TRI-FANUCCHI FARMS v. AGRICULTURAL LABOR RELATIONS BOARDRespondent’s Reply Brief on the MeritsCal.March 14, 2016IN THE SUPREMECOURT OF CALIFORNIA Deputy TRI-FANUCCHI FARMS, ) Case No. §227270 mo ) Petitioner, ) (Fifth District Court of Appeal; ) Case No. F069419) V. ) ) AGRICULTURAL LABOR ) RELATIONS BOARD, ) ) SUPREME COURT Respondent, ) E | L i D ) and MAP 3 4 2016 UNITED FARM WORKERS ) Frank A - OF AMERICA, ) & McGuire Clerk ) )Real Party in Interest. AGRICULTURAL LABOR RELATIONS BOARD’S REPLY BRIEF ON THE MERITS J. ANTONIO BARBOSA,SBN 87829 Executive Secretary “ PAUL M. STARKEY,SBN 109434 Special Board Counsel SCOTTP. INCIARDI, SBN 228814 Senior Board Counsel AGRICULTURAL LABOR RELATIONS BOARD 1325 J Street, Suite 1900-B Sacramento, CA 95814 DATED:March 11, 2016 Telephone: (916) 653-3741 #1825 Facsimile: (916) 653-8570 IN THE SUPREME COURT OF CALIFORNIA TRI-FANUCCHI FARMS, Case No. $227270 (Fifth District Court of Appeal; Case No. F069419) Petitioner, Vv. AGRICULTURAL LABOR RELATIONS BOARD, Respondent, and UNITED FARM WORKERS OF AMERICA, N e e N e e e e e e e e e e e e e a e e e e e e s e s e s a e a e Real Party in Interest. AGRICULTURAL LABOR RELATIONS BOARD’S REPLY BRIEF ON THE MERITS J. ANTONIO BARBOSA, SBN 87829 Executive Secretary PAUL M. STARKEY, SBN 109434 Special Board Counsel SCOTT P. INCIARDI, SBN 228814 Senior Board Counsel AGRICULTURAL LABOR RELATIONS BOARD 1325 J Street, Suite 1900-B Sacramento, CA 95814 DATED: March 11, 2016 Telephone: (916) 653-3741 #1825 Facsimile: (916) 653-8570 eeae TABLE OF CONTENTS INTRODUCTION|... cceeccceteceeeeeeeceaeeeseeeeeecnescaceaeeeseeesenneeseeentaressas 1 ARGUMENTooo. ceeceecccccceeenseeneeeeeseeeeseseeeatenueeceseseecseeaeeeeesnreeteteaeeeeeaeens 4 THE COURT OF APPEAL DID NOT APPLY THE PROPER STANDARD OF REVIEW |... ceeeecececeeeeeeeeieeeeeteneetenetetstentestenenes 4 1 I. A. Tni-Fanucchi’s Argument, and the Court of Appeal’s Conclusion, That the Board’s Makewhole Award Was Based Solely on its Assessmentofthe Merits of Tri-Fanucchi’s Defense is Flatly Contradicted by the Board’s Written DECISION .........cccccccceccessccesseaeeeccessceecceseeecaceesseeeeeceeeessseeseestnaterens 6 Even if it Were Proper for the Court of Appeal to Consider the Board’s Assessmentof the Public Interest in Tri- Fanucchi’s Litigation of the “Abandonment” Defense in Isolation, it Was Erroneousfor the Court to Treat That Assessment as a “Legal Conclusion”..........0....ccccccccceseeesseeees 10 Even With Respect to “Legal” Issues, the Board’s Decisions Must be Upheld WhereIts Interpretation of the ALRA is a “Reasonable” Ome.............c0cccccccccesscesesecseeecseseesseeeeeeessecseeeeeeeas 12 TRI-FANUCCHI FAILS TO JUSTIFY THE COURT OF APPEAL’S DECISION TO ASSUME THE REMEDIAL AUTHORITY OF THE BOARD AND UNDERTAKEITS OWN EVALUATION OF THE APPROPRIATENESS OF MAKEWHOLE|...cceceeeceeeeesneteeeessaeeeeneeesee sebebeeeeeeeteeeeetenees 17 A. The Court of Appeal’s Decision Unmistakably Demonstrates That the Court Made Policy and Remedial Determinations Reserved to the Board’s Exclusive Jurisdiction .................000- 17 Tri-Fanucchi’s Arguments That the Court ofAppeal Had the Authority to Find Makewhole Not Appropriate Rather than Remanding the Matter to the Board Are Unpersuasive............. 19 — eee A ameels: 6. ae TIL. THE COURT OF APPEAL’S CONCLUSION THAT THE STATUS OF THE “ABANDONMENT” DEFENSE WAS UNSETTLED IS INCORRECT AND DISTORTS THE LEGISLATIVE INTENT CONCERNING THE ROLE OF THE ALRB ooo. eceeeecccce cence ceceeseeeenseessnseseseesseesecssessecssessseescsecseseecsseenees 23 A. The Board WasEntitled to Rely Upon Its Own Settled Precedent to Conclude That Tri-Fanucchi’s Litigation of an “Abandonment” Defense Did Not Further the Policies and Purposes of the ALRA...........ccccecceceesecteensceeseeseeeeesseseesessseeaes 23 B. The Court of Appeal’s Decision Failed to Account for the Existence of Appellate Precedent Upholding the Principles on Which the Board’s Rejection of the “Abandonment” Defense Was Based..........ccecceccecceeeeecsecceeqeeeeeeeseesseseneeeseseeeesetseeenaeees 26 C. Tri-Fanucchi’s Contention That “Abandonment”Is a “Proper Defense” to the Duty to Bargain Under the ALRA Should Be Disregarded .0........cccscceceeeeeessceeeseeceesecseseseececnseesueetsaeeeseesseenees 28 D. Tri-Fanucchi’s Contention That the Board’s Previous Decisions Recognized Inactivity-Based Withdrawal of Recogmition is InCOrrect........... cc cccecccccceseseceseecesseeeeceseeeerseeeaus 29 IV. TRI-FFANUCCHI’S CONTENTION THAT THE BOARD’S MAKEWHOLE AWARD REPRESENTS“PUNISHMENT” | FOR SEEKING APPELLATE REVIEW IS INCORRECT........... 32 CONCLUSIONooo. cececccececeeeseeeeneeeneeeeaeeesseeseesscsessesseceesseesseeeseessaesseeates 33 il ataAger TABLE OF AUTHORITIES CASES Arnaudo Brothers, LP (2014) 40 ALRB No.3 ooo... ecceecteeeseeeeesneesetseeeeeneeaatececeeeesensaees 32 Bertuccio v. ALRB (1988) 202 Cal.App.3d 1369.0... cecccceccececceceeeceneeceneaceeeeeneenseeetseneess 9 Beth Israel Hospital v. NLRB (1978) 437 U.S. 483 ooo. ccceeccece cee ceeneeesseeeseneeseeseeeseseaaaeaeessneseeeeasaes 15 Bixby v. Pierno (1971) 4 Cal.3d 130... eeccccecescseceseeeceeseseeneeteeceeeneesecetsensees 11, 12 Bodinson Manufacturing Co. v. California Employment Commission (1941) 17 Cal.2d 320oocccecsecseceeteeesteecseesaeeeessnaeeeseees 24, 25 Bruce Church, Inc. (1990) 17 ALRB No. Lucecece ccceeseceseeeeeseseecteeeestsaeees 29, 30, 31, 32 Communications Workers ofAmerica v. Beck (1988) 487 U.S. 735 ooo ccccccccnecneeeenneeeeseeecesseeeeseeeeeseseuaaeesensessessnaes 26 D.R. Horton, Inc. v. NLRB (Sth Cir. 2013) 737 F.3d 344.0... ccccccccececcseeessceessnneeeeeeesssetessneeeee 14 Dole Fresh Fruit Co. (1996) 22 ALRB No.4... iccccccccccceeseeeesteeeerseeensaeeeeenaeaaes 9, 29, 31, 32 F&P Growers Assoc. v. ALRB (1985) 168 Cal.App.3d 667 0... eceecceeeeceeeeeeesetseeteeeesnereeteees 19, 27, 28 Fall River Dyeing & Finishing Corp. v. NLRB (1987) 482 U.S. 27 oi cccccecccccccseccceecceesesecaseecsnecseneetsenseeeeeesssentiateess 15 Fallbrook Hospital Corp. v. NLRB (D.C. Cir. 2015) 