Seattle Opera v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 21, 2002 Decided June 11, 2002

No. 01-1127

Seattle Opera,

Petitioner/Cross-Respondent

v.

National Labor Relations Board,

Respondent/Cross-Petitioner

American Guild of Musical Artists, AFL-CIO,

Intervenor

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

Richard L. Cys argued the cause for the petitioner. Thom-

as A. Lemly was on brief.

Usha Dheenan, Attorney, National Labor Relations Board,

argued the cause for the respondent. Arthur F. Rosenfeld,

General Counsel, John E. Higgins, Jr., Deputy General

Counsel, John H. Ferguson, Associate General Counsel, Ai-

leen A. Armstrong, Deputy Associate General Counsel, and

Margaret A. Gaines, Attorney, National Labor Relations

Board, were on brief.

Melissa J. Auerbach argued the cause for the intervenor.

Michael Hill Holland entered an appearance.

Before: Henderson, Randolph and Rogers, Circuit Judges.

Opinion for the court filed by Circuit Judge Henderson.

Dissenting opinion filed by Circuit Judge Randolph.

Karen LeCraft Henderson, Circuit Judge: The Seattle

Opera (Opera) petitions for review of a February 8, 2001

decision and order of the National Labor Relations Board

(Board or NLRB). See Seattle Opera Ass'n & Am. Guild of

Musical Artists, Case 19-CA-27288 (Feb. 8, 2001). In the

order, the Board held that the Opera's refusal to bargain with

the American Guild of Musical Artists (Union)--after the

Union was certified as the collective bargaining representa-

tive of an allegedly appropriate unit of the Opera's employ-

ees--constituted an unfair labor practice (ULP) under section

8(a)(5) and (1) of the National Labor Relations Act (Act), 29

U.S.C. s 158(a)(5), (1). On review, the Opera does not dis-

pute that it refused to bargain with the Union. Instead, it

contests the Board's conclusion that the Opera's auxiliary

choristers are "employees" under the Act and that, as em-

ployees, they were properly included in the bargaining unit.

In the alternative, the Opera argues that, even if the auxilia-

ries are employees, they are casual employees lacking a

sufficient community of interest with other Opera employees

to be included in the bargaining unit. The Opera's conten-

tions are without merit; we therefore deny its petition for

review and grant the NLRB's cross-application for enforce-

ment of its order.

I.

The Union represents a bargaining unit of choristers, danc-

ers, stage managers, assistant stage managers and assistant

stage directors of the Opera. The collective bargaining

agreement between the Opera and the Union sets forth

several categories of choristers--regular choristers, tempo-

rary regular choristers, alternate choristers and auxiliary

choristers. The Opera produces approximately five operas

per season and employs 36 regular choristers to fill its basic

seasonal chorus requirement. Regular choristers are re-

quired to perform in at least half of the operas offered per

season and, in order to maintain their regular-chorister sta-

tus, must undergo periodic auditions and evaluations. Under

the agreement, each regular chorister is paid at least $160

"for any single performance" and $16 per hour "for each hour

of rehearsal or fraction thereof." Joint Appendix (JA) 83.

They are eligible to receive a parking reimbursement of $5

per performance or rehearsal if they submit an expense

reimbursement form with "available receipts." JA 90.

The Opera has a pool of 100 to 200 auxiliary choristers who

audition before a musical committee. From the pool of

auxiliaries, the Opera selects up to 16 "alternate choristers"

to fill additional openings in the chorus when a production

requires more than 36 regulars or when regulars are unavail-

able. If a regular takes a leave of absence, his replacement is

designated a "temporary regular chorister." Alternate chor-

isters are given a right of first refusal to perform as tempo-

rary regulars. When alternates perform as "alternate choris-

ters," they receive $20 for each rehearsal and performance;

when they perform as "temporary regular choristers," they

are paid at the higher regular-chorister rate described above

and, like regulars, are eligible to receive a parking reimburse-

ment of $5 per rehearsal or performance if they submit an

expense reimbursement form with "available receipts." JA

90.

Like alternates, those auxiliaries who have not been select-

ed as alternates may yet be called upon to perform when a

production requires more than 36 choristers.1 Moreover, if

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1 For example, if 53 choristers are needed for a given production,

the pool of 16 alternates will not suffice to round out the chorus,

the Opera cannot fill the temporary regular chorister posi-

tions with alternates, it often relies on auxiliaries to fill the

empty slots. Once selected for a given production, an auxilia-

ry signs a letter of intent agreeing to be available for all

rehearsals and performances; he also signs a letter of under-

standing by which he agrees to adhere to the attendance and

decorum requirements spelled out in a handbook provided by

the Opera. The auxiliary receives a flat fee of $214 for the

production, whether he incurs expenses or not; he is not

required to submit any receipts or forms to receive the full

fee. The Opera originally considered the $214 fee an "honor-

arium" but now calls it a "transportation expense" reimburse-

ment.

All choristers performing in a given production--be they

regulars, temporary regulars, alternates or auxiliaries--are

listed together in the program under the heading of "Cho-

rus." Auxiliaries share dressing facilities and receive make-

up instructions and costume fittings with the other choristers.

