Amicus Curiae Brief — NLRB v. Financial Institution Employees

6 (4) Office- Supreme Court, UR,

FILED

NO. 84-1509 and NO. 84-1493

— i ae

an the ALEXANDER L. STEVAS,

CLERK

Supreme Court of the Anite States

Ooroser Term, 1984

SEATTLE-FIRST NATIONAL BANK,

Petitioner in Case No. 84-1509

and

NATIONAL LABOR RELATIONS BOARD,

Petitioner in Case No. 84-1493

vs.

FINANCIAL INSTITUTION EMPLOYEES OF

AMERICA, LOCAL NO. 1182, CHARTERED BY

UNITED FOOD AND COMMERCIAL WORKERS

INTERNATIONAL UNION, AFL-CIO, et al.,

Respondent.

On Writ Of Certiorari To The United States

Court Of Appeals For The Ninth Circuit

BRIEF FOR THE CHAMBER OF COMMERCE OF

THE UNITED STATES AS AMICUS CURIAE

-

oe

ome)

Epwarp B. Muier

Attorney for the Chamber of

Commerce cf the United States

as Amicus Curiae

Of Counsel:

Porr, Baitarp, SHEPARD

& Fowzz, Lop.

69 West Washington Street

Chicago, Illinois 60602

(312) 630-4223

SterHen A. Boxart

National Chamber Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337

‘BEST AVAILABLE C

The Scheffer Press, Inc-—(312) 263-6850

“

x

~F

TABLE OF CONTENTS

PAGE

Interest of the Amicus Curiae .........ccccccccccescscseeseseeeseseeeees 2

Summary of Facts and Proceedings ............cccccseecseceeeeeee 4

RE Cie II, ss siatiiealicisnscthapiiitiiigntglbintniintuail 7

PE: Be 2 ve re nr et See ae Teme 11

I. The Board’s Action in Denying A Requested

Amendment to a Certification Should be Found

to be Discretionary and Unreviewable. .................. 11

A. Although the Statute Restricts the Board’s

Authority to Issue Certifications, It Nowhere

Mandates the Issuance of Amended Certifi-

IS centre ic ea 11

B. The Board’s Decision Not to Issue an

Amended Certification Should Be Totally

Immune from Judicial Review. .............c.08. 14

Il. The Board’s Refusal to Amend the Certification

Here Was, In any Event, a Reasonable Exercise

GE Ba MR ciinstcctehcticinstitaisisiithcdinsiititsndabinileintisiitedincsai 16

A. The Limited Reviewability Standard of 5

te: STEED: nethihndincyintctliiesichiaiabscsibbiiaeansnelemtniedeseenee 16

B. The Board’s Standards for Issuing Amended

Certifications in Cases of Changed

BIN. iiainitetntesniiesnctiizeetinpiiceentiililaditstnientaetpensian 17

C. Change in an Agency’s Views Does Not In-

crease Vulnerability to Judicial Review. .... 20

III. The Ninth Cireuit Has Misconstrued and Mis-

applied Its Reviewing Authority. ............:::..ccce 22

A. This Is Not a Case in Which the Board is

Regulating Union Conduct Through Its Un-

fair Labor Practice Jurisdiction. ..................... 22

B. The Court Is Wrong When It Says the Board

Has Jeopardized Bargaining Stability and

the Viability of Collective Agreements. ........ 24

a ee ae EEE DORSET MITTIN A SOM Ow 28

ll

AUTHORITIES CITED

CASES

American Bridge Div. United States Steel Corp. v.

NLRB, 457 F.2d 660 (3rd Cir. 1972) .......cccccssceeeeeees

American Federation of Labor v. National Labor

Relations Board, 308 U.S. 401 (1940) wu.

Amoco Production Co. (Amoco IIT), 239 N.L.R.B.

a _._._. _ sccnsnsnenssonnssnctnsnovene

Amoco Production Co. (Amoco IV), 262 N.L.R.B.

es sounepenannseseconens

Amoco Production Co. v. NLRB, 613 F.2d 107 (5th

Spe TUNED teicensscothlinscsntacitenctateiadiainabiadicseemmiensate toe

Bear Archery Div. of Victor Comptometer sl

223 NLRB 1169 at 1171-1172, and 1173-1174,

enforcement denied, N.L.R.B. v. Bear Archery Div.

of Victor Comptometer Corp., 587 F.2d 812 (6th

RE EEE Ae, Sea ne

Butte, Anaconda & Pacific Ry. Co. v. United States,

FS EE ee ee

Ferry v. Udall, 336 F.2d 706 (9th Cir. 1964): cert.

den. 381 U.S. 904 (1965)... eee ae)

Financial Institution Emplovees of America, Local

No. 1182 v. NLRB, 752 F.2d 356 (9th Cir. 1984) ....

General Drivers, Ete. v. National Labor Relations

Board, 179 F.2d 492 (10th Cir. 1950) 0.0...

Gulf Oil Corp., 135 N.L.R.B. 184 (1962) o.oo .

Jasper Seating Co., 231 NLRB 1025 (1977) 0.000000...

Knight Newspapers, Inc. v. United States, 395 F.2d

I a ecneme

Leedom vy. International Broth. of Elec. Workers.