785 F.3d 729 occccccccccscecesseccesneceesseeeeeeessssseesssteces 15 FordMotor Co. v. NLRB (1979) 441 U.S. 488 ooo. ccccceecceceteeesaeeceseeeeereeseesaeaseeeesesesssneeess 15 Gibson v. Unemployment Insurance Appeals Board (1973) 9 Cal.3d 494occcccccecsseceeecnseeseecssseeneesseeessaeececessaessseneseees 25 HighlandRanch v. ALRB (1981) 29 Cal.3d 848 ooo...ccc cccscceceecseeeaeeesseeeeaeeneessseeeeeeseeeenseessseees 14 In re Prather (2010) 50 Cal.4th 238 000.eeccecececesseeeneeeeneecesecsaeenenaeeeessaseeneees 21, 22 J.R. Norton Co. v. ALRB (1979) 26 Cal.3d Loo. cccececsceceesceeeeesenesseesseecsresseeenteneseeseeeeseeaas 7, 11 Joe G. Fanucchi & Sons / Tri-Fanucchi Farms, (1986) 12 ALRB NO.8.0...ccceneecseeceseeceseesseeneeeseeseseeseesseenees 25 Kaplan’s Fruit & Produce Co., Inc. (1977) 3 ALRB No. 28.0... ceeeeee cece eeneees eseeseseacsesesssteseeeeeeneees 27, 29 ili eeeee Lindeleafv. ALRB (1986) 41 Cal.3d 86] o.oo icccccsscesscssessctscsecesesseeeseeteeeceessssseeesseeets 6 Lu-Ette Farms, Inc. (1982) 8 ALRB NO. 91 oo... ceceeteceeenseceseeesaeecesnacereeeseensessaeeeenes 30 Montebello Rose Co., Inc. v. ALRB (1981) 119 CalApp.3d- 1 oo.cccccccesseessneeeessnaeeeeesesesestanene 27, 28 Nish Noroian Farms (1982) 8 ALRB NO.25 0... ecceccceceeeseeeseeeseecsneentaeeeeecsseenstessnaeeees 30 NLZRB y. City Disposal Systems, Inc. (1984) 455 U.S. 822 oo ecccccccceeseeeeeneeeeeteecsseecenseaaeeeeseesseeesetes 13, 15 NLRB v. Erie Resistor Corp. (1963) 373 U.S. 220 oie ccceccccccceeceeeecseeeceeteesaeeeesssaeeeseeensseesueneneeees 13 NLRB v. Hearst Publications, Inc. (1944) 322 U.S. LLL ooo ceeeccececcecesecceetecesneeeseseceseeeeeecsesseeeseenaeseeeeses 14 NLRB v. J. Weingarten, Inc. (1975) 420 U.S. 251 oiecceceeeeeeceeeecseeseaeeesseeeseeeeeeeeesesteeeeeseaes 13 NLRB vy. Starbucks Corp. (2d Cir. 2012) 679 F.3d 70... ceccecceccccesseenecseeeseeceneeeseeesereeteesseeeeenens 14 Pandol & Sons v. ALRB (1979) 98 Cal.App.3d 580 oieccccccccssecsseccseneeeeseesensseeeseseseeeeas 20 Pattern Makers’ League v. NLRB (1985) 473 U.S. 95 .ociccccccccecccesecsesteccsneeceeseeeseeseseeeeeecesaestaestseeeeeeas 15 Pictsweet Mushroom Farms (2003) 29 ALRB NO.3 uceccceeccecesseseeeeseceeesseeseneeesseeeceeseeeetecesseeeseeas 32 Prentice v. Board ofAdministration (2007) 157 CalApp.4th 983 20.0... cecceccssccseccecsseeeteeeeeesseseeseeeeeeenas 13 Republic Aviation Corp. v. NLRB (1945) 324 U.S. 793 oooceccccccccccssecctsneeseseeeeceseccsaeecsseeeseessseecssnenseeeecess 14 San Diego Building Trades Council v. Garmon (1959) 359 U.S. 236 oo. eecceccececeneccsneeceeesteneecseecteeessteseesensstsssessateeenens 13 San Joaquin Tomato Growers, Inc. (2011) 37 ALRB NO. 5... cee cececceeseneeeesseseeseseesneeeseeeeeeescaseessesseseesenas 32 Sure Tan, Inc. v. NLRB (1984) 467 U.S. 883 oo. cceccccccneeeeteceeeeseecneecsseeesseeeseessessseeeeesaes 20 Tri-Fanucchi Farms v. ALRB (2015) 236 CalApp.4th 1079 ooo... cccccceccecsesseessessseeessssaseesesseesaes 6, 18 United States Marine Corp. v. NLRB (1989) 944 F.2d 1305 oo. eececccceeceecessceesecseeeseessecseeseeeesenseeessessessesensaes 33 Virginia Electric & Power Co. v. NLRB (1943) 319 U.S. 533 ooo ecccccccessecesseceeeseeeeeeseecseeeesseecessssaeeetsesssesensaaees 5 Iv STATUTES Lab. Code, § 1160.3 .o....ccccecccccccccccecccsseceseeneeneeecnsnnseeeeeenneees 11, 12, 18, 29 Lab. Code, § 1160.8 ..0......iccccccccscecessteeeneesseseeseeeeneeeeeeseeseseaeeceseenagaes 25 REGULATIONS Cal. Code Regs., tit. 8, § 20282, subd. (a) 0.0... cece eeeceseneeeneeeeeseeeeeeeeeeeenes 6 Cal. Code Regs., tit. 8, § 20282, subd. (d)........eeeeeececeeeeeteteceenaeeeneate 6 Vv eee —gepieR SRapaston~ INTRODUCTION The Agricultural Labor Relations Act (the “ALRA”or “Act”) was enacted to protect the right of agricultural employees to decide for themselves whetheror not to be represented by a labor organization free from employerinterference or coercion. The employeesof Tri-Fanucchi Farms (“Tri-Fanucchi”) exercised that right and selected the United Farm Workers of America (the “UFW”)as their bargaining representative. They have never rescinded that selection and the UFW remainstheir certified bargaining representative. Yet, when the UFW demandedto bargain in 2012, Tri-Fanucchi refused. The Agricultural Labor Relations Board (the “ALRB”or “Board”) found, and the Fifth District Court of Appeal(the “Court of Appeal”) agreed, that Tri-Fanucchi’s refusal to bargain violated the ALRA. At issue in this case is the remedy chosen by the Board to expunge the effects of Tri-Fanucchi’s violation of the Act and, specifically, the Board’s determinationthat it was appropriate that Tri-Fanucchi makeits employees whole for any lost wages they suffered as a result of the violation. Tri-Fanucchi’s unlawful conduct has deprived, and three and a half years later continues to deprive, Tri-Fanucchi’s employees of the wage increases and other benefits that would have been secured through collective bargaining. A decision by this Court is now necessary in order that the Board may effectuate its remedy and make those employees whole for the losses they have suffered by reason of Tri-Fanucchi’s unlawful conduct. More fundamentally, this Court’s decision is necessary in order to preserve the properfunctioning of the statutory system created by the California Legislature to govern laborrelations in California’s vital agricultural industry. The Legislature, following the precedent of the National Labor Relations Act (the “NLRA”), created the ALRA as a comprehensivestatutory scheme governing California’s agricultural labor relations. To administer the Act, the Legislature created the ALRB, and vested it with primary and exclusive jurisdiction to adjudicate “unfair labor practice” claims arising under the Act and to formulate remedies designed to expunge the effects of unfair labor practices. The Legislature intended, and scores of decisions from this Court and the United States Supreme Court have held, that the ALRB’s remedial determinationsare subject only to limited judicial review. It is not the role ofreviewing