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 Title Lemoyne-Owen College v. NLRB

 Argued December 9, 2003             Decided February 10, 2004

 Subject Employment Law

                                                                                                                                                                                                                

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      United States Court of Appeals

                 FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 9, 2003                    Decided February 10, 2004

                              No. 03-1031

                     LEMOYNE-OWEN  COLLEGE,

                               PETITIONER

                                      v.

                NATIONAL  LABOR  RELATIONS  BOARD,

                              RESPONDENT

                           Consolidated with

                                 03­1099

         On Petition for Review and Cross-Application

               for Enforcement of an Order of the

                  National Labor Relations Board

  Arnold E. Perl argued the cause and filed the briefs for

petitioner.

 Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

 

                               2

  Steven B. Goldstein, Attorney, National Labor Relations

Board, argued the cause for respondent.      With him on the

brief were Arthur F. Rosenfeld, General Counsel, John H.

Ferguson, Associate General Counsel, Aileen A. Armstrong,

Deputy Associate General Counsel, and Margaret A. Gaines,

Supervisory Attorney.

  Before:  GINSBURG, Chief Judge, and GARLAND and ROBERTS,

Circuit Judges.

  Opinion for the Court filed by Circuit Judge ROBERTS.

  ROBERTS, Circuit Judge:  Petitioner LeMoyne-Owen College

is a historically black college in Memphis, Tennessee that

traces its roots to a school founded in 1862.  The College's

full-time faculty (numbering approximately sixty members)

sought to unionize in the spring of 2002 to negotiate with

management, but the College argued that the faculty mem-

bers were management -- that is, managerial employees not

entitled to the protection of the National Labor Relations Act

(NLRA).     See 29 U.S.C. §§ 152(3), 157 (defining covered

employees and establishing the right of collective bargaining);

see also NLRB v. Bell Aerospace Co., 416 U.S. 267, 283 (1974)

(managerial employees, though not specifically excluded from

NLRA coverage, were ``regarded as so clearly outside the Act

that no specific exclusionary provision was thought neces-

sary'').  The National Labor Relations Board sided with the

faculty, ordering the College to recognize and bargain with

the faculty's representative.   The College petitioned for re-

view in this court, and the Board filed a cross-application to

enforce its order.

  1.  The College relies primarily on NLRB v. Yeshiva Uni-

versity, 444 U.S. 672 (1980), the Supreme Court's leading

(because only) case on determining the managerial status of

an academic faculty.  In Yeshiva, a union of the university's

faculty sought certification to represent the faculty in collec-

tive bargaining with the administration.  The NLRB granted

the union's petition, but the Supreme Court held that the

faculty were managerial employees and thus not covered by

the NLRA.     Id. at 691.   The Court drew its definition of

managerial employees from Bell Aerospace, which held that

 

                                 3

managers are those who `` `formulate and effectuate manage-

ment policies by expressing and making operative the deci-

sions of their employer.' ''  416 U.S. at 288 (quoting Palace

Laundry Dry Cleaning Corp., 75 N.L.R.B. 320, 323 n.4

(1947)).  See Yeshiva, 444 U.S. at 682.  The Court explained

that the exception for ``managerial employees,'' like the ex-

press statutory exception for ``supervisors,'' derived from a

recognition `` t hat an employer is entitled to the undivided

loyalty of its representatives.''   Id.

  Recognizing that the governance structures of academic

institutions differ from the standard industry model for which

the NLRA was designed, id. at 680, the Court declined to

adopt a per se rule on the managerial status of faculty

members, id. at 690­91 n.31.  Instead, the Court emphasized

a number of factors that supported its conclusion that Yeshiva

University's faculty were beyond the scope of the NLRA:

     The controlling consideration in this case is that the

     faculty TTT exercise authority which in any other context

     unquestionably would be managerial.  Their authority in

     academic matters is absolute.  They decide what courses

     will be offered, when they will be scheduled, and to whom

     they will be taught.  They debate and determine teach-

     ing methods, grading policies, and matriculation stan-

     dards.    They effectively decide which students will be

     admitted, retained, and graduated.       On occasion their

     views have determined the size of the student body, the

     tuition to be charged, and the location of a school.

Id. at 686.

