Nathan Katz Realty, LLC v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 6, 2001 Decide June 12, 2001

No. 00-1238

Nathan Katz Realty, LLC, et al.,

Petitioners

v.

National Labor Relations Board,

Respondent

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

G. Peter Clark argued the cause and filed the briefs for

petitioners.

Ruth Burdick, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the briefs

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

Associate General Counsel, Aileen A. Armstrong, Deputy

Associate General Counsel, and Margaret A. Gaines, Supervi-

sory Attorney.

Before: Williams, Sentelle and Henderson, Circuit

Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: Nathan Katz Realty, LLC man-

ages thirty apartment buildings in Queens, New York. After

Local 32B-32J, Service Employees International Union,

AFL-CIO ("the Union") petitioned to organize Katz's service

employees, a National Labor Relations Board ("NLRB") Re-

gional Director determined that the employees constituted

two separate units and ordered that the two elections be held

on the same day at different times. The Director also found

that the superintendents in Katz's buildings were not supervi-

sors under the National Labor Relations Act ("NLRA").

In one of the two elections, the employees voted to be

represented by the Union. Following the election, Katz filed

several objections, contending inter alia that (1) agents of the

Union had improperly interfered with the election by being

present in a no-electioneering zone directly outside the en-

trance of the election site, and (2) the Regional Director erred

in deciding not to count the ballots from the first election

until after the second election was completed. The Regional

Director overruled Katz's objections, and his decision was

affirmed by the Board.

When Katz refused to bargain with the Union, the Board's

General Counsel filed a complaint alleging that Katz's refusal

was an unfair labor practice that violated s 8(a)(5) and (1) of

the NLRA. 29 U.S.C. s 155(a)(5), (1). Katz responded to

the complaint by renewing its earlier objections, incorporat-

ing them by reference in a letter to the Board. The Board

ultimately ruled that Katz had engaged in unfair labor prac-

tices and ordered it to bargain with the Union. See Nathan

Katz Realty LLC, 331 N.L.R.B. No. 22 (May 23, 2000).

Katz petitions us to review the Board's decision, again

arguing that its superintendents are supervisors, the Union's

agents engaged in improper conduct during the election, and

the Director erred by refusing to count the first ballots before

the second election began. In a cross-application for enforce-

ment of its order, the Board contends that these issues are

not properly before us because Katz failed to preserve them

in the underlying representation case.

For reasons more fully set out below, we conclude that

Katz properly preserved all of the issues it raises in its

petition. Furthermore, we hold that the Board failed to

provide a reasoned basis for concluding that the Union's

agents did not interfere with the election and for deciding to

delay tallying the ballots cast in the first election. According-

ly, we grant Katz's petition in part and remand the case for

further proceedings.

I. BACKGROUND

In the spring of 1999, the Union petitioned the NLRB

seeking an election among Katz's superintendents and porters

to permit the Union to become their bargaining representa-

tive. Following a hearing, the NLRB Regional Director

found that the employees of all the buildings but one consti-

tuted an appropriate unit ("multi-site unit"). The employees

of the other building comprised a separate unit ("Sima unit").

The Regional Director scheduled the two units' representa-

tion elections for the same day, with the Sima election in the

morning and the multi-site election in the afternoon.

In his Decision and Direction for Election, the Director

concluded that the buildings' superintendents were not super-

visors under the NLRA. See 29 U.S.C. s 152(11). Specifi-

cally, the Director determined that "[a]t most, superinten-

dents possess some low-level authority to assign and oversee

the porters, but without using independent judgment and

without exercising any real supervisory authority over their

employment status." Nathan Katz Realty, LLC, No. 29-RC-

9265, slip op. at 19 (July 1, 1999). The superintendents

therefore were included in the units. Katz challenged this

ruling, but the Board summarily affirmed it. See Nathan

Katz Realty, LLC, No. 29-RC-9265 (July 26, 1999).

Two and a half weeks before the elections, the Union

requested that the Regional Director not count the ballots

from the Sima election until the voting in the multi-site

election was over. Although Katz objected, the Regional

Director granted the Union's request, asserting that "[t]o

count the ballots in both units simultaneously guarantees that

neither party will enjoy an unfair advantage over the other

based on the result of the election in the SIMA unit." Letter

from Alvin Blyer, Regional Director, NLRB, to G. Peter

Clark, Counsel for Nathan Katz Realty, LLC (July 16, 1999).