courts to second- guess the Board’s remedial determinations. Rather, the Board’s chosen remediesare to be upheld unless those remedies constitute a patent attempt to achieve endsother than those which can befairly said to effectuate the policies of the Act. In reversing the Board’s award of bargaining makewhole (“makewhole”)in this case, the Court of Appeal failed to adhere to this ai opie ee well-established standard of review. Rather than consider whether the Board’s makewhole remedy advanced endsother than those that effectuate the policies of the Act, the Court of Appeal undertook a de novo review of the Board’s order and found that the Board’s conclusion was “wrong.” Compoundingits error, the Court then usurped the Board’srole and proceeded to exercise the Board’s exclusive remedial jurisdiction, rather than remanding the matter to the Board for further consideration asit should have done. In doingso, the court inappropriately formulated its own remedy for Tri-Fanucchi’s unfair labor practice, determining it was appropriate that no makewhole be awardedin this case. In failing to adhere to its proper reviewing role, the Court of Appeal abrogated the Board’srole as the specialized expert agencyin this field and the proper deference owed the Board by a reviewing court. In its answerbrief, Tri-Fanucchi argues that the Court of Appeal’s decision should be upheld. While conceding that a standard of limited review applies to review of the Board’s remedial orders, Tri-Fanucchi argues that it was proper for the Court of Appeal to apply a de novo standard of review because the Court of Appeal’s review was limited to a “legal conclusion” by the Board. Tri-Fanucchi, however, mischaracterizes the basis of the Board’s makewhole award, as well as the nature of the issue before the Court of Appeal, which wasnot a “legal conclusion.” Furthermore, even if the Board’s makewhole award can be characterized as ee e ements ‘ R R R R E E E g oa , makewhole was appropriate. [R. Op. at Br. pp. 24-41.]' That standard, which for ease of reference will be referred to hereinafter as the “Virginia Electric Standard,” requires that an ALRB remedial order be upheld “unlessit can be shown that the order is a patent attempt to achieve ends other than those that can be fairly said to effectuate the policies ofthe Act.” (Virginia Electric & Power Co. v. NLRB (1943) 319 U.S. 533, 540; Carian v. ALRB (1984) 36 Cal.3d 654, 674.) [See R. Op. Br. at pp. 27-32.] Tri-Fanucchi concedesthat the Virginia Electric standard governs review of ALRB remedial orders. [Pet. Ans. Br.at p. 27.) Tri-Fanucchi argues that, because the Court ofAppeal stated that it gave “due deference” to the Board on “ALRA policy issues,” the Court ofAppeal must have been “aware”ofthe proper standard ofreview. [Pet. Ans. Br. pp. at 30-31.] The issue, however, is not whether the Court of Appeal was “aware” of the proper standard of review but whether the Court ofAppeal applied the standard. Onthis issue, Tri-Fanucchi effectively concedes that the Court of Appeal did not, in fact, apply the Virginia Electric standard. Rather, Tri- Fanucchi argues that the Court of Appeal was not required to apply that standard because its analysis was limited to consideration of the Board’s “legal conclusion”that Tri-Fanucchi’slitigation did not further the policies and ’ Referencesto the Board’s opening briefin this case are indicated by “R. Op. Br.” while references to Tri-Fanucchi’s answerbrief are indicated by “Pet. Ans. Br.” The deference afforded to the NLRB’sinterpretations of the NLRA is sufficiently strong that it may prevail “[e]ven if the legislative history (Footnote continued....) 14 In NLRB y. City Disposal Systems, Inc., supra, 455 U.S. 822, the United States Supreme Court rejected the argument that no deference should be given to the NLRB whentheissue was“essentially a jurisdictional or legal question concerning the coverage of the Act,”stating that “[w]e have never . . . held that such an exception exists to the normal standard of review of Board interpretations of the Act.” (NLRB v. City Disposal Systems, Inc., supra, 465 U.S. 822, 830, fn. 7.) Rather, “[w]here the Board’s construction of the Act is reasonable, it should not be rejected merely ‘because the courts might prefer another view of the statute.’” Pattern Makers’ League v. NLRB (1985) 473 U.S. 95, 114 (quoting FordMotor Co. v. NLRB (1979) 441 U.S. 488, 497.) (See also Fall River Dyeing & Finishing Corp. v. NLRB (1987) 482 U.S. 27, 42 (holding that the NLRB’sinterpretation of the NLRA is upheld whereit is “rational and consistent with the Act.”).) The difference between the correct application of the deference owed to the Board’s decisions, even on legal issues, and the treatment of the Board’s makewhole award by the Court of Appeal in this case is stark. This is particularly so given that the instant case involves the application of the Board’s remedial authority, where “the breadth of agency discretion is, if anything, at zenith ....” (Fallbrook Hospital Corp. v. NLRB (D.C. Cir. 2015) 785 F.3d 729, (Footnote continued) arguably pointed toward a contrary view.” (Beth Israel Hospital v. NLRB (1978) 437 U.S. 483, 500.) 15 ho.ee, Pear 735.) The Court of Appeal afforded no deference whatsoeverto the Board’s conclusion that Tri-Fanucchi’slitigation position did not further the policies and purposesof the Act. The decisions of this Court and the United States Supreme Court demonstrate that this was clear error. The Board’s conclusion that, Tri-Fanucchi’s advancementofits “abandonment” defense did not further the policies and purposesof the Act, given that there wassettled Board authority holding that defense mapplicable to the ALRA,wasa reasonable one. Accordingly, the Board’s decision should have been upheld even if the Court viewedit as a “legal conclusion.” However, this Court ultimately need not reach that issue because, as discussed above, the Board’s determination that an award of makewhole was appropriate was not a “legal conclusion,” but rather an exercise of the Board’s discretionary remedial authority based upon a “facts and circumstances”analysis that included not only the Board’s assessmentofthe litigation of the “abandonment”defense, but also the arguments against makewhole advanced by Tri-Fanucchi. The Board’s decision wasnota “patent attempt to achieve ends other than those which can be fairly said to effectuate the policies of the Act,” and should have been upheld underthe proper standard of review. 