Majestic Star Casino, LLC v. National Labor Relations Board

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 5, 2003 Decided July 13, 2004

No. 03-1088

MAJESTIC STAR CASINO, LLC,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITED STEELWORKERS OF AMERICA,

INTERVENOR

Consolidated with

03-1101

On Petition for Review and Cross–Application

for Enforcement of an Order of the

National Labor Relations Board

James Baird argued the cause for petitioner. With him on

the briefs were Joshua L. Ditelberg and James R. Cho.

Bills of costs must be filed within 14 days after entry of judgment.

The court looks with disfavor upon motions to file bills of costs out

of time.

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Eric D. Duryea, Attorney, National Labor Relations

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

brief were Arthur F. Rosenfeld, General Counsel, John H.

Ferguson, Associate General Counsel, Aileen A. Armstrong,

Deputy Associate General Counsel, and Howard E. Perlstein,

Deputy Assistant General Counsel. David S. Habenstreit

and Kira D. Vol, Attorneys, entered appearances.

Amanda Green argued the cause for intervenor. With her

on the brief was Richard J. Brean.

Before: EDWARDS, SENTELLE and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: Majestic Star Casino, LLC (‘‘Ma-

jestic’’ and ‘‘the company’’) petitions this Court for review of a

decision and order of the National Labor Relations Board

(‘‘NLRB’’ and ‘‘Board’’) in an unfair labor practice proceed-

ing. Majestic contests the Board’s underlying certification of

the union, arguing both that the Board erred in ruling on its

election objections, and further that the company was improp-

erly denied an evidentiary hearing on some of those objec-

tions. For the reasons more fully set forth below, we deny

the petition and grant the Board’s cross-application for en-

forcement.

I. Background

Majestic operates a casino in Gary, Indiana. In April 2002,

United Steelworkers of America (‘‘Steelworkers’’ and ‘‘union’’)

sought certification from the Board as the collective-

bargaining representative for the company’s slot-machine

technicians.

On May 21, three days before the election, the union

distributed a flier to the company’s bargaining unit employ-

ees. The flier was styled a ‘‘Steelworkers Guarantee.’’ The

flier stated, in part:

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We Guarantee the following to the Bargaining Unit

Employees of: MAJESTIC STAR CASINO (SLOT

TECHNICIANS)

1 The opportunity for you to elect your own negoti-

ating committeeTTTT

1 [T]hat [any approved contract will be one that]

YOU and your CO–WORKERS negotiated and have

VOTED by a MAJORITY to ACCEPTTTTT

1 That YOU have the right to ELECT your union

representative from your immediate house, who WILL

REPRESENT YOU before managementTTTT

On May 24—pursuant to a stipulated election agreement—

the Board conducted a secret-ballot election. Thirteen em-

ployees voted for representation and eight voted against. On

May 31, the company filed four objections to the election

conduct.

Majestic alleged that the election should be set aside

because the union, it claimed, misrepresented material facts,

impermissibly promised waiver of union initiation fees, im-

properly offered to waive or defer union dues payments, and

improperly influenced the outcome of the election.

The NLRB Regional Director (‘‘RD’’) issued an eighteen-

page report on the company’s objections, recommending that

the Board overrule all four. Majestic filed exceptions with

the Board to the RD’s report and recommendations.

The Board issued its unpublished Decision and Certifica-

tion of Representative on August 28, 2002 (the ‘‘Decision’’).

The Decision adopted the report, dismissed Majestic’s objec-

tions, and certified the union.

On September 17, 2002, the union requested that Majestic

begin bargaining. On October 9, Majestic refused. Two

months later, on December 2, the union filed a charge against

Majestic with the Board. The union alleged that Majestic

violated section 8(a)(5) and (1) of the National Labor Rela-

tions Act (the ‘‘Act’’) by its refusal to bargain. 29 U.S.C.

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§ 158(a)(1) & (5). The RD issued a Complaint and Notice of

Hearing based on the charge.

Majestic answered on December 27, admitting its refusal to

bargain, but maintaining that for the reasons it cited in its

election objections, the Board invalidly certified the union.

The company argued that by ruling as it did—and by not

holding an evidentiary hearing on all of Majestic’s points—the

NLRB ‘‘improperly applied the legal standards governing the

proper conduct of a representative election.’’

On January 13, 2003, NLRB Counsel moved for summary

judgment on the refusal-to-bargain complaint. In response,

the Board directed Majestic to show cause why it should not

grant the motion. Majestic responded—reasserting that the

election should have been set aside for all the reasons it gave

earlier—by repeating that the Board improperly certified the

union.

