D.C. Circuit Review – Reviewed: Why There Will Never Be Another LeBron James

by Aaron Nielson — Saturday, June 18, 2016@Aaron_L_Nielson

My son is away at camp this week, and that’s probably for the best. It means he has missed the last two NBA Finals games. One of his least favorite players is LeBron James, and LeBron—by any measure—has had a pretty amazingweek. At the same time, my son is a huge fan of Shaun Livingston and Andre Iguodala, who, well, haven’t. Why doesn’t he root for LeBron? I’m not entirely sure, though I do know that he thinks referees give LeBron better calls than other players* and that LeBron complains too much. Maybe that’s right, but it’s still hard not to respect LeBron’s legendary last two games. There will never be another LeBron James.

Why am I so confident that there will never be another LeBron? Even leaving aside his unique basketball skills, there will never be another player whose career tracks LeBron’s because the rules have changed. In particular, LeBron James jumped straight from high school to the NBA. I don’t think we will ever see another American basketball player do that. The reason is found in labor law. The NBA and the Player’s Association—the Union—have entered into a collective bargaining agreement (CBA) that cuts off the straight-from-high-school-to-the-pros path. And the NBA isn’t about to budge on this point; indeed, the league hopes to further raise the age minimum to 20 years, no doubt because, among other things, it makes drafting players less risky. And there is reason to think that will happen.

As Pablo Torre explained this week, although the Union says age minimums are unfair, in reality “a majority of players chose personal profit over the rights of the non-voting teens who’d be coming for their jobs. As veteran Grant Hill bluntly told the New York Times in 2005, ‘I always thought that it was the purpose of the union to protect its members, not potential members.’” Thus, “for all the bluster around an age limit, the policy mostly functions as a bargaining chip for the NBPA: It’s something to be swapped, not defended. …. ‘The union isn’t going to cancel the season or miss games over the age limit.’” Without a CBA, there is a good chance that a league-wide boycott of high school players would violate the antitrust laws. But because of the CBA, the age limit has a much sturdier foundation.

Labor law is a complex field; in hindsight, I wish I had taken a class on it during law school. (Multiply that sentiment times a thousand when it comes to patent law.) Before I started this weekly series of blog posts, moreover, I did not realize just how many D.C. Circuit cases involve the NLRB. (This week, of course, there are two blog posts; I reviewed the Net Neutrality decision earlier.) Reading these cases, I’ve stumbled through a lot of labor law. And this week I learned a new rule.

In Sands v. NLRB, the D.C. Circuit (per Judge Griffith, joined by Judges Tatel and Kavanaugh) dismissed a challenge to an NLRB decision as moot. It seems that Laura Sands worked at a unionized grocery store in Indiana. When she was hired, “the union sent her a letter and membership application explaining to her what rights and obligations she had under the union-security clause. The application explained that, whether she joined the union or not, she was required to pay dues to the union to compensate it for acting as her collective-bargaining agent.” But the union also said that “she need not join the union, and that if she did not, she could refuse to pay for the union’s activities that were unrelated to collective bargaining.” The union, however, did not tell her how much she would save by not joining. She joined the union. After she quit, however, she claimed that the union “deliberately misled” her by not informing her how much she would save. In response, “the union argued that Sands was not entitled to that information until after she chose not to join the union.” The Board agreed with the union, though how it did so merits a block quote:

Both the General Counsel and Sands filed exceptions with the Board, arguing that the Board decisions on which the ALJ relied conflicted with D.C. Circuit case law. In particular, they cited our decision in Penrod v. NLRB, 203 F.3d 41 (D.C. Cir. 2000), where we held that new employees must be given “sufficient information” to decide whether to join the union, including “the percentage of union dues that would be chargeable” should they not join. Id. at 47 (applying Abrams v. Commc’ns Workers of Am., 59 F.3d 1373 (D.C. Cir. 1995)). The Board agreed that Penrod and Abrams, the case on which Penrod relied, would answer the question at hand against the union, but quite remarkably dismissed the complaint anyway. The Board asserted that it was not bound to follow Penrod and Abrams because our decisions there had failed to account for a policy that underlay the Board’s position. UFCW, Local 700 (Kroger), 361 N.L.R.B. No. 39 (2014). Before us, the Board recognizes again, as it did below, that our prior decisions would compel us to vacate the Board’s order on the merits. The Board hopes that we will revisit those decisions en banc.

Rather than reaffirm Penrod and Abrams, however, the panel concluded that the dispute was moot—and potentially created a circuit split in the process. It seems that “[i]n 2014, about two months after Sands petitioned this court for review of the Board’s decision rejecting her claims, the union refunded the dues she had paid by sending her a check for $350, claiming that those funds equaled the total dues Sands had paid plus interest.” Because she now has this refund in hand, “Sands can no longer claim her payment of dues as the basis for her interest in this matter.” Ahh, you say, but what about the Sixth Circuit’s decision in Montague v. NLRB, 698 F.3d 307 (6th Cir. 2012), which allowed a challenge to go forward even though the location where the employees worked was no longer covered by the CBA, on the theory that the potential remedy would be applied at covered locations? “To the extent the Sixth Circuit held that an employee without a personal interest in the posting of a remedial notice can pursue her case on the basis of that remedy, we disagree.”

The panel, however, vacated the NLRB decision, explaining, among other things, that “the union prevailed below and mooted the case by sending Sands a refund check after she appealed, which can be reasonably seen as a ‘maneuver[] designed to insulate a decision from review.’” Moreover, “vacatur will prevent the General Counsel from further relying on the Board’s unreviewed decision, thereby opening the door to reconsideration of the merits of the legal issues in this case.” Perhaps we have not seen the last of the NLRB’s disagreement with Penrod and Abrams.

