American Bar Association
Media Alerts
Media Alerts - NLRB v. Allied Mechanical Services, Inc. - Sixth Circuit
Decrease font size
Increase font size
January 23, 2014
  NLRB v. Allied Mechanical Services, Inc. - Sixth Circuit
Headline: Citing First Amendment considerations, the Sixth Circuit denies the NLRB's petition to enforce an order requiring a union contractor to pay all litigation costs, holding that the union contractor's suit was neither objectively baseless nor motivated by an unlawful, retaliatory purpose.

Area of Law: Constitutional Law - First Amendment

Issue Presented: Did the NLRB err when it concluded that a union contractor's federal suit was both objectively baseless and subjectively motivated by a desire to retaliate against the unions?

Brief Summary: Allied Mechanical Services brought a federal suit against two local labor unions and their national counterparts, alleging breach of a collective-bargaining agreement and violations under the National Labor Relations Act. After the case was dismissed, the unions brought an unfair-labor-practice claim before the National Labor Relations Board. An administrative-law judge agreed with the unions and held that Allied must reimburse the unions for their litigation expenses. Allied timely sought review in the Sixth Circuit, arguing that (a) the Board's test for finding liability under the Act "underprotects First Amendment rights to file suit in federal court," (b) its suit wasn't "objectively baseless and retaliatory," and (c) the Board improperly awarded attorney's fees and expenses.

Significance: The Sixth Circuit refused to give deference to the Board's fact finding because the case implicated the First Amendment right to bring suit, and courts - not agencies - have expertise in determining the scope of the right to sue and the objective merit of a federal lawsuit.

Extended Summary: Allied brought a federal suit against two local unions and their national counterparts, claiming that the local unions conspired to withhold certain job-targeting funds for projects because Allied had not signed a collective-bargaining agreement with one of the local unions. The district court dismissed Allied's complaint in its entirety, and the Sixth Circuit affirmed in a per curiam opinion. Following the dismissal, the unions brought an unfair-labor-practice claim before the National Labor Relations Board, claiming that Allied violated the National Labor Relations Act by filing the federal suit. An administrative-law judge agreed with the unions and decided that Allied had to reimburse the unions for the litigation expenses. Several parties filed exceptions to that decision, and the full Board reviewed the case.

While the case was pending before the Board, the Supreme Court issued an opinion, BE & K Constr. Co. v. NLRB, 536 U.S. 516 (2002), which suggested that a more stringent test may be required to avoid implicating First Amendment concerns related to a citizen's rights to sue. After the BE & K opinion was issued, the Board remanded the case to the administrative judge for reconsideration in light of BE & K.

In its supplemental decision, the administrative judge applied a modified test to determine when the Act is violated: "the litigation must be both (1) objectively baseless (as opposed to simply unsuccessful) and (2) retaliatory." In its supplemental decision, the administrative judge concluded that Allied violated the Act and, therefore, awarded attorney's fees and expenses to the unions. The Board adopted the administrative judge's supplemental decision. Allied timely sought review in the Sixth Circuit, arguing (a) that the Board's test for finding liability under the Act "underprotects First Amendment rights to file suit in federal court," (b) that its suit wasn't "objectively baseless and retaliatory," and (c) that the Board improperly awarded attorney's fees and expenses.

The Sixth Circuit explained that although deference to agency fact finding is justified when a case involves issues of fact that are "not within the conventional experience of judges," it is not justified when the case implicates the First Amendment right to sue because courts have more expertise in determining the scope of that right and the merit of federal lawsuits. The Sixth Circuit further explained that unsuccessful lawsuits can have an objective basis.

Applying the test adopted by the Board, the Sixth Circuit found that Allied did not lack an objective basis for filing its suit because Allied had reason to believe that it could have succeeded on the merits of the case against the local unions. And although Allied couldn't succeed against the international unions because of the unions' organizational structure, the Court found that Allied's inclusion of the international unions appeared to be "more like thorough lawyer and less like frivolity."

The Sixth Circuit also determined that the retaliatory prong was not met because there was insufficient evidence to suggest that Allied sued only to burden the unions with litigation costs. Instead, the record merely indicated that there was ill will between Allied and the unions, which is not uncommon in litigation. Therefore, the Court denied the Board's petition to enforce its order.

Link to Full Opinion:http://www.ca6.uscourts.gov/op...13a0312p-06.pdf


Panel: Daughtrey, Rogers, McKeague

Argument: March 15, 2013

Date of Issued Opinion: October 30, 2013

Docket Number: 12-1235/1351

Case Alert Author: Theodora Eisenhut

Counsel: ARGUED: Kira Dellinger Vol, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Petitioner/Cross-Respondent. David M. Buday, MILLER JOHNSON, Kalamazoo, Michigan, for Respondent/Cross-Petitioner. Nicholas R. Femia, O'DONOGHUE & O'DONOGHUE LLP, Washington, D.C., for Intervenor United Association of Journeymen. Tinamarie Pappas, LAW OFFICES OF TINAMARIE PAPPAS, Ann Arbor, Michigan, for Intervenor UA Plumbers. ON BRIEF: Kira Dellinger Vol, Julie Broido, Linda Dreeben, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Petitioner/Cross-Respondent. David M. Buday, Gregory P. Ripple, MILLER JOHNSON, Kalamazoo, Michigan, for Respondent/Cross-Petitioner. Nicholas R. Femia, O'DONOGHUE & O'DONOGHUE LLP, Washington, D.C., for Intervenor United Association of Journeymen. Tinamarie Pappas, LAW OFFICES OF TINAMARIE PAPPAS, Ann Arbor, Michigan, for Intervenor UA Plumbers.

Author of Opinion: Circuit Judge Rogers, McKeague concurred.

Case Alert Circuit Supervisor: Professor Tammy Asher

    Posted By: Mark Cooney @ 01/23/2014 02:45 PM     6th Circuit  

FuseTalk Enterprise Edition - © 1999-2018 FuseTalk Inc. All rights reserved.

Discussion Board Usage Agreement

Back to Top