Pioneer Hotel, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 10, 1998 Decided July 9, 1999

No. 97-1718

Pioneer Hotel, Inc.,

d/b/a Pioneer Hotel & Gambling Hall,

Petitioner

v.

National Labor Relations Board,

Respondent

On Petition for Review and Cross-Application for

Enforcement of an Order of the

National Labor Relations Board

Norman H. Kirshman argued the cause for petitioner.

With him on the briefs was Gary G. Branton.

David A. Seid, Attorney, National Labor Relations Board,

argued the cause for respondent. With him on the brief were

Linda Sher, Associate General Counsel, John D. Burgoyne,

Acting Deputy Associate General Counsel, and Fred L. Corn-

nell, Jr., Supervisory Attorney.

Before: Wald, Silberman and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Garland.

Garland, Circuit Judge: Pioneer Hotel, Inc. petitions for

review of a decision and order of the National Labor Rela-

tions Board ("NLRB" or "Board"), concluding that Pioneer

committed unfair labor practices in violation of sections

(8)(a)(1) and (3) of the National Labor Relations Act (NLRA),

29 U.S.C. s 158(a)(1), (3). See Pioneer Hotel, Inc., 324

N.L.R.B. 918 (1997). The Board cross-applies for enforce-

ment. With two exceptions, we grant the cross-application

for enforcement and deny the petition for review.

Pioneer operates a hotel, a casino, and three restaurants in

Laughlin, Nevada. In late 1994 or early 1995, a union1 began

an effort to organize the company's employees. An Adminis-

trative Law Judge (ALJ) determined, and the NLRB agreed,

that during the course of the union's campaign Pioneer

committed unfair labor practices by: (1) terminating supervi-

sor Thomas Grace because he refused to commit an unfair

labor practice; (2) interrogating employee Sheila Falk re-

garding her support for the union; (3) directing employees to

remove their union buttons while at work; (4) denying em-

ployee James Guirey access to the employee dining room

where he was circulating a petition; (5) reducing Guirey's

work hours and then laying him off; and (6) suspending

employee Anthony Zabala, reducing his work hours, and then

laying him off. Id. at 918, 930.

The ALJ concluded that the first four incidents violated

section 8(a)(1) of the NLRA, and that the last two violated

sections 8(a)(1) and (3). Section 7 of the NLRA, 29 U.S.C.

s 157, guarantees employees "the right to self-organization,

to form, join, or assist labor organizations, ... and to engage

__________

1 Local Joint Executive Board of Las Vegas Culinary Workers

Union, Local 226 and Bartenders Union, Local 165, affiliated with

Hotel Employees and Restaurant Employees International Union,

AFL-CIO.

in other concerted activities for the purpose of collective

bargaining or other mutual aid or protection...." Section

8(a)(1) makes it an unfair labor practice "to interfere with,

restrain, or coerce employees in the exercise of the rights

guaranteed" by section 7. Section 8(a)(3) makes it an unfair

labor practice for an employer to discriminate "in regard to

... tenure of employment or any term or condition of em-

ployment to ... discourage membership in any labor organi-

zation...."

Our role in reviewing the NLRB's decision is limited.

Time Warner Cable v. NLRB, 160 F.3d 1, 3 (D.C. Cir. 1998).

"We must uphold the judgment of the Board unless, upon

reviewing the record as a whole, we conclude that the Board's

findings are not supported by 'substantial evidence,' 29 U.S.C.

s 160(e), (f), or that 'the Board acted arbitrarily or otherwise

erred in applying established law to the facts of the case.' "

International Union of Electronic, Electrical, Salaried,

Mach. & Furniture Workers v. NLRB, 41 F.3d 1532, 1536

(D.C. Cir. 1994) (internal quotations omitted). We are also

required to give "substantial deference to the inferences

drawn by the NLRB from the facts." Time Warner, 160

F.3d at 3. For the reasons stated below, we conclude that

the ALJ's first two determinations are not supported by

substantial evidence, but that the remaining four are.

