UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


JACOBY, JOE

v.

NLRB


99-1450a

D.C. Cir. 2000


*	*	*


Williams, Circuit Judge: Under a labor agreement govern- ing
construction work at a refinery jobsite in California,  Steamfitters
Local Union No. 342 held an exclusive right to  dispatch workers to
subcontractor Contra Costa Electric.  Petitioner Joe Jacoby, a member
of the union for 27 years,  registered for employment through the
union's hiring hall;  due to his skills and experience, his name was
placed on the  highest priority "A" list. For a period the union
mistakenly  dispatched several lower-priority individuals ahead of
Jacoby.  On discovery of the error, it dispatched Jacoby. All parties 
agree, for current purposes at least, that the priority mix-up  was
merely negligent, and reflected no intentional wrongdo- ing.


Jacoby filed an unfair labor practice charge with the Na- tional Labor
Relations Board, and the Board's General Coun- sel issued a complaint.
After a hearing an administrative law  judge found that the union's
negligent deviation from estab- lished hiring hall rules breached its
duty of fair representa- tion and thereby violated ss 8(b)(1)(A) & (2)
of the National  Labor Relations Act as amended (the "NLRA"), 29
U.S.C.  s 158(b)(1)(A) & (2). Steamfitters Local No. 342 (Contra 
Costa Electric), 329 N.L.R.B. No. 65, slip op. at 10-12 (Dec. 5, 
1995). The Board reversed, ruling that the union's negli- gence
violated neither the duty of fair representation nor the  Act.
Steamfitters Local No. 342 (Contra Costa Electric), 329  N.L.R.B. No.
65 (Sept. 30, 1999) ("Board Decision"). Al- though the Board agreed
that the ALJ had correctly applied 


the Board's previous decision in Iron Workers Local 118  (California
Erectors), 309 N.L.R.B. 808 (1992), it reasoned  that that decision,
as well as the ALJ's findings, were incon- sistent with the Supreme
Court's pronouncements about the  duty of fair representation in
United Steelworkers of America  v. Rawson, 495 U.S. 362 (1990), and
Air Line Pilots Ass'n,  Int'l v. O'Neill, 499 U.S. 65 (1991). Board
Decision, 329  N.L.R.B. No. 65, slip op. at 2-4. In addition, the
Board found  that the union's negligent conduct did not, apart from
the fair  representation issue, independently violate the Act. Id. at


We have held that the Board's interpretation of the duty of  fair
representation is entitled to deference under Chevron,  U.S.A., Inc.
v. NRDC, 467 U.S. 837 (1984), when the Board  enforces that duty as
part of its jurisdiction to identify and  remedy unfair labor
practices. Ferriso v. NLRB, 125 F.3d  865, 869 (D.C. Cir. 1997);
Finerty v. NLRB, 113 F.3d 1288,  1291 (D.C. Cir. 1997). We shall
explain why this is so despite  the fact that the duty also exists as
a judge-made, court- enforced duty. But Chevron does not help an
agency that  rests its decision on a misinterpretation of Supreme
Court  precedent, as the Board did here. Accordingly, we reverse  and
remand the case to the Board for it to address the duty  of fair


In addition, the Board's conclusion that the union's negli- gence did
not independently violate the Act is, as we explain  below,
intertwined with the issue of the duty of fair represen- tation.
Accordingly, we find that it would be premature to  rule on it before
the Board has had an opportunity to revisit  the question on remand.


* * *


The duty of fair representation originated in the context of  the
Railway Labor Act, judicially inferred from that statute  and
enforceable in the courts. See Steele v. Louisville &  Nashville R.R.
Co., 323 U.S. 192 (1944). The Supreme Court  extended the Steele
principle to the NLRA in Ford Motor Co.  v. Huffman, 345 U.S. 330
(1952), finding that the statutory  authority of unions as exclusive
bargaining representatives 


under Sec. 9(a) of the NLRA, 29 U.S.C. s 159(a), also gave  rise to a
duty of fair representation, requiring unions to  "make an honest
effort to serve the interests of all [bargain- ing unit] members,
without hostility to any." Id. at 337. A  union breaches this duty
when its actions are "arbitrary,  discriminatory, or in bad faith."
Vaca v. Sipes, 386 U.S. 171,  190 (1967).


