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United States Court of Appeals
for the Fifth Circuit
____________
United States Court of Appeals
Fifth Circuit
No. 23-60270
____________ FILED
July 9, 2024
Lion Elastomers, L.L.C., Lyle W. Cayce
Clerk
Petitioner/Cross-Respondent,
versus
National Labor Relations Board,
Respondent/Cross-Petitioner.
United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial, and Service
Workers International Union, Local 228
Intervenor.
______________________________
Petition for Review of an Order of the from the National Labor Relations
Board
Agency Nos. 16-CA-190681,
16-CA-203509, 16-CA-225153
______________________________
Before Jones, Clement, and Wilson, Circuit Judges.
Edith Brown Clement, Circuit Judge:
The National Labor Relations Board was historically afforded
deference when its interpretations of the National Labor Relations Act were
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subject to judicial review. 1 But what about when the NLRB 2 tells us that it
plans to use one interpretation on remand and then uses another? In Lion
Elastomers v. NLRB I, the NLRB sought a remand to apply a new
interpretation of the NLRA that was announced in General Motors—an
agency adjudication issued after the dispute underlying this proceeding was
initially adjudicated but before briefing on appeal. But that’s not what the
Board did on remand. Instead, the Board used the remand proceeding as a
vehicle to overrule General Motors. Because the NLRB not only exceeded the
scope of the remand but also violated Lion Elastomers’s due-process rights
during the remand proceeding, we VACATE the remand determination and
REMAND once more.
I.
Lion Elastomers manufactures synthetic rubber in Port Neches,
Texas. Around eighty-five to ninety of its approximately 200 employees are
part of a bargaining unit represented by the United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied Industrial, and Service Workers
International Union, Local 228.
A.
Section 7 of the National Labor Relations Act (NLRA) provides
employees “the right to self-organization, to form, join, or assist labor
_____________________
1
After this case was argued, the Supreme Court issued Loper Bright Enterprises v.
Raimondo, No. 22-1219, 2024 WL 3208360, at *1 (U.S. June 28, 2024), which formally
overturned Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc.,
467 U.S. 837 (1984).
Although we discuss how an agency has understood a question of statutory interpretation,
we resolve this case on other grounds and need not reach the validity of the agency’s
interpretation. See Loper Bright,
2024 WL 3208360, at *21.
2
We use “Board” when referring to the National Labor Relations Board in its
capacity as a quasi-judicial body and “NLRB” when referring to the National Labor
Relations Board as an agency and party to this proceeding.
2
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organizations, to bargain collectively through representatives of their own
choosing, and to engage in other concerted activities for the purpose of
collective bargaining”—so called “protected activities.” 29 U.S.C. § 157.
Section 8 of the NLRA, among other things, bars employers from
“interfer[ing] with, restrain[ing], or coerc[ing] employees in the exercise of”
protected activities.
29 U.S.C. § 158(a). Doing so is an unfair labor practice. 3
The NLRA is silent as to when bad behavior during union activities—
e.g., through threats or the use of racial epithets during grievance meetings or
picketing—renders those activities unprotected under Section 7 and
therefore reasonable grounds for employee discipline. The NLRB has sought
to fill that gap by issuing legal rules through adjudications, as is its standard
practice. See Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 374
(1998) (“The [NLRB], uniquely among major federal administrative
agencies, has chosen to promulgate virtually all the legal rules in its field
through adjudication rather than rulemaking.”) (citation omitted). The
Board treats its precedents as binding if and until a new majority of the Board
deems a precedent incorrect. See Epilepsy Found. of Ne. Ohio v. NLRB,
268
F.3d 1095, 1097 (D.C. Cir. 2001) (“It is a fact of life in NLRB lore that certain
substantive provisions of the NLRA invariably fluctuate with the changing
compositions of the Board.”).
_____________________
3
To carry out the NLRA, Congress created the five-member National Labor
Relations Board. The Board and its General Counsel are appointed by the President and
confirmed by the Senate. 29 U.S.C. § 153. The General Counsel acts as prosecutor of
charges of unfair labor practices. The Board plays a quasi-judicial role, adjudicating, among
other disputes, charges brought by the General Counsel. Board members’ terms are
staggered so that one member’s term expires annually.