On the day of the elections, the two employees composing

the Sima unit voted against the Union, but the Union suc-

ceeded in the multi-site election, receiving 21 of 40 employee

votes. Following the elections, Katz filed three objections:

(1) Union agents interfered with the elections by stationing

themselves in a no-electioneering zone during the voting; (2)

the Union provided a substantial benefit to Katz's employees

by providing them with cellular phones during the period

leading up to the elections; and (3) the Director interfered

with the multi-site election by refusing to count the Sima

ballots until after the multi-site election. The Director dis-

missed objection number three and most of the allegations in

objection number one without a hearing. Their dismissal was

summarily affirmed by the Board. See Nathan Katz Realty,

LLC, No. 29-RC-9265 (Oct. 1, 1999). The Director later

dismissed objection number two and the remaining allegation

in objection number one.

After the Union was certified, it sought to bargain with

Katz, but Katz refused. The NLRB General Counsel filed a

complaint alleging that Katz's refusal constituted an unfair

labor practice. When the General Counsel filed a motion for

summary judgment, the Board issued a notice to show cause

to Katz. After Katz responded to the notice, the Board found

that Katz had engaged in unfair labor practices in violation of

s 8(a)(5) and (1) of the NLRA. See Nathan Katz Realty

LLC, 331 N.L.R.B. No. 22 (May 23, 2000).

Katz petitions this Court for review of the Board's unfair

labor practice decision. In its petition, Katz reasserts its

arguments that (1) the buildings' superintendents are supervi-

sors as defined by the NLRA, (2) the Union's agents inter-

fered with the elections through their presence in a no-

electioneering zone during the voting, and (3) the Regional

Director interfered with the multi-site election by refusing to

count the Sima ballots until after both elections were complet-

ed. The Board filed a cross-application for enforcement of its

order.

II. ANALYSIS

A. Jurisdiction

The Board contends that the issues raised by Katz are not

properly before the Court. Specifically, the Board argues

that Katz did not explicitly preserve the issues it had present-

ed in the underlying representation proceeding in accordance

with s 10(e) of the NLRA. 29 U.S.C. s 160(e). In its

response to the Board's notice to show cause in the unfair

labor practice proceeding, Katz wrote that it

relies upon its Answer to the Complaint in Case 29-CA-

23280, the entire record in the related representation

case, Case 29-RC-9265, including the September 21,

1999 Request for Review on the Acting Regional Di-

rector's Supplemental Decision On Objections On Behalf

Of Nathan Katz Realty, LLC, and the transcripts and

records of the proceedings before the hearing officers on

the petition and on the election objections, in opposition

to General Counsel's Motion for Summary Judgment in

the above-referenced cases.

Letter from G. Peter Clark, Counsel for Nathan Katz Realty,

LLC, to John J. Toner, Executive Secretary, NLRB (Apr. 18,

2000). The Board suggests that this statement was insuffi-

cient to provide it with adequate notice that Katz intended to

pursue specific issues in its petition for review.

Section 10(e) provides that "[n]o objection, that has not

been urged before the Board, its member, agent, or agency,

shall be considered by the court, unless the failure or neglect

to urge such objection shall be excused because of extraordi-

nary circumstances." 29 U.S.C. s 160(e). Accordingly, a

"Court of Appeals lacks jurisdiction to review objections that

were not urged before the Board." Woelke & Romero Fram-

ing, Inc. v. NLRB, 456 U.S. 645, 666 (1982). The critical

inquiry in evaluating the Court's jurisdiction to review an

objection is "whether the Board received adequate notice of

the basis for the objection." Alwin Mfg. Co. v. NLRB, 192

F.3d 133, 143 (D.C. Cir. 1999) (internal quotation omitted).

Under the Board's regulations, once a party litigates an

issue in a representation proceeding, it is prohibited from

relitigating those same issues in a subsequent unfair labor

practice proceeding. See 29 C.F.R. s 102.67(f); see also

Joseph T. Ryerson & Son, Inc. v. NLRB, 216 F.3d 1146, 1151

(D.C. Cir. 2000). In light of the no-relitigation rule, Katz

contends that its statement provided the Board with sufficient

notice that it intended to raise the same issues in its petition

for review that it previously had raised in the representation

proceeding. Katz claims that forcing a party to reargue its

representation and election challenges would serve no legiti-

mate purpose.

Last year, in Alois Box Co. v. NLRB, we agreed that a

petitioner does not need "to provide yet another detailed

notice of the issues which have already been presented to the

Board in the representation cases" when it is responding to a

later unfair labor practice charge. 216 F.3d 69, 77 (D.C. Cir.

2000) (internal quotation omitted). We explained, however,

that when a petitioner completely fails to raise an issue

during an unfair labor practice proceeding, "the Board was

entitled to treat the issue as abandoned," and the petitioner

"has forfeited its right to challenge the Board's disposition

... in the representation proceeding." Id. at 77, 78. Be-

cause the Alois Box petitioner neglected to even reference

the contested issue during the unfair labor practice proceed-

ing, we declined to decide "what would provide sufficient

notice" to preserve an issue for judicial review. Id. at 78.