  The Court explained that, in a university such as Yeshiva,

     the predominant policy normally is to operate a quality

     institution of higher learning that will accomplish broadly

     defined educational goals within the limits of its financial

     resources.  The ``business'' of a university is education,

     and its vitality ultimately must depend on academic

     policies that largely are formulated and generally are

     implemented by faculty governance decisions.

 

                                4

Id. at 688.    The Court rejected the suggestion that the

faculty's role was merely advisory because some of its deci-

sions could be overturned by the university administration or

board of trustees.  `` T he fact that the administration holds a

rarely exercised veto power does not diminish the faculty's

effective power in decisionmaking and implementation,'' the

Court found;  ``the relevant consideration is effective recom-

mendation or control rather than final authority.''  Id. at 683

n.17; see id. at 688 n.27 (discussing ``occasional vetoes of

faculty action'').

  2.  As might be expected given such a long list of relevant

factors and the exquisite variety of academic institutions

across the country, the Board has developed a substantial

body of cases that explicate and develop the Yeshiva stan-

dard.  In American International College, 282 N.L.R.B. 189

(1986), for example, the Board held the approximately ninety

faculty members to be managerial employees, noting the

authority of faculty standing committees in such areas as

admissions, curriculum issues, and graduation requirements.

Id. at 190­202.  Although there were some instances in which

the administration had vetoed faculty proposals, the NLRB

said that ``they are not substantial or predominant and do not

show a pattern of unilateral action by the administration.''

Id. at 202.

  In  Livingstone College, 286 N.L.R.B. 1308 (1987), the

NLRB reached the same outcome, even though the faculty

exercised their authority through standing committees of

mixed membership -- including administrators and students.

Id. at 1310.     The faculty's ``substantial authority'' in the

development and implementation of policies in the academic

sphere, id. at 1314, outweighed the lack of faculty input into

budget decisions or the tenure process.      Id. (`` W e do not

believe that lack of participation in budgeting, tenure deci-

sions, or setting tuition  precludes a finding that the faculty

are managerial employees.'').

  The Board again found faculty members to be managerial

employees in Lewis and Clark College, 300 N.L.R.B. 155

(1990).  Faculty workload policies at the college were set by

 

                                 5

the administration, but committees (composed predominantly

of faculty) made effective recommendations in areas such as

admissions requirements and curriculum.   Id. at 156­57.   The

Board rejected a Regional Director's view that ``umbrella

committees'' on which the faculty were a minority, addressing

financial issues and long-term planning, negated the faculty's

managerial status.     As the Board found, `` t here is TTT

nothing inconsistent with the faculty members' having author-

ity over one level of policy (e.g., academics), and the adminis-

tration (including the board of trustees), having control over

another (e.g., financial viability and long-term planning).''  Id.

at 162.   The Board further explained:

     The board of trustees and others in the administration

     are entrusted with the ultimate policy-making and fidu-

     ciary responsibility for the College, not the faculty.  But,

     even as to those areas in which the administration has

     exercised its own managerial decision-making authority,

     high-level implementation of those decisions is performed

     by the faculty.

Id.

  In  Elmira College, 309 N.L.R.B. 842 (1992), the Board

upheld, without comment, a Regional Director's conclusion

that `` w ithout more, the nature of faculty involvement with

respect to academic matters conclusively establishes their

status as managerial employees.''  Id., app. at 849 (Regional

Director decision).    Under the college by-laws, the faculty

had authority over admissions, courses, graduation require-

ments, the nature of available degrees, and related procedural

matters.  Id. at 842.  The Regional Director noted that some

factors supported a lack of managerial status: ``the college

faculty does not participate in promotion decisions exclusive

of tenure and, in a few instances, has been overruled in hiring

decisions.   Also, the faculty has only a limited voice in

administrative decisions involving salary or benefits or the

budget process.''  Id. at 850.  He did not find these factors

controlling, because they ``fall outside the crucial matters of

academic governance considered dispositive by the Supreme

Court in Yeshiva.''   Id.

 

                                 6

  3.  When the faculty of LeMoyne-Owen College petitioned

the NLRB for recognition as a bargaining unit, the College

responded by contending that `` t he instant case bears strong

similarity to cases in which the Board, utilizing the principles

set forth in Yeshiva, found that faculty members were mana-

gerial employeesTTTT''  Employer's Br. to Regional Dir. at 16

(citing,  inter alia,  American International College,  Living-

stone College, and Elmira College).  The College pointed to

significant factual parallels between LeMoyne-Owen and the

other institutions at which faculty members were deemed

managerial employees -- particularly when the comparison

focuses primarily on academic matters and on ``effective

recommendation or control rather than final authority.''