29 U.S.C. § 153(a). It is customary,
although not legally required, that a majority of the Board’s members belong to the
President’s political party, which can ensure that a majority of the Board shares the
President’s policy views.
3
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Until July 2020, whether a union member’s behavior constituted
protected activity depended on “setting-specific” standards—i.e., different
factors applied depending on where the behavior took place. For workplace
outbursts, for instance, the NLRB applied a four-factor standard pronounced
in Atlantic Steel Co., which considered “(1) the place of the discussion; (2)
the subject matter of the discussion; (3) the nature of the employee’s
outburst; and (4) whether the outburst was, in any way, provoked by an
employer’s unfair labor practice.” Atlantic Steel Co., 245 N.L.R.B. 814, 816
(1979).
B.
In May 2020, the Board found that Lion Elastomers had committed
unfair labor practices by threatening, disciplining, and discharging an
employee, Joseph Colone, for engaging in protected activities. In so holding,
the Board adopted an Administrative Law Judge’s (ALJ) decision that,
among other things, applied Atlantic Steel to assess whether Colone’s
behavior lost its protected status. Lion Elastomers filed a petition for review
of the Board’s Decision and Order in this court in June 2020.
But on July 21, 2020—before the appeal of the Board’s decision had
even been briefed—the Board issued General Motors LLC, which announced
that the agency would no longer use Atlantic Steel or other setting-specific
standards to assess “whether employers have unlawfully discharged or
otherwise disciplined employees who had engaged in abusive conduct in
connection with activity protected by Section 7 of the [NLRA].” 369
N.L.R.B. No. 127, 2020 WL 4193017, at *1 (2020). The decision held that
the Board would instead apply its Wright Line burden-shifting framework,
which first requires the General Counsel to make an initial showing that “(1)
the employee engaged in Section 7 activity, (2) the employer knew of that
activity, and (3) the employer had animus against the Section 7 activity,
4
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which must be proven with evidence sufficient to establish a causal
relationship between the discipline and the Section 7 activity.” Id. at *2.
Under Wright Line, if the General Counsel makes a prima facie case, the
burden shifts to the employer to prove that it would have taken the same
action absent the Section 7 activity. Id. Accordingly, General Motors
“overrule[d] all pertinent cases to the extent they [were] inconsistent with
[the Wright Line framework].” Id. General Motors determined that the Board
would “apply Wright Line retroactively to all pending cases in which the
Board would have determined, under one of its setting-specific standards,
whether abusive conduct in connection with Section 7 activity had lost an
employee or employees the [NLRA]’s protection.” Id. at *17.
The NLRB then filed an unopposed motion to remand the case to the
Board “in light of the Board’s decision in General Motors.” The NLRB
explained that General Motors “overruled Atlantic Steel and announced a new
framework for analyzing whether an outburst to management in the
workplace causes an employee to lose the protection of the [NLRA]” and
argued that remand was appropriate so that the Board could “determine
whether General Motors affects the Board’s analysis in this case.” The court
granted the motion in a single-sentence per curiam order. Lion Elastomers v.
NLRB, No. 20-60499 (5th Cir. June 15, 2021).
On remand, the Board sought “statements of position” on “the issues
raised by the remand.” Lion Elastomers filed a brief arguing that the case
should be remanded to an ALJ to apply the General Motors framework in the
first instance or that, alternatively, the Board should reverse the ALJ’s
findings that Lion Elastomers unlawfully threatened, disciplined, and
discharged Colone using the Wright Line approach. By contrast, the NLRB’s
General Counsel argued that the Board should overrule General Motors and
return to the setting-specific standards that applied before the adjudication.
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The General Counsel made no effort to apply the Wright Line approach to
the case or explain how General Motors affected the Board’s analysis.
Although the Board’s letter to parties seeking statements of position
did not contemplate response briefing, Lion Elastomers sought leave to file a
response addressing the General Counsel’s argument that the Board should
overturn General Motors. 4 But the Board found that Lion Elastomers “ha[d]
not presented any circumstances warranting leave to file an answer or reply.”
