Board lacked jurisdiction over this case because the Union was

never certified by the NLRB as the exclusive bargaining

representative of the LDOs. The ALJ properly noted that

certification is not the only way to prove majority-support

status. J.A. 42 (citing Barrington Plaza & Tragniew, Inc., 185

NLRB 962, 963 (1970), enforced in part, 470 F.2d 669 (9th

Cir. 1972). The ALJ explained that:

The issue . . . is not whether the unit is appropriate or

whether the Board could have initially certified the unit

under the Act. . . . Rather, it is whether the employer

voluntarily agreed to recognize . . . a “mixed” unit. . . .

[W]here an employer has consented to a bargaining

unit that includes supervisors, the [Board] properly

may find the employer guilty of an unfair labor practice

with respect to that bargaining unit. . . . It is undisputed

that [Sunrise] voluntarily recognized the Union as the

exclusive bargaining representative of the LDOs on the

four vessels. . . . [T]he 1981 collective-bargaining

agreement (as modified by successive [agreements])

remained in force when [Sunrise] acquired the vessels,

and George Pasha assured the Union that [Sunrise]

would assume and abide by the collective-bargaining

agreement.

J.A. 25-26 (citations omitted).

11

Notably, Sunrise never argued to the ALJ, nor did it offer

evidence to support any claim that either it or the predecessor

employers always believed that the LDOs constituted a

supervisors-only unit.

D. Sunrise’s Exceptions to the Board

Sunrise filed exceptions to the ALJ’s decision, claiming

for the first time that “[t]here is no dispute that since at least

1981, the parties’ collective bargaining agreement

unambiguously states the parties’ mutual intent and

understanding that the [LDO]s—including the Second and

Third Mates—are statutory Supervisors.” Petitioner’s Br. 18

(citation omitted) (emphasis added). However, Sunrise did not

argue that any subjective understanding that Sunrise or its

predecessors may have had about the supervisory status of the

LDO unit would, in and of itself, strip the Board of jurisdiction

over the case.

In response to Sunrise’s exceptions, the Union contended

that the parties had never agreed that LDOs were part of an all-

supervisors unit. Id.

E. The Findings of the Board Majority

In response to Sunrise’s exceptions, a two-member

majority of the Board determined that it “need not engage in an

analysis of whether individuals in the several LDO

classifications possess any of the supervisory indicia

enumerated in Section 2(11) of the [NLRA].” J.A. 5. The

majority accepted the ALJ’s findings that Sunrise had

recognized the Union, agreed to the CBA, and refused to

provide information or arbitrate pursuant to the terms of the

CBA. The majority did not dispute the ALJ’s factual findings

that the second and third mates are in fact employees, not

12

statutory supervisors. And the majority did not contest the

settled law that an employer is bound by its voluntary

recognition of a mixed unit of employees and supervisors. The

majority simply dismissed the complaint without passing on

the merits of the ulp charges, ruling that because Sunrise

always believed that the bargaining unit consisted only of

statutory supervisors, it had no duty to bargain with the Union.

The majority held that Sunrise’s apparent belief stripped the

Board of jurisdiction over the case.

Pointing to the majority opinion’s lack of any “support in

the [NLRA] or its policies, in Board or judicial precedent, or in

the record in this case,” the dissenting member of the Board

predicted the majority’s decision would “sink” on judicial

review. J.A. 6, 11. The Union now petitions for review.

II. ANALYSIS

A. Standard of Review

“Judicial review of NLRB determinations in unfair labor

practice cases is generally limited, but not so deferential that

the court will merely act as a rubber stamp for the Board's

conclusions. Board orders will not survive review when the

Board's decision has no reasonable basis in law or when the

Board has failed to apply the proper legal standard. A Board's

decision will also be set aside when it departs from established

precedent without reasoned justification or when the Board's

factual determinations are not supported by substantial

evidence.” Titanium Metals Corp. v. NLRB, 392 F.3d 439, 445-

46 (D.C. Cir. 2004) (cleaned up); see also Hawaiian Dredging

Constr. Co., Inc. v. NLRB, 857 F.3d 877, 881 (D.C. Cir. 2017).

