[00:00:02] Speaker 00: Case number 14-1045 at Elm, SSC Mystic Operating Company, LLC, doing business as Pendleton Health and Rehabilitation Center Petitioner versus National Labor Relations Board. [00:00:14] Speaker 00: Mr. McGuire for the petitioner, Ms. [00:00:16] Speaker 00: Isbell for the respondent. [00:00:18] Speaker 03: Good morning. [00:00:19] Speaker 03: Good morning, Your Honors. [00:00:21] Speaker 03: May it please the Court, Michael McGuire and the law firm of Shaw and Rosenthal representing the petitioner, Mystic Operating, doing business as Pendleton Nursing and Rehabilitation Center. [00:00:30] Speaker 03: This matter arises out of an NLRB election conducted at the employer's nursing home in Mystic, Connecticut on April 4, 2013. [00:00:37] Speaker 03: 104 employees voted. [00:00:42] Speaker 03: The count was 64 yes in favor of the union, 40 against. [00:00:46] Speaker 03: So if 12 of the 104 employees had changed their mind, the union would have lost in that election. [00:00:53] Speaker 03: With the Court's permission after a brief statement of the facts, I would like to address the primary issues in a different order than we presented in our brief, starting first with the narrowest grounds for the Court to vacate the Board's order, which is the subpoena issue and this Court's recent decision at Ozark Automotive that was decided February 10, 2015. [00:01:13] Speaker 03: Then I will move on to the [00:01:17] Speaker 03: what I would characterize as massive supervisory taint in this case by a undisputed supervisor doing undisputed bad acts. [00:01:28] Speaker 03: And the board's doctrine, which we call into question the harborside doctrine, which says, [00:01:33] Speaker 03: employer anti-union conduct will be evaluated the same way as employer pro-union conduct, as well as the theory from Harborside that assuming bad acts occur by a supervisor in favor of the union, if the employer does nothing to remediate, it waives the objection. [00:01:51] Speaker 03: If the employer does take actions to remediate, then it cures the objection, which presumably leaves only [00:01:59] Speaker 03: trying to do some remediation, but failing, as the only way that that objection still stands. [00:02:04] Speaker 03: And then finally, Your Honors, I was going to address the broader issue, which is that the regional director had no authority to conduct this election in the first place, based on Laurel Bay and New Process Steel. [00:02:18] Speaker 03: So with regard to the subpoena issue, at the hearing we had nine employees, voters in the election, testify as to the gross misconduct by Supervisor Mackin, the undisputed supervisor. [00:02:33] Speaker 03: There was lots of testimony that she was acting in concert with the union's organizer, Jeff Welch. [00:02:40] Speaker 03: We crafted a very narrow subpoena to attempt to get the phone records between Mr. Welsh and Ms. [00:02:47] Speaker 03: Mackin, no other employees, to demonstrate both the frequency and duration of their contacts in an effort to prove agency between the union and Ms. [00:02:56] Speaker 03: Mackin's clearly improper conduct. [00:03:02] Speaker 03: The union objected to the subpoena based on relevance and on it might disclose Section 7 activity of Ms. [00:03:09] Speaker 03: Mackin. [00:03:09] Speaker 03: Of course, in the end, she had no Section 7 rights because she was deemed to be a supervisor. [00:03:14] Speaker 03: The union was present at the hearing in their petition to revoke. [00:03:18] Speaker 04: They said they would have... Weren't the contacts sufficient to make out the point you wanted to make out? [00:03:23] Speaker 04: I mean, it's clear that they had contacts with one another. [00:03:25] Speaker 04: Wasn't that sufficient? [00:03:27] Speaker 03: It was clear they had contacts. [00:03:28] Speaker 03: The question of duration and frequency of contacts. [00:03:32] Speaker 04: Why didn't you subpoena the organizer? [00:03:35] Speaker 03: Your Honor, we had the opportunity to ask the organizer questions. [00:03:40] Speaker 03: He was not in the room. [00:03:41] Speaker 03: The hearing officer said she would produce them. [00:03:43] Speaker 03: But without the phone records to basically keep him honest with regard to his testimony to impeach, if necessary, for credibility reasons, we ended up never calling the organizer. [00:03:55] Speaker 05: impeached for credibility reasons, a person that you never call, it seems a rather poor excuse for not getting the evidence that you could have gotten that way. [00:04:06] Speaker 05: I'm not a little troubled by the thought, well, we didn't, we didn't get the record we wanted, therefore we [00:04:18] Speaker 03: Your Honor, I believe that between the Indiana Hospital case from the Third Circuit, which is cited by the court in Ozark, it strongly suggests that we have the right to get the records first, to make trial determinations as to whether to call witnesses or what questions to ask the witnesses. [00:04:37] Speaker 03: Because quite frankly, if we only had Mr. Welsh in no records, he could say – he could minimize his contacts. [00:04:44] Speaker 03: He could say anything he wanted. [00:04:46] Speaker 05: Then you would have the possibility of arguing [00:04:55] Speaker 03: Well, Your Honor, we could not have impeached without the records, and the hearing officer said she was not going to provide us with the records. [00:05:12] Speaker 03: You didn't handle it because you didn't question, right? [00:05:16] Speaker 03: We did not. [00:05:17] Speaker 03: We never called Mr. Welsh as a witness. [00:05:19] Speaker 03: That's undisputed, Your Honor. [00:05:20] Speaker 03: We believe that under the Ozark case and the Third Circuit Indiana hospital case, we were entitled to have those records in advance of the hearing or at the beginning of the hearing to make that determination. [00:05:31] Speaker 02: Can I ask a question on this issue from a different angle, which is that let's suppose that, with respect to your other objection that you're raising, [00:05:41] Speaker 02: concerning Mackin's conduct as supervisor, that the hearing officer's decision that there was no prejudice from that is sustained. [00:05:50] Speaker 02: I know you would disagree with that, but let's just suppose that that's true. [00:05:54] Speaker 02: And so there was no prejudice from her conduct that would cause for overturning the results. [00:05:59] Speaker 02: Then on this second objection, which deals with the union, the appropriateness of the union conduct, the subpoena only goes to what Mackin did vis-a-vis Welsh, right? [00:06:10] Speaker 02: So we're still talking about