Local Union No. 108, AFL-CIO, 278 F.2d 237

a IR A AER A

PAGE

lr

Local No. 414, Oil Workers Intl. Union v. NLRB,

RB BR FR | renee

NLRB v. Allis-Chalmers Manufacturing Co., 388

Sy OU goa sade cia bimenniceimpanpennoeipecio

NLRB v. Boeing Co., 412 U.S. 67 (1973) .....cccccccecceeseeeee:

NLRB v. Bernard Gloekler North East Co., 540 F.2d

ee nn oc cneeteegeduninasdbesgnandeioanevaiie

National Labor Relations Board y. Clarostat Mfg.

oe: SAR Fy ee ee eee

NLRB v. Detective Intelligence Service, 448 F.2d

IIL, TEITIED .icccciscsansmresdiepyiqnuntagnatocneinimentonsseepens

NLRB v. Local 103, Iron Workers, 434 U.S. 335 (1978)

Ness Investment Corporation v. United States De-

partment of Agriculture, Forest Service, 512 F.2d

ETI, IID ° 2. sda. cn esakcepeenenenenanteenpnqnannioniecsans

Peco, Inc., 204 NLRB 1036 (1973) 0.0... cece se

Retail Store Emplovees, Local 428 v. NLRB, 528

I GEO, UII so tasasasecennsendabeadsotnsaens

Scofield v. NLRB, 394 U.S. 423 (1969) .........0... ee.

Sierra Club v. Hickel, 467 F.2d 1048 (6th Cir. 1972);

a, rr rr Se Cee ...... .. cccssscssssasacubeaseess

Sun Oil Co. of Pennsylvania v. NLRB, 576 F.2d 553

I ce eesidetinncnbiiielaiinnninennee

Switchmen’s Union of North America, et al v. Nation-

al Mediation Board, et al., 320 U.S. 297 (1943) ....

PAGE

7

15

STATUTES

PAGE

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SP Wes IEEE CIEE ED ciccesscncnsieniienesentivatinesintcineenint 24

a 23

SP il cecllhlbiteiieiindill 23

ee nS ras ndanetastntadenietiahde 11

— fe REAR EL nT ROE 12

I 12

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Oe ee 22

In THe

SUPREME COURT OF THE UNITED STATES

Octoser Term, 1984

NO. 84-1509 and NO. 84-1493

SEATTLE-FIRST NATIONAL BANK,

Petitioner in Case No. 84-1509

and

NATIONAL LABOR RELATIONS BOARD,

Petitioner in Case No. 84-1493

vs.

FINANCIAL INSTITUTION EMPLOYEES OF

AMERICA, LOCAL NO. 1182, CHARTERED BY

UNITED FOOD AND COMMERCIAL WORKERS

INTERNATIONAL UNION, AFL-CIO, et al.,

Respondent.

On Writ Of Certiorari To The United States

Court Of Appeals For The Ninth Circuit

BRIEF FOR THE CHAMBER OF COMMERCE OF

THE UNITED STATES AS AMICUS CURIAE

—

This brief amicus curiae is filed with the written

consent of the parties. The letters giving consent have

been separately filed with the Court.

=

INTEREST OF THE AMICUS CURIAE

The Chamber of Commerce of the United States is a

federation consisting of several thousand state and local

chambers of commerce and trade and professional asso-

ciations as well as more than 180,000 corporations,

partnerships and proprietorships who maintain direct

membership. It is the largest association of business and

professional organizations in the United States.

The Chamber regularly represents the interests of its

member employers in important labor relations matters

before the courts, the United States Congress, the Execu-

tive Branch, and the independent regulatory agencies

of the federal government. Such representation con-

stitutes a significant aspect of the Chamber’s activities.

Accordingly, the Chamber has sought to advance its

members’ interests in a wide spectrum of labor relations

litigation.

The Chamber has filed amicus briefs in the case before

the Ninth Cireuit on both oceasions in which this ease

was hefore that Court. The Chamber also filed briefs

in the similar case in the Fifth Cireuit—Amoco Produc-

tion Co. v. NLRB, on both occasions in which the Fifth

Cireuit had that case under consideration (see its deci-

sions in 613 F.2d 107 [5th Cir. 1980} and in Local No.

4-14, Oil Workers Int'l. Union v. NLRB, 721 F.2d 150

[1983]). The Chamber’s primary concern in both cases

related to the NLRB’s failure to look realistically at

these so-called change-in-affiliation cases and its readiness

to permit the substitution of large international unions

for independent unions without giving employees the

kind of governmentally monitored free choice which the

National Labor Relations Act is intended to protect.

wtiea

In the Chamber’s view, the Board, by unwarranted legal

fictions, has tended to avoid holding elections in such

eases by finding that each such large labor organization

is, as a matter of law, the same labor organization as

the independent, without adequate scrutiny of the record

facts.*

In this case the Board, while not requiring an NLRB

election, has at least required that all employees in the

unit be afforded an opportunity to vote in a union-

conducted election before the Board will issue an

amended certification in the name of the international

union.

At least that much concern is welcomed by the

Chamber, and we do not believe a Court of Appeals

shouldbe allowed to undo that much reform by the Board

in this area.

It is the Chamber’s position that a Court of Appeals

cannot properly second guess the N.L.R.B. when the

Board has exercised its administrative discretion to deny

a petition for an amended certification. More particularly,

the Chamber’s view is that the Board is well within the

scope of its administrative discretion when it requires

unit-wide employee participation in a union-conducted

private election on a change in affiliation as a precondi-

tion to amending an existing certification.

The Chamber urges that review courts should not be

allowed to interfere with the Board’s commendable admin-

istrative efforts to promote a broader employee franchise

in affiliation changes.

* While we believe the Board demonstrated exactly that

tendency in this case, that is not the issue currently

before this Court, as we understand it.

—

SUMMARY OF FACTS AND PROCEEDINGS

In the present posture of this case, the relevant facts

are uncontroverted, and were reasonably accurately sum-

marized in the Opinion of the Ninth Circuit. Financial

Institution Employees of America, Local No. 1182 v.

NLRB, 752 F.2d 356 (9th Cir. 1984) at 357-359. We will

review them briefly here.