Substantial evidence “‘means such relevant evidence as a

reasonable mind might accept as adequate to support a

13

conclusion.’” Micro Pac. Dev. Inc. v. NLRB, 178 F.3d 1325,

1329 (D.C. Cir. 1999) (citation omitted). We are obligated to

assess the “‘whole record,’” including “‘whatever in the record

fairly detracts from’” the NLRB’s decision. Tenneco Auto., Inc.

v. NLRB, 716 F.3d 640, 647 (D.C. Cir. 2013) (quoting

Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)).

Furthermore, “judicial deference is not warranted where

the Board fails to adequately explain its reasoning, or where the

Board leaves critical gaps in its reasoning.” David Saxe Prods.,

LLC v. NLRB, 888 F.3d 1305, 1311 (D.C. Cir. 2018) (cleaned

up). When the Board fails to explain or acknowledge its

deviation from established precedent, we vacate its decision as

arbitrary and capricious. See Manhattan Ctr. Studios, Inc., v.

NLRB, 452 F.3d 813, 816 (D.C. Cir. 2006).

B. The Board Erred in Purporting to Decide an

Issue That Was Never Raised With the ALJ

“It is a basic tenet of administrative law that each party to

a formal adjudication must have a full and fair opportunity to

litigate the issues to be decided by the agency,” Trident

Seafoods, Inc. v. NLRB, 101 F.3d 111, 116 (D.C. Cir. 1996),

because otherwise, “the record developed with regard to that

issue will usually be inadequate to support a substantive

finding in [the proponent’s] favor,” id. The law is clear that

“notice adequate to provide a fair opportunity to defend on [an]

issue” must “occur[] before the record is closed,” and that the

Board generally should not consider significant issues that the

parties failed to raise. Id.; see Collective Concrete, Inc. v.

NLRB, 786 F. App’x 266, 267 (D.C. Cir. 2019) (declining to

review issues not presented to the ALJ); Chicago Local No.

458-3M v. NLRB, 206 F.3d 22, 24 n.1 (D.C. Cir. 2000) (an issue

that “the parties did not litigate . . . before the ALJ” was “not

properly before the court”).

14

Here, Sunrise alleged that all LDOs are in fact supervisors.

As explained above, the ALJ reviewed the record and

concluded that second and third mates are in fact statutory

employees, not supervisors. The Board disregarded Sunrise’s

allegations, ignored the ALJ’s principal findings, and gave no

heed to controlling precedent in purporting to hold that it

lacked jurisdiction because Sunrise believed it had consented

to a unit “consisting entirely of supervisors excluded from

coverage under the [NLRA].” J.A. 5. Neither the litigants nor

the ALJ were on notice that the Board would focus on this

issue. More fundamentally, no party had the opportunity to

present evidence before the ALJ regarding Sunrise’s beliefs,

and the ALJ never considered the matter. The greatest irony is

that the Board majority either accepted as accurate the ALJ’s

findings or did not dispute any of the ALJ’s principal

conclusions.

When the Board majority departed from the case that had

been presented to the ALJ and focused instead on a significant

issue that had never been raised before the ALJ, it arbitrarily

and inexcusably denied the parties a full and fair opportunity

to be heard on the merits of the ulp charges. This alone is

grounds to reverse the Board decision. There is more, however.

C. The Board Created a New Rule That Lacks

Reasoned Justification

Beyond disregarding the case presented to the ALJ, the

Board majority decided this case based on a rule untethered to

established law, the parties’ claims, and the record. Neither the

Board nor any reviewing court has ever found that an

employer’s unannounced belief about the supervisory status of

employees determines the Board’s jurisdiction. If anything,

Board precedent suggests the opposite. See Gratiot Cmty.