That question is now squarely before us.

This question has been presented in two of our sister

circuits, the Ninth and Second. In NLRB v. Best Products

Co., the petitioner sought to preserve its election objections

during an unfair labor practice proceeding by stating that it

"incorporates by reference and reaffirms by reference its post

election objections and brief." See 765 F.2d 903, 909 (9th Cir.

1985). The Ninth Circuit held that this statement was suffi-

cient to preserve the objections for judicial review. See id.

Specifically, the Ninth Circuit ruled that a party can preserve

an issue by providing a "firm indication to the Board of the

objecting party's non-abandonment of the issue." Id. at 910.

In contrast, the petitioner in Schnurmacher Nursing Home

v. NLRB sought to preserve arguments it had made in a

representation case by stating during a later unfair labor

practice proceeding that it "disputes the ... other findings as

set forth in [its] Request for Review" of the Regional Di-

rector's representation decision. 214 F.3d 260, 270 n.3 (2d

Cir. 2000). This statement appeared in a footnote in the

petitioner's response to a summary judgment motion in the

unfair labor practice proceeding. See id. Describing the

petitioner's statement as "cryptic," the Second Circuit held

that it was insufficient to preserve the issues for judicial

review. Id. Although the Schnurmacher Nursing Home

court did not provide any substantive analysis in arriving at

its conclusion, it did cite two cases. Those cases, however, do

not support the court's holding.

First, the Second Circuit cited the Supreme Court's deci-

sion in Marshall Field & Co. v. NLRB, specifically referenc-

ing the Court's statement that a " 'general objection [to "each

and every recommendation" of a trial examiner's report] did

not apprise the Board that petitioner intended to press the

question now presented.' " Id. (quoting 318 U.S. 253, 255

(1943) (per curiam)). This statement, however, is simply

dicta, drawn out of its original context. The Marshall Field

Court expressly decided as it did because it could not "find

that, at any stage of the proceedings before the Board, the

objection now urged ... was presented to it or to any

member or agent of the Board." 318 U.S. at 255 (emphasis

added).

Second, the Schnurmacher Nursing Home court cited

NLRB v. Star Color Plate Service to note in a parenthetical

that "raising [an] issue in [a] representation proceeding does

not suffice to preserve it on review of [an] order in [a] related

unfair labor practice proceeding." Schnurmacher Nursing

Home, 214 F.3d at 269 n.3 (citing 843 F.2d 1507, 1510 n.3 (2d

Cir. 1988)). This parenthetical does not by itself support the

Schnurmacher Nursing Home conclusion. It does, however,

support the unremarkable basis for the Star Color ruling.

The Star Color court held that it lacked jurisdiction to

consider the specific issue raised by petitioner on judicial

review. This holding followed from the fact that the issue

"was raised in the original representation proceeding," but

"was not raised in the unfair labor practice proceeding."

843 F.2d at 1510 n.3 (emphasis added).

Neither Star Color nor Marshall Field compels the Second

Circuit's ruling in Schnurmacher. Indeed, together these

cases stand simply for the rule that we articulated in Alois

Box--the Board may treat as abandoned any issue not raised

in an unfair labor practice proceeding. Accordingly, we do

not find Schnurmacher Nursing Home persuasive.

We are persuaded instead to follow the Ninth Circuit's

approach: "A firm indication to the Board of the objecting

party's non-abandonment of the issue is generally adequate to

preserve it for our review." Best Products Co., 765 F.2d at

910. In light of the no-relitigation rule, a detailed restate-

ment of the arguments raised during representation proceed-

ings or in election objections would be futile. See id. Section

10(e) ensures that the Board has an opportunity to entertain

questions that parties will later ask appellate courts to re-

view. See Marshall Field, 318 U.S. at 256. To meet this

objective, we consider whether a party has given the Board

adequate notice of the basis for its objection, see Alois Box,

216 F.3d at 78, and that it "intends to press the specific issue

it now raises" on appeal, NLRB v. Seven-Up Bottling Co.,

344 U.S. 344, 350 (1953). When the Board already has had an

opportunity to consider an issue in an earlier proceeding, the

party simply needs to provide a firm indication that it has not

abandoned the issue in a later unfair labor practice proceed-

ing. As in this case, incorporating earlier arguments by

reference generally provides the Board with adequate notice.

Katz responded to the NLRB General Counsel's motion for

summary judgment by stating that it relied upon "the entire

record in the related representation case, Case 29-RC-9265,

including the September 21, 1999 Request for Review on the

Acting Regional Director's Supplemental Decision On Objec-

tions On Behalf Of Nathan Katz Realty, LLC." Letter from

G. Peter Clark, Counsel for Nathan Katz Realty, LLC, to

John J. Toner, Executive Secretary, NLRB (Apr. 18, 2000).