I

We begin with the Board's contention that Pioneer termi-

nated supervisor Thomas Grace because he refused to commit

an unfair labor practice. Although supervisors are not them-

selves protected by the NLRA, an employer violates section

8(a)(1) when it discharges a supervisor "for refusing to com-

mit an unfair labor practice." Automobile Salesmen's Union

Local 1095 v. NLRB, 711 F.2d 383, 386 (D.C. Cir. 1983); see

also Marshall Durbin Poultry Co. v. NLRB, 39 F.3d 1312,

1315-16 (5th Cir. 1994). The gravamen of the Board's finding

with respect to Grace is that Pioneer fired him because he, in

turn, had refused to fire one of his employees for pro-union

activities.

A

Grace was the director of Pioneer's food and beverage

department. According to his testimony, on June 20, 1995 he

was told by Pioneer's human resources manager that corpo-

rate management wanted Anthony Zabala, an employee

whom Grace knew to be a union supporter, fired. Pioneer

Hotel, 324 N.L.R.B. at 927-28; App. 604-05. Grace said he

"wouldn't do that because Tony was a good employee...."

He also said he did not care "what Chris Lowden.... [a]nd

his prima donna self wanted," referring to a corporate manag-

er who was the son of Pioneer's majority owner. Thereafter,

instead of firing Zabala, Grace said he transferred Zabala to

one of Pioneer's restaurants "to get him out of the line of

fire." When Grace told the human resources manager what

he had done, she replied, "I hope this little stunt doesn't cost

you your job." 324 N.L.R.B. at 928; App. 605-09.

In July 1995, Pioneer's general manager announced he was

resigning to move to another company. Grace applied for the

position, but it went instead to Chris Lowden. Grace had

frequently disparaged Lowden in front of other employees,

calling him not only a "prima donna" but also a "spoiled little

rich boy." 324 N.L.R.B. at 928; App. 1056. On August 2,

1995, Lowden decided to fire Grace. Lowden did so, he

testified, because of Grace's poor performance and "lack of

respect." 324 N.L.R.B. at 928; App. 970. Another Pioneer

manager said Grace was fired as part of a "corporate restruc-

tur[ing]." 324 N.L.R.B. at 928; App. 1049.

The initial complaints filed by the NLRB's General Counsel

did not list the dismissal of Grace as an unfair labor practice.

Following Grace's testimony at the hearing, however, the

Administrative Law Judge asked "whether there's any reme-

dy that needs to be considered for" Grace. App. 617-18. At

the end of that day's proceedings, the General Counsel moved

to amend the complaints to charge that Pioneer terminated

Grace for refusing to commit an unfair labor practice. Deci-

sion on Resp.'s Mot. to Reconsider at 2 (App. 54) [hereinafter

Decision]. The ALJ granted the motion, and Pioneer filed a

motion to reconsider.

The next day, the ALJ advised the parties that he had

consulted "with a colleague" as to the best procedure to follow

in ruling on the motion for reconsideration--that is, whether

to rule immediately or to hold the issue until the parties had

an opportunity to litigate the merits of the Grace charge.

App. 853; Decision at 3 (App. 55). Although the ALJ did not

name the colleague with whom he had consulted, the context

of his statements strongly suggests he was referring to a

fellow judge. Id.; see also App. 843, 858.

In its motion to reconsider, Pioneer argued that the prof-

fered amendment was neither timely nor "closely related" to

the charges in the original complaints. See 29 U.S.C.

s 160(b); Drug Plastics & Glass Co. v. NLRB, 44 F.3d 1017,

1020 (D.C. Cir. 1995). The ALJ found that the amendment

was closely related and denied the motion. App. 53-57.

Thereafter, Pioneer asked the ALJ to disqualify himself on

the grounds that he had acted improperly by suggesting the

amendment, by consulting with a colleague, and by otherwise

displaying bias against Pioneer. The ALJ declined. Id. at

162. He subsequently found Pioneer to have committed an

unfair labor practice by discharging Grace, Pioneer Hotel, 324

N.L.R.B. at 929, and the Board affirmed his rulings in all

respects, id. at 918 & nn. 1, 2.

