United States Court of Appeals, District of Columbia Circuit
Camelot Terrace, Inc. and Galesburg Terrace, Inc., Petitioners
National Labor Relations Board, Respondent
February 9, 2016
Petition for Review and Cross-Application for Enforcement of
an Order of the National Labor Relations Board
Christopher Landau argued the cause for the petitioners. John
S. Irving, Jr. was with him on brief.
Barbara A. Sheehy, Attorney, National Labor Relations Board,
argued the cause for the respondent. Richard F. Griffin, Jr.,
General Counsel, John H. Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General Counsel, and Usha
Dheehan, Supervisory Attorney, were with her on brief.
Margaret Angelucci was on brief for the intervenor, Service
Employees International Union, Healthcare Illinois Indiana
(previously SEIU Local 4) in support of the respondent.
Before: Henderson and Rogers, Circuit Judges, and Williams,
Senior Circuit Judge.
LeCraft Henderson, Circuit Judge:
Terrace, Inc. (Camelot) and Galesburg Terrace, Inc.
(Galesburg) (collectively, Companies) petition for review of
a decision and order of the National Labor Relations Board
(Board) determining that the Companies violated the National
Labor Relations Act (Act), 29 U.S.C. §§ 151 et
seq., by engaging in bad-faith bargaining with the
Service Employees International Union (Union). The Companies
do not contest the Board's conclusion that they violated
the Act; rather, they challenge two of the remedies the Board
imposed: (1) reimbursement of litigation costs incurred by
both the Board and the Union during Board proceedings and (2)
reimbursement of "all" of the negotiation expenses
the Union incurred during its bargaining sessions with the
Companies. See Camelot Terrace, 357 N.L.R.B. No.
161, 2011 WL 7121892, at *13, *15 (Dec. 30, 2011). The
Companies assert that the Board is without authority to
impose either remedy. Alternatively, they argue that the
amount of the bargaining-costs remedy-"all" of the
Union's bargaining expenses-exceeds the amount necessary
to remedy the harm caused by the Companies' conduct and
is improperly punitive.
agree that the Board lacks authority to require the
reimbursement of litigation costs incurred during Board
proceedings, see HTH Corp. v. NLRB, No. 14-1222,
2016 WL 2941936, at *9-11 (D.C. Cir. May 20, 2016), but hold
that the Board may require an employer to reimburse a
union's bargaining expenses pursuant to its remedial
authority under section 10(c) of the Act. We also conclude
that we lack jurisdiction to entertain the Companies'
alternative challenge to the amount of the bargaining-costs
award because they failed to raise it before the Board.
Accordingly, we grant the Companies' joint petition in
part and grant the Board's cross-application for
enforcement in part.
and Galesburg both operate nursing homes in Illinois. In
2007, the Union was certified as the exclusive representative
of employees at both facilities. Over the course of 2008 and
2009, the Companies-primarily through the conduct of their
common owner, Michael Lerner-repeatedly bargained with the
Union in bad faith. The Board's
Office of the General Counsel (OGC) got involved, leading to
a settlement agreement detailing specific bargaining
requirements the Companies were to satisfy. When the
Companies failed to abide by the terms of the agreement and
continued to bargain in bad faith, the OGC issued a complaint
charging the Companies with numerous violations of the Act.
After holding a hearing and concluding that the Companies had
indeed violated the Act, an Administrative Law Judge (ALJ)
ordered, inter alia, that the Companies
"[r]eimburse the [Board] . . . and the Union for all
costs and expenses incurred in the investigation, preparation
and conduct of [the case] before the Board and the
courts." Camelot Terrace, 357 N.L.R.B. No. 161,
2011 WL 7121892, at *125. The ALJ also ordered the Companies
to "[r]eimburse the Union for all costs and expenses
incurred in collective-bargaining negotiations from January
2008 to the [parties'] last bargaining session."
Companies filed exceptions with the Board, challenging the
imposition of these two remedies. In a two-to-one decision,
the Board held that it was authorized to impose both remedies
and did so with one modification. The bargaining-costs remedy, the Board
concluded, was a necessary exercise of its general remedial
power: "[o]nly by ordering the reimbursement of the
Union's negotiating expenses [could] the Board reasonably
restore the Union's previous financial strength and
consequent ability to carry out effectively its
responsibilities as the employees' representative."
Id. at *6. As for the litigation-costs remedy, the
Board concluded that it "has inherent authority to
control its own proceedings, including the authority to award
litigation expenses through the application of the
'bad-faith' exception to the American Rule."
Id. The Board declared that its "inherent
authority" was sufficient to support the remedy and
therefore found it "unnecessary to pass on the
[Companies'] argument that the Board's remedial
authority under [section] 10(c) of the Act does not encompass
the award of litigation expenses." Id. at *6
n.10. Member Hayes dissented from the Board's decision on
the litigation-costs remedy, explaining that the Board is
"not free to invoke principles of 'inherent
authority' in order to unilaterally vest the Board with
powers beyond those contemplated by the legislature."
Id. at *17 (Member Hayes, dissenting). The Companies
petitioned for review, challenging the Board's authority
to impose the two remedies. The Board cross-applied for
outset, because "the Board is entitled to enforcement of
all unchallenged portions of its order, " we summarily
enforce all such provisions of the Board's decision.
United Food & Commercial Workers Union Local 204 v.
NLRB, 447 F.3d 821, 824 (D.C. Cir. 2006) (per curiam).
As for the two reimbursement orders the Companies do
challenge, although we generally afford the Board deference
in reviewing its chosen remedies, see Great Lakes Chem.
Corp. v. NLRB, 967 F.2d 624, 629 (D.C. Cir. 1992)
("The Board has broad authority in devising remedies to
effectuate the policies of the Act, subject only to limited
judicial review." (citation and internal quotation marks
omitted)), deference is limited if a party challenges the
Board's authority to order a particular remedy under
any circumstance. In that case, to the extent the
Board claims its remedial authority arises from the Act, we
defer to the Board "only so far as '[its]
interpretation is rational and consistent with the
statute.' " Unbelievable, Inc. v. NLRB, 118
F.3d 795, 804 (D.C. Cir. 1997) (quoting NLRB v. United
Food & Commercial Workers, 484 U.S. 112, 123 (1987)). To
the extent the Board relies on extra-statutory authority, we
afford no deference at all. See HTH Corp., 2016 WL
2941936, at *9-11 (evaluating Board's "inherent
authority" to award litigation costs without deference);