824 F.3d 1085
D.C. Cir.2016Background
- Camelot Terrace, Inc. and Galesburg Terrace, Inc. (the Companies) operate nursing homes where the Service Employees International Union was certified as bargaining representative; the Companies engaged in repeated bad-faith bargaining.
- The NLRB’s Office of the General Counsel pursued the matter, resulting in an ALJ decision finding unfair labor practices and ordering the Companies to reimburse both (a) the Board and the Union for litigation costs and (b) the Union for all bargaining expenses from January 2008 through the last session.
- The Companies petitioned for review only as to the two remedial orders (litigation-costs and bargaining-costs); they did not contest the underlying liability findings.
- The NLRB (2–1) upheld both remedies, invoking "inherent authority" for litigation-costs and section 10(c) remedial power for bargaining-costs; a dissent warned against extra-statutory grants of power.
- The D.C. Circuit held that (a) the Board lacks authority to award litigation costs (rejecting extra-statutory/inherent authority and finding section 10(c) does not authorize fee-shifting here) and (b) the Board may, under section 10(c), order reimbursement of a union’s bargaining costs in appropriate cases.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Whether the NLRB may require reimbursement of litigation costs incurred in Board proceedings | Companies: Board lacks statutory or inherent authority to shift litigation costs; American Rule applies | Board: Has inherent authority to control its proceedings and award fees for bad-faith conduct | Held: No—Board has no extra‑statutory "inherent" authority and section 10(c) does not implicitly authorize litigation-fee shifting; litigation-costs order denied |
| 2. Whether the NLRB has general authority under §10(c) to order reimbursement of bargaining costs | Companies: Bargaining costs are indistinguishable from litigation costs; §10(c) does not permit cost-shifting for vindicating rights | Board: §10(c) remedial power permits affirmative measures (including bargaining-cost reimbursement) to restore status quo ante | Held: Yes—Board may award bargaining costs in cases of unusually aggravated misconduct to restore the injured party’s economic position |
| 3. Whether awarding the Union “all” bargaining costs was beyond Board power (extent of award) | Companies: Award of "all" costs is punitive/ excessive because some costs would have been incurred even with good-faith bargaining | Board: (not squarely addressed because Companies did not preserve) award may be necessary to restore union to ex ante position | Held: Not reached on the merits—court lacked jurisdiction to consider extent/amount challenge because Companies failed to raise it before the Board |
| 4. Whether the Companies forfeited issues by failing to raise them before the Board | Companies: contended some arguments not presented below were preserved or excused by extraordinary circumstances | Board: procedural forfeiture rules apply; issues not raised cannot be considered | Held: The court found Companies adequately preserved challenge to Board’s general authority to award bargaining costs but forfeited the argument about the scope ("all") of the award |
Key Cases Cited
- Franks v. Bowman Transp. Co., 424 U.S. 747 (U.S. 1976) (§10(c) remedies should recreate conditions existing absent the unfair labor practice)
- Chambers v. NASCO, 501 U.S. 32 (U.S. 1991) (bad‑faith fee awards are punitive and vindicate tribunal authority)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (U.S. 1975) (American Rule presumes each party bears its own litigation costs)
- Fallbrook Hosp. Corp. v. NLRB, 785 F.3d 729 (D.C. Cir. 2015) (bargaining-cost reimbursement proper where misconduct infected core of bargaining process)
- Unbelievable, Inc. v. NLRB, 118 F.3d 795 (D.C. Cir. 1997) (discussing bargaining-cost remedy where misconduct undermined meaningful bargaining)