B

Before reaching the merits of this unfair labor practice

charge, we must consider Pioneer's threshold objections to

the ALJ's actions and to the amendment of the complaints.

First, we find nothing improper about the ALJ's inquiry as

to "whether there's any remedy that needs to be considered

for" Grace. That query did not impermissibly cross the line

between judge and advocate. See NLRB v. Tamper, Inc., 522

F.2d 781, 789-90 (4th Cir. 1975) ("[W]e do not doubt that the

Administrative Law Judge in the exercise of his discretion

may call attention to an uncharged violation....").

Second, we reject Pioneer's contention that the ALJ en-

gaged in an improper ex parte communication by consulting

with a colleague on "the correct procedure" for handling the

Grace amendment. App. 853. Pioneer contends that such a

consultation violated both the Administrative Procedure Act,

5 U.S.C. s 557, and the American Bar Association's Model

Code of Judicial Conduct. In quoting the relevant provi-

sions, however, Pioneer neglects to cite the clauses that limit

their application. Although 5 U.S.C. s 557(d)(1)(C) does

require an ALJ who makes "a communication prohibited by

this subsection" to put it on the public record, the only

prohibited communications are those with "interested per-

son[s] outside the agency," id. s 557(d)(1)(A), (B).2 Similarly,

while the Model Code of Judicial Conduct bars ex parte

communications, American Bar Ass'n, Model Code of Judicial

Conduct Canon 3(B)(7) (1990),3 it expressly excepts "con-

sult[ation] with court personnel ... or with other judges," id.,

Canon 3(B)(7)(c). And the NLRB's own ex parte rules, which

Pioneer also inexplicably fails to cite, likewise only prohibit

communications with "interested person[s] outside this agen-

cy." 29 C.F.R. s 102.126 (1998).

Third, we reject Pioneer's assertion that comments the

ALJ made in his decision rejecting its motion for reconsidera-

tion evidenced prejudicial hostility toward one of Pioneer's

counsel. Decision at 3 (App. 55). Although the ALJ could

have been more restrained in his language4--an admonition

that could on occasion apply to this court as well--there was

nothing to suggest the kind of bias or partiality that requires

judicial disqualification. See Liteky v. United States, 510

U.S. 547, 555-56 (1994). The ALJ's decision did refer to an

earlier case in which Pioneer's attorney, at the time repre-

senting a different casino, also charged him with improperly

crossing the line between judge and advocate. But the

__________

2 Pioneer also cites 5 U.S.C. s 554(d)(1), which bars ex parte

consultation with "a person or party on a fact in issue." There is no

suggestion that the ALJ consulted with his colleague on any

question of fact.

3 But see Model Code, Application s A n.3 (explaining that Model

Code does not necessarily apply to ALJs).

4 He referred to allegations made by Pioneer's counsel as "scurri-

lous." Decision at 3 (App. 55).

decision did no more than cite the NLRB's ruling in the case

as evidence that judicial conduct like that at issue here does

not improperly transgress that line. See Decision at 3 (App.

55) (citing Sahara Las Vegas Corp., 297 N.L.R.B. 726, 727 n.2

(1990)).

Finally, we consider the propriety of amending the com-

plaints. This is a matter of consequence because without

amendment, NLRA section 10(b), 29 U.S.C. s 160(b), would

have barred the charge relating to Grace's firing as untimely.

See Decision at 4 (App. 56). To determine whether an

amendment was permissible, the ALJ asked whether the

amendment and the initial complaints were "closely related."

Id.; see TIC-The Industrial Co. S.E., Inc. v. NLRB, 126 F.3d

334, 339 (D.C. Cir. 1997); Drug Plastics, 44 F.3d at 1020. To

make that determination, the ALJ asked whether the amend-

ment's allegations "(1) involve the same legal theory as

allegations in the timely filed charges; (2) arise from the

same factual circumstances; and (3) entail the same or similar

defenses by the Respondent." Decision at 4 (App. 56). We

have approved this test several times before, see, e.g., TIC,

126 F.3d at 339; Drug Plastics, 44 F.3d at 1021, and agree

with the Board that it was satisfied in this case.