Also, during the production, auxiliaries often perform with

regular choristers in "small group" performances. At least

half of the current regular choristers began with the Opera as

auxiliaries.2

On March 30, 2000 the Union petitioned for a self-

determination election among the Opera's alternate and auxil-

iary choristers,3 in an effort to add the alternates and auxilia-

ries to the bargaining unit. The Opera agreed that the

alternates could be included in the unit but objected to the

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even assuming all 36 regulars and all 16 alternates are available for

the production.

2 The Board found the fact that "performing as an auxiliary

chorister counts toward satisfying the prerequisite for employment

as a general chorister, i.e., that the applicant has sung in two

previous productions," JA 10, further supported its conclusion that

auxiliaries are employees.

3 A self-determination election allows unrepresented employees to

decide whether or not they want to be added to an existing

bargaining unit. See generally St. Mary's Duluth Clinic Health

Sys., 2000 WL 1920362 (N.L.R.B. Dec. 15, 2000).

inclusion of the auxiliaries, protesting that they are not

employees under the Act.

On May 3, 2000 the Board's Regional Director for Region

19 agreed that the auxiliaries are not employees under the

Act and therefore could not be included in the bargaining

unit. See Seattle Opera Ass'n & Am. Guild of Musical

Artists, Case 19-RC-13939 (May 3, 2000). On August 24,

2000 the Board reversed the Regional Director, holding that

the auxiliaries are employees under the Act. See Seattle

Opera Ass'n & Am. Guild of Musical Artists, Case 19-RC-

13939 (Aug. 24, 2000). The Board remanded to the Regional

Director the unresolved question whether the auxiliaries are

casual employees. On September 20, 2000 the Regional

Director issued a supplemental decision holding that the

auxiliaries are not merely casual employees and that adding

them to the bargaining unit would be appropriate. See

Seattle Opera Ass'n & Am. Guild of Musical Artists, Case

19-RC-13939 (Sept. 20, 2000). He directed an election in

which the auxiliaries were to decide "whether or not they

desire to be represented for collective bargaining purposes by

[the Union]." JA 15. The Board then conducted an election

by secret mail ballot. The Union won the election and the

Board certified it on November 14, 2000 as "the exclusive

collective-bargaining representative of the employees in the

following appropriate unit: All alternate and auxiliary choris-

ters employed by [the Opera]." JA 25.

After its certification, the Union requested that the Opera

bargain with it over the auxiliaries' terms of employment.

The Opera refused and the Union filed a ULP charge. On

December 13, 2000 the Regional Director issued a complaint

alleging that the Opera's refusal to bargain violated the Act.

The Opera filed an answer admitting its refusal to bargain

but also challenging the validity of the Union's certification.

The Regional Director moved for summary judgment and the

Opera responded to the motion by claiming that the auxilia-

ries are not employees under the Act. On February 8, 2001

the Board issued the order under review. The Board found

that "[a]ll representation issues raised by the [Opera] were or

could have been litigated in the prior representation proceed-

ing," JA 25; accordingly, it affirmed its August 24, 2000

holding that the auxiliaries are employees under the Act.

Thus, because the auxiliaries were properly included in the

bargaining unit, the Board concluded that the Opera had

violated section 8(a)(5) and (1) of the Act by refusing to

bargain with the Union. It ordered the Opera to cease and

desist from engaging in similar ULPs; to recognize and

bargain with the Union upon request; to embody in a signed

agreement any understanding reached; and to post copies of

a remedial notice.

II.

The Opera asks us to grant its petition and reinstate the

Regional Director's initial decision because, it claims, the

auxiliaries are not employees within the Act's coverage. In

the alternative, the Opera argues that the auxiliaries are

merely casual employees lacking a sufficient community of

interest with other Opera employees to be included in a

bargaining unit. In addressing the Opera's contentions, we

do not undertake a de novo inquiry. See Physicians Nat'l

House Staff Ass'n v. Fanning, 642 F.2d 492, 496-97 (D.C. Cir.

1980) (en banc) ("Whether a particular individual is an em-

ployee depends upon the facts. The task of decision on the

facts of each case ... has been assigned primarily to [the

Board,] the agency created by Congress to administer the

Act." (quotations omitted)); see also 29 U.S.C. s 160(e) ("The

findings of the Board with respect to questions of fact if

supported by substantial evidence on the record considered as

a whole shall be conclusive."). Rather, we must ask whether

the "Board's determination that [the auxiliaries] are 'employ-

ees' under [the] Act ... has warrant in the record and a

reasonable basis in law." Allied Chem. & Alkali Workers of

Am. v. Pittsburgh Plate Glass Co., 404 U.S. 157, 166 (1971)

(quotations omitted). We conclude that it does.

A.

With respect to the Opera's first claim--that the auxiliaries

are not employees within the Act's purview--"our inquiry

starts from the fundamental canon that statutory interpreta-

tion begins with the language of the statute itself." Butler v.

West, 164 F.3d 634, 639 (D.C. Cir. 1999) (quotation omitted).

The relevant statutory text states:

The term "employee" shall include any employee, and

shall not be limited to the employees of a particular

employer, unless this subchapter explicitly states other-

wise, and shall include any individual whose work has

ceased as a consequence of, or in connection with, any

current labor dispute or because of any unfair labor

practice, and who has not obtained any other regular and

substantially equivalent employment, but shall not in-

clude any individual employed as an agricultural laborer,

or in the domestic service of any family or person at his

home, or any individual employed by his parent or

spouse, or any individual having the status of an indepen-

dent contractor, or any individual employed as a supervi-

sor, or any individual employed by an employer subject

to the Railway Labor Act, as amended from time to time,

or by any other person who is not an employer as herein

defined.

