Adtranz ABB Daimler-Benz Transportation, N.A. v. National Labor Relations

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 9, 2001 Decided June 26, 2001

No. 00-1282

Adtranz ABB Daimler-Benz Transportation, N.A., Inc.,

Petitioner

v.

National Labor Relations Board,

Respondent

Machinists Automotive Trades District Lodge No. 190 of

Northern California, International Association of

Machinists and Aerospace Workers, AFL-CIO,

Intervenor

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Mark S. Ross argued the cause for petitioner. With him

on the briefs was Christopher J. Pirrone.

Jeffrey L. Horowitz, Attorney, National Labor Relations

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

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

Ferguson, Associate General Counsel, Aileen A. Armstrong,

Deputy Associate General Counsel, and Frederick C. Havard,

Supervisory Attorney.

David A. Rosenfeld argued the cause for intervenor. With

him on the brief was Eric Borgerson.

Before: Sentelle and Henderson, Circuit Judges, and

Silberman, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Sentelle.

Separate Concurring Opinion filed by Senior Circuit Judge

Silberman.

Sentelle, Circuit Judge: Adtranz ABB Daimler-Benz

Transportation N.A., Inc. ("Adtranz") petitions for review of a

National Labor Relations Board ("NLRB") order calling for a

new representation election. Specifically, Adtranz challenges

the NLRB's conclusion that its policies barring abusive and

threatening language and limiting solicitation in the work-

place constitute unfair labor practices. We vacate the

NLRB's unfair labor practice determinations as they are

utterly without merit. We do not address the Board's order

of a new election, however, as it is not a reviewable final

order.

I. Background

A. Relevant Facts

Petitioner Adtranz refurbishes rail cars for the Bay Area

Rapid Transit system in Pittsburg, California. In December

1997, Adtranz distributed a new employee handbook contain-

ing "Rules of Conduct" with which employees were expected

to comply. Under these rules, "[u]sing abusive or threaten-

ing language to anyone on Company premises" is defined as

"serious misconduct," punishable with suspension for a first

offense and possible termination for a second offense. Ad-

tranz Employee Handbook at 11. "Soliciting or distributing

without authorization" is defined as "extremely serious mis-

conduct" and can result in "immediate termination of employ-

ment." Id. at 10. Under a separate section entitled "Solici-

tation and/or Distribution" the handbook provided that:

The unauthorized sale of tickets, solicitation of contribu-

tions, or distribution of handbills can disrupt work.

Therefore, such activities are not permitted on Company

premises during working time except for specific

Company-sponsored solicitations or distributions.

Unauthorized activities include, but are not limited to,

distribution of any literature or any material in work

areas and solicitation in either work or non-work areas

where either the employee soliciting or the employee

being solicited is scheduled to be working.

All solicitation requests must be approved in advance by

Human Resources.

Id. at 15. The solicitation and distribution rule makes no

explicit mention of union activity. A prior version of the

employee handbook, however, explicitly covered "efforts on

behalf of a labor union."

Beginning in September 1998, Machinists Automotive

Trade District Lodge No. 190 of Northern California ("Un-

ion") began efforts to unionize the employees at Adtranz's

Pittsburg facility. Pursuant to election petitions filed by both

Adtranz and the Union, the NLRB conducted a representa-

tion election on December 9, 1998. Seventy-nine employees

voted in favor of unionization, 135 employees voted against.

A non-outcome determinative number of ballots were chal-

lenged. Under Section 102.69(a) of the NLRB's rules, the

Union had seven days from the tallying of ballots to file

objections to the election, and an additional seven days from

that filing to furnish evidence in support of the objections.

The Union filed two "Objections to Conduct of Election" on

December 16, alleging that Adtranz "interfered with the

election by threatening employees with loss of benefits and

wages and offering increased benefits or wages to employees"

and "provided increase [sic] benefits and wages to employ-

ees." The objections made no mention of the handbook

provisions at issue in this case. One week later, on December

23, the Union filed an unfair labor practice charge against

Adtranz, alleging that various provisions of the employee

handbook were overly broad which "interfered with, re-

strained, and coerced employees in the exercise of the rights

guaranteed" by the National Labor Relations Act ("NLRA").

B. Proceedings Below

In response to the Union's unfair labor practice filing, on

March 18, 1999, the NLRB Regional Director issued a com-

plaint alleging, among other things, that the company's hand-

book policies were overly broad in violation of Section 8(a)(1)

of the NLRA. 29 U.S.C. s 158(a)(1). That same week the

Regional Director consolidated the unfair labor practice com-

plaint with one of the Union's election complaints. The other

election complaint was dismissed for lack of evidence.