16 oatESORPe og Il. TRI-FANUCCHIFAILS TO JUSTIFY THE COURT OF APPEAL’S DECISION TO ASSUME THE REMEDIAL AUTHORITY OF THE BOARD AND UNDERTAKE ITS OWN EVALUATION OF THE APPROPRIATENESS OF MAKEWHOLE In its opening brief, the Board demonstrated that the Court of Appeal did not merely reverse, under an improper standard of review, the remedial determinations of the Board concerning makewhole. The Court ofAppeal went on to improperly assume the Board’s remedial authority and determine that an award of makewhole was not appropriate in this case. [R. Op. Br. at pp. 38-41.] Tn-Fanucchi argues that the Court of Appeal did not, in fact, do this. Tr- Fanucchi is incorrect and fails to rebut the inevitable conclusion that the Court of Appeal’s assumption of the Board’s authority was improper. A. The Court of Appeal’s Decision Unmistakably Demonstrates That the Court Made Policy and Remedial Determinations Reserved to the Board’s Exclusive Jurisdiction Tri-Fanucchi argues that the Court of Appeal “never made a policy determination as to what conduct furthers the policies and purposesofthe Act.” [Pet. Ans. Br. at p. 31.] That is simply false. The Court of Appeal’s concluding statementthat it was reversing the Board’s makewhole award was preceded by the following statement: “Fanucchi’s advancementof thislitigation plainly furthered the broader purposes ofthe ALRA to promote greater stability in labor relations by obtaining an appellate decision on this important 17 [abandonment] issue.” (Tri-Fanucchi Farms v. ALRB, supra, 236 Cal.App.4th 1079, 1098 (emphasis and bracketed material added.) As Tri-Fanucchiitself admits, the purpose ofjudicial review of ALRB ordersis to ensure that the agency does not act in a mannerthatis arbitrary or irrational [Pet. Ans. Br. at p. 27], not to replace the judgmentof the agency with that of the court on matters within the agency’s exclusive jurisdiction. Yet, it is clear the Court of Appeal substituted its judgment for that of the agency. The Court of Appealidentified and considered discretionary factors such as the purported novelty of Tri-Fanucchi’s defense, the allegedly controversial nature of the Board’s precedent, and the extent to which Trni-Fanucchi’s litigation was “helpful,” and found that these factors favored a conclusion that Tri-Fanucchi’s litigation advanced one ofthe underlying policies of the ALRA (laborrelations stability). Given that the result of the Court ofAppeal’s decision would be that no makewhole would be awarded, the Court of Appeal implicitly found that these factors outweighed any other competing factors (such as the harm done to employees by being denied the benefits of collective bargaining or the public interest favoring resolution of representation matters by employees without employerinterference) and that a makewhole remedy was not “appropriate” within the meaning of Labor Codesection 1160.3.’ 4 Tri-Fanucchi contendsthatthere is no indication that the Court of Appeal engaged in any weighing of competing interests. [Pet. Ans. Br. at p. 45.] Even if this were true, it would only mean that the Court of Appeal (Footnote continued....) 18 onogperidiee a. SRNRet B. Tri-Fanucchi’s Arguments That the Court of Appeal Had the Authority to Find Makewhole Not Appropriate Rather than Remandingthe Matter to the Board Are Unpersuasive Tri-Fanucchi arguesthat, with the Court of Appeal having cast aside the Board’s conclusion that Tri-Fanucchi’s litigation did not further the policies and purposes of the Act, there was no need for the Court of Appeal to remand the matter to the Board for further proceedings consistent with its decision. However, even if the Court of Appeal were correct to reverse the Board’s policy conclusions conceming Tri-Fanucchi’s litigation of the “abandonment”issue, that would not necessarily dictate a conclusion that makewhole wasnot appropriate. Rather, it would be necessary to determine, assuming that Tri- Fanucchi’s litigation furthered the policies and purposes of the Act, whether any other facts, circumstances, or policy considerationssufficiently weighed in favor of makewhole so as to make an award appropriate. As discussed in the Board’s opening brief,’ and as further discussed below, the appropriate way to resolve such issues would have been to remand the matter to the Board to allow it to (Footnote continued) impermissibly determined that makewhole wasnot appropriate without even applying the correct legal standard to the issue (the k&P Growers standard). Tri-Fanucchi also contendsthat the Boarditself failed to weigh the competing interests, relying only on its conclusion with respect to the “abandonment” defense. [Pet. Ans. Br. at p. 47.] This is not true, as discussed above. However, even if it were true, the required result would be for the case to be remandedto the Boardto enable it to weigh those interests (as discussed in the following section). > See Respondent’s OpeningBrief at pages 38-39. 