In 1970, the Firstbank Independent Employees Associa-

tion (the Independent) had been certified by the National

Labor Relations Board as the exclusive bargaining

representative of a unit of employees of Petitioner

Seattle-First National Bank (the Bank). By 1978, there

were 4,800 employees in that bargaining unit. In Febru-

ary of 1978, the Independent conducted a vote among

its members, and a majority of those voting (1,206 out

of 1,980) voted to affiliate with the Retail Clerks Inter-

national Union, which has since merged into the United

Food and Commercial Workers Union.

Acting upon a petition for amendment to the Inde-

pendent’s certification, the National Labor Relations

Board, in April of 1979, granted the petition and, by

the amendment, certified “Financial Institution Employees

of America, Local No. 882, chartered by Retail Clerks

International Union, AFL-CTO” (the Affiliated Local).

The Bank refused to recognize or bargain with the

Affiliated Local, and in an ensuing unfair labor practice

proceeding, the NLRB found the Bank guilty of an un-

lawful refusal to bargain, violative of Section 8(a)(5)

and (1) of the Act, 29 U.S.C. 158(a)(5) and (1), and

ordered the Bank to bargain with the Affiliated Local.

The Board’s findings and conclusions rested squarely

wie

on the amended certification, and not on any evidentiary

determination that the Affiliated Local actually enjoyed

majority status among the employees in the bargaining

unit.

The Bank had challenged the validity of the amended

certification on two primary grounds: (1) that all em.

ployees in the unit, not just union members, should have

been permitted to vote on the affiliation; and (2) that

the Affiliated Local was a substantially changed and

different union from the Independent, and therefore

could be entitled to bargaining rights and a certification

only if it had demonstrated majority status in a Board-

conducted election. The Board rejected both contentions,

sustained the validity of the affiliation, and ordered the

Bank to recognize and bargain with the Affiliated Local.

The Bank petitioned for review of the Board’s order

in the Ninth Circuit, and the Board eross-petitioned

for enforcement. Before the Court reached the case for

decision, the Board requested the Court to remand the

ease to the Board for reconsideration because it was

analytically dependent upon Amoco Production Co.

(Amoco IIT), 239 N.I..R.B. 1195 (1979), remanded Amoco

Production Co. v. N.L.R.B., 613 F.2d 107, 111-112 (5th

Cir. 1980), a somewhat similar case which had been

remanded to the Board by the Fifth Cireuit. The Fifth

Cireuit had remanded for a factual analysis of the

Board’s conclusion that the Affiliated Union there was

the same union as the previously unaffiliated union, or,

as it is sometimes phrased, whether there was sufficient

continuity between the pre- and post-affiliation union.

On remand, however, the Board did net undertake

such an analysis, either in Amoco or in this case. Instead,

onion

the Board, in both cases, announced a revision of its

“due process” prerequisite for issuing amended certifica-

tions, ruling that as a part of such “due process” a

petitioner seeking an amended certification would be re-

quired to show that all bargaining unit employees, not

just union members, had been given an opportunity

to vote on the affiliation. Since that prerequisite was

not met, either in Amoco or here, the Board in each

case, on remand, revoked the amended certification and

dismissed the unfair labor practice complaint of refusal

to bargain.

It should perhaps be noted here that the NURB had

required, from 1977 to 1979, that such an all-unit oppor-

tunity to vote had been provided, as a prerequisite to

issuing an amended certification. That requirement had

been announced in Jasper Seating Co., 231 NI.RB 1025,

1026 (1977). In its decision in Amoco III, 239 NLKB

1195 (1979), however, the Board had overruled Jasper

Seating, and thus in both the Amoco case and the Board’s

original decision here, it had not required the all-unit

opportunity to vote. Upon the remands in Amoco Produc-

tion Co. (Amoco IV), 262 N.L.R.B. 1240 (1982) and

here, the Board thus once again reverted to its 1977-1979

requirement of the all-unit voting opportunity.

The Affiliated Local petitioned for review of the

Board’s decision on remand in this case. The Ninth

Circuit found the Board’s requirement of an all-unit

voting opportunity to be irrational and inconsistent with

federal labor policy. It thus once more remanded to

give the Board the opportunity to make a factual deter-

mination of whether the Affiliated Local was the same

union as the Independent, or whether it was substantially

changed. The Court re‘ected the plea of the Bank, the

—

Affiliated Local, and the United States Chamber of

Commerce, as amicus, that the Court itself review the

factual merits and make a determination of this issue.

Financial Institution Employees of America, local No.

1182 v. NLRB, 752 F.2d 356, at 359, n. 4.

Both the NLRB and the Bank then petitioned this

Court for certiorari, each pointing out that the Fifth

Circuit in Amoco IV, Local No. 4-14, Ol Workers Intl

Union v. NLRB, 721 F.2d 150 (1983) had reached a

contrary result, upholding the Board’s reversion to its

Jasper Seating requirement of an all-unit opportunity

to vote as a prerequisite for granting amended certifica-

tions. A conflict in the Cireuits is thus presented, and

this Court has now granted certiorari.

SUMMARY OF ARGUMENT

It is the Chamber’s position, on the issue now before

this Court, that the Court of Appeals for the Ninth

Cireuit overreached its reviewing authority, and has im-

properly attempted to restrain a proper exercise of

administrative discretion by the National Labor Relations

Board.

When a union requests an amended certification be-

cause of a change in affiliation, the Board applies two

tests—one statutory, the other administrative, and hence

discretionary, in nature.

The statutory issue is whether the change in affiliation

has resulted in a substantially changed union. If so, the

Board has no statutory authority to amend the certifica-

tion. There is such an issue in this proceeding, but it is

not before this Court because it was not decided by the

Board although the Court’s initial remand contemplated

that it would be.

—

The administrative, discretionary issue is whether the

change in affiliation has taken place by what the Board

deems reasonably democratic procedures. The Board

here, upon remand, determined that the union had too

narrowly construed the scope of the democratic franchise,

in that only union members, instead of all employees

in the unit, had been given an epportunity to vote. Hence

the Board revoked the amended certification which it

had earlier granted.

