Felix Industries, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 6, 2001 Decided June 12, 2001

No. 00-1239

Felix Industries, Inc.,

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

Peter D. Stergios argued the cause for petitioner. With

him on the brief was Elliot Jay Mandel.

Julie F. Marcus, 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 Margaret A. Gaines,

Supervisory Attorney.

Before: Ginsburg, Randolph, and Rogers, Circuit Judges.

Opinion for the Court filed by Circuit Judge Ginsburg.

Ginsburg, Circuit Judge: An employee telephoned his su-

pervisor to press his right under a collective bargaining

agreement to receive premium pay for working night shifts.

In the ensuing conversation the employee thrice directed

obscenities at his supervisor, for which he was promptly fired.

The National Labor Relations Board decided that the firing

violated s 8(a)(1) of the National Labor Relations Act, s 29

U.S.C. 158(a)(1), because the employee's conduct remained

protected by s 7 of that Act, 29 U.S.C. s 157, notwithstand-

ing his abusive speech. The employer now petitions for

review, and the Board applies for enforcement, of that deci-

sion.

This case turns upon the four factors the Board considers

pursuant to Atlantic Steel Co., 245 NLRB 814 (1979), to

determine "whether an employee engaged in protected activi-

ty loses the protection of the Act by opprobrious conduct: (1)

the place of the discussion; (2) the subject matter of the

discussion; (3) the nature of the employee's outburst; and (4)

whether the outburst was, in any way, provoked by an

employer's unfair labor practice." Felix Indus., Inc., 331

NLRB No. 12, slip op. at 1 (2000). The Board's analysis of

the third factor in this case was arbitrary and capricious in

that it departed from its own precedent and that of this court.

We therefore grant the petition for review and remand this

case for the Board to reweigh that factor as part of its four-

factor balancing test.

I. Background

Felix Industries, Inc. is a general contractor specializing in

the construction of highways and utilities. Salvatore Yonta, a

dockbuilder on the day shift since 1989, was assigned to the

night shift in the second week of September 1996. Yonta's

immediate supervisor at the time was Felix Petrillo, whose

father was the president of the Company.

Under the collective bargaining agreement then in place

Yonta was entitled to a "night differential": he was to be

paid for nine hours of work every time he worked an eight-

hour shift during specified hours. Upon joining the night

shift Yonta asked his shop steward about the night differen-

tial. The shop steward then consulted Petrillo, who told the

steward to consult the union; the steward thereafter told

Yonta he would receive the differential. When Yonta did not

receive the differential with his next pay check (for the period

ending September 15) he contacted the superintendent of

steam operations at his site, who told him to contact Petrillo.

After getting his checks for the periods ending September 22

and 29, again without the differential, Yonta contacted the

union's business agent, who confirmed that Yonta was enti-

tled to the extra pay.

On the morning of October 7 -- three weeks after the issue

was first brought to Petrillo's attention -- Yonta, who was at

home, called Petrillo at his office to ask about the differential.

Petrillo assured Yonta he would get "every penny" to which

he was entitled. He also told Yonta he was tired of "carry-

ing" him. Yonta, who was 42 years old, retorted that Petrillo,

who was 25, was "just a f--king kid," and added, "I don't

have to listen to a f--king kid." When Petrillo asked what

Yonta had just called him, Yonta obligingly confirmed it was

"a f--king kid." Petrillo told Yonta he would get a check

with all his hours, and Yonta was fired that same day.

An Administrative Law Judge, applying the balancing test

of Atlantic Steel, held that although "the subject matter of

the [Yonta-Petrillo] discussion was protected," Yonta "had

lost the protection" of the Act upon directing obscenities at

his supervisor, Petrillo. 331 NLRB No. 12, slip op. at 8. The

Board, with one Member dissenting, disagreed with the ALJ's

application of Atlantic Steel's four factors. Deeming Yonta's

conduct protected under s 7, the Board majority held that

Felix had violated s 8(a)(1) by firing Yonta, and ordered

Felix to reinstate him with backpay. Id. at 1-3.

