A recent decision by the Ninth Circuit Court of Appeals in NLRB v. Fresh and Easy Neighborhood Market, Inc., Case No. 12-55828 (Nov. 13, 2015), emphasizes the importance of exhausting administrative remedies before the NLRB when challenging subpoenas, even when the subpoena was not properly served. In Fresh and Easy, an unfair labor practice case, the union served a subpoena on the employer but did not serve a copy on the employer’s attorney as required by the NLRB’s Rules and Regulations. The employer, however, did email a copy of the subpoena to its attorney, but the attorney overlooked the email and never filed a petition to revoke. Although the employer did raise an issue with the union’s subpoena at the hearing, the administrative law judge declined to to entertain the employer’s arguments in the absence of a petition to revoke. When the employer refused to comply with the improperly served subpoena, the NLRB and the union filed an action in federal court to enforce the subpoena.
While the Ninth Circuit agreed that the subpoena was not properly served, it agreed with the district court’s order requiring compliance with the subpoena:
Although the Union was obliged to serve the subpoena on Fresh & Easy’s counsel of record, we agree with the Board’s conclusion that “failure to serve counsel does not constitute grounds for revoking a subpoena, absent a showing of prejudice.” … In its proceedings before the ALJ and before the Board on appeal, Fresh & Easy “failed to establish or even allege that it suffered any prejudice from the [union’s] failure to serve the subpoena on the [employer’s] counsel.” … Without prejudice, the defective service did not invalidate the subpoena ab initio, and Fresh & Easy was required to bring any challenge to the subpoena through a petition to revoke….
In explaining its ruling, the Ninth Circuit stated that it could not “create a rule that would allow a lawyer with actual notice of a subpoena to take no action, in hope that the charging party will not seek enforcement, and make objections only if enforcement proceedings ensue.”