The Board then dismissed, upon remand, the unfair

labor practice complaint, because it had rested squarely

upon the validity of the amended certification. Hence

the only issue before the Ninth Circuit after the Court

remand was whether the Board had properly exercised

its discretionary authority with respect to monitoring its

certifications.

The Beard, we urge, must be permitted wide latitude

to establish and revise the standards to be met by a

union seeking to have the Board amend an already

issued certification. In such administrative matters, the

Board’s authority is either totally unreviewable under

5 U.S.C. §701, or review is restricted, under 5 U.S.C.

§706, to situations in which the Board’s action is arbi-

trary, capricious, an abuse of discretion, or otherwise

not in accordance with the law.

The Board’s policy of establishing certain democratic

standards for an affiliation vote as a prerequisite to

granting an amended certification to a newly affiliated

union is well within its administrative discretion. The

current policy of including among such prerequisites

an opportunity for an all-unit vote is appropriately

and rationally grounded upon the Board’s perceived need

—

to broaden the base of those democratic standards. While

views may differ as to the need for thus broadening

the base, the Board’s decision to have done so is not

arbitrary, capricious, an abuse of discretion, nor in any

way not in accordance with the terms of the statute

it is charged with administering. The redefinition of the

democratic standards test which has occurred over the

years with respect to the breadth of the franchise in

affiliation votes represents a typical kind of revision in

judgment which an administrative agency is entitled to

make as its membership and its views change from time

to time.

The Court of Appeals for the Ninth Circuit improperly

seeks to narrow the discretion committed to agency dis-

cretion by law. The Court appears to have confused the

discretion the Board has in such an administrative area

with statutory limitations on its authority to regulate

union conduct under its unfair labor practice jurisdiction.

The Court erroneously appears to have treated this mat-

ter as if the Board had prohibited a union from adopting

and enforcing rules governing its members’ conduct. In-

stead, this case involves only the Board’s conditioning the

grant of a discretionary privilege—the issuance of an

amended certification—on the union’s meeting certain

democratic standards in its affiliation voting.

In addition, the Court’s premises will not withstand

scrutiny. The Court’s expressed concern for stability in

collective bargaining and for the continued viability of

the Board’s contract bar rules in election cases are con-

cerns which are simply not presented by the facts or the

legal issues in this case. The Board has not altered its

contract bar rules. Nor did the Board’s decision here dis-

ee

turb the term or the continued effectiveness of the collec-

tive bargaining agreement. Instead, the Board’s decision

here simply determined the appropriate designation of

the union which is one of the contracting parties to the

underlying collective agreement. The Board’s denial of

the amended certification merely left the Independent,

rather than the Affiliated Local, as the appropriate party

to continue to administer that contract on behalf of the

unit employees.

Thus no legitimate concern for the Board’s contract bar

rules nor for bargaining stability can justify the Court’s

attempted interference with a proper exercise of adminis-

trative authority by the Board. The Ninth Cireuit has

improperly attempted to substitute its own judgment for

the Board’s in an administrative area entrusted to agency

discretion. In so doing it has exceeded its proper review-

ing authority.

— yon

ARGUMENT

I. The Board’s Action in Denying a Requested Amend-

ment to a Certification Should be Found to be Dis-

cretionary and Unreliable.

A. Although the Statute Restricts the Board’s

Authority to Issue Certifications, It Nowhere

Mandates the Issuance of Amended Certifica-

tions.

The National Labor Relations Act, as amended, deals

in only one section with the issue of when the Board is

required to issue a certification to a labor organization of

that union’s status as the exclusive bargaining agent for

employees. The only such reference is in that part of the

Act establishing the Board’s authority to hold a Board-

conducted secret ballot election to determine whether a

union represents a majority of the employees in an ap-

propriate bargaining unit. In Section 9(c)(1), 29 U.S.C.

§159(c)(1), the Act states:

If the Board finds upon the record of such a [repre-

sentation case] hearing that such a question of rep-

resentation exists, it shall direct an election by secret

ballot and shall certify the results thereof. (Emphasis

supplied.)

Thus, under the Act, a labor organization has a right

to a certification if and only if it has won an election con-

ducted by the Board under Section 9 of the Act.* In no

*There is value for a union in earning such a certifica-

tion. There is an exemption from union unfair labor prac-

tices under Section 8(b)(4)(B, 29 U.S.C. §158(b) (4) (B)

for a labor organization which “has been certified as the

representative of such employees under the provisions of

—_ es

other circumstances is the Board required by law to is-

sue a certification.

Nowhere does the Act refer to amendments of existing

certifications. Since the only authority the Board has to

issue a certification is to a union which has demonstrated

its majority status in a Board-conducted election, it is

obvious that an amended certification may only be issued

to the same union which had previously demonstrated its

majority status in a Board-conducted election.

Thus, in cases in which the Board has issued an amend-

ed certification to a union substantially different from

the originally certified union, Courts of Appeal have held

that the Board improperly issued the amended certifica-

(footnote i continued)

Section 9... .” A union has protection under Section

8(b) (4)(C), 29 U.S.C. §158(b)(4)(C) from picketing by

a rival union if the union seeking such protection “has

been certified as the representative of such employees un-

der the provisions of Section 9.” A union also has an ex-

emption from the prohibitions against jurisdictional dis-

pute picketing under Section 8(b)(4)(D), 29 U.S.C.

$158(b)(4)(D) if “the employer is failing to conform to

an order or certification of the Board determining the

bargaining representative for employees perfoming such

work.” And a union also enjoys an exemption from the

Act’s prohibitions of recognition picketing under Section

8(b)(7), 29 U.S.C. §158(b) (7) if “such labor organization

is currently certified as the representative of such em-

ployees.”

