National Labor Relations Board v. FedEx Freight, Inc.
832 F.3d 432
| 3rd Cir. | 2016Background
- FedEx Freight’s South Brunswick Terminal employs drivers (city and road) and dockworkers; petitioned unit included all drivers but excluded dockworkers.
- Regional Director certified the drivers-only unit; FedEx refused to bargain, arguing dockworkers must be included; NLRB issued an unfair labor practice order and granted summary enforcement for the union.
- Drivers require CDL, drug testing, uniforms, spend most time off-dock; dockworkers work on the dock/yard, lower pay, fewer prerequisites, different schedules, and limited interchange (dock-to-driver program exists but limited).
- FedEx challenged the NLRB’s reliance on Specialty Healthcare’s two-step unit test (initial community-of-interest analysis, then an "overwhelming-community-of-interest" inquiry to determine whether excluded employees must be included).
- The Third Circuit considered (1) whether FedEx preserved its Specialty Healthcare challenge before the Board, (2) whether Specialty Healthcare’s clarified standard is lawful under the NLRA and APA, and (3) whether the Board properly applied that standard to the facts.
Issues
| Issue | Plaintiff's Argument (FedEx) | Defendant's Argument (NLRB/Union) | Held |
|---|---|---|---|
| Preservation of Specialty Healthcare challenge | FedEx adequately preserved challenge by footnote and incorporation by reference | Board had adequate notice; incorporation and related filings preserved the issue | Court held FedEx did not waive the Specialty Healthcare challenge (Board had adequate notice) |
| Validity of Specialty Healthcare two-step test (initial community-of-interest then overwhelming-community-of-interest) | Test is a new, heightened standard that departs from precedent, violates NLRA/APA, and should have been promulgated by rulemaking | Specialty Healthcare clarified, not altered, longstanding Board practice; Chevron deference applies | Court held the Board’s interpretation was reasonable; Specialty Healthcare is permissible under Chevron |
| Compliance with NLRA § 9(c)(5) (extent of organization not controlling) | The overwhelming-community test improperly privileges employees’ chosen unit and runs afoul of § 9(c)(5) | As long as the Board first finds the proposed unit prima facie appropriate under traditional factors, the heightened second-step does not make organization controlling | Court held no conflict with § 9(c)(5); other circuits’ reasoning supports that two-step approach is lawful |
| Application of the test to FedEx facts | Even under Specialty Healthcare, dockworkers share an overwhelming community of interest and should have been included | Drivers form an appropriate, readily identifiable unit; dockworkers do not share an overwhelming community of interest with drivers | Court held the Board properly applied the two-step test: drivers-only unit appropriate and dockworkers need not be included |
Key Cases Cited
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 (agency deference framework)
- Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359 (agency must clearly announce new rules)
- NLRB v. Metropolitan Life Ins. Co., 380 U.S. 438 (extent of organization may be a factor but not controlling)
- Blue Man Vegas, LLC v. NLRB, 529 F.3d 417 (D.C. Cir. 2008) (describing overwhelming-community-of-interest concept)
- Kindred Nursing Centers East, LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013) (upholding Specialty Healthcare formulation)
- FedEx Freight, Inc. v. NLRB, 816 F.3d 515 (8th Cir. 2016) (related decision addressing preservation and Specialty Healthcare)
- Macy’s, Inc. v. NLRB, 824 F.3d 557 (5th Cir. 2016) (analyzing Specialty Healthcare framework)
- Nestle Dreyer’s Ice Cream Co. v. NLRB, 821 F.3d 489 (4th Cir. 2016) (discussing Specialty Healthcare and its application)