This reference to the representation case is sufficiently spe-

cific to preserve the issues Katz raises for judicial review. In

the underlying representation proceeding, Katz had appealed

three issues to the Board, including whether its superinten-

dents are supervisors. In the September 21 Request for

Review, Katz appealed only two objections to the Board:

whether Union agents had engaged in improper electioneer-

ing and whether the Director erred in not counting the Sima

election ballots until the multi-unit election was completed.

These are the same issues it now asserts in its petition to this

Court.

Indeed, in the decision now under review, the Board noted

that Katz "attacks the validity of the certification on the basis

of its objections to the election and the Board's unit determi-

nation in the representation proceeding." Nathan Katz Real-

ty, 331 N.L.R.B. slip op. at 1. Given this statement, we are

astounded that the Board now argues that it did not receive

sufficient notice concerning the three issues Katz raises in its

petition. The only "objections to the election" Katz appealed

to the Board were the two addressed in the September 21

Request for Review. Likewise, the supervisor issue is one of

only two substantive issues Katz appealed to the Board

concerning the "unit determination." Katz's response to the

summary judgment motion gave a firm indication that it was

not abandoning the issues it had previously raised, and there-

fore unquestionably provided the Board with sufficient notice.

The Board raises the alarming specter that greater speci-

ficity is "fundamental" to its "fair and expedient administra-

tion" of the NLRA. Brief for the NLRB at 15. If the Board

is so seized with concern about this question, it simply could

issue a rule requiring more specific objections. We should

not have to point out that such a rule would govern an

internal procedure. It therefore would not be subject to

notice and comment. See 29 U.S.C. s 156; 5 U.S.C. s 553.

In fact, the Board could easily promulgate such a rule at any

time. In the future, we expect the Board will pursue that

option rather than crying out to the court for help.

The Board was afforded two opportunities to pass on each

of the issues Katz raises in its petition. On both occasions,

the Board summarily affirmed the Regional Director's rul-

ings. Section 10(e) has not been threatened in this case. We

therefore turn to the merits of Katz's petition.

B. Superintendents as Supervisors

Katz employs two property managers who each oversee

fifteen of its apartment buildings. The buildings are staffed

by superintendents and porters. At the pre-election hearing,

Katz argued that its superintendents should be designated as

supervisors under the NLRA. The Regional Director found

that they were not supervisors, and the Board affirmed this

finding. In its petition for review, Katz contends that the

superintendents are supervisors because they effectively dis-

cipline the porters, make hiring recommendations, assign

work to porters, set porters' schedules, and recommend wage

increases. Katz further contends that this conclusion is

mandated by a previous Board ruling, Planned Bldg. Servs.,

Inc., 318 N.L.R.B. 1049, 1059-61 (1995), in which a superin-

tendent for other New York City apartments was found to be

a supervisor.

We will uphold the Board's determination of whether an

employee is a supervisor as long as it is in accordance with

law, supported by substantial evidence, and is the product of

reasoned decisionmaking. See Brusco Tug & Barge Co. v.

NLRB, No. 00-1183, slip op. at 4 (D.C. Cir. May 1, 2001). In

light of its expertise, we accord the Board "a large measure of

informed discretion" in making this determination. Passaic

Daily News v. NLRB, 736 F.2d 1543, 1550 (D.C. Cir. 1984)

(internal quotation omitted). The burden of proving that an

employee is a supervisor must be carried by the party

asserting it. See NLRB v. Ky. River Cmty. Care, Inc., No.

99-1815, slip op. at 4-5 (U.S. May 29, 2001); Beverly Enters.-

Mass., Inc. v. NLRB, 165 F.3d 960, 962 (D.C. Cir. 1999).

Employees who are supervisors are excluded from the

NLRA's protection. See 29 U.S.C. s 152(3). The NLRA

defines "supervisor" as:

[A]ny individual having authority, in the interest of the

employer, to hire, transfer, suspend, lay off, recall, pro-

mote, discharge, assign, reward, or discipline other em-

ployees, or responsibly to direct them, or to adjust their

grievances, or effectively to recommend such action, if in

connection with the foregoing the exercise of such au-

thority is not of a merely routine or clerical nature, but

requires the use of independent judgment.

Id. s 152(11). As this Court has explained before, under the

statute, "the employee must possess at least one of the twelve

types of authority set out in the statute, the exercise of that

authority must require the use of independent judgment, and

the authority must be held in the employer's interest." VIP

Health Servs., Inc. v. NLRB, 164 F.3d 644, 648 (D.C. Cir.