Originally, the duty was the exclusive province of the  courts, falling
within the federal courts' general federal ques- tion jurisdiction.
See Syres v. Oil, Chemical and Atomic  Workers Local 23, 350 U.S. 892
(1955)(mem.), rev'g 223 F.2d  739 (5th Cir. 1955). Beginning with its
decision in Miranda  Fuel Co., 140 N.L.R.B. 181 (1962), however, the
NLRB has  enforced the duty of fair representation itself as part of
its  authority to identify and remedy unfair labor practices. We  have
upheld this branch of the Board's unfair labor practice  jurisdiction.
See Plumbers & Pipe Fitters Local Union No.  32 v. NLRB, 50 F.3d 29,
31-32 (D.C. Cir. 1995); Truck  Drivers and Helpers, Local Union 568 v.
NLRB, 379 F.2d  137, 141-42 (D.C. Cir. 1967).


At the same time, the Supreme Court refused to find that  the Board's
enforcement of the duty of fair representation  preempted judicial
jurisdiction over the duty of fair represen- tation inferred from the
NLRA. Vaca v. Sipes, 386 U.S. 171,  183, 188 (1967). See also Marquez
v. Screen Actors Guild,  Inc., 525 U.S. 33, 49 (1998); Breininger v.
Sheet Metal  Workers Int'l Ass'n Local No. 6, 493 U.S. 67, 74-75
(1989).  As a result the duty is subject to a kind of dyarchy. The 
Board is entitled to Chevron deference when it interprets the  duty as
part of its unfair labor practice jurisdiction, yet many  cases
involving the duty continue to originate in the courts.  See, e.g.,
Air Line Pilots Ass'n, Int'l v. O'Neill, 499 U.S. 65  (1991); United
Steelworkers of America v. Rawson, 495 U.S.  362 (1990).


And it is important to emphasize that for these court- adjudicated
cases the Board's definition of the duty of fair  representation for
purposes of adjudicating unfair labor prac- tices appears only
marginally relevant. The Supreme Court 


in Breininger explicitly "reject[ed] the proposition that the  duty of
fair representation should be defined in terms of what  is an unfair
labor practice." 493 U.S. at 86. "[T]here is no  reason to equate
breaches of the duty of fair representation  with unfair labor
practices." Id. Thus, for cases arising in  the courts, NLRB
interpretations are relevant for what they  may contribute on their
intellectual merits, enjoying defer- ence to the extent of their
"power to persuade." Skidmore v.  Swift & Co., 323 U.S. 134, 140
(1944). Nonetheless, as we  explained, the Board's decision here is
reviewable under the  Chevron doctrine.


The duty of fair representation clearly extends to a union's  operation
of an exclusive hiring hall. See Breininger, 493  U.S. at 87-88
(1989). Prior decisions of the Board described  the duty, in the
hiring hall context, in rather demanding  terms. Ruling in favor of
the Board in such a case, we said:


[A]ny departure from established exclusive hiring hall  procedures
which results in a denial of employment to an  applicant falls within
that class of discrimination which  inherently encourages union
membership, breaches the  duty of fair representation owed to all
hiring hall users,  and violates Section 8(b)(1)(A) and (2) [of the
NLRA],  unless the union demonstrates that its interference with 
employment was pursuant to a valid union-security  clause or was
necessary to the effective performance of  its representative


Boilermakers Local No. 374 v. NLRB, 852 F.2d 1353, 1358  (D.C. Cir.
1988) (quoting Teamsters Local 519 (Rust Engi- neering), 276 N.L.R.B.
898, 908 (1985)). And we also said  that breach of the duty required
no evidence of intent to  discriminate:


No specific intent to discriminate on the basis of union  membership or
activity is required; a union commits an  unfair labor practice if it
administers the exclusive hall  arbitrarily or without reference to
objective criteria and  thereby affects the employment status of those
it is  expected to represent. "By wielding its power arbitrari- ly,
the Union gives notice that its favor must be curried, 


thereby encouraging membership and unquestioned  adherence to its
policies."


Id. (quoting NLRB v. International Ass'n of Bridge, Struc- tural &
Ornamental Iron Workers, Local 433, 600 F.2d 770,  777 (9th Cir.


The Board itself, applying the standard that we upheld in 
Boilermakers, found a breach of the duty (and an unfair labor 
practice) in circumstances virtually identical to the present  ones.
In Iron Workers Local 118 (California Erectors), 309  N.L.R.B. 808
(1992), it ruled that union officials breached  their duty of
representation when, "through mistake and  inadvertence," they failed
to dispatch a worker to a job to  which he should have been referred
under exclusive hiring  hall procedures. Id. at 812. Unsurprisingly,
the ALJ applied  California Erectors in its decision below.


