Alldata Corp. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 9, 2001 Decided April 13, 2001

No. 00-1188

Alldata Corporation,

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

Robert L. Rediger argued the cause and filed the briefs for

petitioner.

Joan E. Hoyte-Hayes, Attorney, National Labor Relations

Board, argued the cause for respondent. With her on the

brief were Leonard R. Page, General Counsel, John H.

Ferguson, Associate General Counsel, Aileen A. Armstrong,

Deputy Associate General Counsel, and Frederick Havard,

Supervisory Attorney. Julie B. Broido, Senior Attorney,

entered an appearance.

Before: Henderson and Randolph, Circuit Judges, and

Silberman, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

Silberman.

Silberman, Senior Circuit Judge: Alldata Corporation peti-

tions for review of the determination that it committed an

unfair labor practice. The NLRB cross-petitions for enforce-

ment. We grant the petition for review and deny the petition

for enforcement.

I.

Petitioner sells an automobile repair database to service

stations. In May 1993, petitioner hired Karl Abbadessa to

sell its products in Queens, New York, under the supervision

of local field manager Arnold Pincus. Petitioner's salesmen

were paid largely on commission. Company policy required

that salesmen meet a quota of 7.5 sales per rolling quarter--

i.e., at the end of every month, each salesman must have met

his quota for the previous three months. At the time of

Abbadessa's hiring, failure to meet the quota resulted in

written warnings prior to discharge.

Abbadessa's tenure in petitioner's employ was tumultuous.

In August 1994, Pincus fired Abbadessa over financial impro-

prieties. Petitioner then nullified the firing and instead

issued a written warning, which stated that Abbadessa need-

ed to maintain his sales quota. By the end of fiscal year

1994, however, Abbadessa's sales placed him in the top 10% of

petitioner's sales force. On April 11, 1995, petitioner in-

formed Abbadessa that his fiscal year 1994 sales had earned

him a trip to the "Winner's Circle," a company-funded trip to

a California resort. Because the trip would allow him to meet

petitioner's executives, Abbadessa spoke to other Alldata

salesmen about their working conditions so that he might

convey their concerns to management.

The primary concern among those in Abbadessa's region

was their changing commission formula. Beginning in early

1994, petitioner adopted a second method for distributing its

database: a contract with Snap-On Tools, a seller of automo-

tive tools. Snap-On's sales force marketed the database to

service stations, in competition with Alldata's own commis-

sion-driven salesmen. Among Abbadessa's fellow salesmen,

this arrangement allegedly led to diminished earnings; with-

out question, it led to resentment of Snap-On's role. Sales-

men under Pincus' supervision, including Abbadessa, made

their dissatisfaction known to Pincus at their monthly sales

meetings. Pincus was not unsympathetic.

For Abbadessa, the Snap-On contract apparently led to

both resentment and hostility toward Snap-On's employees.

On May 10, 1995, Abbadessa was rejected for promotion

because of his antagonistic relationship with Snap-On. After

Pincus recommended two other salesmen for promotions,

petitioner's vice president of sales, Robert Weiffenbach, sug-

gested that he thought Abbadessa was "a better candidate."

Pincus conceded that Abbadessa was a better candidate, but

informed Weiffenbach that

I did not choose him because he has a poor reputation

with [S]nap-[O]n. I feel this will negatively affect their

cooperation with us.... I have attempted and am con-

tinuing efforts to bring upon an improvement in their

relationships. Karl has been resisting making peace.

During the Winner's Circle, having been encouraged by

Pincus to act as an "ambassador[ ]" for his fellow salesmen,

Abbadessa approached Weiffenbach regarding his concerns

and requested a meeting with Rod Georgiu, petitioner's presi-

dent--which he got. Abbadessa spoke to Georgiu about

various issues relating to employee well-being, including bo-

nuses, expenses, reimbursement, and support. Abbadessa

testified that Georgiu appeared sympathetic to his concerns

and suggested that Abbadessa put his complaints in writing.

Weiffenbach also urged Abbadessa to memorialize his con-

cerns and to do so quickly. Abbadessa drafted a letter to

Georgiu, which he had Pincus review, and sent it on May 23.

On June 5, petitioner decided to eliminate some salesmen

who were well below quota. Weiffenbach wrote Pincus and

the other field service managers:

In the next day or two I will be sending you a list of

reps that need to be terminated immediately. Basically

the list will include established reps that are below 2 or 3

units YTD [i.e., since March 31]. Each of you has a rep

or two in this category and this performance can not be

allowed to continue this year. There is absolutely no

excuse for an established rep not to be above quota.

This policy constituted a change from petitioner's previous

one of issuing written warnings to those who were below

quota.

On June 12, Abbadessa e-mailed Weiffenbach to suggest

that "we draw up an 'agreement' which clearly states what

the [Snap-On] dealers['] obligations are, ... and have any

dealer who is interested in participating sign." Abbadessa

apparently also submitted his own draft of such an agree-

ment. The next day, Pincus offered two candidates who were

under his supervision for termination. He told Weiffenbach

that neither Abbadessa nor Alan Tankoos, another salesman,

qualified for retention, because they each had secured only

two of the requisite 7.5 sales, despite the fact that the rolling

quarter within which those sales had to be made was almost

five-sixths over. Pincus stated that "[i]f [Abbadessa's] busi-

ness doesn't improve he may be my first choice to go."