On the other hand, a union which has not been issued

a certification is not disabled from serving as a repre-

sentative of employees or from entering into contracts

on their behalf or from enforcing the terms of such con-

tracts if the union in fact has majority status. Certifica-

tion thus offers certain protections and advantages to a

union, but is not an essential prerequisite to its success-

ful functioning.

_ wn

tion. Retail Store Employees, Local 428 v. NLRB, 528

F.2d 1225,1228 (9th Cir. 1975); Sun Oil Co. of Pennsyl-

vania v. NLRB, 576 F.2d 553 (3rd Cir. 1978); NDRB v.

Bernard Gloekler North East Co., 540 F.2d 197 (3rd Cir.

1976) ; American bridge Div. United States Steel Corp. v.

NLRB, 457 F.2d 660,663 (3rd Cir. 1972).

While the Board itself normally makes the initial de-

termination as to whether the affiliated union is the same

union, and has denied amendments on this ground, Gulf

Oi Corp., 135 N.L.R.B. 184 (1962), the courts in such

eases as those cited above have been diligent in requiring

that a Board finding of continuity be supported by sub-

stantial evidence, as is, of course, the courts’ right and

duty when reviewing Board findings in support of any

order to remedy an alleged statutory violation.

While the Board’s authority to grant requested amend-

ments is, therefore, restricted as a matter of law, no pro-

vision of the Act requires the Board ever to amend one

of its certifications. Hence in all affiliation cases, the

Board could refuse to issue amended certifications, thus

requiring any newly affiliated, disaffiliated, merged, or

spun-off organization to participate in and win a Board-

conducted election, in order to earn a certification in its

newly designated status.

Since there is no statutory requirement that the Board

issue amended certifications at all, it follows that the

Board has a very wide area of discretion as to when it

will grant a request for such an amendment. No court

decision of which we are aware, save for the Ninth Cir-

cuit’s decision here, has ever attempted to exercise its

review authority in such manner as to fault the Board

for a refusal to grant a request for an amended certifi-

cation.

— wan

B. The Board’s Decision Not to Issue an Amended

Certification Should Be Totally Immune from

Judicial Review.

In this case, therefore, the Board’s action in declining

to issue an amended certification, which it has the discre-

tion to issue but is under no statutory obligation to issue,

is an action which should be committed solely to agency

discretion, and not subject to review at all. 5 U.S.C. $701

precludes any judicial review when “agency action is com-

mitted to discretion by law.” §701(a) (2).

In parallel cases under other laws, courts have held

administrative decisions on similar discretionary grants

to be totally unreviewable. In Sierra Club v. Hickel, 467

F.2d 1048 (6th Cir. 1972), cert. den., 411 U.S. 920 (1973),

for example, when the Secretary of the Interior had dis-

cretion to, but was not statutorily required to, enter into

land exchange agreements, his refusal to enter into such

an agreement was held not judicially reviewable. Similar-

ly, in Knight Newspapers, Inc. v. United States, 395 F.2d

353 (6th Cir. 1978), when a statute gave the Postmaster

General authority to make postage refunds, but did not

require him to do so, his action in denying a refund was

held not reviewable. And in Ferry v. Udall, 336 F.2d 706

(9th Cir. 1964), cert. den., 381 U.S. 904 (1965), when the

statute gave the Secretary of the Interior the authority

to issue “cash certificates” evidencing his sale of certain

public lands, but did not require him to sell such lands

or issue such certificates, his refusal to issue such a cer-

tificate was held nonreviewable.

Not only is the issuance of amended certifications a dis-

eretionary administrative grant under the N.L.R.A., but

—_—

indeed the Board’s exercise of its Section 9 authority, in

toto, is not subject to judicial review.? It may be inci-

dentally reviewable, when the Board restrains an unfair

labor practice because Section 9(d) requires that a rele-

vant representation case record be included in the rec-

ord of the unfair labor practice proceeding when the

Board’s unfair labor practice order is before the Circuit

Court for enforcement or review. American Federation of

Labor v. National Labor Relations Bd., 308 U.S. 401 (1940)

at 410,411. But here the Board has decided not to re-

strain any unfair labor practice because the erroneously

issued certification had been revoked, and thus there was

no basis for the once but no longer viable Section 8(a) (5)

proceeding.

When the Board is not obligated to, and has not issued

a certification, and has thus dismissed the unfair labor

practice proceeding sought to be predicated thereon, the

courts have held that the Board’s dismissal of the unfair

labor practice proceeding is not reviewable. General Driv-

ers, Etc. v. National Labor Relations Board, 179 F.2d 492

(10th Cir. 1950). That case dealt with a situation in which

the Board had declined to issue a certification in the first

instance. But the reasoning applies equally to a situation

in which an amended certification has been revoked. In

* Representation case decisions by the National Media-

tion Board, the Board’s counterpart in the railway and

airline industries, have also been held not to be judicially

reviewable. Switchmen’s Union of North America, et al.

v. National Mediation Board, et al., 320 U.S. 297 (1943).

The courts have also affirmed the N.L.R.B.’s authority

to “police its own certifications,”as the Ninth Circuit has

itself recognized. NLRB v. Detective Intelligence Service,

448 F.2d 1022, 1025 (9th Cir. 1971). See also National

Labor Relations Bd. v. Clarostat Mfg. Co., 216 F.2d 525

(Ist Cir. 1954).

—

neither instance is there an outstanding, viable certifica-

tion on which to predicate an unfair labor practice, and

the unfair labor proceeding thus must fall as a matter of

course.

We therefore respectfully submit that the Board’s ex-

ercise of its administrative discretion here by refusing to

issue the amended certification because the Union failed

to meet the Board’s prerequisites, is not subject to any

judicial review at all. Once the certification was revoked,

there was no basis for the refusal to bargain charge, and

the complaint had to be dismissed.

II. The Board’s Refusal to Amend the Certification Here

Was, In Any Event, a Reasonable Exercise of Its

Discretion.