In reversing the ALJ, the Board here acknowledged that  her reading of
that case was "correct," but found that contin- ued application of
California Erectors would be inconsistent  with the Supreme Court
decisions in United Steelworkers of  America v. Rawson, 495 U.S. 362
(1990), and Air Line Pilots  Ass'n, Int'l v. O'Neill, 499 U.S. 65
(1991). Board Decision,  329 N.L.R.B. No. 65, slip op. at 2.


There is undoubtedly language in these Supreme Court  decisions
supporting the Board's view. Both explicate the  standard earlier laid
down by the Court in Vaca v. Sipes, 386  U.S. 171 (1967), which said
that a union breached the duty of  fair representation when its
actions were "arbitrary, discrimi- natory, or in bad faith." Id. at
190. In Rawson, the Court  rejected a claim that a union breached the
duty when it  negligently performed mine-safety related duties
pursuant to  a collective bargaining agreement. The Court observed
that  "[t]he courts have in general assumed that mere negligence, 
even in the enforcement of a collective-bargaining agreement,  would
not state a claim for breach of the duty of fair  representation, and
we endorse that view today." 495 U.S. at  372-73.


O'Neill involved a claim that the Air Line Pilots Association  breached
its duty of fair representation in its negotiation and  acceptance of
a strike settlement. The Court held that the  Vaca standard "applies
to all union activity, including contract  negotiation." 499 U.S. at
67. Moreover, it explained that "a  union's actions are arbitrary only
if, in light of the factual and  legal landscape at the time of the
union's actions, the union's  behavior is so far outside a 'wide range
of reasonableness' as  to be irrational." Id. (quoting Ford Motor Co.
v. Huffman,  345 U.S. 330, 338 (1953)) (internal citation omitted).


Neither Rawson nor O'Neill specifically concerned the duty  owed by a
union when it operates an exclusive hiring hall. In  its decision
here, however, the Board reasons that the two  cases, read together,
mandate that merely negligent conduct  can never breach the duty of
representation in any context,  including that of the hiring hall. See
Board Decision, 329  N.L.R.B. No. 65, slip op. at 2.


But as Jacoby points out, the Board's reading of Rawson  and O'Neill
cannot be reconciled with our decision in Plumb- ers & Pipe Fitters.
There we considered and rejected the  argument that O'Neill undermined
the standard governing a  union's operation of an exclusive hiring
hall--specifically the  principle that a union operate a hiring hall
by "reference to  objective criteria." 50 F.3d at 32-33. We
acknowledged that  fragments from O'Neill such as the passage quoted
above  might, if read in isolation, support the contention that a 
"highly deferential" standard must be applied to the evalua- tion of
union's actions operating a hiring hall. 50 F.3d at 33.  But we
concluded that the "Court did not intend to weaken  the standard of
review applied to a union's operation of a  hiring hall." Id.


In support of this conclusion we relied on the drastic  difference in
context. In O'Neill the Court's focus was on  "protecting the content
of negotiated agreements from judi- cial second-guessing." Id. The
operation of a hiring hall, by  contrast, was one "where the union has
assumed the role of  employer, as well as representative, and where
the risk of  judicial second-guessing of a negotiated agreement that


of such concern to the Court in O'Neill is simply not present."  Id. We
also relied on the Supreme Court's decision in  Breininger, issued
only one year before Rawson and two  years before O'Neill, where the
Court said that the imbalance  of power and possibilities for abuse
created by union opera- tion of a hiring hall were such that "if a
union does wield  additional power in a hiring hall by assuming the
employer's  role, its responsibility to exercise that power fairly
increases  rather than decreases." Breininger, 493 U.S. at 89 (quoted
in  Plumbers & Pipe Fitters, 50 F.3d at 34). Thus, we wound  up, "[w]e
remain confident that unions that operate hiring  halls without
objective criteria violate their duty of fair  representation. This
was the standard we approved in Boil- ermakers and that the ALJ
properly applied in this case.  Absent clear instructions from the
Supreme Court, we decline  to weaken this principle." 50 F.3d at 34.


In its decision here, the Board sought to reconcile Brein- inger's
statement that "additional power" entailed increased  responsibility
with its interpretation of Rawson and O'Neill.  It reasoned that in
Breininger the Court was merely reject- ing the argument that the duty
of fair representation did not  apply at all in the hiring hall
context and had meant the  language about a union's increased
responsibility not to refer  to any heightened degree of duty, but
merely to the fact that  a union "takes on additional
responsibilities" when it operates  a hiring hall. Board Decision, 329
N.L.R.B. No. 65, slip op.  at 2. Nothing in the surrounding language
in Breininger  lends support to this theory.