The following day Weiffenbach angrily responded to Ab-

badessa's June 12 e-mail:

I read the document you intended to try and get the

dealers to sign. Frankly I went a little ballistic. I have

one statement I want you to think about. What makes

you think you have the authority and/or rapport with

Snap-on to ask or require them to sign this unauthorized

document? ! Karl, you need to put your adversarial

attitude about Snap-on in the closet and leave it there.

They do not work for you or [me] and your heavy handed

tactics will only serve to further damage the relation.

You can be certain I will not allow that to happen. I am

working hard to get their entire organization behind us

....

Abbadessa wrote back on June 20 assuring Weiffenbach that

he had taken no direct action to get Snap-On dealers' signa-

tures.

The same day, Weiffenbach e-mailed Abbadessa to notify

him that his Winner's Circle status earned him 600 "stock

option shares." The message congratulated Abbadessa on his

sales success during the preceding fiscal year.

Three days later, Pincus terminated Abbadessa's employ-

ment for "failure to maintain sales volume." Pincus wrote to

Abbadessa stating that Abbadessa had net sales of only two

units with a week left in the rolling quarter--well short of the

required 7.5--and that another possible cancellation threat-

ened to reduce Abbadessa's total to a single sale. Therefore,

according to Pincus' letter, petitioner had "no alternative but

to terminate [Abbadessa's] employment immediately, effective

June 23, 1995." However, field managers other than Pincus

did not begin cutting personnel, pursuant to Weiffenbach's

memorandum, until September of that year. Only then was

Tankoos released.

With Abbadessa's June 23 firing, the clock began running

on the six-month statute of limitations for filing an unfair

labor practice charge under s 10(b) of the National Labor

Relations Act.1 When Abbadessa finally attempted to file a

charge on December 18--five days before the statute of

limitations was up--he did so without attaching the jurat or

declaration required by NLRB regulations.2 At the time

much of the federal government, including the Regional Of-

__________

1 29 U.S.C. s 160(b).

2 See 29 C.F.R. s 102.11. That is, Abbadessa failed to include

either his signature as witnessed by a notary public or a declaration

under penalty of perjury that the contents of the charge were true

and correct. See id.

fices of the National Labor Relations Board, was shut down

due to a budget deadlock. After the offices reopened, on

January 8--after the statute of limitations had run--the

Regional Office requested that Abbadessa refile his charge in

the proper form and deferred for later consideration whether

the refiled charge would be considered timely. Abbadessa

promptly refiled.

An administrative law judge found that Abbadessa's meet-

ing with and letter to Georgiu constituted protected concerted

activity under s 7 of the Act, and inferred that Abbadessa's

termination was brought on by that concerted activity. After

making those findings, however, the ALJ dismissed the com-

plaint because he believed that the untimely filing of the

sworn charge meant that no valid charge was filed. The

Board disagreed, holding that "the failure of a charging party

to comply with the jurat or declaration requirement does not

affect the timeliness of the filing of an unfair labor practice

charge." The Board determined, however, that the ALJ's

decision was insufficiently specific to allow meaningful review,

and so it remanded for specific findings regarding the ele-

ments of the unfair labor practice and witnesses' credibility.3

On remand, the ALJ made a credibility finding as to only

one topic but otherwise fleshed out his previous findings

regarding the unfair labor practice. Over a strong dissent,

the Board adopted the ALJ's order and decision.4 Alldata

petitioned for review and the Board cross-petitioned for en-

forcement.

II.

Petitioner presents us with two arguments. First, it is

contended that an unsworn charge is no charge at all and that

by the very terms of the Board's own regulations Abbadessa's

charge was untimely. Second, petitioner, echoing the dissent-

ing Board member, argues that substantial evidence is lack-

ing for the Board's finding that petitioner acted on the basis

__________

3 Alldata Corp., 324 N.L.R.B. 544, 545 (1997).

4 Alldata Corp., 327 N.L.R.B. 127, 127 (1998).

of animus against concerted activity. We take up those

arguments in order.

A.

The Board's regulations require that a charge contain

either a jurat or a declaration. Petitioner argues that non-

compliance with the jurat requirement invalidates a charge

and that failure to file a valid charge within the six-month

period renders a subsequent charge untimely. The Board

decided, however, that the defective charge's filing tolled the

statute of limitations, and that "[a] charge timely filed within

the 10(b) period remains timely pending its revision to comply

with this provision of the Board's Rules." 324 N.L.R.B. at

545. We give controlling weight to the Board's interpretation

of its own rule unless it is plainly erroneous or inconsistent

with the regulation itself. See Canadian Am. Oil Co. v.