15

Hosp., 312 NLRB 1075, 1075 n.2 (1993); Arizona Elec. Power

Coop., Inc., 250 NLRB 1132, 1133-34 (1980). And nothing in

the NLRA instructs the Board to consider parties’ beliefs as

part of its jurisdictional analysis. Furthermore, what the Board

majority surmised that Sunrise believed is not what Sunrise

argued that it believed before the ALJ. Indeed, Sunrise did not

make any arguments before the ALJ about its subjective

beliefs. In particular, it never argued before the ALJ or the

Board that its subjective beliefs should play a dispositive role

in the Board’s jurisdictional analysis. Therefore, the Board

effectively decided this case not only on a new rule of law but

on a position never fathomed by the ALJ or the parties.

While “[a]gencies are free to change their existing

policies,” they must “provide a reasoned explanation for the

change.” Encino Motorcars, LLC v. Navarro, 579 U.S. 211,

221 (2016); see NLRB v. CNN Am., Inc., 865 F.3d 740, 748

(D.C. Cir. 2017) (declining to enforce a Board order that

“appear[ed] to be inconsistent with its precedents, without

addressing those precedents or explaining why they do not

govern”); see also Dupuy v. NLRB, 806 F.3d 556, 562 (D.C.

Cir. 2015). The explanation “must at least display awareness

that [the Board] is changing position and show that there are

good reasons for the new policy.” Encino Motorcars, 579 U.S.

at 221 (cleaned up); see FCC v. Fox Television Stations, Inc.,

556 U.S. 502, 515 (2009). And it must acknowledge that

“longstanding policies may have engendered serious reliance

interests that must be taken into account,” as failure to do so

renders the new rule arbitrary and capricious. Dep’t of

Homeland Security v. Regents of Univ. of Calif., 140 S. Ct.

1891, 1913 (2020) (cleaned up).

Under the Board’s new rule, employees may lose the

protections of the NLRA not because they are in fact uncovered

by the Act, but because their employer asserts a belief that they

16

are supervisors. Although the ALJ found, and the Board did not

dispute, that the second and third mates are in fact employees

covered by the NLRA, the Board majority found that the LDOs

have no enforceable rights under the NLRA to be free from

ulps simply because some members of the Board assumed that

the employer always believed that all LDOs were supervisors.

Apart from finding no support in established law, the rule

makes little sense. If allowed to stand, the Board’s new rule

might easily destabilize established bargaining relationships

and encourage unseemly strategic litigation. The rule

propounded in the majority opinion would allow any employer

or union to challenge the jurisdiction of the Board (and thereby

aim to deny employees their rights under the Act) simply by

asserting that company or union representatives believed all

workers in the bargaining unit did not meet the statutory

definition of an “employee.”

The Board adopted its new rule with no regard for the

parties’ reliance interests. The Board did not consider the

sweeping impact of its new rule or explain why existing case

law does not govern. It did not acknowledge – much less justify

– its adoption of a new rule, and it afforded the affected parties

no opportunity to address it or offer relevant evidence. Thus,

we are left with no choice but to vacate the Board’s arbitrary

and capricious decision for want of reasoned decision making.

D. The ALJ’s Findings of Fact Are Uncontested

and Thus Dispositive

There can be no doubt that determining supervisory status

requires a heavily fact-intensive analysis of the record to

determine actual, not believed, exercises of authority. See

Jochims v. NLRB, 480 F.3d 1161, 1168 (D.C. Cir. 2007). As

discussed above, after meticulously reviewing disciplinary

records, testimony, and other evidence, the ALJ found that

17

second and third mates are in fact statutory employees because

they “have no authority to hire/fire, discipline or recommend

discipline, transfer, lay off, promote or suspend, schedule,

reschedule, recall or assign any LDOs.” J.A. 41. The ALJ

found that Sunrise voluntarily agreed to bargain with the Union

as the LDOs’ bargaining agent and “admitted that it recognized

the Union as the exclusive collective-bargaining representative

for the LDOs.” J.A. 42. Accordingly, the ALJ reasonably

concluded that the LDOs form an “appropriate bargaining unit”

over which “the Board retains jurisdiction.” J.A. 42.

