Wednesday, December 29, 2004

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Circuit split regarding federal court jurisdiction over federal employees’ claims covered by negotiated grievance procedures

Disagreeing with the Federal and Eleventh Circuits, the Ninth Circuit recently held that federal courts lack subject matter jurisdiction over claims covered by the negotiated grievance procedures of federal employees’ collective bargaining agreements. Whitman v. Dep’t of Transportation, 382 F.3d 938 (9th Cir. 2004).

The Civil Service Reform Act provides that the grievance procedures contained in a collective bargaining agreement covering federal employees “shall be the exclusive administrative procedures for resolving grievances which fall within its coverage,” with certain very limited exceptions. 5 U.S.C. § 7121(a)(1) (emphasis added). Congress added the word “administrative” to § 7121(a)(1) in 1994. Before 1994, that section provided that the grievance procedures “shall be the exclusive procedures for resolving grievances which fall within its coverage.” The courts interpreted the old version of § 7121(a)(1) as stripping the federal courts of subject matter jurisdiction over grievable claims.

The Federal and Eleventh Circuits have held that § 7121(a)(1) no longer strips federal courts of subject matter jurisdiction. Those courts reasoned that, by adding the word “administrative,” Congress signaled an intent to no longer restrict judicial remedies. Associacion De Empleados Del Area Canalera v. Panama Canal Comm’n, 329 F.3d 1235 (11th Cir. 2003); Mudge v. United States, 308 F.3d 1220 (Fed. Cir. 2002). Hence, absent some other bar to subject matter jurisdiction, federal employees may bring their grievable claim in federal court, according to these Circuits.

In contrast, the Ninth Circuit cited its general rule that federal courts “have no power to review federal personnel decisions and procedures unless such review is expressly authorized by Congress in the CSRA or elsewhere.” Applying this rule, the Ninth Circuit held that “5 U.S.C. § 7121(a)(1) preempts employment related claims which fall within collective bargaining agreements because the statute does not expressly provide for federal court jurisdiction over such claims.”

The plaintiff-appellant in the Ninth Circuit decision has petitioned for rehearing en banc. If rehearing is denied, expect a cert. petition.

UPDATE: The Ninth Circuit denied the petition for rehearing en banc.

UPDATE: The plaintiff-appellant filed a cert petition on February 22, 2005. He is represented by Thomas Golstein, Amy Howe, and Pamela Karlan, with the assistance of the Harvard Law School Supreme Court Litigation class.

Can employers waive their right to an NLRB election?

The Bush Board recently granted review of a regional director’s decision to dismiss an employer’s election petition where the employer had allegedly agreed not to demand an NLRB election in the face of a union’s demonstration of majority support. Shaw’s Supermarkets, 343 NLRB No. 105 (2004).

An employer need not voluntarily recognize a union that claims to represent a majority of employees unless the union has won an NLRB election. When a union shows up at an employer’s door holding authorization cards from more than 50% of the employer’s employees, the employer can tell the union to take a hike. The employer’s statutory duty to recognize and bargain with the union will kick in only after the union petitions for and wins an NLRB election. Linden Lumber Div. v. NLRB, 419 U.S. 301 (1974).

Out in the real world, some employers and unions enter into agreements that require an employer to recognize a union at some future time when the union demonstrates that it has the support of a majority of employees. These agreements are called card-check agreements. In a card-check agreement, the employer effectively promises not to insist on an NLRB election.

In Shaw’s Supermarkets, the parties entered into an “after-acquired stores clause.” An after-acquired stores clause is a particular type of card-check agreement. Typically, an after-acquired stores clause appears in a collective bargaining agreement covering a facility where the union already represents the employer’s workers (e.g., Facility A). The employer promises to recognize the union at any of the employer’s other facilities (e.g., Facility B or Facility C) if the union demonstrates that it has majority support.

The after-acquired stores clause in Shaw’s Supermarkets provided that “[w]hen the Employer opens new stores within the geographic area described in Article 1, the Employer will . . . recognize the Union and apply the contract when a majority of Employees have authorized the Union to represent them.” The union obtained signed authorization cards from a majority of employees at a new store and demanded recognition. The employer refused to recognize the union and asked the NLRB to hold an election. The Board’s regional director (RD) refused to hold an election, citing the parties’ after-acquired stores clause. The employer then asked the Board to review the RD’s decision and find that it did not waive its right to insist on an NLRB election.

The Board voted to grant review of the RD’s decision. It questioned whether the after-acquired stores clause clearly evidenced an intent to foreclose the employer from demanding an NLRB election. Assuming the clause was clear, the Board also questioned whether policy considerations weigh against enforcing such an agreement. In a procedural move, the Board granted the employer’s request for review and remanded the case for a hearing on these issues.

The first issue (the clarity issue), while significant, is less important than the second issue (the enforcement issue). Future parties could adapt to a high clarity standard. Thus, even if the Board requires superclarity in after-acquired stores clauses, unions and employers will still be able to negotiate them, even if it requires some additional effort.

On the other hand, the Board’s resolution of the second issue could eliminate after-acquired stores clauses as a method for unions to obtain representational status. In its opinion, the Board stated that policy considerations might counsel against enforcing even a superclear after-acquired stores clause. 343 NLRB No. 105, slip op. at 2. If so, after-acquired stores clauses will no longer be enforceable and unions will lose a tool for expedited recognition. Although an employer could still voluntarily adhere to its after-acquired stores clause, it would have no legal obligation to do so.