Mackin. [00:06:12] Speaker 03: We're talking about Mackin and Welsh. [00:06:14] Speaker 02: So if there was no, if by hypothesis there was no prejudice as to Mackin's conduct as supervisor, what prejudice is there from Mackin's conduct as union agent? [00:06:26] Speaker 03: The prejudice is there is a lower bar to prove a violation if it is a party. [00:06:33] Speaker 02: Is there a lower bar for prejudice? [00:06:35] Speaker 03: No, I'm sorry. [00:06:35] Speaker 03: It's a lower bar for objectionable conduct. [00:06:38] Speaker 02: Right. [00:06:38] Speaker 02: But you still have to show prejudice as to the objection concerning a union use of an agent, right? [00:06:47] Speaker 02: It's not just that there's inappropriate conduct and ergo, you win. [00:06:52] Speaker 02: There's still a prejudice component to that, I think. [00:06:54] Speaker 03: Well, we need to demonstrate that the conduct was of the type that would destroy the laboratory conditions for an election, which the hearing officer concluded it was, Macken's conduct was. [00:07:05] Speaker 03: The question is, can we also attribute Macken's conduct to the union agent? [00:07:10] Speaker 02: I guess I'm asking a slightly different question, which is that if [00:07:13] Speaker 02: You have to show, I think, to prevail ultimately on this argument, that there was prejudice vis-a-vis the election, that it actually has some consequence for the election, right? [00:07:23] Speaker 03: The conduct of Ms. [00:07:24] Speaker 03: Mackin. [00:07:25] Speaker 02: Right. [00:07:25] Speaker 02: And so if we suppose that for the other objection, that Mackin's conduct as supervisor didn't have a prejudicial impact, what's the basis for thinking that Mackin's conduct as union agent would have a prejudicial impact? [00:07:38] Speaker 03: It would only be, Your Honor, that conduct of a union agent is a lower bar to establishing objectionable conduct based on agency, excuse me, of the union. [00:07:49] Speaker 03: And if Mackin is the union's agent, then her conduct is attributable to the union. [00:07:53] Speaker 03: Now, if you're saying, but if Mackin's conduct was never prejudicial, then how could, if it's attributed to the union, have been prejudicial? [00:08:01] Speaker 02: Right. [00:08:02] Speaker 03: Well, we obviously believe Mackin's conduct was prejudicial. [00:08:07] Speaker 02: Right, but I get that argument, which would buy into the notion that there's no daylight between your two objections vis-a-vis the prejudicial impact of Mackin's conduct. [00:08:17] Speaker 02: So if I disagree with you on that, just for argument's purposes, and I think that Mackin's conduct as supervisor was non-prejudicial, [00:08:27] Speaker 02: with respect to the outcome of the election, then I'm not seeing the basis for concluding that Mackin's conduct as union agent was prejudicial. [00:08:35] Speaker 03: Well, I believe the argument would be, Your Honor, that if her polling of employees and her threats to employees were attributed to the union as an agent, because it is a lower bar to establish a violation by a party, the union, than it is to establish a violation by a third party, [00:08:55] Speaker 03: in this case a supervisor, normally it's a rank-and-file employee, that it would be prejudicial to us not to have the opportunity. [00:09:01] Speaker 02: But it sounds like it's, I think it's just a lower bar, if there is a lower bar, it's a lower bar as to whether the conduct is problematic. [00:09:09] Speaker 02: Not a lower bar to determine whether there's been prejudice. [00:09:12] Speaker 02: You still have to show prejudice, and if the bar for showing prejudice is the same, I'm not seeing the daylight between those two objections vis-a-vis the essential prejudice component. [00:09:23] Speaker 03: Well, perhaps I'm not following Your Honor's question, but I believe that if the conduct of matching can be attributed to the union, right, it then becomes prejudicial to the employer because the union is a party to the proceeding. [00:09:38] Speaker 05: I wonder about the order in which you're taking these. [00:09:52] Speaker 05: I was just... Are you abandoning the Laurel Bay Orders? [00:09:54] Speaker 03: No, Your Honor, I was starting with the narrowest, but... We don't get to the narrowest if you're right about the Laurel Bay object. [00:10:03] Speaker 03: So the Laurel Bay point, Your Honors, the pertinent question is, what statutory power did the NLRB have on April 4, 2013 to conduct this election? [00:10:13] Speaker 03: We respectfully submit that there was none. [00:10:16] Speaker 03: There was only one board member sitting on April 4, 2013 at the time that this election was conducted. [00:10:24] Speaker 04: Laurel Bay dealt with the delegation of adjudicative authority, right? [00:10:29] Speaker 04: Not administrative authority. [00:10:32] Speaker 03: It did, but we're responsible. [00:10:33] Speaker 04: What the regional director does in certifying an election isn't quite the same as what the board does when it resolves the charge of an unfair labor practice, is it? [00:10:44] Speaker 03: I would say it is very similar. [00:10:46] Speaker 03: This wasn't an adjudicatory proceeding. [00:10:52] Speaker 04: It was or was not? [00:10:53] Speaker 03: It was. [00:10:54] Speaker 03: The hearing officer made credibility resolutions, wrote the decision herself. [00:11:00] Speaker 03: The regional director was not involved at all in that proceeding other than delegating authority. [00:11:05] Speaker 04: But it wasn't the final determination, right? [00:11:07] Speaker 04: I mean, there's the right of an appeal from [00:11:10] Speaker 04: a regional director's decision, even if it's an adjudicative decision. [00:11:13] Speaker 04: That wasn't present in Laurel Bay, was it? [00:11:15] Speaker 03: Well, in this situation, exceptions were filed directly to the board from the hearing officer's decision. [00:11:22] Speaker 04: And that's always the case when we're dealing with the delegation of authority to a regional director, right? [00:11:27] Speaker 04: If the parties disagree with [00:11:30] Speaker 04: the way the regional director has conducted the election or the adjudication, they are entitled to take an appeal to the board. [00:11:39] Speaker 04: But in Laurel Bay, that wasn't the case, was it? [00:11:42] Speaker 04: I mean, it was a delegation of a final authority. [00:11:45] Speaker 04: And that's a pretty significant difference, isn't it, when we're talking about agency principles, right? [00:11:52] Speaker 03: I do not believe so, Your Honor. [00:11:54] Speaker 03: Can the regional director really act with greater authority than the