29 U.S.C. s 152(3) (emphasis added).

While the statutory definition is somewhat unhelpful, we

are not without guidance; in Sure-Tan, Inc. v. NLRB, 467

U.S. 883 (1984), the United States Supreme Court made clear

that

[t]he breadth of s 2(3)'s definition is striking: the Act

squarely applies to "any employee." The only limita-

tions are specific exemptions for agricultural laborers,

domestic workers, individuals employed by their spouses

or parents, individuals employed as independent contrac-

tors or supervisors, and individuals employed by a person

who is not an employer under the [Act].

Id. at 891 (emphasis added). Because the Opera does not

claim that the auxiliaries fall within any of section 152(3)'s

specific exemptions, resolution of the Opera's petition turns

on the provision's opening words: "The term 'employee' shall

include any employee...." See id.; see also Sunland

Constr. Co., 309 N.L.R.B. 1224, 1226 (1992) ("Under the well

settled principle of statutory construction--expressio unius

est exclusio alterius--only these enumerated classifications

are excluded from the definition of 'employee.' " (footnote

omitted)). Although the words might appear hopelessly cir-

cular, the Court's decision in NLRB v. Town & Country

Electric, Inc., 516 U.S. 85 (1995), provides the necessary

interpretive assistance:

The ordinary dictionary definition of "employee" includes

any "person who works for another in return for financial

or other compensation." American Heritage Dictionary

604 (3d ed. 1992). See also Black's Law Dictionary 525

(6th ed. 1990) (an employee is a "person in the service of

another under any contract of hire, express or implied,

oral or written, where the employer has the power or

right to control and direct the employee in the material

details of how the work is to be performed"). The

phrasing of the Act ... reiterate[s] the breadth of the

ordinary dictionary definition [when] it says "[t]he term

'employee' shall include any employee."

Id. at 90 (emphasis in original). Given that the Court has

assigned such weight to the plain meaning of the term

"employee," it is clear that--where he is not specifically

excluded from coverage by one of section 152(3)'s enumerated

exemptions--the person asserting statutory employee status

does have such status if (1) he works for a statutory employer

in return for financial or other compensation, see id.; see also

WBAI Pacifica Found., 1999 WL 676522, at *3 (N.L.R.B.

Aug. 26, 1999) (requiring "presence of some form of economic

relationship between the employer and the individual held to

have statutory employee status"); and (2) the statutory em-

ployer has the power or right to control and direct the person

in the material details of how such work is to be performed,

see Town & Country Elec., 516 U.S. at 90.

The Opera concedes that auxiliary choristers receive a flat

sum of $214 for their work in a particular production.4 It

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4 This single fact distinguishes the auxiliaries from the non-

employee individuals in WBAI, a decision which the dissent claims

argues, however, that the fee "is not intended to be 'compen-

sation' in return for labor or services performed ... but

rather a reimbursement for out of pocket costs an [auxiliary]

is likely to incur" in connection with attending rehearsals and

performances. Br. of Pet'r at 17. Several facts in the record

suggest otherwise. First, the auxiliaries receive $214, no

more and no less, regardless of the amount of any transporta-

tion, parking and other miscellaneous expenses they incur.

We note the contrast in this regard between the auxiliaries on

the one hand and the Opera's non-employee "supernumerar-

ies"5 and youth choristers on the other; the latter are true

volunteers in that they receive no fee at all (regardless of the

amount of expenses they incur). Second, the auxiliaries are

entitled to the fee even if they incur no expenses at all (e.g., if

they walk to the opera house or if a friend drops them off).

Third, while the Opera labels the fee a "transportation ex-

pense" reimbursement,6 the auxiliaries are not required to

submit expense reimbursement forms or receipts to receive

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the Board has erroneously neglected, see dissenting op. at 2; the

"unpaid staff" in WBAI were just that--unpaid. See WBAI, 1999

WL 676522, at *4-5 ("Unpaid staff do not receive compensation for

their work at the station.... Although there is evidence that at

least one unpaid staff member received travel reimbursement, it

does not appear to be a widespread practice."). Thus, the purport-

ed employer-employee relationship in WBAI lacked the requisite

economic element that exists, and is widespread, here. That the

fee, in the dissent's estimation, amounts to "the grand sum of $2.78

per hour" and is below minimum wage, dissenting op. at 2, has no

bearing on the section 152(3) analysis. The only support the

dissent can marshal for a contrary proposition, Walling v. Portland

Terminal Co., 330 U.S. 148 (1947), is no support at all; Walling

involves interpretation of the Fair Labor Standards Act. Under

the National Labor Relations Act, the amount of (as opposed to the

mere fact of) compensation is irrelevant.

5 Supernumeraries are analogous to "extras" in a film--they are

simply performers with nonspeaking parts.