II. Analysis

In Atlantic Steel Co. the Board established that

even an employee who is engaged in concerted activity

can, by opprobrious conduct, lose the protection of the

Act. The decision as to whether the employee has

crossed that line depends on several factors: (1) the

place of the discussion; (2) the subject matter of the

discussion; (3) the nature of the employee's outburst;

and (4) whether the outburst was, in any, way provoked

by an employer's unfair labor practice.

245 NLRB at 816. Felix nonetheless suggests initially that

Yonta's conduct is categorically unprotected, but it stops

short of arguing that the four-factored balancing test of

Atlantic Steel is itself unlawful. Instead, Felix argues that

the Board unreasonably applied that test to the facts of this

case.

A. Place of the discussion

In holding that the place of Yonta's discussion with Petrillo

did not weigh against protecting Yonta's conduct under the

Act, the Board first opined that a telephone conversation is

"no more or less likely a situs [than the typical workplace

setting] for the type of labor-management dispute where

intemperate language is often tolerated." The Board also

considered it important that "no other employees heard or

observed Yonta's statement to Petrillo" and that the "com-

ments were not made at work and did not have any direct

impact on worker discipline." 331 NLRB No. 12, slip op. at

2.

Felix asserts that the Board illogically assumed that pri-

vate insubordination cannot affect discipline in the workplace.

The Board, however, made no such assumption; it simply

said that Yonta's rant "did not have a direct impact on

workplace discipline," suggesting quite reasonably that any

effect would be smaller than if his outburst had occurred in

the presence of other employees.

Felix also argues that because Yonta's obscene statements

were made outside the formal grievance process, to which the

Board accords special protection, the place of discussion

should weigh against protection. That is a non sequitur.

The Board implied that the place weighed neither in favor of

protection, as it would if the obscenities had been used in a

formal grievance setting, nor against it, as it would if they

had been hurled at Petrillo in the presence of other employ-

ees. That resolution certainly is not arbitrary and capricious.

B. Subject matter of the discussion

There is no dispute that Yonta telephoned Petrillo to

pursue his collectively-bargained right to be paid the night

differential. Accordingly, the Board, along with the ALJ,

determined that the subject matter of their conversation

"concerned Yonta's rights under the collective-bargaining

agreement and thus constitute[d] protected ... activity." Id.

at 2, 7-8. Felix therefore cannot credibly argue that the

subject matter of the conversation does not weigh in favor of

protection. Still, it tries. Felix parses Yonta's words to show

that the obscenities, not surprisingly, had nothing to do with

Yonta's collective bargaining rights. That of course misses

the Board's point: As the Board explained, the obscenities

were "intertwined with [the] protected activity" -- as they

are in every case governed by Atlantic Steel -- and the

Board's task was to determine whether the employee lost the

protection of the Act as a result of the obscenities. Id. at 3.

Felix's attempt to bifurcate the conversation is unavailing,

therefore.

C. Nature of outburst

We agree with Felix that the Board's treatment of the

nature of Yonta's obscene eruption is problematic. All the

Board said on this score is that "Yonta's conduct consisted of

a brief, verbal outburst of profane language, unaccompanied

by any threat or physical gestures or contact." From that

the Board reasoned that this factor did not "weigh[ ] in favor

of Yonta losing the protection of the Act." Id. at 2.

Recall that Yonta's outburst -- though "brief" and "ver-

bal" -- consisted of calling his supervisor a "f--king kid" no

less than three times, and insisting that Yonta need not listen

to him. That no threat or physical violence accompanied this

insubordinate vitriol cannot, under established law, prevent it

from "weigh[ing] in favor of ... losing the protection of the

Act."