board? [00:11:59] Speaker 03: And in this case, there was no board authority. [00:12:02] Speaker 04: No, but just on this one issue, the regional director was not acting with final authority. [00:12:08] Speaker 04: The regional director could not bind the board, right? [00:12:13] Speaker 04: Because the regional director's decisions are subject to the board, correct? [00:12:17] Speaker 03: That is correct. [00:12:18] Speaker 04: In Laurel Bay, the delegated authority was final. [00:12:22] Speaker 04: It bound the board. [00:12:23] Speaker 04: That's a rather significant difference when one's talking about legal principles of agency law, isn't it? [00:12:30] Speaker 03: Well, I don't believe the holding in Laurel Bay necessarily ends up at that same point, Your Honor. [00:12:37] Speaker 03: I believe the holding of Laurel Bay says if you've got a board who is not functioning, then its delegations are not functioning either. [00:12:47] Speaker 03: The regional director cannot have a greater authority to run elections than the board could have, because he is only acting on authority delegated by the board to him. [00:12:58] Speaker 03: And in this situation, [00:13:00] Speaker 04: Now, as you know, it was... Now, I'm just trying to point out the factual circumstances are really quite different. [00:13:09] Speaker 05: If you're not reading the significance of that distinction, don't assume that everybody has an accordion. [00:13:14] Speaker 03: Okay. [00:13:16] Speaker 03: Well, Judge Santel, I understand you've been at the epicenter of a number of these cases. [00:13:21] Speaker 02: I'm the Forrest Gump of labor. [00:13:26] Speaker 02: Well, can I ask this question? [00:13:29] Speaker 02: If the employer, if you never raise an objection on Laurel Bay slash Noel Cannon grounds, would you agree that that kind of objection is forfeited? [00:13:41] Speaker 03: Your Honor, we objected on Laurel Bay Noel Cannon grounds at the very first opportunity. [00:13:46] Speaker 02: No, I'm not asking about what you infected. [00:13:49] Speaker 02: I'm just saying if you hadn't. [00:13:50] Speaker 02: If an employer does not raise an objection on those grounds, would you agree that that kind of objection is forfeitable? [00:13:56] Speaker 03: The case law says that the court could recognize extraordinary circumstances to recognize the objection even if it were to come late. [00:14:04] Speaker 02: We could. [00:14:05] Speaker 02: We could. [00:14:05] Speaker 02: But I get that. [00:14:06] Speaker 02: I think the courts would have some inherent authority to reach down even if they didn't have to. [00:14:11] Speaker 02: But I guess what I'm saying is the court would also have the authority to say that the objection has been waived. [00:14:16] Speaker 03: It would. [00:14:16] Speaker 02: And I hope you're not talking about our case because... I'm not talking about your case for the moment, but here's where I'm going with this question. [00:14:22] Speaker 02: If it's true that the objection can be waived, [00:14:25] Speaker 02: by failure to raise it, then why isn't it also true that the objection can be waived by action of the parties? [00:14:31] Speaker 02: In other words, they agree with another party. [00:14:33] Speaker 02: They just say, you know, we're going to decide that we're going to give the election to the regional director, and that operates as a waiver. [00:14:40] Speaker 02: You could call it a stoppable. [00:14:41] Speaker 02: You could call it whatever you want. [00:14:42] Speaker 02: But I guess if it's true that the party can waive it by failing to raise it, then why isn't it also true that the party can waive it by agreeing that it's going to go to the regional director? [00:14:52] Speaker 03: There's no opportunity to raise an objection on a Laurel Bay grounds at the time a petition is filed unless the employer does one of two things. [00:15:01] Speaker 03: It ignores the Labor Board and lets them run the election without them, which I guess was an option, or it runs into federal court, I suppose, seeking a temporary restraining order, declaratory judgment, that this court's decision in Laurel Bay should end any proceedings at all. [00:15:18] Speaker 05: That's strange. [00:15:19] Speaker 05: I guess maybe I'm wrong about calling it that. [00:15:28] Speaker 05: That's how the process always is. [00:15:39] Speaker 03: And we filed our objection immediately after the election. [00:15:42] Speaker 03: And I can't imagine that the Labor Board would really be suggesting employers ought to ignore the government and run into federal court and ask for TROs whenever they think the board is not acting properly. [00:15:53] Speaker 02: I'm not understanding that response because if a party can decide that, if a party can waive an objection by not raising it, why can't it enter into an agreement that just says, we're going to give this election to the regional director, this person we're calling the regional director. [00:16:08] Speaker 02: That's just how this election is going to be conducted. [00:16:12] Speaker 03: And when you sign a stipulated election agreement, you do agree to a date, a time, a place for an election, and an appropriate voting unit. [00:16:20] Speaker 03: There's no opportunity at that point to raise a fundamental objection on Laurel Bay no authority grant. [00:16:27] Speaker 02: So what if the agreement said, we're agreeing to allocate it to the regional director, regardless of whether the regional director is validly appointed? [00:16:34] Speaker 02: What if the party's actually agreed to that? [00:16:36] Speaker 02: It's expressed on the four corners of the agreement. [00:16:39] Speaker 03: I suppose that could be waived, but that's certainly not what it stipulates. [00:16:43] Speaker 02: But then we're talking about whether it in fact was. [00:16:46] Speaker 02: I guess the first question is whether it could be. [00:16:48] Speaker 02: And if it could be by clear language, then the question becomes whether this did the work. [00:16:55] Speaker 02: But one of the arguments you're raising in your brief is that this type of thing can never be waived, regardless of what the parties do. [00:17:02] Speaker 02: And I guess I'm wondering whether that's in fact true. [00:17:05] Speaker 03: Well, we don't believe it could be waived by entering into a stipulated election agreement. [00:17:09] Speaker 02: Even if it had the language that I just said? [00:17:12] Speaker 02: I thought you just said that it could be waived. [00:17:14] Speaker 05: Have you ever seen a stipulated election agreement that had more than the base language? [00:17:18] Speaker 03: No, and I think