A union, over the protest of respondent company, was certified
by the National Labor Relations Board (NLRB) under § 9(c) of the
National Labor Relations Act as the bargaining representative of
all debit insurance agents at respondent's district office in
Woonsocket, R.I. Following respondent's refusal to bargain with the
certified unit, the union filed unfair labor practice charges with
the NLRB, which, adhering to its determination, directed respondent
to bargain with the union. The Court of Appeals refused to enforce
the NLRB order, having concluded that, contrary to § 9(c)(5), the
NLRB had regarded as controlling the extent to which the employees
had organized. This conclusion was based on the NLRB's failure to
articulate reasons for the unit determination in this case; its
apparently inconsistent determinations of appropriate units of
respondent's employees in other areas; its failure to evaluate the
factor there of the extent of union organization; and its
consistent certification of the unit requested by the union.
Held:
1. Under § 9(e)(5), the extent of union organization may be
considered as one factor, but not as the controlling factor, in
determining the appropriate bargaining unit. Pp.
380 U. S.
441-442.
2. The considerations relied upon by the Court of Appeals did
not compel the conclusion that the NLRB had violated § 9(c)(5) . P.
380 U. S.
442.
3. The NLRB has, however, failed to articulate reasons for
decision in, and distinctions among, this and other cases in this
area. Pp.
380 U. S.
442-443.
4. The integrity of the administrative process requires that
courts may not accept appellate counsel's
post hoc
rationalizations for agency action. Pp.
380 U. S.
443-444.
5. Because of the failure of the NLRB to state the basis of its
decision in this and other cases in this area, its action cannot be
properly reviewed, and thus the judgment of the Court of
Appeals
Page 380 U. S. 439
must be vacated, and the case remanded to that court with
instructions to remand it to the NLRB. P.
380 U. S.
444.
327 F.2d 906 vacated and remanded.
MR. JUSTICE GOLDBERG delivered the opinion of the Court.
On petition of Insurance Workers International Union, AFL-CIO,
and over the protest of respondent, Metropolitan Life Insurance
Company, as to the appropriateness of the bargaining unit, the
National Labor Relations Board, in a proceeding under § 9(c) of the
National Labor Relations Act, 49 Stat. 453, as amended, 29 U.S.C. §
159(c) (1958 ed.), certified the union as the bargaining
representative of all debit insurance agents, including all
canvassing regular and office account agents at respondent's
district office in Woonsocket, Rhode Island. [
Footnote 1] Respondent deliberately refused to
bargain with the union in order to challenge the appropriateness of
the employee unit certified by the Board.
See Pittsburgh Plate
Glass Co. v. Labor Board, 313 U. S. 146. The
union thereupon filed unfair labor practice charges with the Board.
The Board, adhering to its prior unit determination, held that
respondent violated §§ 8(a)(1) and (5) of the Labor Relations Act,
49 Stat. 452, as amended, 29 U.S.C. §§ 158(a)(1) and (5) (1958
ed.), and directed respondent to bargain with the union. 142
N.L.R.B. 491. The Court of Appeals for the First Circuit refused to
enforce the order on
Page 380 U. S. 440
the grounds that, in light of the "Board's failure to articulate
specific reasons for its unit determination," 327 F.2d 906, 909,
the Board's apparently inconsistent determinations of appropriate
units of respondent's employees in other cities or regions,
see 138 N.L.R.B. 565 (Delaware); 138 N.L.R.B. 734 (Sioux
City); 144 N.L.R.B. 149 (Chicago); 138 N.L.R.B. 512 (Cleveland)
[
Footnote 2] its failure to
discuss in these cases what weight, if any, it gave to the factor
of the extent of union organization, and the fact that, in these
cases, the Board consistently certified the unit requested by the
union, the Court of Appeals could
"only conclude that the . . . Board . . . has indeed . . .
[regarded] the extent of union organization as controlling in
violation of § 9(c)(5) of the Act."
327 F.2d at 911. We granted certiorari because
Page 380 U. S. 441
of an apparent conflict between this decision and the decisions
of the Court of Appeals for the Third Circuit in
Metropolitan
Life Ins. Co. v. Labor Board, 328 F.2d 820,
petition for
certiorari pending, No. 56 this Term, which sustained the
Board's determination in the Delaware case, 138 N.L.R.B. 565, and
the Court of Appeals for the Sixth Circuit,
Metropolitan Life
Ins. Co. v. Labor Board, 330 F.2d 62,
petition for
certiorari pending, No. 229 this Term, which sustained the
Board's determination in the Cleveland case, 138 N.L.R.B. 512.