No party has questioned the ALJ’s finding that the 1981

CBA is still in effect and that the parties voluntarily agreed to

it. Nor has any party attempted to undermine the ALJ’s finding

that Sunrise is an employer within the meaning of NLRA

Section 2(2) and the Union is a labor organization within the

meaning of NLRA Section 2(5). Indeed, the Board itself left

untouched the ALJ’s finding that second and third mates are

employees within the meaning of NLRA Section 2(3). Thus,

on the record before us, the LDO unit is in fact a voluntarily

recognized mixed bargaining unit protected by the NLRA. The

Board’s decision to stray from that record and rest its holding

on what the majority surmised about Sunrise’s beliefs cannot

stand.

E. The Board Majority’s Attempt to Justify Its

Position Cannot Withstand Scrutiny

The Board majority began its analysis by acknowledging

NLRB precedent establishing that an employer has a duty to

bargain with a voluntarily recognized “mixed” bargaining unit.

J.A. 25 (citing Union Plaza Hotel & Casino, 296 NLRB 918

(1989), enforced sub nom. E.G. & H. Inc. v. NLRB, 949 F.2d

276 (9th Cir. 1991)). The majority opinion does not question

the controlling law that, after voluntarily recognizing a mixed

18

unit, an employer may neither invoke the mixed nature of the

unit as a defense to any ulp charge, nor assert that the Board

would not have certified the unit in the first place. However,

the majority opinion effectively casts aside this controlling case

law because, in its view, the ALJ failed to “address the

threshold question of what type of unit [Sunrise] voluntarily

recognized.” J.A. 26. It holds that because Sunrise somehow

failed to understand that the LDO unit was mixed, it did not

consent to a mixed unit. In attributing this belief to Sunrise, the

majority presents arguments and offers findings that no party

raised or addressed in the hearing before the ALJ. The

justifications offered to bolster the majority opinion are plainly

specious.

First, the Board majority attempted to ground its

“threshold question” analysis in NLRB precedent. But the sole

case it discussed – Virginia Mason Hospital – provides no

support for its position. 357 NLRB 564 (2011). Virginia Mason

neither discusses parties’ beliefs about workers’ supervisory

status nor suggests that an employer may avoid a present

bargaining obligation by belatedly asserting a mistaken belief

about a bargaining unit’s composition. See generally id.

Indeed, we can find no case law, and the Board offers nothing,

suggesting that Sunrise should be excused for its alleged error.

Rather, case precedent is clear that when parties execute a

collective bargaining agreement “with full knowledge of the

nature of the present duties” of all those covered by the

contract, parties are bound by the agreement. Arizona Elec.

Power Coop., 250 NLRB at 1133. Sunrise is charged with

knowledge of the duties of its employees. See id. Sunrise’s

purported mistaken belief does not controvert the evidence in

the record regarding the actual character of LDOs’ work as

employees, not supervisors.

19

The Board majority opinion also asserts that the parties

must have believed all LDOs are supervisors because the text

of the CBA refers to LDOs’ duties as “supervisory.” J.A. 26.

But case precedent makes clear that merely labelling a position

supervisory does not transform an employee into a supervisor

for the purposes of the NLRA. See Oakwood Healthcare, Inc.,

348 NLRB 686, 688, 690 n.24 (2006). “Job descriptions, job

titles, and similar paper authority, without more, do not

demonstrate supervisory authority.” G4S Regulated Sec. Sols.,

362 NLRB at 1072-73 (cleaned up). Contrary to the majority

opinion, the Board was not free to ignore its duty to engage in

a fact-intensive analysis to determine the actual status of

second and third mates, and these employees are not

“supervisors” merely because the CBA uses the term

descriptively. Notably, the CBA does not state that the parties

intended for the LDOs to be treated as statutory supervisors

under Section 2(11) of the Act, nor does it recite or refer to the

statutory criteria for determining supervisory status. And there

is nothing in the record to suggest that Sunrise said or did

anything that would have put the Union on notice that Sunrise

supposedly believed that the unit consisted only of statutory

supervisors and that the parties’ relationship was not governed

by the NLRA.