the steps are probably in the record. [00:17:20] Speaker 03: The steps haven't changed much in my 35 years of doing this. [00:17:23] Speaker 05: They all look pretty much alike. [00:17:25] Speaker 05: They don't have a lot of extraneous, they just have what you... But what if the parties did? [00:17:29] Speaker 02: The parties see that this kind of objection is coming along the pike because they see what's happening with the Identity Board. [00:17:33] Speaker 02: So they say, [00:17:34] Speaker 02: You know, we're going to enter into this stipulated agreement to have the election conducted by a regional director. [00:17:39] Speaker 02: And actually, we understand that there's a looming issue about whether the board has the requisite quorum to delegate stuff to the regional director and whether that delegation from 1961 continues to persist. [00:17:50] Speaker 02: But we're just deciding that we don't care about that. [00:17:53] Speaker 02: And so they put it in the, I don't see any, why can't they just handwrite it into the agreement? [00:17:57] Speaker 02: They could. [00:17:58] Speaker 02: And it sounds to me like if they did do that, then it would affect a waiver. [00:18:03] Speaker 03: Your Honor, that's an interesting hypothetical. [00:18:07] Speaker 03: I believe it probably could be waived if it said all those things. [00:18:10] Speaker 03: The agreements don't. [00:18:12] Speaker 03: You know, the process for a million years has been you go through the proceedings and then you file objections at the first opportunity if you believe the proceedings were incorrectly or wrongfully carried out. [00:18:24] Speaker 03: My time is up, your honor. [00:18:27] Speaker 02: Can we ask some more questions? [00:18:28] Speaker 02: You go ahead, yeah. [00:18:30] Speaker 02: So I have another set of questions along these lines, sorry. [00:18:32] Speaker 04: Your time may be up at our season. [00:18:35] Speaker 02: So there's another series of arguments in this case about Chevron deference. [00:18:41] Speaker 02: And at the time of Laurel Bay, as I understand it, the board did not raise a Chevron argument in Laurel Bay itself. [00:18:52] Speaker 02: I don't think Chevron ever came into the field of vision there because I don't believe the board claims Chevron deference at Laurel Bay. [00:18:59] Speaker 02: Now the board is claiming Chevron deference based on the language that's in the decision that's under review. [00:19:09] Speaker 02: So is this an issue that just is unamenable to Chevron treatment? [00:19:14] Speaker 02: Or do you just think that there's some problem with the instrument through which the board is claiming Chevron deference? [00:19:23] Speaker 03: I believe that the stipulated election agreement instrument does not address any of these issues, and no party would anticipate that the stipulated election agreement would have addressed an issue of authority of the regional director to conduct the election. [00:19:42] Speaker 02: Right, but later on in the ULP proceeding, the board issues a decision, and in the board's decision, it says that its interpretation of the statutory provisions is that this kind of delegation is okay. [00:19:54] Speaker 02: So, and the board is now, in its brief, claiming Chevron deference to that determination. [00:20:00] Speaker 03: I would simply say, Your Honor, the board has been claiming throughout the litigation of both the new process issue and the Noel Canning issue that they should be entitled to Chevron deference. [00:20:10] Speaker 04: Does the statutory text say anything about the duration of the delegation of the authority of the regional director? [00:20:16] Speaker 03: Did the statute address that at all? [00:20:18] Speaker 03: It did not. [00:20:18] Speaker 03: It was in 1961, as Your Honor knows. [00:20:21] Speaker 04: The delegation was in 61. [00:20:22] Speaker 04: Isn't that a classic example where the statute doesn't address it specifically, that we then defer to agency reasonable interpretation? [00:20:32] Speaker 03: Well, I would believe that when you have obviously gaps in the board, as there have been several times, that the notion that the delegation goes on continually, you know, even when there is no, you know, as one of the, the court pointed out, the chairman of the board, so to speak, to be running the corporation, that agency principals ought to say that it stops. [00:20:54] Speaker 02: But the question is, is it within the zone of ambiguity so that the agency can dispose of the issue in a Chevron treatment? [00:21:05] Speaker 02: Why can't this be something that the agency resolves? [00:21:09] Speaker 03: because I believe it's a fundamental authority issue and I do not believe it would fall within the Chevron. [00:21:15] Speaker 02: But I thought the City of Arlington versus FCC stands for the proposition that agencies get Chevron deference when they speak to the question of their own authority under a statute. [00:21:27] Speaker 02: So it seems to, unless there's some reason City of Arlington doesn't apply here, it seems to me that under City of Arlington, the Supreme Court's decision in City of Arlington versus FCC, that agencies are capable of getting Chevron deference when they speak to the scope of their own statutory authority. [00:21:42] Speaker 02: And so why, this issue, it seems like it could be amenable to Chevron treatment. [00:21:47] Speaker 02: And then the question becomes, if so, why don't they get Chevron deference for their determination in the adjudication under review? [00:21:58] Speaker 03: I don't know if I can answer your Honor's question other than to say what I've already said concerning our belief that this argument has been addressed previously, the Chevron Deference Argument, by... Given that the answer that the Supreme Court has already construed, the authority of the Board with reference to functioning without a quorum, or in this circuit, we in Laurel Bay have [00:22:37] Speaker 03: Well, this court and the Supreme Court has certainly been consistent with regard to that. [00:22:44] Speaker 02: But I guess the reason why that didn't seem to apply, and I'll just put the question to you, is that the Supreme Court's decision doesn't deal with the issue in this case. [00:22:53] Speaker 02: You argue that. [00:22:55] Speaker 02: it's a different rationale. [00:22:57] Speaker 02: And Laurel Bay, as I read Laurel Bay, Laurel Bay, it would be one thing if Laurel Bay said the statute's absolutely unambiguous on this issue. [00:23:05] Speaker 02: Because if Laurel Bay says the statute's absolutely unambiguous on the issue, then there's no room left for the agency to exercise