Local 23, American Federation of Musicians v. NLRB
12 F.4th 778 (2021)
Rule of Law:
An administrative agency's new legal test for defining the scope of employee rights, and its application of that test, must be consistently and logically explained, and properly apply its stated burden of proof, or it will be deemed arbitrary and capricious under the Administrative Procedure Act.
Facts:
- The San Antonio Symphony leases performance space from the Tobin Center for the Performing Arts, a facility owned and operated by Bexar Performing Arts Center Foundation, for 22 weeks each year.
- The Symphony musicians are employees of the San Antonio Symphony, not the Tobin Center, and their collective bargaining agreement guarantees them 30 paid weeks annually, leading them to perform at other venues for approximately eight weeks.
- During the 2016-2017 season, the Ballet San Antonio decided to use recorded music instead of live Symphony music for certain performances at the Tobin Center, which contributed to a work shortage for the Symphony musicians.
- Local 23 decided to engage in leafleting at the Ballet's performances at the Tobin Center to raise awareness among patrons that they would not hear a live symphony and to encourage insistence on live music.
- Ten to fifteen Local 23 members, primarily Symphony musicians, gathered in the Tobin Center’s front plaza and began distributing leaflets to Ballet patrons.
- Tobin Center staff informed the Local 23 members that they could not leaflet anywhere on Tobin Center property and suggested they move to the public sidewalk across the street.
- The Local 23 members complied and moved to the public sidewalk across the street, where they continued to distribute leaflets during subsequent performances.
Procedural Posture:
- Local 23 filed unfair labor practice charges against Bexar Performing Arts Center Foundation (d/b/a the Tobin Center).
- The National Labor Relations Board’s General Counsel subsequently brought a complaint.
- An Administrative Law Judge (ALJ) applied the then-governing framework from New York New York, LLC and found that Bexar violated Section 8(a)(1) by preventing symphony employees from distributing flyers.
- A divided National Labor Relations Board (NLRB) reversed the ALJ's decision, overruled New York New York, LLC, and announced a new two-step standard, ultimately dismissing the General Counsel’s complaint.
- Local 23 (Petitioner) petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the Board’s decision.
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Issue:
Is the National Labor Relations Board's new two-step test, and its application, for determining when a property owner may prohibit an onsite contractor's employees from accessing the property to engage in Section 7 labor organizing activity, arbitrary and capricious?
Opinions:
Majority - Chief Judge Srinivasan
Yes, the National Labor Relations Board’s application of its new two-step test for determining when a property owner may prohibit an onsite contractor's employees from accessing the property to engage in Section 7 activity was arbitrary and capricious. The court found that the Board's implementation of the first step of its new test, requiring contractor employees to work 'regularly and exclusively' on the property, was arbitrary. The Board's finding that the Symphony musicians (present for 22 weeks of the year) did not work 'regularly' was inconsistent with its own hypothetical example that a vending machine operator (present once a week) would, and its post-hoc rationalization in its brief could not be considered under the Chenery doctrine and lacked logical connection to the employee's connection to the property. Furthermore, the Board's definition of 'exclusively' was an 'ill-suited proxy' for connection to the property, creating inconsistent results by potentially excluding employees with substantial presence while including those with marginal presence without adequate explanation. The court also determined that the Board's application of the second step of its test was arbitrary because it failed to impose the burden of proof it explicitly placed on the property owner to show that reasonable nontrespassory alternative means of communication existed. The record was not developed with awareness of this new burden, and Local 23 had no opportunity to challenge the reasonableness or efficacy of the alternative means (like social media or leafleting across the street) without the Tobin Center being required to carry its burden.
Concurring - Circuit Judge Henderson
Yes, the National Labor Relations Board misapplied its new framework for contractor employees’ access rights in this dispute, making the court's remand appropriate. Circuit Judge Henderson concurs in the court's opinion but emphasizes that the Board's new framework is not arbitrary or capricious per se. She acknowledges the Board's general discretion to overrule its precedent with a reasoned explanation. She suggests that if the Board had adequately explained and properly applied the 'exclusivity' and 'alternative means' prongs of its new framework, the decision would have been affirmed.
Analysis:
This case significantly reinforces the principle that while administrative agencies have broad discretion to develop and revise legal standards, their new frameworks must be supported by reasoned explanations and applied consistently and fairly. It highlights the importance of the Chenery doctrine, preventing courts from upholding agency decisions based on post-hoc rationalizations presented in litigation rather than articulated in the agency's original decision. The ruling also underscores that simply establishing a new test is insufficient; agencies must ensure proper procedural application, including the accurate placement and enforcement of the burden of proof, especially when modifying established precedents concerning statutory rights.