On May 21, 1999, Adtranz filed a motion in limine seeking

to bar consideration of the handbook provisions in evaluating

the Union's unfair election complaint. Adtranz claimed that

consideration of the handbook in relation to the election was

procedurally barred under Burns Int'l Security Servs., 256

NLRB 959 (1981), in that the Union did not identify the

handbook as a basis for challenging the election within seven

days of the election. On June 23, 1999, Associate Chief

Administrative Law Judge ("ACALJ") Schmidt issued an

order in which he found the handbook provisions to be

"wholly unrelated to the conduct alleged in the Union's

remaining election objection." The ACALJ nonetheless de-

nied Adtranz's motion to exclude the handbook finding that,

under NLRB precedent, the ALJ who would try the case had

sufficient discretion to consider the handbook in his proceed-

ing.

On January 2000, an Administrative Law Judge ("ALJ")

found that the abusive language and solicitation/distribution

provisions of Adtranz's employee handbook constituted unfair

labor practices under Section 8(a)(1) of the NLRA and consti-

tuted a sufficient basis to overturn the December 1998 elec-

tion. The ALJ rejected the Union's remaining complaints,

including Adtranz's rule limiting employee use of e-mail and

the Union's allegation that Adtranz manipulated employee

benefits to discourage unionization. Adtranz ABB Daimler-

Benz Transp. N.A., Inc., 331 NLRB No. 40, slip op. at 4 (May

31, 2000). The ALJ nonetheless called for a new election and

ordered Adtranz to cease and desist from its unfair labor

practices and post an appropriate notice at its Pittsburg

facility.

On May 31, 2000, the NLRB summarily affirmed the ALJ's

conclusions and call for a new election, and issued a revised

order. Specifically, the NLRB ordered Adtranz to revise its

employee handbook to rescind the "overly broad rules regard-

ing solicitation, distribution, and abusive language" and re-

quired that Adtranz post appropriate notice at all Adtranz

facilities nationwide. Id. at 1. One member of the Board

dissented in part on the grounds that Adtranz's rule against

abusive language did not constitute an unfair labor practice.

Id. at 1 n.3.

II. Merits

Adtranz petitions for review of the NLRB's order, chal-

lenging both of the NLRB's unfair labor practice determina-

tions and ordered remedies. The NLRB cross-petitions for

enforcement of the order. The Union intervenes in support

of the NLRB arguing, inter alia, that the use of abusive

language, vulgar expletives, and racial epithets "is part and

parcel of the vigorous exchange that often accompanies labor

relations." Brief of Intervenor at 2.

A. Jurisdiction

As an initial matter, we must address our jurisdiction, or

lack thereof, over petitioner Adtranz's claims. This Court

has jurisdiction to review a "final order" of the NLRB

pursuant to Sections 10(e) and (f) of the NLRA. 29 U.S.C.

s 160(e) and (f). An NLRB decision affirming an ALJ's

findings of unfair labor practices by an employer is such an

order. However, "the Board's direction of a new election is

not a final order reviewable under either section 10(e) or

section 10(f) of the NLRA." Gold Coast Restaurant v.

NLRB, 995 F.2d 257, 267 (D.C. Cir. 1993) (citing American

Fed'n of Labor v. NLRB, 308 U.S. 401, 409 (1940)). Should

an employer seek "to challenge the new election, it can

precipitate an unfair labor practice charge by refusing to

recognize the union representation that could result from the

election." Id. In the case at hand, this Court has no

jurisdiction to consider petitioner's challenge to the NLRB's

order of a new election or petitioner's claim that the NLRB

improperly considered the employee manuals in its consider-

ation of the Union's election objections. However, we have

jurisdiction over petitioner's remaining claims against the

Board, and the resolution of these claims will no doubt impact

future proceedings concerning the election.

B. Standard of Review

Section 8(a)(1) of the NLRA makes it an unfair labor

practice for an employer "to interfere with, restrain, or coerce

employees in the exercise" of their rights to unionize and

engage in related labor activities. 29 U.S.C. s 158(a)(1).

The NLRA delegates to the Board "the work of applying the

Act's general prohibitory language in the light of the infinite

combination of events which might be charged as violative of

its terms." Republic Aviation Corp. v. NLRB, 324 U.S. 793,

798 (1945). NLRB determinations as to what sort of employ-

er conduct unlawfully restrains or interferes with protected

labor activity are entitled to considerable deference so long as

they are "reasonably defensible." Ford Motor Co. v. NLRB,

441 U.S. 488, 497 (1979).

In evaluating workplace rules promulgated by employers,

the NLRB traditionally considers "whether the rules would

reasonably tend to chill employees in the exercise" of their

statutory rights. Lafayette Park Hotel, 326 NLRB 824, 825

(1998). Where the NLRB faithfully applies this standard,

and adequately explains the basis for its conclusion, we will

enforce its rulings. On the other hand, where the NLRB

adopts an unreasonable or otherwise indefensible interpreta-

tion of Section 8(a)(1)'s prohibition, we will deny enforcement

and vacate the Board's order. This case fits comfortably into

the latter category.