On May 1, 2023, the Board issued a Supplemental Decision and Order
in this case that “overrule[d] General Motors” and “return[ed] to earlier
Board precedent, including Atlantic Steel, applying setting-specific standards
aimed at deciding whether an employee has lost the [NLRA]’s protection.”
The Board therefore “reaffirm[ed] [its] original Decision and Order.” Board
Member Marvin Kaplan dissented.
II.
“We review de novo a district court’s interpretation of our remand
order, including whether the law-of-the[-]case doctrine or mandate rule
forecloses any of the district court’s actions on remand.” Gen. Universal Sys.,
Inc. v. HAL, Inc., 500 F.3d 444, 453 (5th Cir. 2007) (internal quotation marks
and citation omitted). While much of the relevant case law concerns the
scope of remands to district courts rather than administrative agencies, the
same standards generally apply. See FCC v. Pottsville Broadcasting Co.,
309
U.S. 134, 140–41 (1940); accord Grigsby v. Barnhart,
294 F.3d 1215, 1218 (10th
Cir. 2002).
_____________________
4
Lion Elastomers principally argued that they should be entitled to file a response
under 29 C.F.R. § 102.46(b)—the Board rule that allows for answering briefs on
“exceptions” to be filed within 14 days—and only requested leave “out of an abundance
of caution.” But it appears that the Board determined that the regulation did not apply.
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III.
Lion Elastomers argues that the Board exceeded the scope of this
court’s remand order. According to Lion Elastomers, the Board lacked
authority to revisit the correctness of General Motors because the remand
limited the Board to “determin[ing] whether General Motors affects the
Board’s analysis in this case.” Lion Elastomers argues that the Board was not
permitted to “ignore . . . applicable law in place at the time of remand . . . by
simply changing the standard itself.” In other words, according to Lion
Elastomers, the Board violated the “mandate rule”—a corollary of the law-of-the-case doctrine. United States v. Lee, 358 F.3d 315, 320 (5th Cir. 2004)
(“[A]bsent exceptional circumstances, the mandate rule compels
compliance on remand with the dictates of a superior court and forecloses
relitigation of issues expressly or impliedly decided by the appellate court”).
In its Supplemental Decision and Order, the Board read the court’s
remand more broadly, holding as follows:
The court’s remand did not order the Board to apply General
Motors, nor did the court decide any issue related to the
governing legal standard here. It simply gave the Board the
opportunity to determine what legal standard, in its view, was
applicable. The Board was entirely free, then, to determine that
General Motors has no bearing on this case because it was
incorrectly decided and is overruled.
Now, on appeal, the NLRB argues that 29 U.S.C. § 160(e) deprives
this court of jurisdiction to consider Lion Elastomers’s scope-of-the-remand
argument because the argument “was not pressed before the Board.” See
29
U.S.C. § 160(e) (“No objection that has not been urged before the Board, its
member, agent, or agency, shall be considered by the court, unless the failure
or neglect to urge such objection shall be excused because of extraordinary
circumstances.”). According to the NLRB, to preserve its argument, Lion
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Elastomers was required to file a motion for reconsideration before the Board
prior to any appeal.
The NLRB’s argument lacks merit. This court has rejected the notion
that this provision of 29 U.S.C. § 160(e) is jurisdictional and instead has
characterized it as “an exhaustion of remedies provision.” Indep. Elec.
Contractors of Houston, Inc. v. NLRB,
720 F.3d 543, 550 (5th Cir. 2013); see
also Santos-Zacaria v. Garland,
598 U.S. 411, 416 (2023) (holding the
Immigration and Nationality Act’s exhaustion requirement is
nonjurisdictional). And, in any event, Lion Elastomers did raise its scope-of-the-remand argument to the Board via its (denied) motion to file an answer
to the General Counsel’s brief on remand. 5 Indeed, the Board’s
Supplemental Decision and Order specifically addressed whether its decision
exceeded the scope of this court’s mandate. Where, as here, the Board is on
notice of a party’s purportedly unexhausted argument, a motion for
reconsideration is not required. See Indep. Elec. Contractors,
720 F.3d at 551
(“The purpose of [
29 U.S.C. § 160(e)] is to give the Board notice and an
opportunity to confront objections to its rulings before it defends them in
court.”); Bath Marine Draftsmen’s Ass’n v. NLRB,
475 F.3d 14, 24 (1st Cir.
2007) (holding that a motion for reconsideration was not required to exhaust
where the Board had “adequate notice” of the party’s position).