1999). Whether an employee exercises independent judg-

ment is an inquiry into "the degree of discretion exercised

with respect to the statutory indicia of supervisory status. If

an individual's discretion ... is tightly constrained, then her

exercise of that authority is 'routine....' " Beverly Enters.-

Penn., Inc. v. NLRB, 129 F.3d 1269, 1270 (D.C. Cir. 1997)

(per curiam) (mem.). In this case, the Board's determination

that Katz's superintendents are not supervisors is supported

by substantial evidence and is the product of reasoned deci-

sionmaking.

Katz avers that the "most notable exercise of a superinten-

dent's supervisory authority is found in the area of disci-

pline." Brief for Petitioners at 29. Katz claims that its

evidence demonstrates that the superintendents effectively

discipline porters--or at least effectively recommend disci-

pline. Although the record includes testimony that superin-

tendents theoretically could discipline porters, Katz offered

no evidence that a superintendent ever actually had disci-

plined a porter. One of Katz's property managers testified

that a superintendent could suspend a porter for hitting a

tenant, but the manager acknowledged that he had never

talked with any superintendent about this alleged authority.

Without specific evidence that any superintendent had disci-

plined a porter, we cannot possibly conclude that the Regional

Director erred.

A Katz property manager also testified that superinten-

dents could make recommendations on discipline, but "the

kind of option I'm taking will be my decision." This assertion

does not establish that any superintendent had in fact effec-

tively recommended discipline. Indeed, the record reflects

that Katz failed to offer any evidence that a superintendent's

recommendation had "resulted in an adverse personnel ac-

tion." Beverly Enters.-Penn., 129 F.3d at 1270. Although

Katz did proffer testimony that a superintendent informed a

property manager that a porter "wasn't doing a good job,"

"mere reporting is insufficient to establish that [employees]

effectively recommend discharge or discipline." VIP Health

Servs., 164 F.3d at 648. Accordingly, we hold that the

Regional Director's determination is supported by substantial

evidence.

Katz's other arguments concerning superintendents' super-

visory authority do not fare any better. First, Katz claims

that superintendents effectively recommend hiring porters.

Yet, Katz failed to offer any evidence that superintendents

have in fact made such effective recommendations, except in

the case of one superintendent who recommended his wife for

a job. As the Board has ruled in the past, "[i]t is scraping

the bottle [sic] to argue that ... recommendations of mem-

bers of his family ... prove the supervisory status contem-

plated in the Act." Pierre Pellaton Enters., Inc., 201

N.L.R.B. 409, 412 (1973). Absent evidence of other effective

recommendations, Katz cannot carry its burden of proof,

much less show that the Regional Director's decision is not

supported by substantial evidence.

Second, Katz contends that superintendents assign work to

porters. Those assignments, however, are generated from

tenant requests. When the Board has found that a superin-

tendent exercises independent judgment in assigning work,

the Board has relied on specific evidence of that judgment.

For example, in Planned Building Services, the NLRB's

decision was based on evidence showing that the employee in

question "transfer[red] porters and handymen from one as-

signment and between buildings depending on the presence of

emergencies which would periodically arise and his judgment

as to their urgency." 318 N.L.R.B. at 1060. Although Katz

claims that its superintendents exercise independent judg-

ment by balancing "conflicting demands" in assigning work,

Brief for Petitioners at 30, there is no evidence in the record

to support its claim. As the Board has aptly explained in the

past, a superintendent's "point[ing] out the type and location

of work to be done" and transmitting "a tenant's request" are

"of no great[ ] consequence." Pierre Pellaton, 201 N.L.R.B.

at 412.

Third, despite Katz's assertions, the record contains no

evidence that superintendents set porters' schedules or ap-

prove vacation requests. Even if they did set the schedules,

Katz offered no evidence that the superintendents have "sub-

stantial autonomy" in creating the schedules or that they

exercise independent judgment in creating the schedules.

Micro Pac. Dev., Inc. v. NLRB, 178 F.3d 1325, 1331 (D.C.

Cir. 1999). In contrast, the petitioner in Micro Pacific

demonstrated that its housekeeping supervisors relied on a

number of specific factors "to make independent determina-

tions in scheduling and assigning the employees." Id.; see

also Beverly Enters.-Penn., 129 F.3d at 1270 (explaining that

licensed practical nurses "have no authority to schedule [cer-

tified nursing assistants] on any given day or week").

Fourth, Katz claims its superintendents recommend wage

increases. This claim is centered on a property manager's

testimony that a superintendent "can recommend" such an

increase. The manager testified, however, that no superin-

tendent ever had recommended to him that a porter receive a

raise and that he did not know of any superintendent ever

actually making a wage recommendation. There is simply no

specific evidence to support Katz's claim.