In Atlantic Steel the Board expressly disavowed any rule

whereby otherwise protected activity "would shield any ob-

scene insubordination short of physical violence." 245 NLRB

at 817. Yet the Board's treatment of the third Atlantic Steel

factor in this case runs toward precisely such a rule. In

addition, this court previously rejected a suggestion from the

Board that employees engaging in protected activity "could

not be dismissed unless they were involved in flagrant, vio-

lent, or extreme behavior"; as we pointed out, s 10(c) of the

National Labor Relations Act, 29 U.S.C. s 160(c), permits

discharge for "cause" short of that. Aroostook County v.

NLRB, 81 F.3d 209, 215 n.5 (1996); see also Republic Avia-

tion Corp. v. NLRB, 324 U.S. 793, 803 n.10 (1945) ("The Act,

of course, does not prevent an employer from making and

enforcing reasonable rules covering the conduct of employees

on company time"). If an employee is fired for denouncing a

supervisor in obscene, personally-denigrating, or insubordi-

nate terms -- and Yonta here managed all three with econo-

my -- then the nature of his outburst properly counts against

according him the protection of the Act.

The Board here truly does not contend otherwise; rather,

it observes that it could, notwithstanding the nature of Yon-

ta's outburst, deem his conduct protected as a result of its

overall balancing of the four factors. That is correct but

irrelevant; it does nothing to rehabilitate the Board's actual

treatment of the third factor in its order, where it blandly

asserts that Yonta's statements did not "weigh[ ] in favor of

Yonta losing the protection of the Act." Under the applicable

precedents Yonta's statements do weigh against protection.

Whether they weigh enough to tip the balance in that di-

rection is for the Board to decide on remand.

D. Provocation by unfair labor practice

The Board, interpreting Petrillo's comment that he was

tired of "carrying" Yonta as "convey[ing] at least an implicit

threat that Yonta could lose his job for having engaged in the

protected activity," found that Petrillo committed an unfair

labor practice, which in turn provoked Yonta's obscenities.

331 NLRB No. 12, slip op. at 2. Felix challenges those

factual determinations. First, Felix argues there is no evi-

dence in the record that shows Petrillo's "carrying" comment

preceded rather than followed Yonta's vulgar outburst. Actu-

ally, there is substantial and uncontradicted evidence to that

effect: Yonta testified that the conversation unfolded in that

order, whereas Petrillo could not recall the sequence.

Second, Felix objects to the Board's characterization of

Petrillo's "carrying" remark about Yonta as an implied threat.

The ALJ and the dissenting Member thought Petrillo's re-

mark referred to Yonta's sub-par performance, not to his

claim to the night differential. Id. at 4, 7. There is evidence

in the record both that Yonta's performance was indeed sub-

par and that Petrillo tried to mollify Yonta, not to meet his

demand for the differential with a threat. Still, the record as

a whole contains substantial evidence to support the Board's

characterization. The Board reasonably found that "Petrillo's

remark was angrily made in response to Yonta's pressing his

right to extra pay under the contract. Although Petrillo

credibly testified that he had previously received supervisory

complaints about Yonta's work, Petrillo did not testify that he

mentioned these complaints in the phone discussion." Id. at

2. And, as the Board points out, Petrillo's statement must be

evaluated from Yonta's perspective: Petrillo's intent in mak-

ing the remark about carrying Yonta does not necessarily

mirror the impression it reasonably could have made upon

Yonta. See NLRB v. Gissel Packing Co., 395 U.S. 575, 617

(1969). Therefore, we find no reason to disturb the Board's

treatment of this factor.

III. Conclusion

Because the Board's offhand treatment of the nature of

Yonta's outburst departs from precedent, we hold that it is

arbitrary and capricious. Upon remand of this case, the

Board will need to reexamine that factor as part of its overall

weighing of the Atlantic Steel factors. In doing so it must

either adhere to precedent or else justify, if it can, its

departure therefrom. Accordingly, Felix's petition for review

is granted, the Board's application for enforcement is denied,

and this matter is remanded to the Board for further pro-

ceedings consistent with this opinion.

So ordered.