19 Pre. carry out its role as the expert agency with primary and exclusive jurisdiction over remedying violations of the ALRA. That the Court of Appeal did not remand the matter showsthat the Court of Appeal necessarily, and improperly, assumed the Board’s jurisdiction and decided the makewholeissueforitself. Tri-Fanucchi cites Pandol & Sons v. ALRB (1979) 98 Cal.App.3d 580, 590 for the proposition that the ALRA itself “makes no provision” for remandto the Board once a court of appeal has accepted review. Tri-Fanucchi, however, omits the remainderofthat decision’s analysis finding that courts do have the authority to remand matters to the Board where appropriate. (/d. at pp. 590-591.) In fact, the decision recognizes the “need for the reviewing court to remandcases to the Board for further proceedings [which] resultsfrom the division of functions between the Board and the court...” (Id. at p. 591 (emphasis and bracketed material added).) Indeed, the decision characterizes the idea that a court would fail to remand a case and,instead, take on a function assigned to the Board as “repugnant” to the Act. (/d.at p. 591, fn. 6.) The concepts discussed in Pandol were applied by the United States Supreme Court in Sure Tan, Inc. v. NLRB (1984) 467 U.S. 883. In that case, the appellate court modified an NLRB remedy by requiring that reinstatementoffers be drafted in Spanish and be delivered in a waythat verified receipt. (/d.at p. 905.) The United States Supreme Court found that, while the modifications appeared unobjectionable and eventrivial, “[i]f the court believed that the Board haderred in failing to impose such requirements, the appropriate course was to 20 remand back to the Board for reconsideration” because “[s]uch action best respects the congressional schemeinvesting the Board and not the courts with broad powers to fashion remediesthat will effectuate national labor policy.” (Ibid. (internal citations and punctuation omitted).) In re Prather (2010) 50 Cal.4th 238, a decision by this Court involving judicial review of administrative parole determinations, is also illuminating. That case, like the instant one, involved discretionary authority, namely the authority of the California Board of Parole Hearings (“Parole Board”) to release prisoners on parole, which was “vested in the [agency], not the courts” and was, therefore, subject to limited judicial review. (/d. at 254 (bracketed material added).) In one of the two casesat issue in the decision, the reviewing appellate court, having rejected the Parole Board’sbasis for denying parole, ordered that the prisoner in question be granted parole. (/d. at 248.) This Court reversed, holding that the reviewing court’s decision “to dispense entirely with any further evaluation” by the Parole Board “materially infringe[d] upon the Board’s discretion to make parole decisions onthe basis of all relevant information, and thereby improperly circumscribe[d] the Board’s statutory directive.” (/d. at 255 (bracketed material added).) Asthis Court explained in Prather, a reviewing court must take care not to infringe on the statutory authority of the agency out ofjudicial restraint and respect for the intent of the Legislature. This limited scope ofjudicial review and the corresponding deferential standard ofreview is a function of separation 21 R E AR RB IR S 4 Se a E ofpowers principles. (/n re Prather, supra, 50 Cal.4th 238, 254; Cal Const., art. III § 3 (“The powers of state governmentare legislative, executive, and judicial. Persons charged with the exercise of one power may not exercise either of the others except as permitted by this Constitution.”).) Although the separation of powers doctrine does not necessarily prohibit one branch from taking actionsthat might affect those of another branch, “the doctrine is violated when the actions of one branch defeat or materially impair the inherent functions of another branch.” (ibid. (internal citations and punctuation omitted).) As shown in Prather, a reviewing court’s failure to limit itself to the proper scope ofreview of an agency decision may violate the separation of powers doctrine. (/d. at p. 257.) That the Court ofAppeal failed to adhere to the properly limited scope of review is shown bythe fact that the Court of Appeal made policy and other determinations that are within the ALRB’s exclusivejurisdiction and, after reversing the Board on a discrete, purportedly “legal” issue, did not remand the matter for further consideration by the Board but proceeded to issue a decision that effectively made the determination that makewhole was not appropriate under the circumstances. Accordingly, the Court of Appeal’s decision should be reversed. 22 aot agama sei I. THE COURT OF APPEAL’S CONCLUSION THAT THE STATUS OF THE “ABANDONMENT” DEFENSE WAS UNSETTLED IS INCORRECT AND DISTORTS THE LEGISLATIVE INTENT CONCERNING THE ROLE OF THE ALRB A. The Board Was Entitled to Rely Upon Its Own Settled Precedent to Conclude That Tri-Fanucchi’s Litigation of an “Abandonment” Defense Did Not Further the Policies and Purposes of the ALRA Asdiscussedat length in the Board’s opening brief, the Legislature established the ALRB as an expert agency with primary and exclusive jurisdiction to adjudicate unfair labor practice claims and to devise remedies for violations of the ALRA. [R. Op.Br. at pp. 24-26.] The Legislature intended that, as a general rule, the Board’s orders would be final with respect to matters within the Board’s jurisdiction subject only to limited judicial review to act as a check against arbitrary conduct by the Board. In its decision, the Court of / Appeal acceptedthat, to the extent that there was settled authority that the “abandonment” defense wasnot a valid defense to the duty to bargain under the ALRA, thelitigation of that defense would not further the policies and purposes of the Act. However, the Court of Appeal held that the Board’s decisional precedent, no matter how well-established, was categorically insufficient to render the status of the “abandonment”settled. Rather, only a published judicial decision could render the issue sufficiently settled to supportthe Board’s conclusion that assertion of the defense did not advance the policies and purposes of the Act. 23 A rineEE Aer ie, Tri-Fanucchi, expanding on the Court of Appeal’s erroneous reasoning, argues that Board decisions, and the legal and policy conclusionsstated therein, are “not binding or final” until upheld by an appellate court and, therefore, for the Boardto treat its own precedentas settled is “necessarily . . . erroneous.” [Pet. Ans. Br. at p. 40.] Tri-Fanucchi’s principal authority for this position is a case that does not stand for the