C. Abusive and Threatening Language

Adtranz seeks to maintain a decorous and peaceful work-

place. As documented in the employee manual at issue in

this case, the company's "shared values" which it deems

fundamental to its "continuous pursuit for success" include

"[t]rust and respect for self and others," "[t]eamwork and

cooperation," and "[e]ffective communication." Adtranz Em-

ployee Handbook at 3. In accordance with these values,

Adtranz prohibits the use of "abusive or threatening language

to anyone on company premises." Id. at 11. Adtranz also

prohibits harassment and other conduct that could conflict

with its values.

To the NLRB and Union Intervenor, Adtranz's effort to

maintain a civil and decent workplace is an unfair labor

practice that threatens the statutory rights of Adtranz's

employees under the NLRA. Prohibiting the use of abusive

or threatening language, the Board maintains, has the unreal-

ized potential to chill the exercise of protected activity, as the

rule "could reasonably be interpreted as barring lawful union

organizing propaganda." Adtranz ABB, 331 NLRB No. 40,

slip op. at 4. The NLRB does not argue that such "chilling"

necessarily has occurred at Adtranz's Pittsburg facility, nor

does it maintain that Adtranz either adopted or applied the

policy in order to frustrate or discourage union activity.

Rather, the NLRB asserts that the rule against the use of

abusive and threatening language in the workplace on its face

constitutes an unfair labor practice.

Under the Board's reasoning, every employer in the United

States that has a rule or handbook barring abusive and

threatening language from one employee to another is now in

violation of the NLRA, irrespective of whether there has ever

been any union organizing activity at the company. This

position is not "reasonably defensible." It is not even close.

In the simplest terms, it is preposterous that employees are

incapable of organizing a union or exercising their other

statutory rights under the NLRA without resort to abusive or

threatening language.

The NLRB notes that union campaigns are heated affairs,

often spawning intemperate language. According to the

NLRB, the abusive or hostile nature of such outbursts does

not strip such language of its protected status, and therefore

it is unlawful for a company to threaten punishment for the

use of such language. According to the Board and the Union

Intervenor, it is perfectly acceptable to use the most offensive

and derogatory racial or sexual epithets, so long as those

using such language are engaged in union organizing or

efforts to vindicate protected labor activity. Expecting deco-

rous behavior from employees is apparently asking too much.

Indeed, Union Intervenor suggests that it is unfair to expect

union members to comport themselves with general notions of

civility and decorum when discussing union matters or exer-

cising other statutory rights. We do not share the Union's

low opinion of the working people it purports to represent.

America's working men and women are as capable of discuss-

ing labor matters in intelligent and generally acceptable

language as those lawyers and government employees who

now condescend to them.

The NLRB claims that "it is well settled that an employer

violates Section 8(a)(1) ... by maintaining a rule that seeks to

broadly prohibit employee speech beyond deliberate or mali-

cious false statements." Brief for the NLRB at 9. This is a

stunning misreading of the applicable precedent, including

the Board's own prior rulings. Indeed, the NLRB has long

held the opposite, noting that "an employee who is engaged in

concerted protected activity can, by opprobrious conduct, lose

the protection of the Act." Atlantic Steel Co., 245 NLRB

814, 816 (1979). Under Atlantic Steel, if an employee is

sanctioned for the use of obscenity or abusive language, the

Board may not ignore the nature of the language used.

Rather the NLRB is required to consider "the nature of the

employee's outburst," among other factors, in determining

whether the employee's activity remains protected. Id. See

also Felix Indus. v. NLRB, 2001 WL 640638 (D.C. Cir. June

12, 2001).

The NLRB is correct that some of its prior precedent could

be read to support the proposition it advances here. This

proves nothing. Where, as here, the NLRB adopts an unrea-

sonable position, it can find no solace in the fact that it made

the same mistake in prior cases. As we have observed in

other contexts, "merely applying an unreasonable statutory

interpretation for several years [cannot] transform it into a

reasonable interpretation." F.J. Vollmer Co. v. Magaw, 102

F.3d 591, 598 (D.C. Cir. 1996). The NLRB may be bound by

its erroneous precedents. We are not. That said, the

Board's ruling here is substantially broader than the cases on

which it attempts to rely. For instance, the rules at issue in

Lafayette Park Hotel, 326 NLRB No. 824 (1998), and Flam-

ingo Hilton-Laughlin, 330 NLRB No. 34 (1999), barred false,

vicious, profane or malicious statements about the employer.