The question before us today differs from that in Plumbers  & Pipe
Fitters primarily with regard to two details, both  ultimately
insignificant. First, this case turns on a different  aspect of the
legal standard defined in Boilermakers.  Whereas Plumbers & Pipe
Fitters involved the operation of a  hiring hall "without reference to
objective criteria," see Boil- ermakers, 852 F.2d at 1358, the facts
here implicate the rule  precluding departures "from established
exclusive hiring hall  procedures," id. But this distinction does
nothing to help the  Board's position. That position is premised on
the conclusion  that O'Neill generally precludes heightened scrutiny


hiring hall context, but in Plumbers & Pipe Fitters we  concluded that
the "Court did not intend to weaken the  standard of review applied to
a union's operation of a hiring  hall." 50 F.3d at 33. See also
Radio-Electronics Officers  Union (Radio Officers Union) v. NLRB, 16
F.3d 1280, 1284- 85 (D.C. Cir 1994) (applying Boilermakers's
"departure" stan- dard).


In addition, one might argue that in the present context the 
Boilermakers standard is more vulnerable to the claim of  erasure by
O'Neill and Rawson, as this case involves a claim  of negligence, thus
encountering Rawson's conclusion that  "mere negligence" did not
violate the duty of fair representa- tion in the contract
administration context. But the Board's  application of Rawson relies
exclusively on the type of "one- size-fits-all" theory that Plumbers &
Pipe Fitters rejected.  And, once again, Rawson is not a hiring hall
case. It  concerned the specific question of whether a union violates 
the duty of fair representation through negligent enforcement  of a
collective bargaining agreement. Although the Court  endorsed what
courts had "in general assumed," namely, that  negligence does not
"state a claim for breach of the duty of  fair representation," 495
U.S. at 372-73, it never considered  the applicability of this
principle to the hiring hall. Thus we  see no reason why Rawson's
general statements on negli- gence should be regarded as any less
subject to qualification  than O'Neill's statements about "behavior so
far outside a  range of reasonableness as to be irrational." 499 U.S.


The Board's decision here seems in effect to recognize its 
contradiction of Plumbers & Pipe Fitters. Rather than try to 
distinguish the case, the Board simply observed that "the  circuit
court's assertion that the standard for operation of a  hiring hall
can and should be different from the standard for  contract
administration seems to us to be unsupportable."  Board Decision, 329
N.L.R.B. No. 65, slip op. at 3 n.19.


Intervenor's brief relies on two additional decisions issued  after
Plumbers & Pipe Fitters, one from the Supreme Court,  Marquez v.
Screen Actors Guild, Inc., 525 U.S. 33 (1998), and  one from this
circuit, Thomas v. NLRB, 213 F.3d 651 (D.C. 


Cir. 2000). As neither case concerned nor even mentioned  the hiring
hall context, neither affects our analysis in Plumb- ers & Pipe
Fitters.


The Board's reliance on its mistaken analysis of O'Neill and  Rawson
compels a remand. "An agency action, however  permissible as an
exercise of discretion, cannot be sustained  'where it is based not on
the agency's own judgment but on  an erroneous view of the law.' "
Sea-Land Service, Inc. v.  Department of Transportation, 137 F.3d 640,
646 (D.C. Cir.  1998) (quoting Prill v. NLRB, 755 F.2d 941, 947 (D.C.
Cir.  1985)). On remand, the Board must consider whether, given  the
union's heightened duty of fair dealing in the context of a  hiring
hall, the union's negligent failure to adhere to its  referral
standards was an unfair labor practice. In remand- ing, of course, we
express no opinion on the validity of any  alternate grounds that the
Board might use to overrule  California Erectors.


We now turn to the Board's second holding--that the  union's conduct
did not, quite apart from any breach of the  duty of fair
representation, violate ss 8(b)(1)(A) & 8(b)(2) of  the Act. The
latter bars a union from causing an employer to  discriminate against
an employee in violation of s 8(a)(3),  which in turn bars an
employer's discrimination against an  employee "to encourage or
discourage union membership."  A violation of s 8(b)(2) would
derivatively violate  s 8(b)(1)(A)'s ban on union restraint of
employees in the  exercise of their rights under s 7 of the Act. Board
Deci- sion, 329 N.L.R.B. No. 65, slip op. at 4; see also id. at 8 
(Member Brame, dissenting); Radio Officers' Union of Com- mercial