Yeshiva, 444 U.S. at 683 n.17.  For example, the LeMoyne-

Owen faculty have, according to the Faculty Handbook, ``poli-

cy and procedural authority'' over a range of academic areas,

including admissions standards, the curriculum, general edu-

cation requirements, graduation requirements, standards for

grading, candidates for graduation, and conditions of aca-

demic standing, suspension, and dismissal.      Faculty Hand-

book §  3.00.

  The faculty act largely through a Faculty Assembly, con-

sisting of all full-time faculty members, and various standing

committees.   Id.   The standing committees include a Curricu-

lum Committee, which approves curriculum changes and

course additions or modifications, and an Academic Honors,

Standards, and Selection Committee, which oversees the

awarding of academic honors and handles cases of academic

probation and dismissal.  See id. § 3.06 (curriculum commit-

tee);  id. § 3.05 (academic honors committee).  Faculty have

discretion over their teaching methods and the content of

their courses, within certain parameters described in the

Faculty Handbook.        For example, each full-time faculty

member is obliged to teach twelve credit hours per semester,

and for each course, the faculty member must prepare a

detailed syllabus and file it with the appropriate division

chair.   Id. §§ 9.01, 10.01.   College policy mandates that an

 

                               7

evaluation of each student's English usage form at least ten

percent of the student's grade.   Id. §  10.06.

   Faculty recommendations on academic policies and other

matters, such as tenure, often require the approval of the

president and ultimately of the College's board of trustees.

But the president testified that he had never, in six years as

president, failed to approve a faculty recommendation on

degree requirements or other matters related to the courses

taught at the College.     Hearing Transcript 338.     He also

stated that he had forwarded all Faculty Assembly recom-

mendations on curricular changes to the trustees, without

exception, and that the trustees had never rejected any of

those recommendations.   Id. at 339­40.

   4.  The Regional Director determined, however, that the

faculty at LeMoyne-Owen were not managerial employees,

and certified a bargaining unit consisting of all full-time

faculty members.  Decision and Direction of Election, NLRB

Case No. 25-RC-10120 (Aug. 6, 2002), at 2­3 (Certification

Decision).  The Regional Director distinguished the College's

faculty from the faculty at Yeshiva University, stating that

``the faculty of LeMoyne-Owen College neither possess abso-

lute control over any facet of the school's operations, nor

`effectively' recommend policies affecting its administration.

They neither establish new policy nor effectively recommend

changes to existing policy.''  Id. at 11.    In support of this

conclusion, the Regional Director noted that committee rec-

ommendations at the College are ``subject to multiple levels of

review, and subject to change by higher levels of authority.''

Id.   The existence of such multiple levels of authority, he

stated, makes it less likely that faculty recommendations will

be effective, because the recommendations can be altered on

their way up the hierarchy.     Id. at 12.     The Regional Di-

rector pointed to a number of other factors, including the

presence of non-faculty on standing committees, an ad hoc

core curriculum committee with significant non-faculty repre-

sentation established by the president in apparent tension

with the faculty Curriculum Committee, and the instructional

policies in the Faculty Handbook, such as the English usage

requirement and the rules governing course syllabi.      Id. at

 

                                8

12­13.  He also stated that the faculty play ``a limited role in

the selection of applicants for hire, and  no role in the

decision to dismiss staff or faculty,'' and cited specific instanc-

es such as the firing of secretaries during a financial crunch

at the College in 2000 and the hiring of a professor as a full-

time faculty member despite a faculty recommendation that

she be hired only as a visiting professor.   Id.

  In reaching his determination, the Regional Director did

not discuss any of the cases the College had cited.  Instead,

he relied primarily on Florida Memorial College, 263

N.L.R.B. 1248 (1982);       Kendall School of Design, 279

N.L.R.B. 281 (1986); and University of Great Falls, 325

N.L.R.B. 83 (1997).     See Certification Decision at 12, 14.

