After more than four years of fruitless negotiations with a labor union, DISH concluded the parties were at an impasse and refused to participate further. The NLRB thought DISH threw in the towel (pun intended) prematurely and, as a result, concluded that DISH had committed an unfair labor practice that violated the National Labor Relations Act. The Fifth Circuit held the Board lacked substantial evidence for that decision.
The main problem, Judge Oldham explained in his opinion for a unanimous panel, was that the Board's decision rested on a factual finding the ALJ had made that was itself based on a flawed reading of the record. Because Congress "has defined substantial evidence in terms of 'the record considered as a whole,'" the Court explained (citing 29 U.S.C. §160(e)-(f)), "a flawed reading of the record' provides no substantial evidence for a finding."
The Board also ignored another closely related principle: "because the evidence must be viewed in light of the whole record, '[t]he substantiality of evidence must take into account whatever in the record fairly detracts from its weight.'” (quoting Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)). Here, however, the Board "simply didn't address" evidence that should have led it to discovery the ALJ's mistaken factual premise.
It's worth pausing here to emphasize that Judge Oldham's reasoning on this point may carry unremarked significance. Notice that he concludes that the Board's failure to address contrary evidence was enough, by itself, to establish the Board's failure to consider that evidence. What's the big deal, you ask? Well, although the Court doesn't dwell on it here, the very same distinction received much more attention from the Court in Schofield v. Saul, No. 18-11390 (5th Cir. Feb. 22, 2020), another Judge Oldham opinion I covered here. As those of you who read my post on the "borderline situation ... situation" at issue in that case may recall, Judge Oldham's near-identical reasoning in that case led the Court to take sides in a fairly deep circuit split:
My guess is many--probably most--people who read this part of Judge Oldham's opinion won't even notice the distinction, much less pause to ask whether Judge Oldham's reasoning checks out. In my view, this is a great example of just how careful you have to be when reading legal opinions. If you don't make a habit of questioning every single line of legal reasoning you read, you will miss this sort of thing. Law students and budding appellate lawyers, in particular, should take note.
Finally, Judge Oldham criticized the Board's supposition that if DISH “had been willing to meet about this substantial giveback, the give and take of bargaining might have led everyone closer to an agreement.” (emphasis added). "The bare possibility that something might have clicked during later negotiations," Judge Oldham reasoned, "does not offer any support for the Board’s finding." (citing TruServ Corp. v. NLRB, 254 F.3d 1105, 1116 (D.C. Cir. 2001) (rejecting Board’s reliance on “its intuitive belief that, upon further bargaining, each side would have made additional concessions”)). On that point, Judge Oldham invoked everyone's favorite D.C. Circuit Judge, adding "[a]s Judge Sentelle once put it, 'You never know’ is no substitute for substantial evidence.” (quoting Erie Brush & Mfg. Corp. v. NLRB, 700 F.3d 17, 23 (D.C. Cir. 2012) (Sentelle, J.). Honestly, what would a Judge Oldham opinion be without a Sentelle reference?
The Court went on to reject NLRB's counterarguments. I won't go into detail on all of them, but I think one point from this part of the Court's opinion merits further discussion. As you may have noticed from the discussion of Schofield v. Saul earlier in this post, the Chenery I doctrine came up in Judge Oldham's discussion of the substantial evidence standard of review there. Similarly here, Chenery I features prominently in Judge Oldham's refutation of several NLRB counter-arguments:
He adds that the Court "recognizes that the NLRB, in particular, struggles with this rule," explaining what he means in a footnote:
I found this case to be a fun read. I don't get into the details of the dispute that prompted the four-year staring contest between DISH and the union here, but the Court's opinion does. It's a worth reading in full if you have the time or are interested in this area of law in particular.