The Board in effect has said that its rationale in Boiler- makers is
inapplicable to this context. There we upheld its  finding that "[a]ny
departure from established exclusive hir- ing hall procedures which
results in a denial of employment to  an applicant falls within that
class of discrimination which  inherently encourages union
membership," and thereby vio- lates ss 8(b)(1)(A) and (2) of the Act.
852 F.2d at 1358. And  we endorsed its underlying rationale: "By


arbitrarily, the Union gives notice that its favor must be  curried,
thereby encouraging membership and unquestioned  adherence to its
policies." Id. Here the Board reasoned:


While this reasoning makes sense when applied to the  volitional
actions of union officials, it is unpersuasive  when applied to simple
mistakes. When as in this case, a  union officer in charge of
referrals intends to follow the  prescribed procedures and thinks he
has done so, his  inadvertent failure to do so, even to the detriment
of an  applicant, simply does not carry the message that appli- cants
had better stay in the good graces of the union if  they want to
ensure fair treatment in referrals.


Board Decision, 329 N.L.R.B. No. 65, slip op. at 4.


Given the focus of s 8(b)(2) on discrimination, we cannot  fault the
Board's view that a purely negligent breach of the  rules would lack
the signaling effect that the provision, and  the Board, sought to
avoid. But the Board's analysis is  complicated by its additional
holding that this approach does  not contradict any of its earlier
decisions--a statement that, if  true, renders inapplicable the
Board's duty to give a "rea- soned justification for any departure
from its prior policies or  practices." Pittsburgh Press Co. v. NLRB,
977 F.2d 652, 655  (D.C. Cir. 1992) (citing Motor Vehicles Mfrs. Ass'n
v. State  Farm Mut. Ins. Co., 463 U.S. 29, 57 (1983)). Given that the 
underlying theory in California Erectors (which the Board  does
explicitly overrule) and other duty of fair representation  cases is
that breaches of the duty are themselves violations of  ss 8(b)(1)(A)
& (2), see, e.g., California Erectors, 309  N.L.R.B. at 811, 812
(treating duty of fair representation  breach as a violation of ss
8(b)(1)(A) and (2)), the Board in  essence argues that the standard
for judging violations of the  same statutory provisions may depend
upon whether or not a  complaint or ruling specifically invokes the
magic words "duty  of fair representation." The Board does not cite,
and we have  been unable to find, any evidence that in hiring hall
cases the  Board has ever applied different standards depending on 
whether the complaint invoked the duty of fair representation  or not.
See, e.g., Laborers Local No. 135 (Bechtel Corp.), 271 


N.L.R.B. 777, 780 (1984) (cited by the Board in the non-duty  of fair
representation context, see Board Decision, 329  N.L.R.B. No. 65, slip
op. at 4 & n.26, and holding that "[a]  departure from established
exclusive hiring hall procedures  that results in a denial of
employment to any applicant  inherently encourages union membership
and therefore vio- lates Section 8(b)(1)(A) and (2) without regard to
the presence  of unlawful motivation.") Rather, the Board appears
merely  to argue that in cases in which it has found a violation of 
ss 8(b)(1)(A) & (2) without explicitly invoking the duty of fair 
representation, the facts have never involved purely negligent 
departures from exclusive hiring hall rules. See id.


At the time of the Board's decision, of course, the effect of  its
holding regarding these "independent" violations of  ss 8(b)(1)(A) &
(2) was to ensure that, in the relevant con- text, the statute imposed
no broader liability independent of  the duty of fair representation
than as construed with that  duty. Our reversal on the duty of fair
representation theory  now puts the question in a different light. If,
on remand, the  Board again decides to overrule California Erectors,
it will  need to provide a reasoned justification beyond its current 
theory of compulsion by the Supreme Court--and any suc- cessful
justification is likely to support the Board's more  general
interpretation of the relevant statutory provisions,  assuming that
that interpretation does in fact depart from  prior Board precedent.
So our remand on the Board's first  holding makes it, as a practical
matter, premature to rule on  the sufficiency of its second one.


Similarly, we do not pass judgment on the theory proposed  by Member
Brane in his dissent, to the effect that if Blevins's  individual
negligence did not itself constitute an unfair labor  practice, then
the union's subsequent failure to make Jacoby  whole did. Board
Decision, 329 N.L.R.B. No. 65, slip op. at 7  (Member Brame,
dissenting). The Board refused to consider  this theory on the grounds
that it was raised neither in the  General Counsel's complaint nor
during oral argument, see  Board Decision, 329 N.L.R.B. No. 65, slip
op. at 4 n.27, and  Jacoby has not properly appealed this ruling.


For the reasons given we reverse and remand the case to  the Board.


So ordered.