Grace was at one time the director of the department in

which most of the unfair labor practices alleged in the com-

plaints occurred. The October 1995 firing of Zabala, an

employee of that department, was a central focus of the

original complaints. See infra Part II. Part of the evidence

that Pioneer fired Zabala for union activism in October was

that it had unsuccessfully ordered Grace to fire Zabala for the

same reason just a few months earlier. The amendment's

charge was that Grace was fired for refusing to carry out that

order. Pioneer Hotel, 324 N.L.R.B. at 927. Hence, the two

allegations "arise from the same factual circumstances." And

while the legal theories are not identical, they are closely

related: both allege that Pioneer violated section 8(a)(1) by

firing employees out of anti-union animus. Moreover, Pio-

neer asserts the same defense to both: each firing, at least in

part, was assertedly due to a "corporate restructuring" plan.

This is not, then, a case like Drug Plastics, where the only

connection between the amendment and the complaint was

that the alleged conduct was part of the same "anti-union"

campaign. 44 F.3d at 1020-21. Rather, in this case "th[e]

amended allegation was properly allowed, because it shared a

significant factual affiliation with the original charge." TIC,

126 F.3d at 339.5

C

Although we agree with the ALJ and the Board that the

complaints were properly amended to include Grace's termi-

nation, we cannot find substantial evidence to support the

conclusion that Grace was fired "because he refused to com-

mit unfair labor practices." Pioneer Hotel, 324 N.L.R.B. at

930 (emphasis added). Proof of such motivation is required

to establish the Board's prima facie case. See Marshall

Durbin Poultry, 39 F.3d at 1315-16; Automobile Salesmen's

Union, 711 F.2d at 386. See generally NLRB v. Transporta-

tion Management Corp., 462 U.S. 393, 398-402 (1983) (ap-

proving Wright Line, 251 N.L.R.B. 1083 (1980)); TIC, 126

F.3d at 337. The entirety of the evidence on this point is

Grace's own testimony, not one word of which states that

Grace was told to fire Zabala because of his union activities or

that Grace refused to do so because he thought it would

constitute an unfair labor practice. To the contrary, Grace

was told no more than that corporate management "wanted

Tony fired." App. 605. And besides disparaging Chris Low-

den, Grace said no more than that he "wouldn't do that

because Tony was a good employee...." Id.; see id. at 606-

07. Since the Board is unable to show that Grace's termi-

nation was motivated by protected conduct, we have no need

to consider whether Pioneer could rebut a prima facie case of

__________

5 Pioneer also claimed in its briefs that the amendment violated

its right to due process, because the General Counsel had not

moved to amend until after he rested his case in chief. Pioneer

abandoned that point at oral argument, however, conceding that

because the hearing was recessed for two months, it had an

opportunity to prepare to rebut the new allegation.

anti-union animus--for example, by demonstrating that Grace

would have been fired in any event because he had publicly

belittled the person who ended up as his boss. See TIC, 126

F.3d at 338; see also Transportation Management, 462 U.S.

at 401-03.

II

In this Part, we consider the remaining unfair labor prac-

tice charges against Pioneer.

The first charge is that Grace--ironically, the same super-

visor who allegedly risked his job to avoid unlawfully termi-

nating Zabala--did himself commit an unfair labor practice

by interrogating another employee about the union. Such an

interrogation violates the NLRA only "if, under all the cir-

cumstances, it reasonably 'tends to restrain, coerce, or inter-

fere with rights guaranteed by the Act.' " Purdue Farms,

Inc. v. NLRB, 144 F.3d 830, 835 (D.C. Cir. 1998) (quoting

Rossmore House, 269 N.L.R.B. 1176, 1177 (1984)).

We find this charge unsupported by substantial evidence.

