Ordinarily, courts defer to the National Labor Relations Board’s (NLRB) factual findings and its remedial orders given the Board’s broad discretion when fashioning a remedy. However, in the D.C. Circuit’s recent decision in RAV Truck & Trailer Repairs Inc. v. NLRB, 997 F.3d 314 (D.C. Cir. 2021), the Court refused to do so.

Sometimes being too persuasive can have a downside, as Peter Robb, former General Counsel of the NLRB can attest. Robb had convinced the NLRB to find an owner had illegally closed his business and had further persuaded the NLRB to order it reopened. Contrary to common practice, the Court refused to rubber stamp the NLRB’s factual findings or to defer to the remedy, stating that the NLRB’s order “does not purport to explain how restoration is even factually possible.” Instead, the Court gave the NLRB a second chance at finding the necessary evidence in the now closed record.

The case arose during a union organizing campaign. The employer, RAV Truck and Trailer, was part of a single employer. It repaired trucks, and its counterpart, Concrete Express, delivered concrete. The employees at Concrete Express petitioned the NLRB for a vote on union representation. Shortly thereafter, two of RAV Truck’s employees signed union cards. In the meantime, RAV Truck’s landlord cancelled its lease, forcing it to find new space — which it did, albeit in an unlicensed location, which was “unsuitably small.”

Upon learning the two RAV Truck employees had signed union authorization cards, the owner terminated one employee because he was not authorized to work in the United States. Shortly thereafter, RAV Truck closed its business. The Union’s petition was filed later, on the same day as the closing.

The NLRB found the terminations of the two employees were illegal, that the closing of the business was also illegal, and as the remedy ordered the business reopened and the two employees reinstated.

Initially, the Court expressed reservations about the NLRB’s conclusion that the closing was unlawfully motivated under the analysis mandated by the Supreme Court in Textile Workers Union v. Darlington Mfg. Co., 380 U.S. 263 (1965). In Darlington, the Court ruled an employer can lawfully close its entire business or a single worksite because employees sought union representation unless the NLRB demonstrates the employer closed the business to chill union organizing at another location or business. Id. at 275-76. In the underlying RAV Truck decision, the Administrative Law Judge (ALJ) characterized the record as having “evidentiary gaps” but proceeded to find the closing was unlawful anyway. See RAV Truck & Trailer Repairs, Inc., 369 N.L.R.B. No. 36, (Mar. 3, 2020). When the case got to the NLRB it essentially ignored the evidentiary gaps identified by the ALJ, except to note that the gaps had been filled by unfair labor practices committed at Concrete Express the other employer comprising the single employer with RAV Trucks.

The DC Circuit faulted the NLRB for not addressing the “evidentiary gaps” identified by the ALJ and for not explaining how unfair labor practices committed at Concrete Express filled those gaps. This portion of the NLRB’s order in the RAV Truck case was vacated and remanded for reconsideration.

The Court also refused to enforce the NLRB’s Order, requiring RAV Truck to reopen its business, describing this portion of the Order as “def[ying] reasoned decision making.” The Court focused its attention on the fact RAV Truck no longer had any leased space in which to conduct its business. It was also troubled by the fact the employer was occupying unlicensed space at the time it made the decision to close its business. The Court concluded its analysis by “doubting” that the NLRB meant to require the employer “to continue operating unlawfully.”

Key takeaways for employers

While other courts have refused to enforce NLRB decisions which lacked the proper fact finding see e.g. NLRB v. Chicago Tribune, 962 F.2d 712 (7th Cir. 1992) (failure to find union animus fatal to unlawful discharge finding), RAV Truck serves as a reminder that when administrative agencies make decisions, those decisions must be based on facts, and not speculation or inference. Appealing an adverse NLRB decision which is untethered from the factual record may prove worthwhile. For assistance with your labor and employment needs, contact your Baker McKenzie employment attorney.