Finally, Katz argues that the Board's determination in this

case conflicts with an earlier ruling in which the Board

concluded that a superintendent for several New York City

apartment buildings was a supervisor. See Planned Bldg.

Servs., 318 N.L.R.B. at 1059-61. In Planned Building Ser-

vices, the Board ruled that a "senior superintendent" was a

supervisor because he exercised independent judgment in a

number of areas. See id. at 1060. Specifically, the Board

reviewed extensive evidence detailing the senior superinten-

dent's assigning work, disciplining employees, allowing em-

ployees to leave work early, and screening employment appli-

cations. See id.

In Planned Building Services, the Board did not claim to

establish a per se rule concerning superintendents in New

York City apartments. Rather, it concluded that "other

superintendents" in the same buildings were not supervisors.

Id. "[T]he issue of supervisory status is heavily fact-

dependent" and is not subject to a blanket determination

based on the class of the job in question. Brusco Tug &

Barge, No. 00-1183, slip op. at 4. Here, Katz's evidence did

not come close to proving that its superintendents possess the

same responsibility as the Planned Building Services senior

superintendent. Accordingly, the Board did not err in find-

ing that Katz's superintendents are not supervisors under the

NLRA.

C. Election Interference by Union Agents

The multi-unit election was held at a single, central loca-

tion: a classroom in a Lutheran church. According to Katz,

"[t]o reach the polling place, voters needed to open a gate at

the edge of the 41st Avenue sidewalk and walk about ten feet

to the side door of the Church building, open the door and

enter the building." Brief for Petitioners at 10-11. Two of

Katz's managers and several of its employees alleged that

during the election two Union agents were in a car parked

within twenty feet of the church's side door. According to

Katz's managers and employees, the Union agents motioned,

gestured, and honked at the employees as they passed the

car.

After the election, Katz filed an objection based on these

incidents. In its objection, Katz alleged that the Board Agent

had established a 25-yard no-electioneering zone outside the

entrance of the church. Katz argued that the Union agents'

presence and actions in the no-electioneering zone constituted

objectionable conduct that justified setting aside the election.

The Regional Director overruled Katz's objection, concluding

that the allegations--even if true--were insufficient to dem-

onstrate that the Union had "interfered with the exercise of

the employees' free choice." Nathan Katz Realty, LLC, No.

29-RC-9265, slip op. at 9 (Sept. 8, 1999) ("Supplemental

Decision"). The Board summarily affirmed the Director's

conclusion.

We will uphold Board decisions concerning election objec-

tions if they are the product of reasoned decisionmaking and

supported by substantial evidence. See Family Serv. Agency

S.F. v. NLRB, 163 F.3d 1369, 1377 (D.C. Cir. 1999). In

Board proceedings, the party seeking to overturn a represen-

tation election maintains the burden of establishing "that the

election was not fairly conducted." Id.

In previous cases, we have recognized the NLRB's Mil-

chem rule, which prohibits "prolonged conversations between

representatives of any party to the election and voters wait-

ing to cast ballots," regardless of the content of the remarks.

Milchem, Inc., 170 N.L.R.B. 362, 362 (1968). When this rule

is violated, "the Board will order a new election." Family

Serv. Agency, 163 F.3d at 1381.

"When an employer objects to electioneering not encom-

passed within the Milchem rule"--that is, when the alleged

objectionable conduct occurs at a time other than while voters

are waiting to cast ballots in the designated voting area--"the

Board will overturn the election only if the electioneering

substantially impaired the exercise of free choice." Overnite

Transp. Co. v. NLRB, 140 F.3d 259, 270 (D.C. Cir. 1998)

(internal quotation omitted). In conducting this inquiry, the

Board considers a range of factors, including the "nature and

extent of the electioneering, whether it happened within a

designated 'no electioneering' area, whether it was contrary

to the instructions of the Board's election agent, whether a

party to the election objected to it, and whether a party to the

election engaged in it." Id.

In this case, the Regional Director assumed that all of the

allegations contained in Katz's election objection were true.

Accordingly, Katz's allegations establish that (1) the Union

agents' conduct occurred in a no-electioneering zone; (2) their

presence and actions were contrary to the instructions of the

Board Agent; (3) Katz objected to the Union agents' conduct;

and (4) the people who engaged in the conduct were agents of

a party to the election. The Regional Director concluded that

"[a]lthough the [Union agents] may have been stationed

within the designated no-electioneering zone area for a por-

tion of the polling period, there is no suggestion that they

actually engaged in any electioneering" nor that "they en-

gaged in objectionable conduct sufficient to set aside the

election." Supplemental Decision at 9-10. The Director is

correct that Katz has not introduced evidence of direct elec-

tioneering by the Union agents; however, in previous cases,

the Board has stated that a party's mere presence may be

sufficient to justify setting aside an election. Katz cites two

such cases: Performance Measurements Co., 148 N.L.R.B.

