Unpublished Disposition, 841 F.2d 1128 (9th Cir. 1988)

MEMORANDUM^** 

This petition arises out of an attempt by Bridgeway Oldsmobile ("Employer") to undermine its salesmen's support for the Automobile Salesmen's Union, Local 1095, United Food and Commercial Workers, AFL-CIO ("Union"). The Employer's actions included hiring otherwise unnecessary salesmen, who did not support the Union, to ensure the Union's defeat in the upcoming representative election ("unit packing"). The Administrative Law Judge ("ALJ") found, and the National Labor Relations Board ("NLRB") agreed, that the Employer's actions constituted unfair labor practices in violation of Sec. 8(a) (1) and (5) of the National Labor Relations Act ("NLRA"), ch. 372, 49 Stat. 452 (1935) (codified as amended at 29 U.S.C. § 158(a) (1), (5)).

The ALJ recommended a cease and desist order and various affirmative remedies, including a bargaining order. The Employer took various exceptions to the ALJ's findings. The Union took exception only to the ALJ's failure to order the Employer to reimburse its salesmen for commissions lost as a result of the unit packing. In its decision adopting virtually all of the ALJ's recommendations, the NLRB expressly rejected the Employer's exceptions. See Decision and Order, p. 1, n. 1. It also failed to award the lost commissions sought by the Union; however, it did so without express reference or explanation.

The union argues that the NLRB's failure to express a rationale for rejecting its exception requires a remand. In the alternative, the Union contends that if a remand is not necessary, the NLRB was arbitrary or capricious in its decision not to award lost commissions.

The NLRB is correct when it contends that a reviewing court must give "special respect" to the NLRB's choice of remedies. See NLRB v. Gissel Packing Co., 395 U.S. 575, 612 n. 32 (1969). This is so because "Congress has invested the [NLRB] and not the courts with broad powers to fashion remedies that will effectuate national labor policy." II C. Morris, The Developing Labor Law 1710 (2d ed. 1983) (citing NLRB v. Food Store Employees Local 347, 417 U.S. 1, 8 (1974)). However, the analysis of the issue presented in this case cannot end with that well established principle.

It also is a well established principle of administrative law that when an agency adjudicates a dispute, it must include in its decision its findings, conclusions, and reasons on all material issues presented. See Administrative Procedure Act ("APA"), Pub. L. No. 89-554, 80 Stat. 387 (1966) (codified as amended at 5 U.S.C. § 557(c)); S.E.C. v. Chenery Corp., 332 U.S. 194, 196-97 (1947). If an agency decision includes no rationale, a reviewing court is powerless to affirm or reverse that decision, for to do so would "propel the court into the domain which Congress has set aside exclusively for the administrative agency." NLRB v. Metropolitan Life Insurance Co., 380 U.S. 438, 444 (1965) (quoting Chenery, 332 U.S. at 196). In the absence of a rationale, the proper course for a reviewing court is to remand the action to the agency for further consideration. Id.

The NLRB apparently argues that the Union's exception is immaterial because an award of lost commissions "is not justified by the factual circumstances of this case." The NLRB takes the position that such a remedy is only justified when a violation of Sec. 8(a) (3) of the NLRA, 29 U.S.C. § 158(a) (3), is found; and in this case, only violations of Sec. 8(a) (1) and (5), 29 U.S.C. § 158(a) (1) and (5), were found. But this argument is without support and at odds with the NLRB's broad discretion in fashioning remedies. To the contrary, it is not uncommon for the NLRB to order make-whole remedies, such as that sought by the Union, when it finds violations of Sec. 8(a) (5). See II C. Morris, supra at 1665 and n. 198. Therefore, because the Union's exception presented a material issue, its rejection must be accompanied by reasons set forth in the record.

The NLRB has not only failed to provide a rationale for rejecting the Union's only exception, but it failed to even acknowledge that such an exception was taken. In its brief, the NLRB seeks to rationalize its decision on various grounds (e.g., lost commissions is an inappropriate remedy when no Sec. 8(a) (3) violation is found). But a reviewing court cannot accept the post hoc rationalizations of the NLRB's attorneys. Metropolitan Life, 380 U.S. at 444; Local Union No. 2338, International Brotherhood of Electrical Workers, AFL-CIO v. NLRB, 499 F.2d 542, 544 (D.C. Cir. 1974).

As a result, a remand is necessary to enable the NLRB to consider the Union's exception and articulate the reasons in support of its decision.

REMANDED.