A. The Limited Reviewability Standard of 5 U.S.C.

$706.

While we have urged that the Board’s exercise of its

discretion in refusing to grant a requested amendment to

a certification be held to be non-reviewable under 5 U.S.C.

$701, we recognize that it may be argued that it is subject

to a very limited review under 5 U.S.C. §706. 5 U.S.C.

§706 provides that a reviewing court shall:

... hold unlawful and set aside agency action, findings,

and conclusions found to be:

a) arbitrary, capricious, an abuse of discretion

or otherwise not in accordance with the law;

As the Ninth Circuit itself noted at some length in

Ness Investment Corporation v. United States Department

of Agriculture, Forest Service, 512 F.2d 706 (9th Cir.

1975), some tension exists between the total nonreview-

ability concept of Section 701 and the arbitrary and ca-

pricious standard of Section 706. But, as the Ninth Cir-

cuit held in Ness, very little, if any, opportunity for re-

_— ps

view is available when an administrator has the discre-

tion to, but is not required to, issue a certificate or per-

mit.

B. The Board’s Standards For Issuing Amended

Certifications in Cases of Changed Affiliations.

The National Labor Relations Board has, over the

years, chosen to issue amended certifications under cer-

tain limited circumstances. As already pointed out, ‘t

can do so under the statute only if the requesting union

is the same union as the one previously certified under a

different name. This has become known, and was referred

to by the Ninth Circuit, as the Board’s test of “continuity

of representation” in the course of which, in a case involv-

ing a change in affiliation, the Board determines whether

the nature and character of the union was in any signifi-

cant respect substantially changed as a result of the

change in affiliation.

In addition to seeking to comply with that statutory limi-

tation on its right to issue certifications, the Board has

also exercised its discretion in affiliation change cases by

utilizing its administrative discretion to establish certain

prerequisites which must be met as a condition of grant-

ing the privilege of the amended certification. The stan-

dards which it has adopted relate, essentially, to whether

the affiliation change was accomplished by democratic

means.* Thus the Board has required that there be ade-

* Although sometimes termed a “due process” inquiry,

it does not relate to the protection of property rights

against a governmental taking, in t*> traditional due pro-

cess sense. Instead the inquiry relates to whether demo-

cratic procedures have been followed, and might more

appropriately be referred to as the Board’s “democracy”

test.

—_— =

quate and proper notice of the affiliation vote,* and an

orderly voting procedure, including reasonable precautions

to maintain a degree of secrecy of the ballot.° We know

of no case in which any court of appeals has ever held that

the Board could not properly exercise its administrative

discretion by establishing and enforcing these democratic

prerequisites to granting an amended certification in cases

of new or changed affiliation. Nor does the Ninth Circuit

so suggest here.

In formulating and applying these democratic stan-

dards, the Board has vacillated on the issue of the

breadth of the democratic franchise. Prior to 1977, the

Board deemed its democracy requirement met even

though only union members were allowed to vote on the

affiliation issue. As pointed out, swpra, p. 6, a major-

ity of the Board Members decided otherwise in the

Jasper Seating case in 1977, and for the next two years

the democracy test included a broader franchise—one

extending to all employees in the bargaining unit. This

was done on the theory that since the union has a duty

to represent all employees in the unit, all such em-

ployees should have a voice in determining whether their

bargaining agent should affiliate with an international

union or change or rescind such an affiliation.

By 1979, the composition of the Board had changed,

and in Amoco III, by a 3-2 decision, a majority of the

* Peco, Inc., 204 NLRB 1036 (1973).

* See the discussion by both the majority and a dissent-

ing members of the Board in Bear Archery Div. of Victor

Comptometer Corp., 223 NLRB 1169 at 1171-1172, and

1173-1174, enforcement denied, NLRB v. Bear Archery

Div. of Victor Comptometer Corp., 587 F.2d 812 6th Cir.

(1977).

— =

then Board members once again narrowed the required

franchise to union members. In 1982, the Board member-

ship had again changed, and in Amoco IV, the broader

franchise requirement of Jasper was reinstated, again by

a 3-2 decision of the Board.

The instant case has been buffeted by the winds of

these changing views. The requested amended certifica-

tion was originally sought here at a time when the

broader franchise was required, but by the time it reached

the Board for decision in 1979, the requested amended

certification was granted, following the Amoco III prece-

dent. Now, upon remand from the Court of Appeals, the

amended certification was revoked in 1982, with the Board

now following the Amoco IV precedent.

The difference in views among Board members on this

issue appears to stem from whether they view a change

in affiliation as having an “indirect” effect on unit em-

ployees who are not union members, as the dissenting

Board members in Amoco IV argued,* or whether, as the

majority asserted, “affiliation votes affect the intcrests of

all employees,” and an affiliation decision “. . . directly

impacts on matters within the breadth of the Act .. .”’

The members also differ on whether the requirement im-

properly impinges on internal union affairs, as the dis-

senting members argued,® or whether, as the majority

stated, it is no more of an impingement on union internal

affairs than the Board’s other tests of democracy such

* Amoco IV, 262 NLRB at 1242.

"Td. at 1241.

®* Jd. at 1242.

__ 19 —

as its notice requirements and its orderly and properly

protected voting requirements.”

As amicus, our sense of fairness leads us to the view

that the current Board majority has the better of those

arguments. We are offended by the injustice which would

result here from permitting 1,206 employees to determine

the affiliation issue for 4,800 employees. But whether

one’s own views tend to support the position of the cur-

rent majority or the views of the dissenting Board mem-

bers who were part of an earlier majority, we respectfully

suggest that neither set of views can properly be de-

scribed as “arbitrary, capricious, an abuse of discretion

or otherwise not in accordance with the law” within the

meaning of 5 U.S.C. $706.