The sum and substance of the charge is a single conversation

Grace initiated with employee Sharon Falk by saying: "I

know that you're in the union and it's okay with me...."

Pioneer Hotel, 324 N.L.R.B. at 930; App. 601. He then

asked about a "problem," whether "my management people,

Mary and me and Chef Paul and those people, have ... done

something to make you unhappy with us." Falk replied, "No,

it isn't you guys, it's them.... [t]he Pioneer, the Lowdens."

Grace said, "Well, just so it's not something we're doing

wrong," and Falk again confirmed, "It isn't." According to

Grace, a final "[t]hank you ... ended it." Id.

This brief exchange does not evidence a tendency to coerce.

Without going into the case law in detail, it is enough to say

that most of the factors upon which both the Board and the

courts rely to find coercion are absent here. See Purdue

Farms, 144 F.3d at 835. Grace did not "appear to be seeking

information on which to base taking action against" Falk. Id.

He was not high in the company hierarchy, id., and according

to the NLRB itself, was personally protective of his employ-

ees' rights under the NLRA. The conversation did not occur

in "an atmosphere of 'unnatural formality.' " Id. Indeed,

"natural informality" would be a better description, as it

apparently occurred off to the side in the employee dining

room. App. 600. And there is no suggestion that Falk's

reply was not truthful. 144 F.3d at 835.

The Board fares better with respect to the remaining

charges. The record supports its contention that directing

employees to remove their union buttons constituted an un-

fair labor practice. The right to wear union buttons or other

insignia while at work is generally protected by the NLRA.

See Republic Aviation Corp. v. NLRB, 324 U.S. 793, 801-03

& n.7 (1945). In the absence of special circumstances, an

employer's prohibition against wearing such insignia violates

section 8(a)(1). See, e.g., NLRB v. Malta Constr. Co., 806

F.2d 1009, 1011 (11th Cir. 1986).

Pioneer's dress code originally barred only the wearing of

"stickers or pins" on employee name tags. Pioneer Hotel,

324 N.L.R.B. at 922 (quoting NLRB Ex. 60). In August

1995, the union sent Pioneer a letter listing the names of its

in-house organizing committee. Id. At approximately the

same time, the company modified its dress code by banning

"pins, stickers, [and] buttons" altogether. Id. (quoting

NLRB Ex. 8). Just days later, nine or ten employees were

sent home for refusing to remove buttons identifying them as

union "committee leaders." Id. Pioneer offered no evidence

to justify the ban below, see id. at 923, and does not seriously

defend it here. Instead, Pioneer relies principally on the

contention that it repudiated its action and allowed the em-

ployees to return to work without loss of pay. The record,

however, supports the ALJ's conclusion that Pioneer's repudi-

ation was ambiguous and inadequately publicized, and hence

ineffective under the case law. Id.; see General Indus.

Employees Union, Local 42 v. NLRB, 951 F.2d 1308, 1312 n.1

(D.C. Cir. 1991) (citing Passavant Mem'l Area Hosp., 237

N.L.R.B. 138, 138-139 (1978)); Wilson Trophy Co. v. NLRB,

989 F.2d 1502, 1511 (8th Cir. 1993).

We also find substantial evidence to support the conclusion

that Pioneer violated section 8(a)(1) by denying James Guirey

access to the employee dining room when he attempted to

circulate a petition there. Pioneer offers two principal de-

fenses to this charge: that Guirey was in violation of a

company policy barring employees from the dining room

more than thirty minutes before their shifts; and that Guirey

was never actually removed from or ordered to leave the

dining room. As to the first, we find substantial evidence to

support the ALJ's findings both that no such company policy

existed, and that even if one did, the security guards enforced

it selectively against Guirey's petitioning alone. See Pioneer

Hotel, 324 N.L.R.B. at 926; App. 693-95, 772-73; see also

NLRB v. S.E. Nichols, Inc., 862 F.2d 952, 958-59 (2d Cir.