As such, these rules discouraged speech that is arguably

related to protected activities, in a way that "abusive or

threatening language" more generally is not. An employer's

effort to squelch criticism from employees, and threatening to

punish "false" statements without evidence of malicious in-

tent, is quite different from demanding employees comply

with generally accepted notions of civility. The former may

well constitute an unfair labor practice in the proper context.

The latter, in and of itself, does not. This distinction is fully

consistent with Linn v. United Plant Guard Workers of

America, Local 114, 383 U.S. 53 (1966), which held that libel

actions under state law are only preempted by the NLRA to

the extent that such actions do not require knowledge of the

statement's falsity or a reckless disregard for the truth.

The other cases relied upon by the NLRB are no more

helpful. In Great Lakes Steel, the company's unfair labor

practice was a rule prohibiting the possession or distribution

of literature--whether or not during working hours--that

was "libelous, defamatory, scurrilous, abusive or insulting" or

"which would tend to disrupt order, discipline or production

within the plants." 236 NLRB 1033, 1033 (1978). This rule

did far more than impose a standard of civility on workplace

behavior. Thus, the Sixth Circuit Court of Appeals found

that the rule "taken as a whole" was "too broad," in no small

part because it could prohibit solicitation "during nonworking

hours." Great Lakes Steel v. NLRB, 625 F.2d 131, 132 (6th

Cir. 1980).

We cannot help but note that the NLRB is remarkably

indifferent to the concerns and sensitivity which prompt many

employers to adopt the sort of rule at issue here. Under both

federal and state law, employers are subject to civil liability

should they fail to maintain a workplace free of racial, sexual,

and other harassment. Abusive language can constitute ver-

bal harassment triggering liability under state or federal law.

See, e.g., Harris v. Forklift Sys., Inc., 510 U.S. 17, 21 (1993).

Given this legal environment, any reasonably cautious em-

ployer would consider adopting the sort of prophylactic mea-

sure contained in the Adtranz employee handbook. While a

single, isolated remark will rarely be sufficient to trigger

employer liability, see Clark County School Dist. v. Breeden,

121 S. Ct. 1508 (2001), failure to maintain a workplace free of

such language can place an employer at significant financial

risk nonetheless. See generally Eugene Volokh, What Speech

Does 'Hostile Work Environment' Harassment Law Restrict?

85 Geo. L.J., 627 (1997). Under current law, the "only

reliable protection is a zero-tolerance policy, one which pro-

hibits any statement that, when aggregated with other state-

ments, may lead to a hostile environment." Id. at 638-39.

Indeed, such rules are commonplace. See, e.g., id. at 639 n.35

and citations therein. To bar, or severely limit, an employer's

ability to insulate itself from such liability is to place it in a

"catch 22."

That the threat of legal liability justifies limitations on

threatening language due to the potential for workplace dis-

cord or violent confrontations is a principle the NLRB has

itself acknowledged. In Southwestern Bell Tel. Co., the

NLRB upheld an employer's ban on employees' wearing

offensive shirts making derogatory reference to the employer

during contract negotiations as a "reasonable precaution

against discord and bitterness between employees and man-

agement, as well as to assure decorum and discipline in the

plant." 200 NLRB 667, 670 (1972).

We understand that labor negotiations produce occasional

intemperate outbursts and, in a specific context, such lan-

guage may be protected. We also recognize that the uneven

or partial application of a rule against abusive and threaten-

ing language could constitute an unfair labor practice if

directed against employees seeking to exercise their statutory

rights. Yet the Board's position that the imposition of a

broad prophylactic rule against abusive and threatening lan-

guage is unlawful on its face is simply preposterous. It defies

explanation that a law enacted to facilitate collective bargain-

ing and protect employees' right to organize prohibits em-

ployers from seeking to maintain civility in the workplace.

D. Solicitation

The second claim raised by petitioner presents a closer

issue, but only slightly. The Adtranz employee handbook

contains a rule against "soliciting and distribution without

authorization." Adtranz maintains that this rule when read

in context, does not discourage or chill protected activity.

Instead, petitioner claims, the rules are clearly focused upon

preventing work disruptions and curbing potential distrac-

tions. As above, the NLRB cites no evidence, let alone

substantial evidence, to the contrary. Instead, the NLRB

argues that the policy is unlawful on its face because it will

"chill" protected labor activity. This, too, is not a "reasonably

defensible" position.