We turn now to the merits. The NLRB argues that “the one-sentence
per curiam judgment granting remand did not order the Board to apply any
_____________________
5
The NLRB also claims that Lion Elastomers failed to adequately raise the issue
because its argument was underdeveloped and unsupported in its motion to file an answer.
But of course it was. The Board denied Lion Elastomers the opportunity to file a brief on
the issue, which is precisely where the company would have developed and supported the
argument. As Lion Elastomers argues, if anything, it provided the Board greater notice of
its argument by raising the scope-of-remand issue before the Board issued its Supplemental
Decision and Order.
8
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particular standard and did not foreclose the possibility of the Board
overruling any particular case.” The agency contends this is because “[t]he
motion and order granting remand left all options open as it is ultimately the
Board’s ‘central role’ [to] balance[e] between employees’ right to self-organization and an employer’s right to maintain discipline.”
True, the Board has been afforded “deference” when engaging in its
“special function of applying the general provisions of the [NLRA] to the
complexities of industrial life.” NLRB v. J. Weingarten, Inc., 420 U.S. 251,
266 (1975) (internal quotation marks and citations omitted). But the NLRB
cites no authority as to why it should be afforded deference in interpreting
this court’s remand order. To the contrary, the Board was bound to “proceed
within the letter and spirit of the mandate by taking into account the appeals
court’s opinion and the circumstances it embraces.” United States v. Pineiro,
470 F.3d 200, 205 (5th Cir. 2006). And this court reviews de novo whether
the Board complied with the “letter and spirit” of the remand order. See
United States v. Hoffman,
70 F.4th 805, 812 (5th Cir. 2023); see also NLRB v.
Donnelly Garment Co.,
330 U.S. 219, 227 (1947) (“[T]he court that issues a
mandate is normally the best judge of its content” because “the author of a
document is ordinarily the authoritative interpreter of its purposes”).
Looking at the “letter and spirit” of this court’s remand order, we
disagree with the NLRB’s position that the Board was “free to determine
that General Motors has no bearing on this case because it was incorrectly
decided and is overruled.” The “circumstances [that the remand order]
embraces” are of critical importance. See Pineiro, 470 F.3d at 205. It was the
NLRB—not Lion Elastomers—that sought remand “in light of the Board’s
decision in General Motors LLC.” The agency’s remand motion explained
that the Board had relied on Atlantic Steel when deciding the case below and
argued that because the Board overruled Atlantic Steel in General Motors, the
case should be remanded so that the Board could “determine whether
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General Motors affects the Board’s analysis in this case.” The NLRB’s
motion gave no suggestion to the court that it intended to seek the
overturning of General Motors. Rather, the clear implication was that the
agency would simply apply the General Motors standard to the facts of this
case. In determining that General Motors did not “affect[] [its] analysis”
because the adjudication was wrongly decided was a bait-and-switch. Indeed,
if the NLRB intended to defend Atlantic Steel and its application to Lion
Elastomers, it’s unclear why the agency sought remand at all. 6 Said another
way, by granting the NLRB’s motion for a voluntary remand, this court
decided that the NLRB was to apply General Motors to this case. See Lee, 358
F.3d at 321.
To be sure, the mandate rule does not apply when there has been an
intervening change of law by a controlling authority. Collins v. Dep’t of the
Treasury, 83 F.4th 970, 984 (5th Cir. 2023). And, in the context of an agency
action, a reviewing court may relax the obligation to abide by the mandate rule
to permit uniform implementation of a newly developed rule to the extent it
was developed in an adjudication independent of those controlled by a judicial
mandate. 18B Charles Alan Wright, Arthur R. Miller &
Edward H. Cooper, Federal Practice and
Procedure § 4478.3 (3d ed. 2024); accord Padilla-Caldera v. Holder,
637
F.3d 1140, 1145–1147 (10th Cir. 2011). Here, however, there was no
“intervening” change of authority independent from the adjudication
controlled by our mandate. Instead, the Board had sought remand to
_____________________
6
That the remand order simply granted the NLRB’s motion is of no matter. Had
Lion Elastomers been on notice that the NLRB intended to revisit the viability of General
Motors on remand, Lion Elastomers purportedly would have objected to the motion. This
court, therefore, would have confronted at that point the question of whether and the
extent to which remand was appropriate.
