IBEW v. NLRB, No. 19-60616 (5th Cir. Sept. 2, 2020) (Jones, Elrod, Higginson)

Under the National Labor Relations Act (NLRA or Act), it is an “unfair labor practice” for an employer “to refuse to bargain collectively with the representatives of [its] employees.” 29 U.S.C. § 158(a)(5). This case required the Fifth Circuit to decide whether transmission and distribution dispatchers employed by Entergy Mississippi, Incorporated are “employees” or “supervisors” under the Act. The unions representing Entergy’s dispatchers--referred to here as "IBEW"--argued that the National Labor Relations Board (NLRB) erred when it deemed them “supervisors,” excluding them from the Act’s collective-bargaining protections. Unpersuaded, the Fifth Circuit affirmed. Judge Higginson wrote the opinion for a unanimous panel.

The NLRA guarantees employees the right to unionize and to appoint a bargaining representative. See 29 U.S.C. § 157. It also requires employers to bargain with their employees' representatives. Id. § 158(a)(5). But because "supervisors" aren't "employees" under the Act, they don't enjoy the same guaranteed right to unionize and bargain. Id. § 152(3).

"[T]he statutory definition of supervisor" is therefore "essential in determining which employees are covered by the Act." NLRB v. Health Care & Retirement Corp. of Am., 511 U.S. 571, 573 (1994). 29 U.S.C. § 152(11) defines "supervisor" as:

[A]ny individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibly to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection with the foregoing the exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment.

The Supreme Court has explained that this definition “sets forth a three-part test for determining supervisory status.” NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706, 712-13 (2001). “Employees are statutory supervisors if (1) they hold the authority to engage in any 1 of the 12 listed supervisory functions, (2) their exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment, and (3) their authority is held in the interest of the employer.” Id. at 713 (clutter omitted).

After holding that IBEW had waived its first argument (that the NLRB erred when it failed to provide a reasoned explanation for its conclusion that dispatchers "assign" employees to "places"), Judge Higginson addressed IBEW's objections to the Board's conclusion that dispatchers exercise independent judgment when making assignments—the second prong of the Kentucky River three-part test. The Board found that dispatchers exercise discretion when they prioritize outages, determine the number of employees to send to the site of an outage, and reassign employees in response to changing circumstances. Because these decisions require dispatchers to “make complex decisions” without clear “standard operating procedures or rules,” the Board held that dispatchers exercise independent judgment.

IBEW challenged the Board's independent judgment conclusion on three grounds: (1) it overlooked contrary evidence in the record; (2) the Board erred when it considered evidence of dispatchers' prioritization decisions; and (3) the Board erroneously overlooked the fact that dispatchers do not assess the skills of field employees.

The Court rejected all three arguments, but I want to focus on the second one--that the Board erred when it considered evidence of dispatchers' prioritization decisions. IBEW emphasized that “prioritization” isn't one of the functions listed in § 152(11)’s definition of "supervisor," and argued that it was therefore error for the NLRB to consider this evidence. See, e.g., Ky. River, 532 U.S. at 713 (Section 2(11) requires the supervisor to exercise independent judgment in connection with one of the supervisory functions).

The panel wasn't persuaded. First, Judge Higginson noted that "[b]oth the Board and federal courts frequently consider prioritization as an element of supervisory authority, even though 'prioritization' is not one of the listed functions in Section 2(11)." (citing cases and agency decisions). Second, he explained that the term "independent judgment" is ambiguous and the "Board is to be given room to apply the term." (quoting Alois Box Co. v. NLRB, 216 F.3d 69, 182 (D.C. Cir. 2000)). Notably, aside from a lone reference to the D.C. Circuit's 2000 opinion in Alois Box Co., the panel opinion doesn't explain why it concludes that "independent judgment" is ambiguous or whether and to what it extent the panel (or the D.C. Circuit in Alois Box Co.) exhausted the traditional tools of statutory construction before drawing a conclusion regarding the term's ambiguity.

In any case, once Chevron deference was in play, the panel had "no trouble concluding that this interpretation was reasonable, well-reasoned, and supported by substantial evidence." Accordingly, it deferred to the NLRB and rejected IBEW's second objection to the Board's independent-judgment conclusion.

The panel opinion is worth reading in full. It contains a detailed discussion of waiver under 29 U.S.C. § 160(e) and substantial evidence review in the NLRA context.

IBEW v. NLRB, No. 19-60616 (5th Cir. Sept. 2, 2020)
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