discretion and construe it differently. [00:23:13] Speaker 02: Because under another decision, Brand X, that's tantamount to a step one Chevron treatment. [00:23:18] Speaker 02: So the agency can't resolve it. [00:23:21] Speaker 02: But Laurel Bay said the issue was close. [00:23:23] Speaker 02: I think that's the exact worst of the decision. [00:23:25] Speaker 02: And then Laura May went on to say that the OLC interpretation on which the board premised its conduct wasn't clearly incorrect or worse to that effect. [00:23:34] Speaker 02: So then it seems like it's still within the zone of something that the agency can resolve, because Laura May didn't say that it's unambiguously the case that [00:23:41] Speaker 03: Well, I would say that Laurel Bay and the Supreme Court have said that's a question for another day. [00:23:46] Speaker 03: And perhaps this is the day. [00:23:49] Speaker 03: Or this is the two weeks, because I know there was a case last week dealing with it, too. [00:23:52] Speaker 03: And you'll see how. [00:23:53] Speaker 04: Thank you. [00:23:54] Speaker 04: Thank you, Your Honor. [00:23:54] Speaker 04: Thank you very much. [00:23:55] Speaker 04: We'll give you back a couple minutes. [00:24:05] Speaker 01: May it please the Court, Kelly Isbell here on behalf of the National Labor Relations Board. [00:24:10] Speaker 01: On the issue of Chevron deference, since we're there, we believe the board is entitled to Chevron deference. [00:24:16] Speaker 01: We did not argue it in Laurel Bay because we relied on an OLC memo and we agreed when we asked for the OLC's opinion that we would comply with their opinion. [00:24:27] Speaker 01: We did not think we deserved Chevron deference because we were not interpreting the National Labor Relations Act at that time. [00:24:33] Speaker 02: But then you asked for Chevron deference in the Supreme Court, a new process. [00:24:38] Speaker 01: In new process? [00:24:40] Speaker 01: New process or no? [00:24:41] Speaker 01: In new process. [00:24:42] Speaker 01: In new process, did we? [00:24:43] Speaker 02: Yeah. [00:24:43] Speaker 02: And that would have been based on, I think, and that would have been based on the exact same thing that you just said wouldn't be entitled to Chevron deference, so. [00:24:49] Speaker 01: That is very interesting. [00:24:51] Speaker 01: But the reason we, I think, deserve Chevron deference here is because the delegations at issue are very different. [00:24:58] Speaker 01: The delegation in Lowell Bay in the process was about the board's delegation of its core function to decide and remedy unfair labor practices. [00:25:08] Speaker 01: The delegation that's at issue here is a delegation of representational authority to the regional directors based on Congress's decision in 1959 to amend the act to allow the delegation and their determination that regional directors had the expertise to decide representation. [00:25:26] Speaker 04: But is there language in Laurel Bay that so limits its holding? [00:25:29] Speaker 04: Doesn't it paint with a broader brush than that? [00:25:33] Speaker 01: It could perhaps be read that way, but I don't think the issue of the regional director's delegation was not an issue in Laurel Bay at all. [00:25:43] Speaker 04: Whenever Laurel Bay quotes the act... But there's nothing in Laurel Bay to say that it's limited to the ways that you're speaking of. [00:25:50] Speaker 04: There's no language in Laurel Bay that says it should be limited that way. [00:25:53] Speaker 04: Now one can argue from inference, but it's a pretty tough argument to make, isn't it, in the face of Laurel Bay, which binds us. [00:26:03] Speaker 01: accept that there's been an intervening decision by the Supreme Court, a new process? [00:26:07] Speaker 02: I thought you were going to say accept that there's been an intervening decision by the board, because why does Laurel Bay, unless Laurel Bay says the statute's unambiguous, why can't the agency construe the statute differently than Laurel Bay did? [00:26:17] Speaker 02: I thought that's the whole point of Brand X, that an agency can decide a statutory issue differently than a court did, as long as the court didn't say that the statute was unambiguous. [00:26:28] Speaker 01: the board can interpret the statute differently. [00:26:31] Speaker 01: I don't think that Laurel Bay decided this particular point, which is about the kind of delegation to the regional directors that is only Section 9. [00:26:42] Speaker 01: It does not involve what we call final orders, orders that can be enforced [00:26:46] Speaker 01: in a court. [00:26:47] Speaker 04: They're all preliminary orders issued by... But in Laurel Bay, there was a statutory decision, there was a holding based on the language of the statute, there was a holding based on agency law principles, and if the case had been decided on a statutory basis alone, your argument's a good one. [00:27:05] Speaker 04: But it wasn't. [00:27:06] Speaker 04: In Laurel Bay, we went on to look at fundamental agency principles. [00:27:10] Speaker 04: And that's what I'm asking you to address. [00:27:12] Speaker 04: The language of Laurel Bay doesn't appear to be as limited to the facts of Laurel Bay. [00:27:20] Speaker 04: So how do you get around that? [00:27:22] Speaker 01: I think the board would point you to new process, where the court recognized that the two delegations, they didn't decide, we do not say they decided the issue because they did not, but they did point out that the two kinds of delegations are very different. [00:27:38] Speaker 05: That brings me to the question then, does Laurel Bay remain binding presidential law in this circuit, given that the Supreme Court did not reverse it and did not decide that issue, [00:27:55] Speaker 05: circuit president. [00:27:57] Speaker 01: Laurel Bay is circuit president, but I would argue that Laurel Bay does not at all address the delegation to the regional directors, which is very different. [00:28:07] Speaker 01: And agency law, when you're in Laurel Bay... I'm not sure why it's different. [00:28:12] Speaker 05: I understand there's a distinct [00:28:18] Speaker 05: possesses no authority to act, and we've held it can't delegate authority when it possesses no authority itself, how does it make a difference that the delegate is the regional director as opposed to the committee of the board? [00:28:35] Speaker 01: The board made its delegation, of course, when it did have authority to act back in 1964. [00:28:43] Speaker 01: And the delegation in Laurel Bay was a process [00:28:47] Speaker 01: developed specifically to deal with an upcoming quorum