6 We decline to lend evidentiary credence to this label, especially

given the fact that, until recently, the Opera referred to the flat fee

as an "honorarium."

the full sum.7 Indeed, that the Opera did not explain to the

Board how it arrived at the $214 "transportation expense"

set-off--much less present evidence of parking costs or dis-

tances traveled--bolsters the Board's conclusion that the

remuneration qualifies as compensation for the auxiliaries'

work.8 See JA 10. Nothing in the record justifies our

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7 The Opera argues that "[w]hether an [a]uxiliary must request

the reimbursement, or provide proof of expenditures for travel and

parking, is inconsequential [because] the travel reimbursement is

merely intended to be an approximation of travel and parking costs

for the typical [a]uxiliary, and Seattle Opera has decided it is not

worth the administrative time, effort and cost to collect and process

receipts and reimbursement forms." Br. of Pet'r at 18. It con-

tends that the Board neglected its "cost-efficiency reasoning" in

handling the payment to auxiliaries as it did. Id. at 13; see also id.

at 17-18. Even if the Opera's cost-efficiency reasons were relevant

to the section 152(3) inquiry, however, nothing in the record sug-

gests that it presented those reasons to the Board or that "extraor-

dinary circumstances" prevented it from doing so. Hyatt Mgmt.

Corp. of New York, Inc. v. NLRB, 817 F.2d 140, 143 n.2 (D.C. Cir.

1987) (where petitioner failed to raise issue before Board, it was

"barred from raising it in a petition for review, absent 'extraordi-

nary circumstances' which [were] clearly not present" (quoting 29

U.S.C. s 160(e))).

8 The dissent seeks to fill the mathematical gap left by the Opera

and offers numerous suppositions about how much a given auxiliary

might make per hour or per trip. See Dissenting op. at 2-4. For

instance, the dissent calculates that--far from being compensated

for their work performance--auxiliary choristers will not even

receive full reimbursement for their travel expenses unless "they

live or have a day job within 9.2 miles of the Opera House." Id. at

4. For all the Board knew, however--given that the Opera prof-

fered neither the calculations the dissent offers nor any evidence

about distances traveled--all of the auxiliaries lived within 9.2 miles

of the opera house. Whether the dissent's calculations are accurate

or not, the Board has no obligation to weigh evidence not presented

to it. See Allied Chem. & Alkali Workers, 404 U.S. at 166 (court

will uphold Board's "employee" determination if it "has warrant in

the record and a reasonable basis in law" (emphasis added)).

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The dissent also supposes that if the auxiliaries are in fact

employees under the Act, they and the Opera are in violation of the

federal tax laws because they "are not on the payroll" and "no taxes

of any sort are withheld from their $214." Dissenting op. at 6.

However, the Opera does not take issue with the Board's omitting

to consider the tax treatment of the $214 payments. While the

Opera states in its brief that no taxes are withheld from the

payments, it never explains the legal significance of the fact. See

Br. of Pet'r at 17, 22, 27. Accordingly, by failing to raise the tax

argument adequately on appeal, the Opera has waived it. See

Wash. Legal Clinic for the Homeless v. Barry, 107 F.3d 32, 39 (D.C.

Cir. 1997) (litigant does not argue issue by addressing it in "cursory

fashion"); Ry. Labor Executives' Ass'n v. United States R.R. Ret.

Bd., 749 F.2d 856, 859 n.6 (D.C. Cir. 1984) (declining to decide issue

"on the basis of briefing which consisted of only three sen-

tences...and no discussion of the...relevant case law"). The

dissent's assertion that we have "unfair[ly]" declined to consider the

tax issue, dissenting op. at 6 n.5, is surprising to say the least; for a

party that had purportedly "made the tax argument in its brief not

once but three times" (by merely stating the fact that "no taxes are

withheld"), id., the Opera at oral argument was caught decidedly

off-guard by our dissenting colleague's inquiries:

Q: [D]id they give [the auxiliaries] W-2 forms?

A: I don't believe they did, but I can't tell you for sure that

that is in the record.

Q: That's not in the record. Okay.

A: I'm not sure that question was asked [before the

Board]....

Q: [I]f "employee" means the same under the Internal Reve-

nue Code that it does under the NLRB, then every one of

these 150 [auxiliaries] has violated the federal tax laws.

A: I'm not sure I follow that, Your Honor....

Q: They didn't report--

A: I don't know why they should, if it's reimbursement for

expenses.

Q: No. If the NLRB is right ... and "employee" means the

same in the Tax Code as it does in the National Labor

Relations Act, then they have put 150 people in violation of the

federal income tax and they owe back taxes, with penalties.

disturbing that conclusion.9

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A: I mean, I would have to go back if--in court--if this Court

does not accept our position, we'd have to go back and look at

that. But it certainly is a de minimis amount of money.

Infra at 16-18 (Oral Arg. Tr. at 13-15); see also infra at 19-21

(Oral Arg. Tr. at 24-25, 36). The conclusion that our dissenting

colleague raised the tax issue sua sponte at oral argument--

surprising the Board and thereby precluding it from "suggest[ing]

'waiver,' " dissenting op. at 6 n.5--seems inevitable, especially given

that the record contains no evidence whatsoever regarding (1) the

Opera's tax reporting treatment of the $214 payments; or (2) the

auxiliaries' reporting or failing to report properly any payments to

federal and state taxing authorities.

