In National Labor Relations Board v. ArrMaz Products, Inc., 2024 WL 5116732 (11th Cir. Dec. 16, 2024), the Eleventh Circuit held that it had jurisdiction to review a decision of the National Labor Relations Board (“NLRB”) that employees of a wholly owned subsidiary were not eligible to vote in a union-representation election, where the NLRB had reserved ruling on whether it could also impose compensatory remedies to the union due to the employer’s refusal to bargain.
ArrMaz Products, Inc. (“ArrMaz”), a specialty chemicals manufacturer, entered into a stipulated election agreement with the International Chemical Workers Union Council of the United Food and Commercial Workers Union (“the Union”) to decide whether the Union would be the collective-bargaining representative for employees of ArrMaz. Two employees of Amp Trucking, Inc. (“AMP”), a wholly owned subsidiary of ArrMaz, sought to cast ballots in the election. Their ballots were disputed by the Union and not counted. The Union won the election with 20 employees voting in favor of the Union and 18 employees voting against the Union. Because the Union needed a majority vote to win, the two disputed votes were potentially determinative of the election outcome.
The stipulated election agreement between ArrMaz and the Union governed the procedure for the election and defined the employees who would be included in the collective bargaining agreement. The agreement was entered into between only ArrMaz (defined as “Employer”) and the Union. The agreement defined “Unit and Eligible Voters” to include certain specified positions “employed by the Employer” and excluded all “other employees.”
As part of its duty to oversee representation elections, the NLRB ordered a hearing on the Union’s challenge to the ballots, and the hearing officer sustained the Union’s challenge. After the election results were certified, ArrMaz still refused to bargain with the Union. The Union then filed a separate charge against ArrMaz with the NLRB.
The NLRB ordered ArrMaz to bargain. A previous NLRB ruling, Ex-Cell-O Corp., 185 NLRB 107 (1970), however, had held that the NLRB lacked authority to order any compensatory remedies in enforcement proceedings for an employer’s refusal to bargain. Though the NLRB ordered ArrMaz to bargain, it reserved ruling on whether it could order a compensatory remedy despite Ex-Cell-O and severed that issue for further consideration. The NLRB then applied for the Eleventh Circuit’s enforcement of the NLRB’s order. ArrMaz cross-petitioned for review.
In an opinion written by Judge Hull and joined by Judges Wilson and Brasher, the Eleventh Circuit held that the parties’ election agreement plainly and unambiguously provided that only ArrMaz employees were eligible to vote, and thus the NLRB properly sustained the Union’s challenge.
But first the court considered whether it had jurisdiction to review the NLRB’s order. ArrMaz argued that jurisdiction was not proper because the enforcement order was not a final order since the NLRB severed and retained the issue of whether to overrule the Ex-Cell-O precedent. The Eleventh Circuit explained that two conditions must be satisfied for an agency action to be final and reviewable: (1) the action must mark the consummation of the agency’s decision-making process—not tentative or interlocutory; and (2) the action must be one by which rights or obligations have been determined or from which legal consequences will flow.
Three other circuits have addressed whether an NLRB order that severs and retains a remedial issue is final, and all three held that the severance of the Ex-Cell-O remedial issue does not affect an appellate court’s jurisdiction to adjudicate issues that the NLRB has resolved. The Eleventh Circuit joined its sister circuits and concluded that the order was final and reviewable because it was a “consummation” of the NLRB’s decision-making process, it determined ArrMaz’s obligations, and it imposed liabilities on ArrMaz from which legal consequences followed.
The court then addressed whether the agreement between the Union and ArrMaz was ambiguous. The court held that the agreement unambiguously included only ArrMaz employees within the bargaining unit. The agreement, the court held, clearly defined ArrMaz as the Employer. The agreement also clearly limited eligible voters to employees of the Employee. The two AMP voters were employed by AMP, not ArrMaz. Accordingly, the court granted the NLRB’s application for enforcement.