Yet only if the current majority’s views, and its deci-

sion herein, are that far beyond the scope of the discre-

tion vested in the Board to monitor its own certifications

ean there be even an arguable basis for judicial review.

©. Change in An Agency’s Views Does Not Increase

Vulnerability to Judicial Review.

The changing views of the Board on the scope of the

democratic franchise in affiliation votes may be a source

of irritation for lawyers who try to advise clients as to

the Board’s requirements. But such changes are typical

of the way the administrative process operates from time

to time. Since the Board has discretion in this area, it

may choose to exercise that discretion differently at dif-

ferent times without interference by reviewing courts. As

this Court said in NLRB v. Local 103, Iron Workers, 434

U.S. 335, 351 (1978) :

An administrative agency is not disqualified from

changing its mind.

°Td. at 12A1.

— 21 —

Changes in membership of administrative boards and

commissions do result in some changes in viewpoint. Such

chang« neither invite nor authorize judicial reversal of

their administrative determinations. In Butte, Anaconda

& Pacific Ry. Co. v. United States, 290 U.S. 127 (1933),

this Court held that the Interstate Commerce Commis-

sion had unreviewable discretion to determine whether or

not a “deficit” was sustained. The Commission’s defini-

tion of “deficit” had changed as its membership changed.

This Court said at page 135:

Obviously, “mistake there was none, but merely a re-

vision of judgment in respect of matters of opinion.”

United States v. Great Northern Ry. Co., 287 U.S.

144, 151.

In Butte this Court wisely refrained from itself deter-

mining which of the Commission’s changing definitions

was proper. Instead, this Court said:

We have no occasion to determine which of the

Commission’s interpretations of the word “deficit” is

the correct one. Jd. at 135.

We respectfully submit that the Ninth Circuit here

should similarly have refrained from determining which

of the Board’s varying views as to the appropriate

breadth of the democratic franchise was the better view.

Instead it should have limited itself to finding that the

current majority’s broader concept of the scope of the

democratic franchise provides a rational basis for its

action here.

The Board, we submit, here acted within its authority.

It exercised its discretion in a reasonable manner in a

debatable subject area. The law requires no more, even

if the Board’s action is subject to 5 U.S.C. §706, rather

—~ =

than being, as we believe it is, within the wholly unreview-

able province of 5 U.S.C. $701.

IlI. The Ninth Circuit Has Misconstrued and Misapplied

Its Reviewing Authority.

A. This Is Not a Case In Which The Board is Regu-

lating Union Conduct Through Its Unfair Labor

Practice Jurisdiction.

Throughout its decision, the Ninth Circuit appears to

have misconstrued the Board’s action here as if the

Board had been regulating union conduct by deciding that

the union was guilty of an unfair labor practice and,

thus, of violating the Act. Had that been what the Board

was doing, the Court’s ruling might arguably have been

within the permissible scope of its reviewing authority

in unfair labor practice proceedings.

As this Court well knows, the Board’s decisions in un-

fair labor practice cases are, by the Act itself, made re-

viewable. 29 U.S.C. §160(f). In such cases the courts of

appeal must determine both whether the Board’s factual

findings are supported by substantial evidence on the

record considered as a whole and whether the Board’s

interpretation in application of the unfair labor practice

prohibit prohibitions of the Act are consistent with the

language of the statute and with Congressional intent in

enacting the law. Even in such cases, however, the courts

customarily grant deference to the Board’s expertise. But

there does not exist the same kind of essentially unre-

viewable discretion as is applicable to the Board’s exer-

cise of its Section 9 administrative functions.

The Court’s confusion in this regard is perhaps made

most clear by its discussion of whether the Board has, in

— _

the Court’s view, intruded too far into internal union

affairs. In that discussion, the Court relies heavily on

this Court’s holdings in such cases as NLRB v. Allis-

Chalmers Manufacturing Co., 388 U.S. 175 (1967); NLRB

v. Boewg Co., 412 U.S. 67 (1973); and Scofield v. NLRB,

394 U.S. 423 (1969). But in all of those cases the issue

presented for review was whether the respondent union

had been guilty of an unfair labor practice. More pre-

cisely, the issue in each of those cases was whether the

unions had violated their obligations to their members

and thus had contravened the proscriptions of Section

8(b) of the Act, 29 U.S.C. §158(b), or whether the union’s

actions were, instead, a reasonable exercise of their

powers of governance.

But here the Board has not found that there was any

violation of the prohibitions of Section 8(b). No conten-

tion is made that the Independent’s policy permitting

only its members to vote on affiliation issues exceeded its

powers of self-governance, nor that it constituted union

coercion of employees in contravention of Section 8(b)

(1), 29 U.S.C. §158(b)(1). The Board’s holding, neither

in Amoco IV nor in this case, prohibits any union from

following whatever voting procedure it wishes on affilia-

tion issues, without fear of prosecution under the unfair

labor practice provisions of the Act.

The Court’s discussion of those unfair labor practice

eases adds nothing to the analysis of whether the Board’s

refusal of a discretionary benefit—an amended certifica-

tion—may properly be conditioned upon this union’s

meeting certain Board-prescribed democratic standards.

And indeed the Court itself seems to recognize the

Board’s authority to set such standards, when it speaks

with apparent approval of what it calls “assuring that

__ 94 —

democratic voting procedures are observed in affiliation

elections,” (752 F.2d at 367) by other of the Board-speci-

fied requirements designed to that end. Yet we assume

that neither the Ninth Circuit nor any other Court of

Appeals would enforce those democratic procedures

which the Ninth Cireuit praises by finding a failure to

observe them a violation of Section 8(b)(4). Indeed, it

is doubtful that the statute gives the Board any authority

to so hold, in light of this Court’s decisions in Allis-Chal-

mers, Boeing, and Scofield.