See also National Labor Relations Board v. Western &
Southern Life Ins. Co., 328 F.2d 891 (C.A.3d Cir.),
petition for certiorari pending, No. 91 this Term.
Section 9(b) of the National Labor Relations Act, 49 Stat. 453,
as amended, 29 U.S.C. § 159(b) (1958 ed.) provides:
"The Board shall decide in each case whether, in order to assure
to employees the fullest freedom in exercising the rights
guaranteed by this subchapter, the unit appropriate for the
purposes of collective bargaining shall be the employer unit, craft
unit, plant unit, or subdivision thereof. . . ."
This broad delegation of authority,
see Pittsburgh Glass Co.
v. Labor Board, supra, was limited in 1947 by the enactment of
§ 9(c)(5) of the Act, 61 Stat. 144, 29 U.S.C. § 159(c)(5) (1958
ed.), which provides that,
"[i]n determining whether a unit is appropriate for the purposes
specified in subsection (b) of this section, the extent to which
the employees have organized shall not be controlling."
Although it is clear that, in passing this amendment, Congress
intended to overrule Board decisions where the unit determined
could only be supported on the basis of the extent of organization,
both the language and legislative
Page 380 U. S. 442
history [
Footnote 3] of §
9(c)(5) demonstrate that the provision was not intended to prohibit
the Board from considering the extent of organization as one
factor, though not the controlling factor, in its unit
determination. [
Footnote 4]
The Court of Appeals here properly recognized this effect of §
9(c)(5), but held, in light of the unarticulated bases of decision,
and what appeared to it to be inconsistent determinations approving
units requested by the union, that the only conclusion that it
could reach was that the Board has made the extent of organization
the controlling factor, in violation of the congressional mandate.
We agree with the Court of Appeals that the enforcing court should
not overlook or ignore an evasion of the § 9(c)(5) command. We
further agree that, in determining whether or not there has been
such an evasion, the results in other recent decisions of the Board
are relevant. We cannot, however, agree that the only possible
conclusion here is that the Board has violated § 9(c)(5).
Cf.
Metropolitan Life Ins. Co. v. Labor Board (Cleveland), supra;
Metropolitan Life Ins. Co. v. Labor Board (Delaware),
supra.
On the other hand, due to the Board's lack of articulated
reasons for the decisions in and distinctions among these cases,
[
Footnote 5] the Board's action
here cannot be properly
Page 380 U. S. 443
reviewed. When the Board so exercises the discretion given to it
by Congress, it must "disclose the basis of its order" and "give
clear indication that it has exercised the discretion with which
Congress has empowered it." [
Footnote 6]
Phelps Dodge Corp. v. Labor Board,
313 U. S. 177,
313 U. S. 197.
See Burlington Truck Lines v. United States, 371 U.
S. 156,
371 U. S.
167-169;
Interstate Commerce Comm'n v. J-T Transport
Co., 368 U. S. 81,
368 U. S. 93.
Although Board counsel in his brief and argument before this Court
has rationalized the different unit determinations in the variant
factual
Page 380 U. S. 444
situations of these cases on criteria other than a controlling
effect being given to the extent of organization, the integrity of
the administration process requires that "courts may not accept
appellate counsel's
post hoc rationalizations for agency
action. . . ."
Burlington Truck Lines v. United States,
supra, at
371 U. S. 168;
see Securities & Exchange Comm'n v. Chenery Corp.,
332 U. S. 194,
332 U. S. 196.
For reviewing courts to substitute counsel's rationale or their
discretion for that of the Board is incompatible with the orderly
function of the process of judicial review. Such action would not
vindicate, but would deprecate, the administrative process, for it
would "propel the court into the domain which Congress has set
aside exclusively for the administrative agency."
Securities
& Exchange Comm'n v. Chenery Corp., supra, at
332 U. S.
196.
Accordingly, the judgment of the Court of Appeals is vacated,
and the case remanded to that court with instructions to remand it
to the Board for further proceedings consistent with this
opinion.
It is so ordered.
[
Footnote 1]
The Decision and Direction of Election, issued by the Board on
October 24, 1962, is unreported.