problem. [00:28:53] Speaker 01: It was not the delegation that is part of Congress's intent in amending the Act in 1959 to ensure that representation cases get processed on time and quickly. [00:29:08] Speaker 01: And that's the purpose of the delegation in Section 3B to the regional directors. [00:29:13] Speaker 01: The delegation at issue in Laurel Bay was a delegation to ensure that the board could [00:29:18] Speaker 01: act when it didn't have enough members. [00:29:21] Speaker 01: And the Supreme Court said we couldn't do that. [00:29:24] Speaker 01: There's no indication, a new process, that the delegation to the, there's the opposite indication anymore. [00:29:29] Speaker 04: But what are we supposed to do with the language of Laurel Bay that isn't so confined to the facts of the case or the purposes of the different delegations? [00:29:39] Speaker 04: The language of Laurel Bay sure sounds, it's almost, it's talking about sort of a metaphysical point, right? [00:29:44] Speaker 04: And that is when there is no quorum of a board, [00:29:49] Speaker 04: Delegated authority evaporates. [00:29:52] Speaker 04: And all you're offering me thus far is, well, the facts were different. [00:29:57] Speaker 04: And to be sure they were different, but facts are always different. [00:30:02] Speaker 04: How do you deal with the metaphysical language of Laurel Bay? [00:30:05] Speaker 01: The common law discussion in Laurel Bay is incidental to the court's decision. [00:30:10] Speaker 04: It's not dicta. [00:30:11] Speaker 04: It was part of the holding. [00:30:12] Speaker 04: Are you arguing it's dicta? [00:30:13] Speaker 01: No, sir, I'm not. [00:30:14] Speaker 04: What do you mean by it's incidental? [00:30:16] Speaker 01: I don't think you need to rely on the discussion of the common law for the holding in Laurel Bay. [00:30:25] Speaker 01: The Supreme Court did not in due process say that the [00:30:31] Speaker 01: All delegations end when the board loses a court. [00:30:36] Speaker 04: But it sure sounds like we said that in Laurel Bay. [00:30:39] Speaker 04: Forget new process. [00:30:40] Speaker 04: Just for sake of argument. [00:30:43] Speaker 04: I'm not persuaded by your new process argument. [00:30:45] Speaker 04: I'm looking at Laurel Bay and I'm trying to decide what to do with the broad language of Laurel Bay. [00:30:54] Speaker 01: I think that the discussion of the common law in Laurel Bay is [00:31:00] Speaker 01: I am sorry, Judge Sintel. [00:31:02] Speaker 01: Incorrect. [00:31:03] Speaker 05: You're entitled to say that. [00:31:07] Speaker 05: But what you're not entitled to say is that if it's circuit law, we can abandon it. [00:31:11] Speaker 05: The panel can't abandon circuit law. [00:31:14] Speaker 01: I agree with you. [00:31:15] Speaker 01: I agree with you. [00:31:15] Speaker 05: We can say it, but it wouldn't have any effect. [00:31:18] Speaker 02: Can I bring you back to Chevron, though, on this question? [00:31:20] Speaker 02: Because let's suppose that Laurel Bay does directly address the question here. [00:31:27] Speaker 02: Let's just suppose it does. [00:31:28] Speaker 02: I know you contest that, but let's just engage in the hypothetical that it does. [00:31:33] Speaker 02: If Laurel Bay engages on the direct question here, but then says, you know, I think it's really close, [00:31:38] Speaker 02: I'm not exactly sure which way the statute's better read, but my best reading of it is that it comes out against the board. [00:31:46] Speaker 02: And then the board goes through notice and comment rulemaking and issues a rule that says, we read the statute to affect the opposite result. [00:31:57] Speaker 02: Can the agency not do that? [00:31:59] Speaker 01: I think the agency can do that. [00:32:01] Speaker 01: I'm not an administrative law expert, but I believe it can do that. [00:32:07] Speaker 02: Well, you're claiming Chevron in your brief, so you're at least an expert to that, I assume. [00:32:13] Speaker 01: Yes, we could make a rule. [00:32:15] Speaker 02: And then that would get Chevron treatment, deference, even though the court construed the statute differently. [00:32:22] Speaker 02: Is that your argument? [00:32:24] Speaker 02: So then, aren't you making the same argument now vis-a-vis the adjudication? [00:32:28] Speaker 02: That yeah, even if Laurel Bay did address the issue in this case, it didn't say that the statute was unambiguous. [00:32:36] Speaker 02: And unless it said the statute's unambiguous, the agency still has room to construe the statute. [00:32:41] Speaker 02: even if it disagrees with the interpretation that the court had in Morrill Bay. [00:32:45] Speaker 02: It wouldn't matter if the Supreme Court, as I understand it, it wouldn't matter if the Supreme Court read the statute in a particular way, as long as it didn't think the statute was unambiguous. [00:32:53] Speaker 02: And the agency can come along and say, we've looked at the matter and we think the statute is best read differently for whatever discretionary reasons the agency has to do that. [00:33:02] Speaker 02: Am I misunderstanding your argument or is that? [00:33:04] Speaker 01: I don't think so, you're not. [00:33:08] Speaker 01: In the... [00:33:09] Speaker 01: In the case of the regional director's decisions, as I've noted before, we do see that as very different than the delegation of the board's authority to a panel of three, then two, of the board's ability authority to issue decisions under Section 10 that are legally binding on parties and can be enforced in a court. [00:33:32] Speaker 01: The Regional Director's decisions are representation decisions under Section 9. [00:33:37] Speaker 01: They cannot be enforced in court. [00:33:39] Speaker 01: They must be reviewed by the Board before they become an enforceable or legally binding order. [00:33:45] Speaker 01: The Board, in its discretion, reviewing the Act, does believe that to be a very different item. [00:34:05] Speaker 05: why does it matter whether the authority being delegated is to make a final decision or a reviewable decision? [00:34:13] Speaker 01: I think it does make a difference. [00:34:15] Speaker 05: Well, you started complaining that you think it does. [00:34:17] Speaker 05: I want to know what that difference is. [00:34:19] Speaker 01: Well, what the regional directors do is investigate and tee up cases for the board. [00:34:25] Speaker 01: So when there is an election petition, it is Congress's express intent that election petitions be held quickly. [00:34:34] Speaker 05: Yeah, and that stipulation that we were talking about before, that's a board form, isn't it? [00:34:39] Speaker 