The Opera's decision not to argue the tax issue is unsurprising in

any event. As counsel for the Board correctly stated at oral

argument, the fact that the auxiliaries were not given W-2 forms

"doesn't mean that the[y] aren't employees under the Act," infra at

20 (Oral Arg. Tr. at 25); the tax treatment of the payments is of

little analytical significance where "the Board [can] reasonably

conclude that ... various indicia of employee status," like compen-

sation and a right of control, "outweigh those factors suggesting

otherwise," including tax treatment. NLRB v. Amber Delivery

Serv., Inc., 651 F.2d 57, 61-62 (1st Cir. 1981) (Breyer, J.) (package

delivery drivers found to be employees under section 152(3) even

though company made no deductions for unemployment, workmen's

compensation, social security insurance or income taxes); see J.

Huizinga Cartage Co. v. NLRB, 941 F.2d 616, 620 (7th Cir. 1991)

(same, observing that "if an employer could confer independent

contractor [i.e., non-employee] status through the absence of payroll

deductions there would be few employees falling under the protec-

tion of the Act"); NLRB v. Keystone Floors, Inc., 306 F.2d 560, 561,

563 (3d Cir. 1962) (salesmen found to be employees under section

152(3) even though company made no deductions for social security

or income tax).

9 While the dissent makes much of the Regional Director's calcu-

lations, see dissenting op. at 2-4 & n.3, the Director's conclusion

that the $214 amount is only "sufficient to let an individual roughly

break even with out-of-pocket expenses," JA 5, was based on mere

speculation about the travel, parking and meal expenses that the

Moreover, the record shows that the Opera possesses the

right to control the auxiliary choristers in the material details

of their performance. Auxiliaries are required to sign letters

of understanding and intent agreeing to adhere to the attend-

ance and decorum requirements spelled out in a handbook

provided by the Opera.10 The Opera requires the auxiliaries

to sign in when they arrive, on time, at each and every

rehearsal and performance. Pursuant to the handbook, the

auxiliaries receive artistic feedback and are expected to follow

musical and dramatic direction while on stage. The auxilia-

ries undergo the same costume fittings and make-up instruc-

tion as regular and alternate choristers. In short, like all

choristers, auxiliaries must sing their part lest the whole

production suffer.11

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"average" auxiliary chorister might incur and in fact ignored testi-

mony that some auxiliaries incurred no expenses at all.

10 The letter of understanding requires an auxiliary to affirm the

following by signature:

I have read the Seattle Opera "Auxiliary Handbook" provided

for my benefit. I understand these requirements, including

those addressing attendance and decorum, and agree to comply

as a condition of being considered as an Auxiliary Chorister. If

I have any questions, I understand that I can contact the

Chorus Personnel Coordinator or the Music Coordinator for

clarification. I understand that failure to comply with these

guidelines may lead to my dismissal as an Auxiliary Chorister

from this production, and my removal from consideration as an

Auxiliary Chorister from any future opera.

JA 13 (emphasis added).

11 The dissent--delivered molto agitato--believes it "outright sil-

ly" for the Board or for us to consider that the Opera has the power

to control the auxiliary choristers in the material details of their

performance. Dissenting op. at 7. The dissent itself acknowledges,

however, that the Board can and should consider the common law

definition of "employee" when performing a section 152(3) analysis.

See id. at 6; Nationwide Mut. Ins. Co. v. Darden, 503 U.S. 318,

322-23 (1992) ("[W]hen Congress has used the term 'employee'

without [clearly] defining it, we have concluded that Congress

intended to describe the conventional master-servant relationship as

In light of the foregoing facts, as well as the "degree of

legal leeway" the Board possesses "when it interprets its

governing statute, particularly where Congress likely intend-

ed an understanding of labor relations to guide the Act's

application," Town & Country Elec., 516 U.S. at 90, we cannot

say the Board exceeded its authority in concluding that the

auxiliary choristers are employees within the meaning and

reach of 29 U.S.C. s 152(3).

B.

We reject as well the Opera's alternative claim--that the

auxiliary choristers are casual employees lacking a sufficient

community of interest with other Opera employees to be

included in the bargaining unit--because it is not properly

before us.

Its assertions to the contrary notwithstanding, see Reply

Br. of Pet'r at 15-17, the Opera failed to preserve for review

its casual employee argument. Upon concluding in his sup-

plemental decision that auxiliaries are not casual employees,

the Regional Director explicitly advised the Opera of its right,

pursuant to 29 C.F.R. s 102.67, to file a request for review of

his findings. The Opera never filed such a request. Section

102.67(f), therefore, would have precluded the Board from

considering the Opera's casual employee claim in the ULP

proceeding even if the Opera had attempted to raise the

claim, which it did not. 29 C.F.R. s 102.67(f); see Alois Box

Co. v. NLRB, 216 F.3d 69, 77 (D.C. Cir. 2000) ("Because the

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understood by common-law agency doctrine."). The Board did not

act arbitrarily in finding that there was a master-servant relation-

ship here; the dissent's observation that an opera is an especially

"collective enterprise" in which "[e]veryone has to sing at the same

time," dissenting op. at 7, only bolsters the Board's conclusion.

Indeed, had the Board ignored the Opera's amount of control over

the auxiliaries, its neglect of the common law definition could have

rendered its decision arbitrary and capricious. See Town & Coun-

try Elec., 516 U.S. at 94 ("In some cases, there may be a question

about whether the Board's departure from the common law of

agency ... renders its interpretation unreasonable.").

company did not raise [its argument] in the unfair labor

practice proceeding, the Board was entitled to treat [it] as

abandoned."). The Act provides that "[n]o objection that has

not been urged before the Board ... shall be considered by

the [reviewing] court, unless the failure or neglect to urge

such objection shall be excused because of extraordinary

circumstances." 29 U.S.C. s 160(e). The Opera does not

allege that extraordinary circumstances exist here. Accord-

ingly, we do not consider its casual employee argument.