proposition. Tri-Fanucchi repeatedly cites Bodinson Manufacturing Co. v. California Employment Commission (1941) 17 Cal.2d 321 (“Bodinson’”) for the proposition that administrative precedentis not “bindingor final” absent judicial approval. The case does not so hold. The issue in that case was whether an unemploymentinsurance statute, which did not explicitly provide for judicial review of Employment Commission decisions, precludedjudicial review, making the Commission’s decisionsfinal in all respects. (/d. at pp. 325-326.) This Court rejected that proposition, holding that ' the courts’ constitutionally vested authority to interpret statutes meantthat the statute must be construed to permit judicial review of Commission decisions as to matters of statutory interpretation. (/bid.) It was in this context that the Court stated that an administrative decision on a matterof statutory interpretation “makesno pretenseat finality.” It is not “final” because it is subject to judicial review,in contrast to, for example, issues of fact, which may be accordedfinality 24 at the administrative level.° (See, e.g., Lab. Code, § 1160.8 (ALRB factual findings supported by substantial evidence are “conclusive’’).) In fact, Bodinson confirmed both the limited nature ofjudicial review of administrative decisions and the deference to be paid to such decisions, even with respect to issues of law. The decisionstates that, while an agency’s legal conclusionsare subject to judicial review, the “administrative interpretation of a statute will be accorded great respect by the courts and will be followed if not clearly erroneous.” (Bodinson, supra, 17 Cal.2d 321, 325.) Furthermore, the Court confirmedthat it “would of course be highly improperfor this court to substitute its opinion for that of an administrative agency on matters which were properly entrusted to the agency to decide” and that reversal of the Commission wasonly proper because, accepting asestablished all conclusionsentrustedto the Commission’s exclusive jurisdiction, it was clear that there was “nostatutory authority” for the Commission’s decision. (/d. at p. 331.) Likewise, in Gibsonv. Unemployment Insurance Appeals Board (1973) 9 Cal.3d 494, 498, the other case cited by Tri-Fanucchi, this Court stated that the decisions of the agency in question “represent a settled administrative construction of the statute which © Of course, the decisionsthat the Board relied upon in concludingthat the status of the “abandonment” defense wassettled were no longer subject to appellate review and, in somecases, had been upheld by reviewing courts. (See Joe G. Fanucchi & Sons / Tri-Fanucchi Farms, (1986) 12 ALRB No.8, which wasupheld in an unpublished decision of the Court of Appeal.) 25 aan, ammats: saree must be given great weight.” Indeed, this Court’s use of the term “settled” to describe established administrative precedent, runs counter to Tni-Fanucchi’s contention that the Board’s precedent can never be regardedassettled absent a publishedjudicial decision. The fallacy of Tri-Fanucchi’s position is shown by the following contradiction: This Court’s decisions have repeatedly confirmed that the appellate courts, and this Court itself, are to give the Board’s interpretation of the Act “great weight” and are to follow that interpretation as long as it is reasonable. Yet, Tri-Fanucchi argues, and the Court of Appeal held, that the Board itselfwas not permitted to rely on its own settled interpretation of the Act when deciding whether Tri-Fanucchi’s assertion of the “abandonment” defense furthered the policies and purposes ofthe Act. (See Communications Workers ofAmerica v. Beck (1988) 487 U.S. 735, 769, fn. 6 (rejecting appellate construction ofNLRA that “contradicts the [NLRB’s] settled interpretation of the statutory provision” because “[w]here the [NLRB’s] construction of the Actis reasonable,it should not be rejected merely becausethe courts might prefer another view ofthe statute.”) (bracketed material added; internal punctuation omitted).) B. The Court of Appeal’s Decision Failed to Account for the Existence of Appellate Precedent Upholding the Principles on Which the Board’s Rejection of the “Abandonment” Defense Was Based Evenifthe Court ofAppeal were correct to regard the Board’s precedent standing alone as being incapable byitself of settling the status of the 26 Seee d s gontin. => SagaOA “abandonment” defense, the Court of Appeal’s opinion failed to account for the fact that, as the Court of Appealitself stated, the Board’s rejection of the “abandonment” defense represented an application of principles established in appellate precedent. In Kaplan’s Fruit & Produce Co., Inc. (1977) 3 ALRB No. 28 at pp. 2-3, the Board held that the duty to bargain created by certification is ongoing in nature and “contains no time limit.” In Montebello Rose Co., Inc. v. ALRB (1981) 119 Cal.App.3d 1, 29-30, a court of appeal upheld the Board’s analysis of the continuing nature of the duty to bargain. In the instant case, the Court of Appeal acknowledgedthat the Montebello Rose decision supports the conclusion that the duty to bargain created by a certification “continues until that union is replaced or decertified by a subsequent election.” (7ri-Fanucchi Farms v. ALRB, supra, 236 Cal.App.4th 1079, 1092 (emphasis in original).) The principles discussed in Kaplan’s Fruit and upheld in Montebello Rose were applied in the F&P Growers case to uphold the Board’s rejection of the “good faith doubt / loss of majority support” defense as being inconsistent with the Act and the underlying legislative intent. (F&P Growers Assoc. v. ALRB (1985) 168 Cal.App.3d 667, 674-676.) The Court of Appeal recognized that the “abandonment” defenseis “clearly analogous” the “loss of majority support” defense rejected in k&P Growers. (Tri-Fanucchi Farms v. ALRB, supra, 236 Cal.App.4th 1079, 1093.) Indeed, Tri-Fanucchi itself concededin its briefing before the Court of Appealthat its “abandonment” defense is simply a 27 -gnae, = erin” permutation of the “loss of