Each of these post-Yeshiva cases held that an academic

institution's faculty were not managerial employees.           The

College, however, contends that the facts of these cases are

distinguishable in significant respects from the facts in the

LeMoyne-Owen record.        There was no tenure system at

Florida Memorial College, and teaching contracts were gener-

ally only for a single year.  Nor was there evidence of any

effective faculty input into the college's curriculum; faculty

members seeking to introduce new courses had to seek

approval directly from the president and the dean of aca-

demic affairs.  263 N.L.R.B. at 1249­51.  The school had an

open admissions policy (precluding a faculty role in admission

standards), and the administration established continuation

requirements and approved students for graduation.  Id. at

1250.  Noting that the administration had ``systematically and

independently reviewed'' faculty proposals and ``consistently

substituted its own judgment for that of the faculty,'' the

Board found that the faculty's authority did not satisfy the

Yeshiva standard.   Id. at 1254.

  At the Kendall School of Design, meetings of the full

faculty were held only twice per semester, and votes of the

full faculty were never taken; a refocusing of the school's

curriculum took place under the direction of the academic

dean, who gave the faculty curriculum committee only the

broad outlines of the revisions and then demanded a simple

 

                               9

up-or-down vote.  279 N.L.R.B. 281, app. at 283, 286 (Region-

al Director decision).   Faculty members played no role in

other academic matters such as matriculation standards and

graduation requirements.     Id. at 286.  University of Great

Falls involved an institution where the dean of faculty had on

several occasions refused to let faculty use the textbooks of

their choice, and the deans -- not the faculty -- were

responsible for approving students for graduation.           325

N.L.R.B. 83, app. at 85 (Regional Director decision).         In

addition, the Board found that, unlike in Elmira College and

Lewis and Clark College, there was no ``clear evidence that

faculty recommendations were generally followed.''          325

N.L.R.B. at 83 & n.8.

  LeMoyne-Owen requested that the Board review the Re-

gional Director's decision, challenging the Regional Director's

reliance on these cases and renewing its argument that other

cases, such as American International College and Lewis and

Clark College, were controlling precedent.     See Employer's

Request for Review of Bargaining Unit Certification at 10­12,

17­21.  The Board denied the request by a 2­1 vote, declar-

ing in a one-sentence order that the College had ``raised no

substantial issues warranting review.''   Order, NLRB Case

No. 25-RC-10120 (Sept. 4, 2002).  After the faculty voted to

accept their bargaining representative, the Regional Director

issued a formal certification of that representative and the

College again sought the review of the Board.        As it had

before, the College argued that the LeMoyne-Owen faculty

exercise authority comparable to that of the faculty members

in  American International College and the analogous post-

Yeshiva cases.   See Employer's Request for Review of Re-

gional Director's Supplemental Decision and Certification of

Representative at 12­15.     The Board again issued a terse

order denying review, again with no discussion of the prece-

dents.  Order, NLRB Case No. 26-RC-8328 (Oct. 11, 2002).

The College refused to bargain with the faculty, and the

Board ultimately deemed the College guilty of unfair labor

practices and ordered it to bargain.      Decision and Order,

NLRB Case No. 26-CA-20953, at 2 (Jan. 17, 2003).            The

matter is before this court on the College's petition for review

 

                                10

of the order and the Board's cross-application for enforce-

ment.    The College's challenge brings the entire NLRB

proceeding -- including the Regional Director's underlying

decision to certify the full-time faculty as a bargaining unit --

before this court for review.  Boire v. Greyhound Corp., 376

U.S. 473, 477 (1964);  Terrace Gardens Plaza, Inc. v. NLRB,

91 F.3d 222, 225 (D.C. Cir. 1996).

   5.  We accord deference to the Board's exercise of its

authority under 29 U.S.C. § 159 to certify appropriate bar-

gaining units.  See, e.g., BB&L, Inc. v. NLRB, 52 F.3d 366,

369 (D.C. Cir. 1995).    That deference is subject to certain

limits, however, and one of those limits is that the Board

``cannot ignore its own relevant precedent but must explain

why it is not controlling.''  Id. (citing Cleveland Constr. Co. v.