01: Well, Your Honor, it's a board form. [00:34:41] Speaker 01: But in the Noel Canning era, companies did make challenges to regional director authority that was added to stipulations and approved by... They could have made, under the board's procedures, [00:34:56] Speaker 05: I'm taking you off your point. [00:34:57] Speaker 05: Go back to your point. [00:35:00] Speaker 01: What was my point? [00:35:02] Speaker 01: No. [00:35:04] Speaker 01: The regional directors only tee up questions for the board to decide. [00:35:10] Speaker 01: They don't get to decide these issues themselves. [00:35:12] Speaker 05: Why does that matter in terms of whether the board thinks they'll get the authority? [00:35:17] Speaker 05: I understand the distinction. [00:35:19] Speaker 05: I'm not sure I understand why it makes a difference. [00:35:22] Speaker 05: And I've not yet heard you tell me anything that to my mind at least answers that question. [00:35:30] Speaker 01: The issue in Laurel Bay was the board's actions, the board acting. [00:35:34] Speaker 01: The regional director is getting things ready for the board to act. [00:35:40] Speaker 01: Nothing can become final until the board acts. [00:35:43] Speaker 01: As you know, many of our cases actually settle out. [00:35:48] Speaker 01: Elections happen or unfair labor practices happen, the regional offices handle them and they settle. [00:35:54] Speaker 01: All that happens without the board's involvement. [00:35:58] Speaker 01: And under the purposes of the act, reducing labor strife, making sure that elections, unions lose, unions win, all that, the votes can be counted by regional directors without going to the board. [00:36:10] Speaker 01: When there are problems, however, that goes to the board, and if the board has no quorum, [00:36:14] Speaker 01: The board can act and those issues wait. [00:36:17] Speaker 01: But the investigation or the taking of evidence, that can happen without the board having to get involved. [00:36:24] Speaker 01: And that's why I think the delegations are very different. [00:36:26] Speaker 01: It does not, the Congress recognized in 59, the board doesn't need to be involved in most of these representation petitions. [00:36:33] Speaker 01: Probably more than 90% of them happen, go through the process without the board's involvement. [00:36:37] Speaker 04: I'd like to go back to the deference issue, the Chevron deference issue. [00:36:43] Speaker 04: Now, the view that the board is taking here on the delegated authority of the regional director, was that a view that emerged from the sort of formal process we typically require of Chevron deference? [00:36:59] Speaker 04: I thought it was announced in an opinion by the board. [00:37:05] Speaker 04: I mean, there's no notice and comment rulemaking or some form of formal process. [00:37:08] Speaker 01: There is no notice and comment. [00:37:10] Speaker 04: Don't we just, don't we typically reserve Chevron DeFrance for opinions that emerge from a formal, more formal process than was had here? [00:37:19] Speaker 01: In terms of rulemaking, I don't think so. [00:37:23] Speaker 01: I mean, I think chevron deference can be applied to the board's interpretation of its statute. [00:37:27] Speaker 04: But I may be wrong here. [00:37:29] Speaker 04: I thought this view came out of an opinion of the board, that it wasn't part of a formal rulemaking process. [00:37:36] Speaker 01: Not part of a rulemaking process. [00:37:38] Speaker 02: Well, the board doesn't do rulemaking, but it came out of adjudication, right? [00:37:41] Speaker 01: It came out of adjudication. [00:37:42] Speaker 01: We do do rulemaking, but rarely. [00:37:44] Speaker 05: You didn't do rulemaking for many, many years. [00:37:47] Speaker 05: I think probably we ought to be glad you have gone. [00:37:52] Speaker 05: Let me go back just a moment to the conduct of the election. [00:37:55] Speaker 05: Doesn't the statute say the board will conduct elections? [00:37:59] Speaker 05: So that anything the regional director does is by delegation. [00:38:04] Speaker 01: It is by delegation of the board. [00:38:07] Speaker 05: The delegation happened in 61 and has never been revoked. [00:38:17] Speaker 01: It has never been taken back. [00:38:20] Speaker 02: Does the board not ask for Chevron deference for its adjudications? [00:38:27] Speaker 01: Well, because of section 10e of the Act, it says that questions of fact were resolved by substantial evidence. [00:38:35] Speaker 01: I mean, the language of the APA is in the Act, so we usually, I mean, that's our standard review. [00:38:39] Speaker 02: On Chevron deference, as I understand it, Chevron deference extends to adjudications, I believe. [00:38:45] Speaker 02: I think the Supreme Court said that in Aguirre Aguirre. [00:38:48] Speaker 01: Yes. [00:38:49] Speaker 02: And doesn't the board ask for Chevron Deference, even though it's not engaged in formal rulemaking, it asks for Chevron Deference when it announces some interpretation in an adjudication? [00:38:58] Speaker 01: When we're interpreting our statute. [00:39:01] Speaker 02: Did you think that's what you were doing here? [00:39:02] Speaker 02: You're asking for Chevron Deference. [00:39:04] Speaker 01: We are asking for Chevron Deference because we are interpreting Section 3B of the Act. [00:39:10] Speaker 02: Even though you're doing it in an adjudication, you're still asking for Chevron Deference? [00:39:13] Speaker 01: Yes. [00:39:15] Speaker 02: And do you know of a reason that you can't get Chevron deference because your interpretation wasn't announced in adjudication rather than in rulemaking? [00:39:22] Speaker 01: I know of no reason why we could not get Chevron deference. [00:39:25] Speaker 04: Could you address the subpoena issue, please? [00:39:28] Speaker 04: I know you're out of time, but we're not. [00:39:32] Speaker 01: Yes, Your Honor. [00:39:33] Speaker 01: In the subpoena, all they asked for was the number of phone records. [00:39:39] Speaker 01: How many times did these two people talk? [00:39:42] Speaker 01: It was already in evidence. [00:39:45] Speaker 04: What was already in evidence? [00:39:46] Speaker 01: That they had very frequent contact. [00:39:51] Speaker 01: But the issue really is, I don't understand what the information would get them. [00:39:57] Speaker 01: I mean, after it's all over, the hearing officer found that Supervisor Mackin engaged in coercive pro-union conduct. [00:40:06] Speaker 01: The board applies harborside. [00:40:08] Speaker 01: If the board had also found her to be an agent, the board would apply harborside. [00:40:13] Speaker 01: So I don't