Kfc National Management Corp. v. National Labor Relations Board

497 F.2d 298, 86 L.R.R.M. (BNA) 2271, 1974 U.S. App. LEXIS 8722
CourtCourt of Appeals for the Second Circuit
DecidedMay 8, 1974
Docket821, Docket 73-1982
StatusPublished
Cited by50 cases

This text of 497 F.2d 298 (Kfc National Management Corp. v. National Labor Relations Board) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kfc National Management Corp. v. National Labor Relations Board, 497 F.2d 298, 86 L.R.R.M. (BNA) 2271, 1974 U.S. App. LEXIS 8722 (2d Cir. 1974).

Opinion

J. JOSEPH SMITH, Circuit Judge:

KFC National Management Corp., ordered by the National Labor Relations Board (204 N.L.R.B. No. 69) to bargain with a union certified as representative of its employees petitions for review of the order and the Board cross-petitions for enforcement. Review granted. Cross-petition for enforcement denied.

This petition for review of an unfair labor practice decision raises the troublesome question of delegation of authority in administrative decision making. The genesis of the petition, was a representation election contested by the employer, KFC, on grounds of pro-union activity of supervisory employees. The NLRB Regional Director, to whom KFC protested, conducted an ex parte investigation into the company’s claims and concluded that they had “no merit” and that therefore the union should be certified as the duly-elected bargaining representative.

*300 Dissatisfied with both the Director’s findings and his failure to conduct an adversary hearing, KFC petitioned the Board for review. On September 7, 1972 — approximately two weeks after the petition was filed — KFC’s counsel received a brief telegram informing him that the request had been denied “as it raises no substantial issues warranting review.” The telegram was signed, “By direction of the Board.” A further petition for reconsideration was similarly telegraphically denied, “as lacking in merit”' — again “By direction of the Board.”

When KFC continued to refuse to bargain, this unfair practice charge was filed. In its answer to the complaint, KFC again pressed its objections to the election and asked for a full hearing on its claims. In addition, the company for the first time challenged the denials of review and reconsideration on the grounds that the “Board” had in fact been composed of but one Board member and two staff assistants. 1

In its decision on the unfair practice charge, the Board — now eoncededly composed of three official members— refused to reconsider the Director’s decision relying on its “no relitigation” rule, and categorically rejected KFC’s procedural objection as an unjustified intrusion into its decision-making process. 2

*301 As part of this petition for review of the Board’s unfair practice order, KFC made a motion for a supplemental list of materials including,

All documents, papers and records, including agenda memos, case summaries, etc. of the National Labor Relations Board and particularly members Miller, Fanning, and Jenkins, their agents, employees, attorneys and assistants, and in particular any such documents, papers and records in the Review Section of the Board under the supervision of Gilbert Rosenberg, relating to consideration of the Employer’s Request for Review.
. . . . . .

On October 17, 1973, this court denied the motion, except “to the limited extent” of requiring “that the Board shall serve and file a detailed statement showing the extent and date of the participation of members Miller, Fanning and Jenkins in the consideration of the Employer’s request and motion. . . .” The Board responded with an affidavit from its Executive Secretary stating:

Member Jenkins was personally present and Chairman Miller and Member Fanning were each represented by an attorney assistant employed on his respective staff who had been authorized to cast a vote for him at the said agenda. The vote at the agenda was unanimous to deny review.

From its own argument — both written and oral — we have further learned that the authorizations referred to were quite general in nature: In the normal course of events, Board members seldom discuss individual cases with their assistants prior to these voting sessions. There is, apparently, a one-day period between the votes and the filing of decisions, but there is no evidence that the members normally review the votes cast by their staff assistants. The Board has represented — and we have no reason to doubt — that particularly difficult or significant eases receive the individual attention of the members either before or after their votes are cast by their proxies. But there is no suggestion that such was the case here: Indeed it is the Board’s position that this case — like the vast majority of review petitions 3 — was so routine that it was well suited to this general delegation approach. 4

I.

The question then is whether this virtually complete delegation com *302 ports with the requirements of the National Labor Relations Act and of administrative due process in general.

Inquiry into the statutory requirements of the National Labor Relations Act should begin with a bit of legislative history. Until the Landrum-Griffin Act of 1959, the Board was directly responsible for each and every representation decision. This tremendous burden — over 10,000 cases in 1959 5 — prompted Congress to amend the Act to permit delegation of those decisions to the Board’s Regional Directors — -subject to discretionary review by the Board:

The Board is also authorized to delegate to its regional directors its powers under section 159 of this title to . certify the results [of bargaining elections], except that upon the filing of a request therefor with the Board by any interested person, the Board may review any action of a regional director delegated to him under this paragraph.

29 U.S.C. § 153(b).

In 1961 the Board exercised this authority by delegating representation matters subject to review by the Board on four different grounds:

(c) The Board will grant a request for review only where compelling reasons exist therefor. Accordingly, a request for review may be granted only upon one or more of the following grounds:
(1) That a substantial question of law or policy is raised because of (i) the absence of, or (ii) a departure from, officially reported Board precedent.
(2) That the regional director’s decision on a substantial factual issue is clearly erroneous on the record and such error prejudicially affects the rights of a party.
(3) That the conduct of the hearing or any ruling made in connection with the proceeding has resulted in prejudicial error.
(4) That there are compelling reasons for reconsideration of an important Board rule or policy.

29 C.F.R. § 102.67(c).

Section 102.67 makes it clear that the decision on whether or not to grant such review is also to be made by the Board. See 29 C.F.R.

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Bluebook (online)
497 F.2d 298, 86 L.R.R.M. (BNA) 2271, 1974 U.S. App. LEXIS 8722, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kfc-national-management-corp-v-national-labor-relations-board-ca2-1974.