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implement a newly developed rule, but rather than implementing the rule,
the Board overturned it.
Put simply, the remand order was not an invitation for the Board to
reconsider what legal standards should apply but rather an instruction to
apply the legal standards set forth in General Motors. The Board thus
exceeded the scope of the remand by failing to do so.
IV.
In addition to exceeding the scope of the remand, the Board also
violated Lion Elastomer’s due-process rights when it decided to overturn
General Motors without providing the company an opportunity to be heard on
the issue.
Under the Fifth Amendment, “[t]he fundamental requirement
of due process is the opportunity to be heard at a meaningful time and in a
meaningful manner.” Mathews v. Eldridge, 424 U.S. 319, 333 (1976)
(quotation marks and citation omitted); see also NLRB v. Smith Indus., Inc.,
403 F.2d 889, 895 (5th Cir. 1968) (“While the consideration of whether an
administrative body must give notice and an opportunity to be heard to
interested individuals frequently involves difficulties of statutory
interpretation, the ultimate legal problem is whether the procedure utilized
satisfies the guarantee of due process of law.” (citation omitted)). 7 What
_____________________
7
The Administrative Procedure Act provides statutory due-process rights too:
“Persons entitled to notice of an agency hearing shall be timely informed of . . . the matters
of fact and law asserted,” and the agency must “give all interested parties opportunity for
. . . the submission and consideration of facts, arguments, offers of settlement, or proposals
of adjustment when time, the nature of the proceeding, and the public interest permit.”
5 U.S.C. § 554(b)–(c). These rights reflect constitutional standards. Indep. Elec.
Contractors,
720 F.3d at 552.
11
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procedures are required to satisfy due process is context dependent.
Mathews, 424 U.S. at 334.
The Supreme Court has explained that part of the reason why the
Board may pronounce new legal rules through adjudications is because
“[t]hose most immediately affected [by the adjudication], the [parties] in [a]
particular case, are accorded a full opportunity to be heard” before the Board
announces a new policy. NLRB v. Bell Aerospace Co. Div. of Textron, Inc., 416
U.S. 267, 295 (1974). Relatedly, “the [NLRB] knows that it cannot change
theories in midstream [of an adjudication] without giving respondents
reasonable notice of the change.” Indep. Elec. Contractors,
720 F.3d at 552
(quotation marks and citation omitted). For instance, when the NLRB “has
chosen to litigate against a respondent on a narrow theory of liability, and the
respondent was reasonably led to believe that it would not have to defend on
a broader theory, an ALJ is not free to resolve the case on a broader theory.”
Id.
That logic applies here. Lion Elastomers had no reason to anticipate
that the Board would reinstate Atlantic Steel on remand: the NLRB had
sought remand from the Fifth Circuit specifically so that the agency could
apply the General Motors standard. The first time Lion Elastomers received
notice that the Board may overrule General Motors was when the General
Counsel submitted its statement of position following remand. 8 Lion
Elastomers, therefore, could not have foreseen the need to argue for the
continued viability of General Motors in its own statement of position.
Because the Board denied Lion Elastomers’s motion to respond to the
_____________________
8
Indeed, just two weeks before the NLRB filed its position statement in this case,
the Board issued a decision applying General Motors in another case where the Board had
initially applied Atlantic Steel and a court of appeals remanded. Constellium Rolled Prods.
Ravenswood, LLC, 371 NLRB No. 16 (Aug. 25, 2021).
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General Counsel’s argument, Lion Elastomers was deprived of a full
opportunity to be heard. See Bell Aerospace, 416 U.S. at 295.