1657 (1964), and Electric Hose & Rubber Co., 262 N.L.R.B.

186 (1982).

In Electric Hose, the Union lodged two election objections

directly relevant to the case now before us. First, it objected

to the presence of a company supervisor within ten or fifteen

feet of the entrance to the voting area. See Elec. Hose, 262

N.L.R.B. at 216. Second, the Union objected to the presence

of two supervisors who stood in areas where employees "had

to pass in order to vote." Id. The Administrative Law

Judge not only found that the first supervisor had engaged in

objectionable conduct, but she also concluded that the two

supervisors' "unexplained presence" alone was "coercive evi-

dence of such a nature as to have destroyed the laboratory

conditions necessary for the conduct of a free and fair elec-

tion." Id. According to the ALJ, the only plausible purpose

for the supervisors' presence, like the lone supervisor's pres-

ence near the entrance to the voting area, was "to convey to

[the voting] employees the impression that they were being

watched." Id. The Board adopted these conclusions. See

id. at 186.

The Regional Director attempted to distinguish Electric

Hose from this case by noting that here the Union agents

were stationed in a car outside the church, not "immediately

outside of the actual polling area." Supplemental Decision at

10 n.12. This distinction is manifestly inadequate. In Elec-

tric Hose, only one of the supervisors stood immediately

outside the polling area. The other two supervisors simply

stood in an area where employees "had to pass in order to

vote." Nothing in the Electric Hose decision indicates that

these two supervisors were anywhere near the actual polling

place. Katz alleges that, like the employees in Electric Hose,

the multi-site employees had to pass the Union agents on

their way to vote. In Katz's election objection, it specifically

alleged that "[a] voter approaching the Church entrance on

the sidewalk (the only means of access) would have to walk

within a few feet of the car." Similarly, several Katz manag-

ers stated in their affidavits that "[a]nyone in the car could

easily watch the side doorway to the Church and the sidewalk

along 41st Avenue leading to that entrance used for the

NLRB election." The Regional Director simply did not

attempt to explain why the presence of the Union agents

should be treated differently than the "unexplained presence"

of the two Electric Hose supervisors.

In Performance Measurements, the employer's president

"stood by the door to the election area so that it was

necessary for each employee who voted to pass within 2 feet

of him to gain access to the polls." 148 N.L.R.B. at 1659.

The Regional Director in that case found that there was no

evidence that the president engaged in any electioneering.

Nevertheless, the Board held that the president's "continued

presence" constituted "improper conduct" that "interfered

with employees' freedom of choice in the election." Id.

In this case, the Regional Director distinguished the Union

agents' actions by stating that they "were stationed near the

outside entrance to the building, not the entrance to the

church basement classroom where the actual voting took

place." Supplemental Decision at 10 n.12. This is a hollow

distinction. After all, according to Katz's election objection,

which the Regional Director assumed to be true, the Board

Agent established a no-electioneering zone. No such zone

existed in Performance Measurements. The Director did not

explain why the Union agents' "continued presence" in a no-

electioneering zone by the entrance to the site of the election

(where employees had to pass) is different from standing

outside the room in which employees actually vote. Standing

in either place could "interfere with the employees' freedom

of choice"--particularly if the Board Agent enacted a no-

electioneering zone, presumably to prevent the parties from

interfering with that freedom.

The Regional Director also distinguished Performance

Measurements by stating that "there is no evidence to sug-

gest that employees were required to pass the [Union agents]

in order to enter the building." Id. As we explained above,

this statement is simply false. The Director purported to

assume that Katz's allegations were true, yet discounted--

without explanation--its allegation that employees were re-

quired to pass the Union agents.

Together, Electric Hose and Performance Measurements

seem to stand for the proposition that a party engages in

objectionable conduct sufficient to set aside an election if one

of its agents is continually present in a place where employ-

ees have to pass in order to vote. In light of these cases,

Katz's allegations appear to establish that the Union agents'

presence outside the church's entrance constitutes conduct of

such a nature that it substantially impaired the multi-site

employees' exercise of free choice--even if the agents did not

actually talk to any employee. The Board, however, came to

the opposite conclusion. It is "axiomatic that an agency

adjudication must either be consistent with prior adjudica-

tions or offer a reasoned basis for its departure from prece-

dent." ConAgra, Inc. v. NLRB, 117 F.3d 1435, 1443 (D.C.

Cir. 1997) (internal citation omitted). The Board's decision in

this case did neither. Accordingly, we vacate the Board's

decision and remand the case for further proceedings.