NLRB, 44 F.3d 1010, 1016 (D.C. Cir. 1995));  see also Inter-

national Union of Operating Eng'rs v. NLRB, 294 F.3d 186,

188 (D.C. Cir. 2002) (``The Board has an obligation to engage

in reasoned decisionmaking, which TTT requires it to give a

reasoned explanation when it departs from its own prece-

dent.'') (citations omitted).  In this case, the Board has not

provided any explanation -- let alone an adequate one -- of

how its disposition is consistent with its contrary holdings in

the post-Yeshiva cases that appear to have presented similar

facts.   The only opinion is that of the Regional Director,

which did not discuss or even mention a single one of the

precedents on which the College relied.

   An agency is by no means required to distinguish every

precedent cited to it by an aggrieved party.          See Bush-

Quayle '92 Primary Comm., Inc. v. Federal Election

Comm'n, 104 F.3d 448, 454 (D.C. Cir. 1997) (``We may permit

agency action to stand without elaborate explanation where

distinctions between the case under review and the asserted

precedent are so plain that no inconsistency appears.'');  Hall

v. McLaughlin, 864 F.2d 868, 873 (D.C. Cir. 1989) (``if the

court itself finds the past decisions to involve materially

different situations, the agency's burden of explanation about

any alleged `departures' is considerably less'').  But where, as

here, a party makes a significant showing that analogous

 

                                 11

cases have been decided differently, the agency must do more

than simply ignore that argument.         See Speedrack Prods.

Group, Ltd. v. NLRB, 114 F.3d 1276, 1279 (D.C. Cir. 1997)

(Board ``ignored its own precedent without offering any expla-

nation as to why this precedent was inapplicable'').  As this

court noted in Cleveland Construction, 44 F.3d at 1016, ``we

cannot uphold silence.''     Emerson's advice to preachers --

``emphasize your choice by utter ignoring of all that you

reject,'' RALPH WALDO EMERSON, The Preacher, reprinted in 10

LECTURES AND BIOGRAPHICAL  SKETCHES 215, 235 (1904) -- will

not do for administrative agencies.

   The need for an explanation is particularly acute when an

agency is applying a multi-factor test through case-by-case

adjudication.  The ``open-ended rough-and-tumble of factors''

on which Yeshiva launched the Board and higher education,

Jerome B. Grubart, Inc. v. Great Lakes Dredge & Dock Co.,

513 U.S. 527, 547 (1995);  see Yeshiva, 444 U.S. at 690 n.31

(Court's analysis ``is a starting point only, and TTT other

factors not present here may enter into the analysis in other

contexts''), can lead to predictability and intelligibility only to

the extent the Board explains, in applying the test to varied

fact situations, which factors are significant and which less so,

and why.  As the Second Circuit explained in Arrow Fastener

Co. v. Stanley Works, 59 F.3d 384, 400 (2d Cir. 1995),

``thorough, careful, and consistent application'' of a multi-

factor test is important to allow ``relevant distinctions be-

tween different factual configurations to  emerge,'' and be-

cause ``appellate courts depend on it for the performance of

their assigned task of review.''  In the absence of an explana-

tion, the ``totality of the circumstances'' can become simply a

cloak for agency whim -- or worse.  See HENRY  J. FRIENDLY,

BENCHMARKS 104 (1967) (``Lack of definite standards creates a

void into which attempts to influence are bound to rush;  legal

vacuums are quite like physical ones in that respect.'').

   A court reviewing an ipse dixit outcome that seems incon-

sistent with proferred precedent is left to attempt to discern

for itself which factual differences might have been determi-

native, without guidance from the agency, and to assess

whether making such distinctions controlling is rational or

 

                              12

arbitrary, again without any agency explanation of why par-

ticular factors make a difference.    The court really has no

way of knowing if the rationale it discerns is in fact that of

the agency, or one of the court's own devise.  Yet only the

former can provide a legitimate basis for sustaining agency

action.  SEC v. Chenery Corp., 318 U.S. 80, 87­88 (1943).

Requiring an adequate explanation of apparent departures

from precedent thus not only serves the purpose of ensuring

like treatment under like circumstances, but also facilitates

judicial review of agency action in a manner that protects the

agency's predominant role in applying the authority delegated

to it by Congress.

  The NLRB may have an adequate explanation for the

result it reached in this case.  We cannot, however, assume

that such an explanation exists until we see it.  We therefore

grant the petition for review, deny the cross-application for

enforcement, and remand to the NLRB for further proceed-

ings.

 

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