majority support” defense. [Petitioner’s Opening Brief to the Court of Appeal at p. 15.] The Court of Appeal stated that the Board’s holdingsrejecting the “abandonment” defense are “consistent with how California appellate courts - have construed the ALRA”and, in this conclusion, the Court of Appeal was clearly correct. (Tri-Fanucchi Farms v. ALRB, supra, 236 Cal.App.4th 1079, 1092.) However, in considering the makewholeissue, the Court of Appeal erroneously failed to recognize and give effect to the fact that cases such as Montebello Rose and F&P Growers uphold the very principles that undergird the Board’s holdings on “abandonment”and that, therefore, the Board’s conclusion that the “abandonment”issue wassettled is supported not only by Board precedent, but appellate precedent as well. Indeed, even if there had been no Board precedent on “abandonment,” the appellate cases cited above would have dictated the result reached by the Board. In this context, the Court of Appeal’s conclusion that an appellate decision was necessary to “clarify” or “settle” the law must be rejected as erroneous. C. Tri-Fanucchi’s Contention That “Abandonment”Is a “Proper Defense” to the Duty to Bargain Under the ALRA Should Be Disregarded Tri-Fanucchi arguesthat an “abandonment” defense to the duty to bargain based upon labor organization inactivity should be recognized under the ALRA. [Pet. Ans. Br. at pp. 32-34.] That contention, however,is irrelevant to the 28 ee,ee weptes analysis of whether the Board’s makewhole award was proper. Bargaining makewhole is a remedy for an unlawful refusal to bargain. (Lab. Code, § 1160.3.) Tri-Fanucchi’s argumentthat its defense should have been accepted goes to the issue of whether an unfair labor practice was committed, not the remedyfor the violation. Tri-Fanucchi’s argumentis not relevant to the issue of whether, given that Tri-Fanucchi’s refusal to bargain was unlawful, the Board’s remedial determination was proper.’ D. Tri-Fanucchi’s Contention That the Board’s Previous Decisions Recognized Inactivity-Based Withdrawal of Recognition is Incorrect Tri-Fanucchi arguesthat a pair of Board decisions from the 1990s, Bruce Church, Inc. (1990) 17 ALRB No. 1 (“Bruce Church’) and Dole Fresh Fruit Co. (1996) 22 ALRB No. 4 (“Dole Fresh Fruit’), recognized labor organization inactivity as a defense to the duty to bargain. To the extent that Tri-Fanucchi is arguing that these cases show that the Board’s precedent on labor organization inactivity was “unsettled,” the cases do not stand for the propositions argued by Tri-Fanucchi. The Board haslong held, with judicial approval, that the duty to bargain created bycertification is continuing in nature and contains notimelimitation. (Kaplan’s Fruit & Produce Co., Inc., supra, 3 ALRB No. 28 at pp. 2-4; ’ Tri-Fanucchi does argue, in connection with its own petition for review,that its refusal to bargain with the UFW waslawful. The Board explained in its answer briefwhy those arguments lack merit. 29 ~~heeHe -ieeeer: Ae= Montebello Rose Co., Inc. v. ALRB, supra, 119 Cal.App.3d 1, 29-30.) Following these principles, the Board holds that labor organizations,once certified by employees, remain certified until such time as they are decertified by employees (known as the “certified until decertified” rule). (Nish Noroian Farms (1982) 8 ALRB No.25 at p. 13.) The two exceptionsto this rule are disclaimer of interest (the deliberate and unequivocal relinquishmentof the certification by the labor organization) and defunctness(the institutional death of the labor organization). (Lu-Ette Farms, Inc. (1982) 8 ALRB No. 91 at pp. 4-5.) In Bruce Church and Dole Fresh Fruit, the Board referred to “abandonment”being established when the labor organization is “unwilling or unable to represent the bargaining unit, alternatively phrased in Bruce Church as the labor organization having “left the scene altogether.” (Bruce Church, supra, 17 ALRB No.1 at p. 10.) However, those cases, particularly Dole Fresh Fruit, makeclear that “unwillingness or inability” to represent refers to the two recognized exceptionsto the “certified until decertified” rule; disclaimer and defunctness, and notto an inactivity-based defense to the duty to bargain. Thus, in Bruce Church the Board rejected the employer’s inactivity-based defense, holding that “a Union remainsthe certified representative until decertified or until the Union becomes defunct or disclaimsinterest . ..”* (/d. at p. 9.) 8 Tri-Fanucchi, as it has in other briefing in this case, liberally quotes from the decision of the ALJ in the Bruce Chuch case without signaling to the Court that it is quoting the ALJ and not the Board. [See Pet. Ans. Br. at (Footnote continued. ...) 30 heraeae. Furthermore, in Dole Fresh Fruit, the Board held that, to the extentthat it relied on labor organization inactivity, “‘abandonment’ . . . could notitselfbe a valid defense under the ALRA.” (Dole Fresh Fruit, supra, 22 ALRB No.4,at p. 10.) The Board further held that it “could not recognize the concept of ‘abandonment’ beyondthat already present in Board case law,i.e., where certified labor organizations becomeinactive by becoming defunct or by disclaiming interest in continuing to represent the bargaining unit” and that “[i}n all other circumstances, certified bargaining representatives remain certified until decertified by the employees themselves.” (Jd. at p. 15.) Accordingly, the Bruce Church and Dole Fresh Fruit decisions, despite their use of the term “abandonment,” do not recognize an inactivity-based defense to the duty to bargain as Tri-Fanucchi contends. The relevance of these decisionsto the present matter is that they constitute part of the line of decisions in which the Board hasheld that inactivity by a labor organization, regardless of (Footnote continued) pp. 35-36.] In its Bruce Church decision, the Board clearly stated thatit wasupholding the ALJ only to the extent that the ALJ’s decision was consistent with the Board’s own decision. (Bruce Church, Inc., supra, 17 ALRB No.2, at p. 2.) Not only is it improper for Tri-Fanucchi to cite ALJ opinionsthat were not adopted by the Board, it is particularly improper for Tri-Fanucchi to misleadinglypresent them to this Court as if they were statements of the Board itself. 