The Board is not, however, similarly limited with re-

spect to requiring democratic safeguards, including a

wider breadth of the democratic franchise, as a prere-

quisite to the discretionary grant of an amended certifi-

cation. The Ninth Circuit appears to have failed to rec-

ognize the distinction, and by failing to do so has mis-

construed its reviewing authority.

B. The Court is Wrong When It Says The Bvard

Has jeopardized viability of Collective Agree-

ments.

The Court is also wide of the mark in its attempted

evaluation of the effect of the Board’s amended certifica-

tion rules on bargaining stability. It errs, first because

striking of an appropriate balance between the need for

industrial relations stability and the need for maintain-

ing full freedom of choice for employees is precisely the

kind of policy decision which is entrusted to the expert

agency administering the Act. It is not an area in which

the courts are entitled to second guess the Board.

As the Court of Appeals for the D. C. Circuit said in

Leedom v. International Broth. of Elec. Workers, Local

Union No. 108, AFL-CIO, 278 F.2d 237,242 (D.C. Cir.

1960) :

5

—_ =

Congress relied on the Board's expertise to harmonize

the competing goals of industrial stability and em-

ployee freedom of choice to best achieve the ultimate

purposes of the Act.

Secondly, the Court appears to have misunderstood the

effect of the Board’s decision here. The decision not to

amend a certification does not destroy the contract or the

bargaining relationship, nor, as the Court seems to sug-

gest, does it have the effect of decertifying a certified

union. When the Board declines to amend, the old certifi-

cation remains in full force and effect, and the original

union has both the protection of its certification and its

full rights as a party to the collective agreement. No un-

ion has been decertified, as the Ninth Circuit seems to

suggest, nor is any term of the governing collective agree-

ment altered one whit by the Board’s declination to amend

the certification.

The only effect of the Board’s decision is as to the

designation of the party entitled to administer the agree-

ment on behalf of the employee constituency. If, as here,

the Independent fails to follow adequately democratic pro-

cedures in effectuating its attempted affiliation, then it

must continue to administer the agreement as an indepen-

dent, unaffiliated union. Had it followed the Board-pre-

scribed democratic requirements, then it could administer

the contract as an affiliated local.

© We find nothing in the Board’s decision in this matter

which discusses the continued viability of the contract.

Nor do we find any indication in the Board of the Court’s

opinion that the Bank was shown, by this record, to have

repudiated its contract here. The ‘Ninth Circuit notes that

in Amoco the employer “unilaterally cancelled” the current

contract. We find no discussion in any of the decisions

issued by the Board or by the Fifth Circuit in the Amoco

cases as to whether that repudiation per se was a viola-

—_ =

In summary, then, the Court of Appeals for the Ninth

Circuit seems to have misconstrued its reviewing authori-

ty by approaching this case as if this were a proceeding

against a union in which the Board had found the union

guilty of unfair labor practices. Instead, this case is an

unfair labor practice proceeding against the employer,

charging only a refusal to bargain, and predicated solely

upon the Affiliated Local’s possession of an amended cer-

tification issued to it by the Board. When the Board, in

its discretion, subsequently decided it had improvidently

issued that amended certification and revoked it, the re-

fusal to bargain case fell. That case stood or fell solely

upon the amended certification and thus upon an exercise

of the Board’s discretionary administrative powers, an

area as to which a Court of Appeals has little, and prob-

ably no, reviewing authority.

Furthermore, in attempting to apply what it misunder-

stood as its reviewing authority, the Court compounded

its error by confusing this case with one in which a union

had been shorn of its bargaining rights and/or of its con-

tract rights. But the mere denial of a requested amend-

(footnote 10 continued)

tion of the Act. Such repudiation may, at least arguably,

be lawful if an affiliation results in a substantially dif-

ferent union. In such a situation, if the original contract-

ing union no longer exists, and a substantially changed

union is the only labor organization claiming to represent

the employees, it may be that the contract has become a

nullity because of the defunctness of one of the contracting

parties. Under those circumstances the employer would

not be bound by a contract and could “repudiate” it. That

issue is not presented here because the Board did not

decide the continuity issue on remand, because there is

no claim here of a contract repudiation by the Bank, and

because there has been no finding here that the Indepen-

dent is defunct.

:

.

= -

ment to a certification does not destroy the Independent’s

rights in those areas, unless, of course, the affiliation

worked a substantial change in the union—a matter

which has not here been determined. Since it must there-

fore be assumed for present purposes that the Affiliated

Local is essentially the same union as the Independent,

the only issue is whether the Independent or the Affili-

ated Local is to be the one designated in the Board’s cer-

tification and the one to administer the contract. That

simply does not present the kind of issues with which the

Court seemed to believe it was dealing.

These considerations, too, require a finding here that

the Court exceeded its reviewing authority, perhaps be-

cause its premises were faulty. But whatever the reasons,

as we believe we have demonstrated throughout this brief,

the Court did not have authority to interfere with the

Board’s reasonable exercise of its administrative discre-

tion in declining to grant an amended certification. Once

it had exercised its discretion in this manner, there was

no basis for the unfair labor practice proceeding, and its

order of dismissal of that proceeding should be sustained.

— 98 —

CONCLUSION

The decision of the Court of Appeals for the Ninth Cir-

cuit should be reversed, and the Board’s revocation of its

amended certification and its ensuing dismissal of the un-

fair labor practice proceedings should be allowed to stand.

Respectfully submitted,

Epwarp B. MILLER

Attorney for the Chamber of

Commerce of the United States

as Amicus Curiae

Of Cownsel:

Porr, BaLLarp, SHEPARD

& Fow te, Lrp.

69 West Washington Street

Chicago, Illinois 60602

(312) 630-4223

STEPHEN A. Boxart

National Chamber Litigation Center, Inc.

1615 H Street, N.W.

Washington, D.C. 20062

(202) 463-5337