“‘You never know’ is no substitute for substantial evidence”: D.C. Circuit Vacates NLRB’s Finding that Union’s Overtures Broke Bargaining Impasse

Today the D.C. Circuit vacated the National Labor Relations Board’s decision that an employer unlawfully refused to bargain with a union before its employees decertified the union’s representation. Noting the court’s obligation to “examine carefully both the Board’s findings and its reasoning,” Chief Judge Sentelle concluded that “the record evidence not only does not support the Board’s finding, but uniformly supports [the employer’s] position” that the parties were at an impasse. Therefore, the employer was under no obligation to continue bargaining with the union.

The court held that a union negotiator’s vague promise to continue discussing the non-negotiable issue with his principal is, without a “specific proposal,” just a “bare assertion of flexibility” that is “entirely inadequate to break the impasse.” The court also held that “the Board cannot rely on a party’s post-impasse conduct to find no impasse.”

The court rejected the Board’s “rank speculation” that further bargaining might have yielded concessions despite both parties’ acknowledgement that they were at an impasse on the key issue:  ” ‘You never know’ is no substitute for substantial evidence.”

Citing Chenery, the court declined to reach the Board’s post hoc rationalization for its decision — the argument that “impasse cannot be found if the parties have not negotiated over economic issues.”  But the court expressed “serious[] doubt” about its merit.

Chief Judge Sentelle also noted in dicta that the Board’s remedy — imposing a bargaining order on the employer — was “an extraordinary remedy that may not be imposed in run-of-the-mill cases.”

From the opinion:

Impasse on a single critical issue can create an impasse on the entire agreement. A party asserting impasse based on a single issue must show that: first, a good-faith bargaining impasse actually existed; second, the single issue involved was critical; and third, the impasse on this critical issue led to a breakdown in the overall negotiations.

*  *  *

In this case, the evidence overwhelmingly points to the existence of an impasse on March 31. . . . At no point during the ten month negotiation did either party propose a compromise on union security or arbitration that was acceptable to the other party.

*  *  *

NLRB’s position is undermined by the inconvenient fact that the Union here not only did not say that the parties “weren’t at impasse” on March 31, its representative said — out-loud and in-person — that they were “at impasse.” . . . Thus, the Board’s finding . . . that no good faith impasse existed, is not supported by substantial evidence in the record, for the evidence “practically shouted impasse” on March 31.

Erie Brush & Manufacturing Corp. v. NLRB, No. 11-1337 (Nov. 27, 2012) (Sentelle, C.J., joined by Henderson & Griffith, JJ.)

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