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Beneli v. The National Labor Relations Board

United States Court of Appeals, Ninth Circuit

October 17, 2017

Coletta Kim Beneli, Petitioner,
v.
The National Labor Relations Board, Respondent, and Babcock & Wilcox Construction Co., Inc., Respondent-Intervenor.

          Argued and Submitted May 15, 2017 San Francisco, California

         On Petition for Review of an Order of the National Labor Relations Board No. 28-CA-022625

          Myron L. Scott (argued), Law Office of Myron Scott, Tempe, Arizona, for Petitioner.

          Ruth E. Burdick (argued), Deputy Assistant General Counsel; Heather S. Beard, Attorney; Robert J. Engleheart, Supervisory Attorney; Linda Dreeben, Deputy Associate General Counsel; John H. Ferguson, Associate General Counsel; Jennifer Abruzzo, Deputy General Counsel; Richard F. Griffin Jr., General Counsel; National Labor Relations Board, Washington, D.C.; for Respondent.

          Julie A. Trout (argued), Akron, Ohio, for Respondent-Intervenor.

          Michael Goldberg (argued), Cherry Hill, New Jersey, for Amicus Curiae Association for Union Democracy.

          Before: William A. Fletcher and Richard C. Tallman, Circuit Judges, and Paul C. Huck, [*] District Judge.

         SUMMARY[**]

         National Labor Relations Board

         The panel denied an employee's petition for review, held that the National Labor Relations Board ("NLRB") properly applied a new standard for deferring to arbitral decisions only prospectively, and upheld the NLRB's substantive decision to affirm an arbitral decision - denying the employee's unfair labor practice complaint - under the previous more deferential standard.

         The panel applied the five factors articulated in Montgomery Ward & Co. v. FTC, 691 F.2d 1322, 1333 (9th Cir. 1982), to review the NLRB's decision to apply only prospectively the new standard for arbitral deferral. First, the panel held that this case was a case of "first impression, " and the factor weighed in favor of retroactive application of the new standard. Second, the panel held that the new standard represented an abrupt departure from well-established practice, and this factor strongly favored prospective application. Third, the panel held that the employer relied on the old standard that was in place for nearly 60 years, and this reliance and other equitable considerations supported only the prospective application of the new standard. Fourth, the panel held that retroactive application would severely burden the employer, and this favored prospective application. Fifth, the panel held that the balance of statutory interests favored prospective application. The panel concluded that the NLRB did not abuse its discretion when it deferred to the arbitral decision under the old more deferential standard set forth in Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1995), and Olin Corp., 268 N.L.R.B. 573 (1984).

         Judge Fletcher concurred in the result. Judge Fletcher dissented from the majority's use of the factors articulated in Montgomery Ward & Co. to review the NLRB's decision to apply only prospectively the new deference rule. Instead, Judge Fletcher would address the prospective-only application of the new rule under the NLRB v. Wyman-Gordon, 394 U.S. 759 (1969), framework, which addresses concerns of informed and deliberate agency rulemaking.

          OPINION

          HUCK, District Judge.

         The central issue on appeal is whether the National Labor Relations Board (the "NLRB" or "Board") properly determined that a new standard for deferring to arbitral decisions, which was developed by the Board in the underlying case, should only be applied prospectively. As a result of the prospective application of the new standard, Petitioner Coletta Kim Beneli's unfair labor practice complaint against Respondent-Intervenor Babcock & Wilcox Construction Co., Inc. ("B&W") was analyzed under the previous standard and consequently denied. Beneli also challenges the Board's substantive decision to affirm the arbitral decision under the previous deferral standard.

         The Board's usual practice is to apply its new policies and standards in all pending cases, at whatever stage, subject to balancing such retroactivity against "the mischief of producing a result which is contrary to a statutory design or to legal and equitable principles." Levitz Furniture Co. of the Pac., Inc., 333 N.L.R.B. 717, 729 (2001). This Court has adopted a five-factor analysis to balance the interests in considering retroactive application of a new standard. Oil, Chem. & Atomic Workers Int'l Union Local 1-547 v. NLRB, 842 F.2d 1141, 1145 (9th Cir. 1988) (citing Montgomery Ward & Co. v. FTC, 691 F.2d 1322, 1333 (9th Cir. 1982)). Balancing those factors here, the NLRB properly applied the new standard only prospectively. Therefore, we deny Beneli's petition for review.

         I. BACKGROUND

         Beneli worked for B&W as a forklift and crane operator and served as a job steward for her union, the International Union of Operating Engineers ("the Union"). Beneli was fired from her job approximately two months after she was hired. According to Beneli, her firing culminated a running dispute over her actions as a union job steward. According to B&W, Beneli was fired for cause because of repeated safety violations and inappropriate conduct.

         On the day she was fired, B&W's project superintendent summoned Beneli to a meeting with two B&W safety representatives. One of the representatives told Beneli that she was being suspended for three days without pay for two safety policy violations. Beneli responded to the proposed suspension by stating, "[i]s this the fucking game you guys are going to play?"-a statement which she then repeated. The representatives told Beneli that they considered that language a threat and terminated her. Beneli refused to sign termination papers that claimed that she was fired for "inappropriate conduct."

         The Union, in accordance with its collective-bargaining agreement ("CBA") with B&W, filed a grievance over Beneli's suspension and termination, alleging that she had been fired for union activities and without just cause. The grievance moved through the CBA process to binding arbitration before a joint labor-management Grievance Review Subcommittee (the "Subcommittee"). Both Beneli and B&W presented witness testimony before the Subcommittee supporting their respective positions. The Subcommittee denied the grievance ...


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