The Board majority opinion also surmises that the parties’

collective bargaining relationship must have always existed

“outside the aegis of the [NLRA],” based on three findings: (1)

the Union had not, until now, “invok[ed] the [NLRA] or

involv[ed] the Board” in the parties’ 40-year relationship, J.A.

26; (2) federal courts in the 1970s and ‘80s found – and the

Union itself once argued – that all LDOs are supervisors, J.A.

26 & n.7, 27; and (3) the Union was never certified under the

NLRA. These arguments are unpersuasive.

20

First, as amici explain, “the absence of Board charges

could be evidence that a collective bargaining relationship is

working as the statute intended rather than that the union

believed the workers have no statutory rights.” Amicus Br. 18.

In other words, a lack of ulp charges or other NLRB

involvement does not prove that the NLRA is inapplicable.

Second, the supervisory status of LDOs aboard ships in the

1970s and ‘80s is irrelevant here, where the ALJ specifically

found – based on the record in this case – that some LDOs are

employees. And even if the facts of the cited cases had any

bearing here, the Board majority inexplicably ignored

countervailing evidence that technological advances in the last

several decades have transformed the roles of LDOs.

Third, the law is clear that an employer is bound by its

acceptance of a labor agreement for a mixed unit even if the

unit is one that the NLRB would not have certified in a Board-

conducted election. See Loomis Armored US, Inc., 364 NLRB

No. 23 (2016). Employers seeking to renege on bargaining

obligations cannot simply point out that a Section 9 election

never occurred; instead, they must establish a good faith

reasonable doubt about the union’s continuing majority

support. Allentown Mack Sales and Serv., Inc. v. NLRB, 522

U.S. 359, 364, 372 (1998). This is true where, as here, the

employer assumed a CBA as a successor employer. See Fall

River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 44

(1987).

The majority opinion also suggests that the “practicalities

of operating large vessels on the open seas” lends support to its

finding that Sunrise only “consented to a supervisory unit.”

J.A. 26. The opinion notes, for example, that the LDOs worked

and slept separately from unlicensed crewmembers. J.A. 26.

However, the majority’s reliance on cherry-picked practices is

21

based on its erroneous conflation of maritime practices and

labor law. Pointing to crewmembers’ sleeping arrangements –

or even pointing to authority they may have wielded “to

demand obedience” from other officers – simply “doesn’t

answer the questions posed by the 2(11) indicia of supervisory

status.” Brusco Tug & Barge, 359 NLRB 486, 493 (2012), aff’d

696 F. App’x 519 (D.C. Cir. 2017).

Finally, it is worth noting that it is implausible to imagine

that Sunrise would not have adopted the same position as the

Board majority if the employer thought there was any truth to

the claim that it always believed that the LDO unit consisted of

only supervisors. If Sunrise had truly believed that all LDOs

aboard its own ships were supervisors and thought this belief

was a significant consideration, we assume that Sunrise would

have tried to press the point before the ALJ. It did not. Rather,

Sunrise claimed only that the LDOs are in fact supervisors, a

position that not even the Board majority opinion embraces.

III. CONCLUSION

On the record before us, we find that the Board’s position,

as reflected in the Board majority opinion, lacks support in the

record, defies established law, and creates a new rule without

reasoned justification. It therefore fails substantial evidence

review and is arbitrary and capricious for want of reasoned

decision making. We also find that the arguments advanced by

Sunrise find no support in the record or in controlling

precedent. We therefore grant the petition for review, vacate

the Board’s decision, and remand the case for reconsideration

consistent with this opinion.

So ordered.