[
Footnote 2]
In the Delaware case, the Board certified as a unit two of
respondent's three district offices in the State; in the Sioux City
case, the unit certified was respondent's single district office in
Sioux City, Iowa, together with two detached offices under its
administrative control in Fargo, North Dakota, and Sioux Falls,
South Dakota, 284 and 120 miles distant, respectively, from Sioux
City; in the Chicago case, the unit certified was that all of the
district offices within the city limits of Chicago, although some
of the city offices had territories extending into the suburbs and
some of the suburban offices' territories extended into the city;
in the Cleveland case, the certified unit consisted of respondent's
six offices in the city as well as three offices in the suburbs;
finally, in the instant case, the unit certified was respondent's
single district office in Woonsocket, Rhode Island, out of the
eight offices in the State and the 75 offices in respondent's "New
England Territory." In addition to the instant case and the Sioux
City case, the Board has certified single district offices in
Western & Southern Life Ins. Co., 138 N.L.R.B. 538;
Metropolitan Life Ins. Co. (Meriden and New London), 147
N.L.R.B. 69;
Metropolitan Life Ins. Co. (Holyoke), 147
N.L.R.B. 688;
Metropolitan Life Ins. Co. (Chicago
Heights), 148 N.L.R.B. No. 145.
See also Metropolitan Life Ins.
Co. (Detroit), 146 N.L.R.B. 1577;
Metropolitan Life Ins.
Co. (Toledo), 146 N.L.R.B. 967;
Equitable Life Ins.
Co., 138 N.L.R.B. 529.
[
Footnote 3]
See H.R.Rep.No.245, 80th Cong., 1st Sess., 37-38;
H.R.Conf.Rep.No.510, 80th Cong., 1st Sess., 48; 93 Cong.Rec. 6444,
6860.
[
Footnote 4]
See National Labor Relations Board, Twenty-Eighth
Annual Report 51 (1963), which properly states this statutory test:
"Although extent of organization may be a factor evaluated, under
section 9(c)(5), it cannot be given controlling weight."
[
Footnote 5]
The Board's entire basis of decision on this issue in this case
was set forth in the following footnote in its unit determination
decision:
"The Employer has eight district offices and two detached
offices in Rhode Island, and has only one district office in
Woonsocket. The nearest district office is located 12 miles away,
in Pawtucket. In the prior proceeding in Case No. 4-RC-4865, based
on the same record incorporated by reference herein, we found that
each of Employer's individual district offices was, in effect, a
separate administrative entity through which the Employer conducted
its business operations, and therefore was inherently appropriate
for purposes of collective bargaining.
See Metropolitan Life
Insurance Company, 138 NLRB . . . (565). Applying the tests
set forth therein, we find that, since there is no recent history
of collective bargaining, no union seeking a larger unit, and the
district office sought is located in a separate and distinct
geographical area, the employees located at the Woonsocket district
office constitute an appropriate unit.
See also Metropolitan
Life Insurance Company, . . . [138] NLRB . . . [734]."
The cases cited are the Board's decisions in the Delaware and
Sioux City cases discussed
supra. They do not appear,
because of their variant factual circumstances, to be direct
authority for decision in this case. Moreover, the Board made no
attempt to distinguish other cases, particularly the Chicago and
Cleveland cases discussed
supra, in which it certified
different types of units. The unfair labor practice proceeding
added nothing to the analysis, as the trial examiner did not review
the issue, as he felt "bound by the Board's ruling in the
representation proceeding," 142 N.L.R.B. at 492, and the Board
affirmed the trial examiner's ruling without discussion,
id. at 491.
[
Footnote 6]
Of course, the Board may articulate the basis of its order by
reference to other decisions or its general policies laid down in
its rules and its annual reports, reflecting its "cumulative
experience,"
Labor Board v. Seven-Up Bottling Co.,
344 U. S. 344,
344 U. S. 349,
so long as the basis of the Board's action, in whatever manner the
Board chooses to formulate it, meets the criteria for judicial
review.
Cf. Swayne & Hoyt, Ltd. v. United States,
300 U. S. 297,
300 U. S. 299,
300 U. S. 304;
Radio & TV Local 1264 v. Broadcast Serv. ante, p.
380 U. S. 255.
MR. JUSTICE DOUGLAS, dissenting.
A reading of the Court's opinion reveals the fallacies on which
the Board proceeded. The employer sought review of the Board's
order, asking that it be set aside. Concededly, it should be. But
we need not act as
amicus for the Board, telling it what
to do. The Board is powerful and resourceful, and can start over
again should it wish. How stale this record may be we do not know.
Neither of the parties asks for a remand. They are willing to stand
or fall on the present record, and we should resolve the
controversy in that posture.