III.

For the foregoing reasons, the Opera's petition for review

is denied and the NLRB's cross-application for enforcement

of its February 8, 2001 order is granted.

So ordered.

[Transcript pages not available electronically].

Randolph, Circuit Judge, dissenting: This is an important

case to volunteers throughout the country and to the organi-

zations they assist. By one estimate, more than 109 million

Americans in 1998 freely gave their time and energy to help

in the arts and humanities, in education, health, youth devel-

opment, environment, and so forth. See Independent Sector,

The New Nonprofit Almanac in Brief 16 (2001). Some

volunteers receive nominal payments to defray their ex-

penses. Now the National Labor Relations Board, at the

instigation of a union representing regular employees, has

decided that volunteers are also "employees" and are entitled

to bargain collectively over wages, hours and working condi-

tions. The rule of "law" embedded in the Board's decision is

this: if volunteers are paid a flat amount to reimburse them

for expenses, the payment is "wages" and the volunteers

become "employees." In my view, the Board's decision is

arbitrary and ridiculous. The majority opinion only com-

pounds the Board's errors. I therefore dissent.

The Seattle Opera is a non-profit organization, nearly forty

years old, specializing in the operas of Richard Wagner. On

infrequent occasions the Opera needs more choristers for a

production than its 36 regular choristers and their alternates.

To fill the gap, the Opera draws on a contingent of volun-

teers--the "auxiliary chorister volunteers," as they are

known. These are individuals, trained in voice, who volunteer

their services to the Opera. If they pass the audition, they

are added to the list of some 200 auxiliary choristers. When

and if the Opera calls upon them, they are free to decline

without consequence. If they agree to volunteer for a pro-

duction, they of course must show up for evening rehearsals

and for the performances, and sing in tune and in unison.

For their efforts, each volunteer chorister is invited to the

Opera's end-of-the-season "volunteers party"; they receive a

"Volunteer Dress Rehearsal Pass"; and--critical to the

Board's thinking--they are paid a flat amount of $214 after

the last performance as reimbursement for travel and parking

expenses.

A rose is a rose and under the definition in the National

Labor Relations Act, an "employee" is an "employee." 29

U.S.C. s 152(3). To break the circle, the Board holds that

volunteers are not "employees." See WBAI Pacifica Found.,

328 N.L.R.B. No. 179, 1999 WL 676522 (Aug. 26, 1999). The

WBAI decision should have led the Board to declare that the

auxiliary choristers were not employees. To "work for hire,"

the Board ruled in WBAI, "is to receive compensation for

labor or services." Id. at *4. The Supreme Court, quoting

with approval a House Committee report, said much the

same: "An 'employee,' according to all standard dictionaries,

according to the law as the courts have stated it, and accord-

ing to the universal understanding of almost everyone ...

means someone who works for another for hire." Allied

Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404

U.S. 157, 167 (1971). By no stretch are the auxiliary choris-

ters being paid for their services, or are they working "in

return for financial or other compensation." Maj. op. at 8

(emphasis added). The most telling fact is the amount they

receive.

On average, an auxiliary chorister is expected to attend 7

music rehearsals (each lasting for 3 hours), 7 stage rehearsals

(each lasting for 4 hours), and 8 performances (about 3 1/2

hours in length). In other words, if the $214 were wages

rather than reimbursement for expenses the auxiliary choris-

ters were making the grand sum of $2.78 per hour. The

Regional Director, after making the same calculations, had it

right--"the amount received is trivial"; it represents "only an

amount sufficient to let an individual roughly break even with

out-of-pocket expenses" and is probably not enough to accom-

plish even that; "the 'economic reality' is that nobody can be

functioning as an auxiliary primarily for immediate financial

gain."

The Board rejected the Regional Director's analysis for

this reason: "to find individuals not to be employees because

they are compensated at less than the minimum wage, or

because their compensation is less than a living wage, contra-

venes the stated principles of the Act." Seattle Opera Ass'n,

331 N.L.R.B. No. 148, 2000 WL 1224905, at *3 (Aug. 24,

2000). Of course this assumes the very issue--that the $214

represents compensation rather than a reimbursement for

expenses. And exactly what "principles of the Act" does the

Board have in mind? There is of course no principle that

volunteers have a right to bargain collectively over wages.

Volunteers are not paid wages. But to take the Board's logic,

one might as well say that because volunteers receive no

compensation for their labor, that is all the more reason "the

principles of the Act" give them a right to bargain collectively

for some compensation. At any rate, the Board's "reason-

ing"--I hesitate to call it that--flatly contradicts the leading

case of Walling v. Portland Terminal Co., 330 U.S. 148

(1947), on which the Regional Director relied. In Walling, a

railroad gave training to prospective brakemen and paid

successful trainees retroactively at the rate of $4 per day for

their training period (this translates into roughly $32 per day

in current dollars). The Court held that despite the payment,

the trainees were not "employees" subject to the minimum

wage law because they were not being compensated for work

performed. In language that applies equally to the auxiliary

choristers and other volunteers throughout the country, the

Court refused to sweep within the law "each person who,

without promise or expectation of compensation, but solely

for his personal purpose or pleasure worked in activities

carried on by other persons either for pleasure or profit."