actually understand [00:40:16] Speaker 01: what the subpoena records would get them. [00:40:18] Speaker 02: So I didn't see that argument in your brief and I think that's along the lines of [00:40:23] Speaker 02: the questions we were presenting to those in council about whether there's a different prejudice inquiry. [00:40:28] Speaker 02: And is there a different prejudice inquiry, or is it the same prejudice inquiry? [00:40:31] Speaker 01: I don't think so. [00:40:32] Speaker 01: I mean, the issue were unions can pull employees, but they can't pull coercively. [00:40:40] Speaker 01: But here we've got a supervisor, the supervisory contact, and the board applies harborside. [00:40:46] Speaker 01: in that case. [00:40:47] Speaker 01: And it's also a stringent standard. [00:40:48] Speaker 01: It's not a lower standard. [00:40:50] Speaker 01: And there's no, we were talking about the bar to reach. [00:40:53] Speaker 01: The harbor side bar is also, it's the same. [00:40:57] Speaker 01: In Miller Refrigerated Services, there was a supervisory, a supervisor acting as a union agent in the board applied harbor side. [00:41:05] Speaker 01: That's the standard the board applies. [00:41:11] Speaker 01: Thank you. [00:41:14] Speaker 04: We'll give you back two minutes for rebuttal only. [00:41:24] Speaker 03: Just on the last point Council raised, if a supervisor is polling coercively and she's acting as an agent of the union, then the agent is polling coercively. [00:41:35] Speaker 03: And that is grounds for setting aside an election. [00:41:40] Speaker 03: We have a real concern with the NLRB and Harbor side there tipping their hat to the notion that pro-union supervisory conduct will be evaluated under the same tough standard as anti-union supervisory conduct, but that clearly is not what the Board does. [00:41:57] Speaker 03: This case, and the Court may have seen many cases where there's questions about supervisory status of the charge nurse, [00:42:04] Speaker 03: There's questions about whether she asked someone to sign a card. [00:42:07] Speaker 03: This has the strongest record of undisputed supervisory status and repeated efforts to get employees to sign cards. [00:42:15] Speaker 05: Does the subpoena question go to the coercive question? [00:42:21] Speaker 03: The subpoena question goes to the regularity of contacts between Mackinac and Welsh. [00:42:34] Speaker 05: officer every day. [00:42:36] Speaker 03: It gives us the opportunity to show that her action should be imputed to the Union as an agent. [00:42:41] Speaker 05: Well, if it's not coercive, why does it matter? [00:42:45] Speaker 03: The hearing officer found it to be coercive. [00:42:48] Speaker 03: She just found mitigating circumstances. [00:42:50] Speaker 03: Right. [00:42:51] Speaker 05: The only thing about the coercive finding [00:42:58] Speaker 03: We at least have the argument, Your Honor, that the union is engaging in the conduct as opposed to a third party engaging in the conduct, which is the distinction that... Can I ask this question on that just really quickly? [00:43:10] Speaker 02: Why does it matter if the employees don't know that the union is engaging in the conduct? [00:43:15] Speaker 03: She, Ms. [00:43:17] Speaker 03: Mackin, told employees she was regularly meeting with the union agent and she's telling them who's voting yes and who's voting no and what the issues are, and he's giving her information to carry back. [00:43:27] Speaker 02: Right, but I guess my question is, the frequency of contacts between Mackin and Welsh, they don't shed light on the extent to which the employees would have assumed that Mackin is acting close with the union's authority, unless the employees know how often they're talking to each other. [00:43:44] Speaker 03: And the only evidence the employees would have would be the testimony of the employees that's on the record as to the frequency. [00:43:50] Speaker 02: So I don't understand how the subpoena information is adding to the argument, I guess. [00:43:55] Speaker 03: I believe the cases Ozark and Indiana Hospital say that it is prejudicial error, just de facto, for a ward hearing officer to deny a subpoena for what would be relevant evidence. [00:44:14] Speaker 03: Maybe it turns out not to be. [00:44:16] Speaker 05: Yeah, that seems to be where we are, whether the evidence is genuinely relevant in the sense of [00:44:21] Speaker 05: materially affecting the likelihood of a fact to be true. [00:44:28] Speaker 05: And as you referred to the hearing of the fund mitigation, what about the subpoenaed evidence could possibly change the mitigation factor? [00:44:36] Speaker 03: It does not change the mitigation, Your Honor. [00:44:39] Speaker 05: The mitigation goes to the coercion factor, right? [00:44:43] Speaker 05: Correct. [00:44:44] Speaker 05: If the mitigation factor is still the same, and the coercion factor does not appear to be changing a great deal, [00:44:54] Speaker 05: Why isn't it non-predicital, assuming an error, which it may be? [00:44:58] Speaker 05: Why isn't it non-predicital? [00:45:00] Speaker 03: Well, because I believe the case is distinguished between Mackett as a third party or an employee engaging in bad acts and a party, the union, engaging in bad acts. [00:45:10] Speaker 03: Okay. [00:45:10] Speaker 04: We're not requiring... And your point is you didn't get a chance to show that. [00:45:13] Speaker 03: We did not get a chance to show that all those acts should be attributed to a party, the union, and we believe the Ozark case and the Indiana hospital case, which is cited, I believe, in Ozark, clearly state that we should have had that opportunity. [00:45:26] Speaker 04: But would it change the outcome? [00:45:29] Speaker 04: If the hearing officer already looked at this and said, regardless, we saw what Mackin did and it did not affect the outcome. [00:45:39] Speaker 04: What difference does it make if we find out that Mackin was being paid by the union and on their payroll, hypothetical? [00:45:46] Speaker 04: What difference would that make? [00:45:48] Speaker 03: the hearing officer seemed to think it would make a difference. [00:45:50] Speaker 03: She said she paints us as not having produced a shred of evidence of agency status between Mackin and Welsh when she denied us the opportunity to get phone records that would have shown regularity of contact and frequency and duration of contact, which are clearly factors that are considered relevant under Ozark and Indiana Hospital to proving agency status. [00:46:16] Speaker 04: Thank you. [00:46:16] Speaker 04: Thank you very much. [00:46:16] Speaker 04: Case is submitted.