In fact, the Board’s Supplemental Decision and Order appears to
concede that Lion Elastomers was not heard on the issue of whether General
Motors should be overruled. The Board also held, however, that no due-process problem existed because Lion Elastomers “was not prejudiced by the
Board’s action.” According to the Board, because the agency simply
returned to the law under which the case was originally decided, its failure to
give Lion Elastomers the opportunity to argue against such action was
harmless. But that’s not how due process works. A due-process violation “is
not remedied by observing that the outcome would perhaps or even likely
have been the same” absent the violation. NLRB v. Complas Indus., Inc., 714
F.2d 729, 734 (7th Cir. 1983) (quoting Rodale Press, Inc. v. FTC,
407 F.2d
1252, 1257 (D.C. Cir. 1968)). Rather “[i]t is the opportunity to present
argument under the new theory . . . [that] must be supplied.”
Id.
On appeal, the NLRB continues to hang its hat on a purported lack of
prejudice to Lion Elastomers. First, the NLRB argues that Lion Elastomers
did not file a motion for reconsideration below addressing due process, failing
to exhaust the argument and thus requiring a showing that the company was
prejudiced by the procedural violation. But as Lion Elastomers rightly points
out, due process ensures parties a right to be heard before a decision is made,
not after. Here, Lion Elastomers was deprived of a pre-decision opportunity
to be heard. The fact that it could have complained after the fact via a motion
for reconsideration is of no consequence. Moreover, Board Member Kaplan
led his dissent with a section dedicated to Lion Elastomers’s due-process
rights, stating “that [Lion Elastomers]’s due process rights [were] being
violated by the majority’s decision to use this case to overrule General
Motors” and that Kaplan “ha[d] serious concerns whether the decision
[would] survive judicial review on due process grounds.” So, the Board was
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clearly on notice that Lion Elastomers’s due-process rights were implicated.
Nonetheless, the Board proceeded to overturn General Motors without Lion
Elastomers’s input.
Second, the NLRB asserts that Lion Elastomers was not prejudiced
because the NLRB “merely returned to the law as it stood when Lion
[Elastomers] disciplined and discharged Colone.” 9 This argument ignores
the posture of this case and the nature of the harm at issue. At the NLRB’s
request, this court remanded the case to the Board for it to apply a new legal
standard—General Motors—that was announced between the close of the
adjudication and briefing on appeal. But that’s not what the Board did on
remand. Instead, without accepting any arguments from Lion Elastomers on
the issue, it decided that General Motors did not apply at all. So, while Lion
Elastomers may not have been prejudiced by the mere fact that the Board
decided to return to the Atlantic Steel standard, it was prejudiced by the fact
that it essentially had no say in that outcome.
Finally, the NLRB argues that Lion Elastomers had no substantive
right to have the General Motors standard applied to its case and, therefore,
that no due-process violation occurred here. Given that the Board exceeded
the scope of this court’s remand, Lion Elastomers had at least some interest
in the Board applying General Motors during the remand proceeding. But
regardless, this argument again misses the point. Lion Elastomers is not
arguing that the Board’s failure to apply General Motors constitutes a due-process violation. Rather, Lion Elastomers is arguing that it had no
opportunity to be heard before the Board decided to overturn General Motors.
_____________________
9
The Union, as intervenor on appeal, raises a similar argument, contending that
Lion Elastomers was not deprived of due process because the Board simply applied the
same legal standard—Atlantic Steel—that it used in the initial adjudication.
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Lion Elastomers’s asserted due-process violation was its loss of the “chance
to persuade” the Board not to overturn General Motors in the first place.
The bottom line is that the Board’s ability to change policies via
adjudication is premised on the assumption that the parties to that
adjudication will be “accorded a full opportunity to be heard before the Board
makes its determination.” Bell Aerospace, 416 U.S. at 295. Lion Elastomers
was afforded no such opportunity here.
V.
For the foregoing reasons, we VACATE the Board’s Supplemental
Decision and Order and REMAND for the Board to apply General Motors to
this case. 10
_____________________
10
We need not reach the question of whether Atlantic Steel comports with the
NLRA or other federal laws. We also decline to reach the question of whether the agency’s
Decision and Order are supported by substantial evidence.
15