330 U.S. at 152.1

Rather than simply assuming that the $214 represented

wages, the Board should have tested its thesis through ele-

mentary mathematics. The parking lots near the Opera

House are coin operated (so no receipts are given). For a

rehearsal or performance, parking would cost about $4. Giv-

__________

1 The majority dismisses the Supreme Court's decision in Port-

land Terminal on the ground that it arose under the Fair Labor

Standards Act. Maj. op. at 9 n.4. But the Board's WBAI opinion

relied on the treatment of volunteers under the Fair Labor Stan-

dards Act and found no evidence that the individuals there would be

considered "employees." WBAI, 328 N.L.R.B. No. 179, 1999 WL

676522, at *5 n.3. Yet in this case, the Board disregarded the

Regional Director's decision that the auxiliary choristers were not

employees, in part on the basis that he relied on the Fair Labor

Standards Act. See Seattle Opera Ass'n, 331 N.L.R.B. No. 148,

2000 WL 1224905, at *3 n.4.

en the average number of rehearsals and performances (22),

this amounts to $88 in parking fees. Under the collective

bargaining agreement the Opera reimburses some union

members for transportation expenses at the rate of 31 cents

per mile. For auxiliary choristers driving from their home to

the Opera House and back for all 22 rehearsals and perfor-

mances, this comes to the handsome total of $2.86 per trip

($214 less $88 divided by 44). At 31 cents per mile, these

volunteers will receive full reimbursement for their travel

expenses only if they live or have a day job within 9.2 miles of

the Opera House.2 Maybe the phantom of the opera did not

have commuting expenses but in modern society most every-

one else does.3

Not content with the Board's own irrationalities, the major-

ity makes up one of its own. It supposes that an auxiliary

chorister might walk to all rehearsals and performances, and

thus incur no travel expenses. Maj. op. at 9. What is the

point? That because someone walks to the Opera Hall, every

auxiliary chorister does? Or is it that because a chorister or

two might get to the Opera Hall without driving, all auxiliary

choristers must be singing for wages? The majority also is

impressed with the fact that none of the auxiliary choristers

are required to submit expense reports or receipts. Maj. op.

__________

2 The majority states that for "all the Board knew ... all of the

auxiliaries"--that is, all 200 of them--"lived within 9.2 miles of the

opera house." Maj. op. at 10 n.8. The absurdity of this supposition

is probably why the Board did not indulge in it. The majority

seems to forget that the Opera was charged with committing unfair

labor practices. The burden was on the Board's general counsel to

prove those charges, see 29 U.S.C. s 160(c), a burden which could

not be carried without proving that the auxiliary choristers were

"employees" under the Act. Any evidentiary gap therefore militat-

ed in favor of the Opera.

3 The majority says that the Board did not have to consider the

computations I have set forth in the text because "the Board has no

obligation to weigh evidence not presented to it." Maj. op. at 10

n.8. But the computations represent reasoning from evidence

already in the record, and it is reasoning that is missing from the

Board's decision.

at 9-10. The Board was too. It propounded the following

non sequitur: "auxiliaries ... are not required to submit

receipts or expense reports, and they receive remuneration in

the amount of $214 at the end of a production whether or not

they incur costs. Therefore we find the auxiliaries' remuner-

ation to be compensation for their work." Seattle Opera

Ass'n, 331 N.L.R.B. No. 148, 2000 WL 1224905, at *3. Where

does the "Therefore" come from? There is no rule of labor

law, at least none the Board or anyone else has identified,

holding that unless payments to defray expenses are preced-

ed by an expense report and receipts, the payments must be

wages. The Opera's witnesses testified that the $214 repre-

sented an approximation of expenses. Flat reimbursement

payments are fairly common. (Consider the per diem pay-

ment many employees receive when they are on official

travel, a payment not considered wages even if the employee

did not incur equivalent expenses. See, e.g., Berry v. Excel

Group, Inc., 288 F.3d 252 (5th Cir. 2002).) Flat payments

save on the bookkeeping and are fair to those who are freely

giving up their time. Congress recognized as much when it

amended the Fair Labor Standards Act.4 As the Senate

report stated, "a volunteer crossing guard does not become

an 'employee' because he or she receives a uniform allowance

and/or travel expenses." S. Rep. No. 99-159, at 14 (1985).

The short of the matter is that the $214 paid to the auxiliary

choristers is consistent with reimbursement of expenses; it is

entirely inconsistent with wages.

__________

4 Under the Fair Labor Standards Act, 29 U.S.C. s 201 et seq.,

which defines "employee" in much the same manner as the National

Labor Relations Act, a volunteer at a public agency does not

become an employee merely because the person is paid "expenses,

reasonable benefits, or a nominal fee." 29 U.S.C. s 203(e)(4). This

is true whether the volunteer submits receipts for expenses or

receives instead the "approximate" amount of those costs. 29

C.F.R. s 553.106(b). One can distinguish between volunteers and

employees under the Fair Labor Standards Act only "by examining

the total amount of payments made (expenses, benefits, fees) in the

context of the economic realities of the particular situation." 29

C.F.R. s 553.106(f). This is precisely what the Board refused to do.