NLRB, 82 F.3d 469, 473 (D.C. Cir. 1996). Here, we see no

reason not to defer to the Board's interpretation. While

s 102.11 requires that a charge "shall" contain a jurat or

declaration, the consequence of a charge's noncompliance on

its timeliness is not mentioned. If the agency allows a

statutorily valid charge filed within the statutory period to be

subsequently brought into compliance with agency specifica-

tions, there is nothing "plainly erroneous or inconsistent" with

the text of the regulation about doing so.

B.

It is, of course, axiomatic that the Board's unfair labor

practice determination must be premised on a finding that

petitioner was motivated by animus against Abbadessa's con-

certed activity. And Abbadessa's efforts to improve the pay

and working conditions of his fellow salesmen were protected

activity. But petitioner claims that there is not a shred of

evidence that the company resented Abbadessa's concerted

activity--at least insofar as it remained within legitimate

scope and bounds. In fact, the company encouraged Ab-

badessa's role.

The Board's finding, not atypically explained in a footnote

to the Board's opinion, is based on inferences it draws from

certain circumstances:

the timing of the discharge in that it occurred shortly

after Abbadessa's voicing of employee complaints about

[petitioner's] bonus policy, expense reimbursement, sales

support and other issues; the disparity in [petitioner's]

treatment of Abbadessa and other underperforming sales

people; and the inconsistency between commending and

rewarding Abbadessa for his sales performance and then

shortly thereafter firing him for alleged poor perfor-

mance.

327 N.L.R.B. at 127 n.2.

That sort of circumstantial evidence, when combined with

some evidence of employer animus directed at an employee's

protected activity, would ordinarily suffice to support a Board

finding of illegal discharge. But it is doubtful that it would

suffice without that crucial link. Cf. MECO Corp. v. NLRB,

986 F.2d 1434, 1437 (D.C. Cir. 1993).

In any event, the Board's description of the circumstantial

evidence in this case ignores other circumstances which whol-

ly undermine its finding of unlawful motivation. Taking the

last point first, there is no logical inconsistency in the compa-

ny's behavior in discharging Abbadessa for poor performance

shortly after giving him a reward, because the reward was for

his performance in the prior year, fiscal 1994, whereas his

performance in early fiscal 1995 was below company stan-

dards.

To be sure, turning to the timing, Abbadessa was dis-

charged before the group of firings Weiffenbach contemplat-

ed--which did not come until September. The Board particu-

larly was struck by the fact that Tankoos, who like Abbadessa

had only two net sales for the rolling quarter, was not

discharged until September. At the time Abbadessa was let

go, however, Tankoos, unlike Abbadessa, had four potential

sales in the pipeline, whereas Abbadessa was not making a

comparable effort.5

Still it is a fair observation that the timing of Abbadessa's

discharge was suspiciously abrupt coming even before the end

of the quarter. But the Board (and the ALJ) ignored Ab-

badessa's extraordinary drafting and sending to Weiffenbach

of the proposed new agreement with Snap-On. In the con-

text of Abbadessa's troubled relations with Snap-On employ-

ees it is quite apparent that Abbadessa's initiative did engen-

der animus, even fury. Weiffenbach wrote Abbadessa that

he, Weiffenbach, "went ballistic" when he received that com-

munication only days before Abbadessa was discharged. The

Board's counsel conceded Abbadessa's efforts to directly in-

fluence Alldata's contractual relations with Snap-On went

beyond any reasonable definition of protected concerted activ-

ity yet neither the ALJ nor the Board even discussed its

relevance.6 Abbadessa's ploy, coming in the wake of his

troubled relations with Snap-On employees, may well have

pushed him to the front of the queue of marginal employees,

but it constitutes a non-protected ground for discharge.

We agree with the dissenting Board member that there is

simply no evidence that petitioner ever manifested any hostil-

ity to Abbadessa's protected concerted activity. Abbadessa

was encouraged by his supervisors, Pincus and Weiffenbach,

to present his and his fellow salesmen's compensation con-

cerns to Georgiu both orally and in writing (Pincus even

helped Abbadessa to draft a letter to Georgiu). Abbadessa

went too far, however; he took his advocacy role beyond

protected bounds and, assuming that initiative in part contrib-

uted to the timing of his discharge--which is a fair infer-

__________

5 The ALJ refused to credit Pincus' testimony that he had pled

with Abbadessa to increase his sales efforts because there was no

written record of those pleas. The Board implies that Abbadessa's

unwarned firing, coupled with petitioner's prior policy of issuing

written warnings, suggests improper motivation. But Weiffen-

bach's June 5 memo plainly changed that policy for the whole

company.

6 To be sure, petitioner did not make this point very effectively.

ence--it nevertheless does not support the Board's finding of

unlawful motive. The Board just flatly ignored the obvious

superseding (and benign) explanation for the abruptness of

Abbadessa's discharge and instead fixed on an unsupported

cause. As such, its inference drawn from the circumstances

is unreasonable. See Allentown Mack Sales & Serv., Inc. v.

NLRB, 522 U.S. 359, 366-67 (1998); see also Southwest

Merch. Corp. v. NLRB, 943 F.2d 1354, 1360 (D.C. Cir. 1991).

* * * *

Accordingly, the petition for review is granted.

So ordered

.