D. Counting the Sima Ballots

According to the NLRB's statement of procedures, "[c]us-

tomarily, the Board agents ... count and tabulate the ballots

immediately after the closing of the polls. A complete tally of

the ballots is made available to the parties upon the conclu-

sion of the election." 29 C.F.R. s 101.19(a)(3). Likewise, the

Board's rules and regulations state that "[u]pon the conclu-

sion of the election the ballots will be counted and a tally of

ballots prepared and immediately made available to the par-

ties." 29 C.F.R. s 102.69(a). The NLRB's Case Handling

Manual for Representation Proceedings echoes these rules,

providing that "[t]he count should take place as soon after the

close of voting as possible." s 11340.1 (Sept. 1989 ed.).

In this case, following a request by the Union, the Regional

Director decided to refrain from counting the Sima election

ballots until after the completion of the multi-site election.

He explained his decision by stating that "[t]o count the

ballots in both units simultaneously guarantees that neither

party will enjoy an unfair advantage over the other based on

the result of the election in the Sima unit." The Director also

noted that waiting to count the Sima ballots "fosters laborato-

ry conditions for both elections."

After the elections, Katz filed an objection with the Region-

al Director, arguing that the decision to delay the Sima ballot

count unreasonably deviated from normal Board procedures.

The Director overruled the objection for two reasons. First,

he found that Katz had failed to submit evidence establishing

that the delayed count materially affected the results of the

elections. Supplemental Decision at 15. Second, he conclud-

ed that Katz did not proffer evidence to show that the

Director's decision was an abuse of discretion. Id. at 15-16.

The Board summarily affirmed this ruling. In its petition,

Katz renews its claim.

The Board maintains "a wide degree of discretion in estab-

lishing the procedure and safeguards necessary to insure the

fair and free choice of bargaining representatives by employ-

ees." NLRB v. A.J. Tower Co., 329 U.S. 324, 330 (1946).

Nevertheless, neither the Board nor the Regional Director

may abuse that discretion. Indeed, if they choose to depart

from usual election procedures, they must provide a reasoned

explanation. See Macmillian Publ'g Co. v. NLRB, 194 F.3d

165, 168 (D.C. Cir. 1999).

Here, the Regional Director's only reason for departing

from the normal procedure of counting the ballots and reveal-

ing the results "immediately" after the Sima election was that

it might give one of the parties an "unfair advantage."

Although the Board suggests that this casual conclusion is

consistent with earlier election decisions, see Brief for the

NLRB at 30 (citing Diamond Walnut Growers, Inc., 308

N.L.R.B. 933 (1992); Indep. Rice Mill, Inc., 111 N.L.R.B. 536

(1955)), it is not immediately apparent what is "unfair" about

announcing the results of one election before another election

commences--even when the two elections are closely related

or include employees of the same company. Neither the

Regional Director nor the Board offered any explanation. It

is as if the Board has taken a page from the Bard: "For

there is nothing either good or bad, but thinking makes it so."

William Shakespeare, Hamlet act 2, sc. 2.

In its brief and at oral argument, the Board primarily

stresses only one rationale for upholding the Regional Di-

rector's decision in this case: the Director has broad discre-

tion. This misses the point. The Board (and in turn the

Director) has received from Congress a delegation of authori-

ty to act in certain circumstances. See Kwik Care Ltd. v.

NLRB, 82 F.3d 1122, 1126 (D.C. Cir. 1996). When it acts,

however, Congress requires it to act in a reasoned fashion,

not arbitrarily and capriciously. See BB&L, Inc. v. NLRB,

52 F.3d 366, 369 (D.C. Cir. 1995) (per curiam). If the Board

cannot assign a reason for what it has done, then its actions

are arbitrary and capricious. See Motor Vehicle Mfrs. Ass'n

v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).

That the Board has broad discretion is of no import. To state

the standard of review is not to offer a reason. If the Board

chooses to exercise its discretion, it must explain its action,

and its explanation must reflect reasoned decisionmaking.

See Pittsburgh Press Co. v. NLRB, 977 F.2d 652, 655 (D.C.

Cir. 1992). Just as simply stating that a procedure is "unfair"

does not make it so, simply stating that the Director has

broad discretion does not establish that he has exercised it

properly.

Ultimately, to prevail, "a party attempting to set aside a

representation election must demonstrate that the conduct

complained of interfered with the employees' exercise of free

choice to such an extent that it materially affected the

election." C.J. Krehbiel Co. v. NLRB, 844 F.2d 880, 882

(D.C. Cir. 1988). While the delay in tallying and releasing

the results of the Sima vote might not itself be grounds for

reversal, the Board's complete inability to explain how releas-

ing the results prior to the multi-site election could be

"unfair" makes a remand appropriate.

III. CONCLUSION

For the foregoing reasons, the petition for review is grant-

ed in part, and the cross-application for enforcement is de-

nied.