The Board's analysis is flawed in many other respects. I

will mention just a few. In applying the common law defini-

tion of employee, as the Board does in these cases, see NLRB

v. Town & Country Elec., Inc., 516 U.S. 85, 94 (1995), it

should have taken into account the tax treatment of the

auxiliary choristers' $214. See Nationwide Mut. Ins. Co. v.

Darden, 503 U.S. 318, 324 (1992), quoting Community for

Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989).

The Opera's officials testified without contradiction that the

auxiliary choristers are not on the payroll and that no taxes of

any sort are withheld from their $214. If these payments

were in fact wages, as the Board supposed, the Opera--and

the auxiliary choristers--were violating the federal tax laws

and probably state laws as well. I am not willing to assume

any such thing and I do not think the Board had any business

doing so either.5

__________

5 The majority thinks "the tax treatment of the payments is of

little analytical significance," citing some court of appeals opinions.

Maj. op. at 12 n.8. But the Supreme Court in Nationwide, 503 U.S.

at 324-25, decided after the court of appeals decisions the majority

mentions, held that in "determining whether a hired party is an

employee under the general common law of agency, we consider ...

the tax treatment of the hired party." (Italics added.) See also

Community for Creative Non-Violence v. Reid, 490 U.S. 730, 753

(1989) (relying on the purported employer's failure to deduct taxes

as a factor indicating that the individual was not an employee). The

Court in Nationwide also pointed out that in the past, when the

NLRB twice deviated from the common law definition of employee,

"Congress amended the statute so construed to demonstrate that

the usual common-law principles were the keys to meaning." Id. at

324-25. See also Willmar Elec. Serv., Inc. v. NLRB, 968 F.2d 1327,

1329 (D.C. Cir. 1992).

In response to this dissent, the majority claims the Opera

"waived" any argument about tax withholding. Maj. op. at 11 n.8.

This is unfair to the Opera, and to its counsel, and it is quite wrong.

The Opera made the tax argument in its brief not once but three

times. The Board never even suggested "waiver" because it knew,

better than the majority, that the argument had indeed been

preserved and presented. On the basis of ample testimony about

the subject in the agency proceedings, the Opera argued to us:

"The Seattle Opera does not consider the travel reimbursement to

be wages and no taxes are withheld." Brief for Petitioner at 17.

It

The Board and the majority find it significant in determin-

ing whether the auxiliary choristers are employees rather

than volunteers that the Opera "has the power or right to

control and direct the person in the material details of how

such work is to be performed." Maj. op. at 8. This is

outright silly. Are we to suppose that volunteer firefighters

or volunteer rescue workers become "employees" because the

fire chief or the head of the rescue squad directs them? As

to this case, the Board seems to have forgotten that we are

dealing with a choir. Auxiliary choristers join other singers

to perform musical works. I can imagine no more collective

enterprise. Everyone has to sing at the same time. Unlike a

supernumerary (a non-singing extra)--who could miss a per-

formance without much effect--missing singers affect the

balance of the choir between the various voice parts. Re-

hearsal cannot be done independently. Choir members need

to know not only the notes and the words, but they must also

blend their voices together into a single sound. We all

pronounce a's and e's a little differently from one another. In

this context it is therefore nothing but irrational to treat

control and direction as a feature distinguishing a volunteer

from an "employee."

The Opera has never treated its auxiliary choristers as

anything but volunteers, and they have never viewed them-

selves otherwise. Their very title is revealing. Most are

familiar with the ladies auxiliary, as one type of volunteer

__________

emphasized the point again, arguing that "such reimbursement is

not considered wages" because "no taxes are withheld," id. at 22;

see also id. at 27. It was in light of these arguments that the

subject naturally came up in oral argument.

Furthermore, the Board could hardly have been surprised that

the matter of tax withholding would be discussed. Not only did the

Opera argue the point, but also the Regional Director, in determin-

ing that the Opera treated the "auxiliaries as volunteers," relied on

the fact that "[n]o withholding is taken" out of the $214. While the

majority believes the record contains "no evidence" on the subject

of tax withholding, maj. op. at 12 n.8, the evidence is there for all to

see, as is the Regional Director's factual finding directly on point, a

finding the Board never upset.

group used to be called. The Opera gives each such chorister

an "Auxiliary Chorister Volunteer Handbook." At the end of

the season, in addition to an invitation to the volunteers

party, each auxiliary chorister receives a letter from the

Opera's director thanking them for their "contributions" and

stating that none of the Opera's achievements would have

been possible "without the undying support of Seattle Opera

Volunteers."

According to the Board this was all a charade. The Opera

paid its auxiliary choristers at less than the minimum wage,

in violation of the Fair Labor Standards Act. It did not

withhold taxes from their "paychecks," in violation of the

federal tax laws. It engaged in phony transactions, pretend-

ing to reimburse the auxiliary choristers for expenses, while

actually compensating them for their work. It called the

auxiliaries volunteers when they were really employees. And

by not treating them as employees, the Seattle Opera violated

the National Labor Relations Act. Everyone was deluded

thinks the Board, everyone that is except the Board itself.

The plain truth is the opposite. Something has gone terribly

wrong in this case. Courts review Board decisions to correct

such aberrations. Too bad we did not perform that function

today. What fate awaits this precedent must now depend

upon the inevitable petition for rehearing en banc.