The D.C. Circuit issued another NLRB decision this week—or rather reissued one from April. In Fort Dearborn Company v. NLRB, Judge Rogers (joined by Judges Henderson and Kavanaugh) sided with the NLRB. Even so, the NLRB was not thrilled with a particular paragraph in the decision and so moved to have the opinion amended. The Court agreed to do so. What did the offending paragraph say? Here it is (with some citations omitted):

The Board’s threshold objection that the Company’s good-faith-belief argument is not properly before the court because it was not presented to the Board, is not well taken. Even though the Company’s exceptions to the ALJ’s decision do not clearly raise the good-faith issue, at times “ ‘vague exception[s]’ to an ALJ’s finding may be sufficient ‘to preserve an issue for appeal when [the] petitioner’s brief in support of its exceptions adequately puts the Board on notice’ of the grounds on which the petitioner is objecting.” DHL Express, Inc. v. NLRB, 813 F.3d 365, 372 (D.C.Cir.2016) (quoting Parsippany Hotel Mgmt. Co. v. NLRB, 99 F.3d 413, 417–18 (D.C. Cir. 1996)). That is true here. In its supporting brief to the Board, the Company argued that its managers reasonably believed that Hedger may have compromised confidential company information by walking Schmidt through the Plant for upwards of an hour. The Company raised the issue more explicitly in other briefs to the Board: “The Company did not and does not claim that Hedger was discharged because he actually spent 50 minutes to an hour with Schmidt on the evening of August 12, 2010. He was discharged because of what [the Company] believed took place on August 12….” Taken together, the Companys submissions to the Board adequately raised the good-faith issue, and the court has jurisdiction to consider these challenges. See DHL Express, 813 F.3d at 372.

The reason why this paragraph was withdrawn is that—quoting the NLRB’s motion—“[a]fter the Company filed its reply brief … the Board filed a letter withdrawing its argument regarding 10(e)” because, upon reflection, the Board agreed with the petitioner that the issue was presented.

Moving beyond the NLRB, the D.C. Circuit also decided an important SEC case. In Lindeen v. SEC, Judge Henderson, joined by Judges Ginsburg and Sentelle, upheld SEC regulations involving state preemption. In particular, the SEC “created a new class of securities offerings freed from federal-registration requirements so long as the issuers of these securities comply with certain investor safeguards.” The SEC also preempted all state regulation for “qualified purchasers.” Montana and Massachusetts petitioned for review “because the SEC declined to adopt a qualified-purchaser definition limited to investors with sufficient wealth, revenue or financial sophistication to protect their interests without state protection.” Long story short, the D.C. Circuit disagreed. Relying on the statute’s text, the panel determined that Congress did not directly speak regarding the definition of qualified purchaser but rather explicitly authorized the commission to define the term. By leaving the definition to the SEC’s discretion, Congress demonstrated its desire to give the SEC wide latitude. This is an interesting Chevron case; it suggests that even if words may be unambiguous if read by themselves, if Congress authorizes the agency to define those words, the agency will receive deference: “When the ‘Congress explicitly authorize[s]’ an agency to ‘define [a] term,’ it ‘necessarily suggests that Congress did not intend the word to be applied in its plain meaning sense.’”

Finally, we come to United States v. Castle and Morris v. McCarthy (EPA). Both of these cases are heavy on the facts. Because this blog focuses on administrative law, I won’t spend too long on either of them. In Morris, a discrimination case, the panel (Judge Griffith, joined by Judges Millett and Williams) concluded, among other things, that a reasonable jury could find that Susan Morris’s supervisor discriminated against her. And in Castle, the panel (Judge Edwards, joined by Judge Millett) concluded that the police lacked a reasonable articulable suspicion. Judge Silberman dissented: “In my view, the majority opinion is quite unfortunate. It not only breaks with circuit precedent, it is quite confusing regarding the appropriate scope of review we should apply in reviewing district court factual determinations – particularly inferences drawn from historical facts.”

So there you go—another week’s worth of cases. Enjoy the weekend. (And for the sake of my son’s off-season happiness, let’s hope LeBron does not have one more legendary game in him.)

* Cf. Chief Justice John Roberts: “Somebody asked me, you know, ‘Are you going to be on the side of the little guy?’ And you obviously want to give an immediate answer. But as you reflect on it, if the Constitution says that the little guy should win, the little guy is going to win in court before me. But if the Constitution says that the big guy should win, well, then the big guy is going to win, because my obligation is to the Constitution.” 

D.C. Circuit Review – Reviewed is designed to help you keep track of the nation’s “second most important court” in just five minutes a week.

Cite As: Author Name, Title, 36 Yale J. on Reg.: Notice & Comment (date), URL.

This entry was categorized in D.C. Circuit Review and tagged , .

About Aaron Nielson

Professor Nielson is an associate professor at Brigham Young University Law School, where he teaches and writes in the areas of administrative law, civil procedure, federal courts, and antitrust. He currently serves as a public member of the Administrative Conference of the United States, a federal agency that studies the administrative process and makes recommendations on ways to improve it. He also co-chairs the Rulemaking Committee of the American Bar Association’s Section of Administrative Law & Regulatory Practice. Previously he chaired the Section's Antitrust & Trade Regulation Committee. Before joining the academy, Professor Nielson was a partner in the Washington, D.C. office of Kirkland & Ellis LLP (where he remains of counsel). He also has served as a law clerk to Justice Samuel A. Alito, Jr. of the U.S. Supreme Court, Judge Janice Rogers Brown of the U.S. Court of Appeals for the D.C. Circuit, and Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit. Follow him on Twitter @Aaron_L_Nielson.

Leave a Reply

Your email address will not be published. Required fields are marked *