The United States Court of Appeals for the District of Columbia Circuit issued a scathing rebuke to the National Labor Relations Board for “abusive tactics and extremism” and ordered the Board to pay an employer nearly $18,000 in legal fees incurred due to the Board’s “bad faith litigation” in Heartland Plymouth Court MI, LLC v. NLRB, No. 15-1034, decided September 30, 2016.

The Board sued employer Heartland on the theory that the employer unlawfully refused to bargain on a matter allegedly within the scope of a collective bargaining agreement without a “clear and unmistakable” waiver.  D.C. Circuit precedent has consistently rejected that theory, regarding the contents of a CBA to be a question of “contract coverage.”  Heartland appealed the Board’s adverse order to the D.C. Circuit in 2013. That decision was held in abeyance pending the Supreme Court’s ruling in NLRB v Noel Canning. When the Supreme Court found the recess appointments of two Board members unconstitutional, the Board set aside its order against Heartland. A new Board panel readopted its prior order.  Heartland appealed the order again.

Rather than attempting to transfer the appeal to the Sixth Circuit — which embraces the Board’s “clear and unmistakable” waiver policy and covers Michigan where the conduct underlying the dispute occurred — the Board doubled down on its challenge to the D.C. Circuit’s precedent and cross-petitioned for enforcement in that Court.  “In lieu of its legitimate options,” the D.C. Circuit wrote, “the Board chose obstinacy.”

Worse, in a responsive brief filed late in the litigation, the Board for the first time asserted a policy of “nonacquiescence,” claiming a prerogative to “stake out its own position contrary” to any circuit, or all circuits.  The D.C. Circuit was unimpressed, characterizing this as the Board’s “general policy of flouting any circuit’s NLRA interpretation with which the Board disagrees.”  Noting that “nonacquiescence is justifiable only as a means to judicial finality, not agency aggrandizement,” the Court observed that the Board not only declined to transfer the case to the friendly Sixth Circuit, but also had steadfastly refused to seek certiorari review in the Supreme Court.  This tactic, the Court observed, amounted to “an evasion of finality in the name of hegemony.”

In principle, nonacquiescence allows the Board to oppose adverse circuit court decisions and bring national labor law questions to the Supreme Court for resolution, thus achieving a uniform and orderly administration of the NLRA.  But proper nonacquiescence is justifiable only as a means to judicial finality, where the agency preserves its arguments against adverse precedent to preserve them for Supreme Court review.  Far from pursuing this goal, the D.C. Circuit observed, the Board’s history reveals “its primary goal is . . . to see its interpretation of the federal labor laws prevail in as many cases as possible, rather than to change contrary law in particular circuits or . . . serve as a percolator for the Supreme Court.”  Thus, the Board’s nonacquiescence argument in this case amounted to an attempt to “make legal contentions not warranted by existing law and supported by no argument for modifying, reversing, or establishing new law.”  This position, the Court declared, is “intolerable.” Further, the Board’s choice to “pretend” that its Order did not conflict with the Court’s precedent amounted to a “lack of candor” and was “nonsensical.”

In the most forceful passage of its decision, the Court excoriated the Board for a “lack of candor,” and for this “obstinacy” that “forced Heartland to waste time and resources fighting for a freedom the Board knew our precedent would provide.”  The Board’s conduct, the D.C. Circuit observed, was clearly intended to chill opposition to the Board:

It is clear enough that the Board’s conduct was intended to send a chilling message to Heartland, as well as others caught in the Board’s crosshairs.

Thus, it held an award of fees to Heartland was justified, and left no doubt as to its view of the Board’s conduct:

We recognize the Board’s unimpeded access to the public fisc means these modest fees can be dismissed as chump change. But money does not explain the Board’s bad faith; “the pleasure of being above the rest” does.  See C.S. Lewis, MERE CHRISTIANITY 122 (Harper Collins 2001). Let the word go forth: for however much the judiciary has emboldened the administrative state, we “say what the law is.” Marbury, 5 U.S. (1 Cranch) at 177. In other words, administrative hubris does not get the last word under our Constitution. And citizens can count on it.

This is not the first time a Circuit Court has awarded attorneys’ fees against the Board for asserting “nonacquiescence” on an issue the court had already decided — but Heartland highlights the Board’s increasingly aggressive agenda to trample legitimate opposition from employers.  And in an era of increasing regulation by administration, reiterates firm judicial limitations thereon.  Time will tell whether the Board heeds the clear warning of the Court.