1988) (affirming finding of unfair labor practice when compa-

ny enforced its rules in discriminatory fashion). And while it

is true that Pioneer's security guards never physically re-

moved Guirey from the dining room, their repeated admoni-

tions effectively stopped his petitioning. App. 695.

The record also supports the conclusion that Pioneer violat-

ed sections 8(a)(1) and (3) by subsequently reducing Guirey's

hours and then laying him off. See Transportation Manage-

ment, 462 U.S. at 397-98. After the confrontation in the

dining room, Guirey continued his pro-union activity. Three

times he distributed leaflets at the hotel entrance, and on

each occasion the company's security guards videotaped him

and reported the incident to General Manager Chris Lowden.

App. 254-59. In October 1995, Pioneer cut Guirey's hours

without explanation, and without regard to seniority. Pio-

neer Hotel, 324 N.L.R.B. at 926-27. When Guirey was

subsequently laid off, Jorge Garcia, his supervisor, said it was

because of "poor work habits" and "a lack of consistency."

App. 431. This explanation was contrary to Guirey's most

recent six-month appraisal, which had rated his work as

"successful"; the statement of Guirey's immediate supervisor

that he was doing a good job and that the company wanted to

give him a raise; and Garcia's own concession that he had not

reviewed Guirey's personnel file. See Pioneer Hotel, 324

N.L.R.B. at 926; App. 304-05, 684, 704, 708-09, 730-31. We

defer to the ALJ's finding that the reasons given for the work

reduction and layoff were pretextual and intended to conceal

Pioneer's true motive--retaliation for Guirey's union activity.

Pioneer Hotel, 324 N.L.R.B. at 927.

Finally, we uphold the determination that Pioneer violated

sections 8(a)(1) and (3) by suspending Anthony Zabala, reduc-

ing his work hours, and subsequently laying him off because

of his pro-union activity. Zabala was a cook whose name

appeared on the list of in-house organizers the union sent

Pioneer in August 1995. Id. at 924 (citing App. 252). On

August 9, Zabala was sent home for refusing to remove a

union button. Id. Four days later, and without explanation,

he was assigned to more onerous pantry duties. Id. During

September and October, Zabala handed out union leaflets on

the premises; company security officers videotaped the activi-

ty and gave written reports to Chris Lowden. App. 254-55,

258-61. On one occasion, Zabala allegedly criticized Pioneer

while distributing handbills to a line of customers. Id. at 309.

The next day, October 14, Zabala's supervisor (Garcia again)

told him the company was cutting his hours as part of a

"restructuring," and was keeping only people who were good

workers and "loyal" to the company. Pioneer Hotel, 324

N.L.R.B. at 924; App. 506.

On October 21, 1995, Zabala received a three-day suspen-

sion for the handbilling incident. On October 26 he was laid

off, purportedly due to the "restructuring," although there is

substantial evidence the layoff deviated from Pioneer's prom-

ise that seniority would be followed during the restructuring

process. Pioneer Hotel, 324 N.L.R.B. at 925. Garcia later

told Zabala that he could be rehired only if he passed a cook's

test, a qualification never previously required. Id. And

notwithstanding the company's assertions that the layoff was

motivated by a need to downsize its operations and that

Zabala had failed the cook's test, the record contains evidence

that Pioneer was simultaneously hiring temporary employees

to do cooks' work without requiring them to take the test.

Id.

The ALJ inferred and the NLRB agreed that unlawful

motives lay behind the adverse actions taken against Zabala,

based on evidence of Pioneer's general anti-union animus, the

timing of Pioneer's actions vis-a-vis Zabala's pro-union activi-

ties, and the pretextual justifications offered by Pioneer. Id.

Discerning substantial evidence for the Board's findings of

fact, and deferring to its reasonable inferences from those

facts, we uphold the NLRB's determinations with respect to

Zabala.

III

For the reasons stated above, we grant the Board's cross-

application for enforcement and deny Pioneer's petition for

review in all respects other than those relating to Pioneer's

termination of Grace and Grace's interrogation of Falk. We

deny the cross-application and grant the petition with respect

to those two issues.

So ordered.