Our decision in Aroostook County Regional Ophthalmology

Center v. NLRB, 81 F.3d 209 (D.C. Cir. 1996), is instructive.

In Aroostook, this Court reversed the NLRB's finding that a

policy barring medical office employees from discussing griev-

ances within earshot of patients constituted an unfair labor

practice. We held that the NLRB could not declare such a

policy to be facially unlawful based upon "fanciful" specula-

tion, but rather had to consider the context in which the rule

was applied and its actual impact on employees. As we

explained:

In the absence of any evidence that [the employer] is

imposing an unreasonably broad interpretation of the

rule upon employees, the Board's determination to the

contrary is unjustified. If an occasion arises where [the

employer] is attempting to use the rule as the basis for

imposing questionable restrictions upon employees' com-

munications, the employees may seek review of the Com-

pany's actions at that time. However, the rule on its face

is not unlawful.

81 F.3d at 213.

This legal standard should come as no surprise to the

NLRB. Indeed, the NLRB has itself cautioned against

parsing workplace rules too closely in a search for ambiguity

that could limit protected activity. Rather, the Board should

consider "the realities of the workplace" and the actual

context in which rules are imposed. See Lafayette Park Hotel,

326 NLRB 824 (1998). In the Board's decision before us,

however, there is no consideration of the context of Adtranz's

rule, or its impact on employees. Indeed, the ALJ's decision

adopted by the Board considered nothing more than the

General Counsel's claim that "the rule could reasonably inter-

preted as barring lawful union organizing propaganda or

rhetoric." Adtranz ABB, 331 NLRB No. 40, slip op. at 3.

Unlike the cases relied upon by the ALJ for his decision,

Our Way Inc., 268 NLRB 394 (1983); Laidlaw Transit Inc.,

315 NLRB 79 (1994); Opryland Hotel, 323 NLRB 723 (1997);

and Baldor Electric Co., 245 NLRB 614 (1979), the rule in

question only applies to conduct during working time and in

the work place. In these other cases the invalidated rules

prohibited or restricted solicitation, handbilling and the like

during breaks and meals-times when an employer could not

usually claim to have a significant interest in preventing

workplace "distractions." " 'Working time is for work' is a

long-accepted maxim of labor relations." Our Way, 268

NLRB at 395 (quoting Peyton Packing Co., 49 NLRB 828,

843 (1943)). Therefore, "rules prohibiting solicitation during

working time are presumptively lawful because such rules

imply that solicitation is permitted during nonworking time, a

term that refers to the employees' own time." Id. at 394.

Similarly, "an employer's prohibition against employee distri-

bution in work areas at all times is presumptively valid."

Beverly Enterprises-Hawaii, Inc., 326 NLRB 335, 335 (1998).

The NLRB's decisions embody a "long-held standard that

rules banning solicitation during working time state with

sufficient clarity that employees may solicit on their own

time." Our Way, Inc., 268 NLRB at 395. But they also

support the principle that the NLRB may not cavalierly

declare policies to be facially invalid without any supporting

evidence, particularly where, as here, there are legitimate

business purposes for the rule in question and there is no

suggestion that anti-union animus motivated the policy.

As with the rule against abusive language, Adtranz's rule

applies across the board, so it cannot be said to discriminate

against unionization efforts or other protected activity. Ad-

tranz also proffered undisputed evidence to the ALJ demon-

strating that there was widespread employee solicitation and

distribution during non-worktime and that the company en-

couraged such activities. Not only did the NLRB fail to

consider any of petitioner's evidence, it cites no evidence to

support its concerns about "chilling" protected activity. In-

deed, there is no evidence in the record--let alone "substan-

tial evidence"--to suggest that any employees believed that

the solicitation and distribution rule prohibited union activi-

ties, while some employees claimed the opposite. Thus, we

find no basis for the NLRB's holding.

III. Conclusion

For the reasons set forth above, we vacate the NLRB's

order insofar as it found that Adtranz's employee policies

constituted unfair labor practices under the NLRA.

Silberman, Senior Circuit Judge, concurring: I concur in

the majority's opinion with respect to "abusive and threaten-

ing language" because I agree that it is absurd for the Board

to hold that an employer who bans that sort of language--

even though the ban has never been implemented in an anti-

union fashion nor in a manner that could be thought to

interfere with organizational efforts--per se violates s 8(a)(1).

This charge was an obvious gimmick (fashioned well after the

election contest period ended) designed to overturn

the election.