31 Seeeee | eR the duration of such inactivity, does not permit an employer to withdraw recognition or otherwise refuse to bargain with a certified labor organization.” IV. TRI-FANUCCHI’S CONTENTION THAT THE BOARD’S MAKEWHOLE AWARD REPRESENTS “PUNISHMENT” FOR SEEKING APPELLATE REVIEW IS INCORRECT Tri-Fanucchi argues that an award of makewhole punishesit for seeking to bring a purportedly unsettled issue before the Court of Appeal. Tn-Fanucchi completely misrepresents the basis of the Board’s makewhole award in arguing that the award was “imposed. . . for seeking [an] appeal[] of important public policy questions.” [Pet. Ans. Br. at p. 1.] Makewhole was awarded because Tri- Fanucchi violated its employees’ rights under the Act and because any public interest in Tri-Fanucchi’s position before the Board did not outweigh the harms caused by Tri-Fanucchi’s unlawful conduct. Tri-Fanucchi’s argument and the Court of Appeal’s holding that the Board should have declined to award makewhole becauseof the potential benefits of appellate review of the Board’s order ignores the factthat, at the time that the Board issued its makewhole award it did not know, and could not have known, whether Tri-Fanucchi would actually seek appellate review. Tri-Fanucchi’s argument reducesto the proposition that ” For decisions issued since Dole Fresh Fruit rejecting the type of inactivity-based defenselitigated by Tri-Fanucchi in this case, see PictsweetMushroom Farms (2003) 29 ALRB No.3, at pp. 5-6, San Joaquin Tomato Growers, Inc. (2011) 37 ALRB No.5, at p. 3, and Arnaudo Brothers, LP (2014) 40 ALRB No.3 at p. 10. To the extent that Bruce Church and Dole Fresh Fruit could be read as potentially recognizing an inactivity-based defense, which would not represent a correct reading ofthose cases, these more recent decisionssettled that issue. 32 the Board should haveleft Tri-Fanucchi’s employees without a remedy for their financial losses caused by Tri-Fanucchi’s unlawful conduct because Tri-Fanucchi might (but might not) seek appellate review and that review might (but might not) result in a published opinion on the “abandonment”issue. Tri-Fanucchi was not “punished” for seeking appellate review. The Board’s makewhole award was issued before the Board could have known whether Tri-Fanucchi would seek review and applied whether or not review was sought. CONCLUSION In United States Marine Corp. v. NLRB (1989) 944 F.2d 1305, 1314, a federal appellate court, after reviewing the familiar authority setting forth the limited role of a court reviewing an NLRB decision, noted that “[t]he faithful application of these principles requires a great deal ofjudicial restraint” and requires acknowledgementthat the legislative body “has decided to vest primary responsibility for the implementationof[legislative policy] in the NLRB andnotin this court.” (Bracketed material added.) Thoseprinciples apply equally to the role of an appellate court reviewing an order of the ALRB. Unfortunately, in this case the Court of Appeal failed to adhere to these principles. As a result, the Court ofAppeal strayed from the proper inquiry into whether the Board’s makewhole award represented a “patent attempt to achieve endsother than those which can be fairly said to effectuate the policies of the Act” and proceeded to assume 33 ae the remedial authority of the Board by evaluating whether the Board’s conclusions were “wrong” and determiningforitself that an award of makewhole wasnot appropriate. In order to uphold the legislative intent that the ALRB serveas the expert agency with primary and exclusive jurisdiction over remedying unfair labor practices, the ALRB respectfully submits that the Court should reverse that portion of the Court of Appeal’s decision that reverses the ALRB’s awardof bargaining makewholein this case. DATED:March 11, 2016 Respectfully submitted, J. ANTONIO BARBOSA Executive Secretary PAUL M. STARKEY Special Board Counsel SCOT P. INCIARDI Senior Board Counsel Attorneys for Respondent AGRICULTURAL LABOR RELATIONS BOARD 34 CERTIFICATION OF WORD COUNT Pursuant to California Rule of Court 8.504(d)(1), the undersigned hereby certifies that the Agricultural Labor Relations Board’s Reply Brief on the Merits contains 8,187 words according to the word count function included in Microsoft Word software with which the brief was written. DATED:March 11, 2016 SCOTT ¥. INCIARDI Senior Board Counsel AGRICULTURAL LABOR RELATIONS BOARD 35 Tri-Fanucchi Farms v. ALRB §$227270 STATE OF CALIFORNIA AGRICULTURAL LABOR RELATIONS BOARD PROOF OF SERVICE BY MAIL (1013a, 2015.5C.CP.) I am a citizen of the United States and a resident of the County of Sacramento. I am over the age of eighteen years and nota party to the within entitled action. My business address is: 1325 J Street, Suite 1900-B, Sacramento, California 95814. On March 11, 2016, I served the within AGRICULTURAL LABOR RELATIONS BOARD’S REPLY BRIEF ON THE MERITSonparties in said action by placing a true copy thereof enclosed in a sealed envelope with postage thereon fully prepaid, in the United States mail at Sacramento, California, addressed as follows: Via U.S. Mail Via Hand Delivery Howard A. Sagaser Mark Woo-Sam, Sagaser, Watkins & Weiland PC Acting General Counsel 7550 N. Palm Avenue, Suite 100 1325 J Street, Suite 1900-A Fresno, CA 93711-5500 Sacramento, California 95814 Mario G. Martinez Via U.S. Mail MARTINEZ AGUILASOCHO & LYNCH P.O. Box 11208 Kamala G. Harris, Attorney General Bakersfield, CA 93389-1208 Office of the Attorney General 1300 I Street Clerk of Court of Appeal Sacramento, California 95814-2919 Fifth Appellate District | 2424 Ventura Street Fresno, California 93721 Executed on March 11, 2016, at Sacramento, California. I certify (or declare), under penalty of perjury that the foregoingis true and correct. Sonia Louie