On February 26, the Board granted the union’s Motion for

Summary Judgment and found that Majestic’s conduct consti-

tuted an unlawful refusal to bargain in violation of section

8(a)(5) and (1) of the Act. The Majestic Star Casino, 338

NLRB No. 107 (February 26, 2003) (the ‘‘Decision and Or-

der’’). The Board reasoned that it had already ruled against

Majestic’s objections when it had certified the union, and that

Majestic thus already had or could have litigated these issues

then. Decision and Order at 1. Moreover, the Board contin-

ued, Majestic did not ‘‘offer to adduce at a hearing any newly

discovered and previously unavailable evidence, nor [did] it

allege any special circumstances that would require the Board

to reexamine’’ its decision to certify the union. Id. The

Board reasoned that because the factual issues relating to the

election were litigated in the representation proceeding, there

were no genuine issues of material fact in the unfair labor

proceeding. Id. (citing Pittsburgh Plate Glass Co. v. NLRB,

313 U.S. 146, 162 (1941)). The Board therefore denied Majes-

tic an evidentiary hearing, reasoning that it would serve no

purpose. See, e.g., Alois Box Co. v. NLRB, 216 F.3d 69, 78

(D.C. Cir. 2000) (‘‘[b]ecause [a] company had an opportunity

to litigate all relevant issues of fact TTT an evidentiary

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hearing would have served no purpose’’). The Board thus

ordered Majestic to, inter alia, bargain with the union upon

request, to embody any agreement reached in a signed docu-

ment, and to post an appropriate remedial notice at its plant

in Gary, Indiana. Decision and Order at 2.

II. Analysis

A. Material Misrepresentations

The company contends that various statements contained in

the ‘‘Steelworkers Guarantee’’ flier misrepresented material

facts, and the flier’s distribution thus tainted the election.

The company argues that the statements constitute a materi-

al misrepresentation because the union failed to disclose that:

(1) only members of the union and not all employees vote for

ratification of a contract, (2) only members of the union and

not all employees are allowed to elect negotiation committee

members, and (3) the International Union and not the em-

ployees themselves approve or reject contract provisions.

Thus, the flier failed to disclose certain limitations on the unit

employees’ opportunity to participate in certain internal union

affairs, such as choosing their union representatives and

approving any agreement reached with the company. The

company argues that voting employees were swayed by the

statements in the flier. In support of this assertion, the

company relies on affidavits it claims show that the state-

ments led employees to form certain beliefs before the elec-

tion, and that after the election they realized those beliefs

were mistaken. The company further contends that the

issues concerned were important to the employees. The RD,

whose findings were adopted by the Board, considered and

resolved this objection with longstanding and controlling

precedent.

The RD, and by adoption the Board, reviewed the allegedly

misleading campaign statements under the standards set

forth in Midland National Life Insurance Company, 263

NLRB 127 (1982). Under the Midland rule, the Board

refrains from inquiring into the truth or falsity of the parties’

campaign statements, and will not set elections aside on the

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basis of misleading campaign statements. The Board will

intervene and set aside an election only in ‘‘cases where a

party has used forged documents which render the voters

unable to recognize propaganda for what it is.’’ Id. at 133.

While acknowledging the existence of the Board’s prece-

dent, the company argues that the Board erred by ‘‘blindly

following Midland.’’ Rather, the company argues, the Board

should have adopted the United States Court of Appeals for

the Sixth Circuit’s exception to Midland. That circuit has

carved out a narrow exception to Midland for purposes of

‘‘evaluating whether campaign literature unlawfully interfered

with the employees’ free choice in a representation election.’’

NLRB v. St. Francis Healthcare Centre, 212 F.3d 945, 964

(6th Cir. 2000). That Court has applied the exception in

cases where no forgery is involved, ‘‘but where the misrepre-

sentation is so pervasive and the deception so artful that

employees will be unable to separate truth from untruth and

where their right to a free and fair choice will be affected.’’

Id.

However, under section 10(e) of the National Labor Rela-

tions Act, ‘‘[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 extraordinary circumstances.’’ 29

U.S.C. § 160(e). The company never argued to the RD or

the Board that the Board should adopt the exception that the

company now supports, nor any other exceptions to the

Midland rule. Before the RD and the Board, the company

put forward the wholly distinct argument that the Board

should reject its Midland standard, and revert to the prior

standard of Hollywood Ceramics, Co., 140 NLRB 221 (1962),

under which the Board did evaluate the veracity of objection-

able statements. Thus, under section 10(e), this court is

without jurisdiction to consider the argument which the com-

pany never made before the Board.1

1We are aware that the Board itself has in recent opinions

expressly distinguished between misrepresentations covered by the

Midland precedent and coercive threats. As to the latter, it has in

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B. Economic Inducements

We likewise conclude that the Board did not err in finding

that the union did not act improperly by offering to waive

initiation fees or to defer collection of dues.

The company argues that the union’s promise to waive

initiation fees constituted objectionable conduct and amounted

to an economic inducement which inhibited employees’ free

choice, constituted the purchase of endorsements, and painted

a false portrait of employee support during the election

campaign. Under judicial and Board precedent, an offer to

waive initiation fees is not impermissible unless it is condi-

tioned upon an employee’s demonstration of support for the

union. See NLRB v. Savair Mfg. Co., 414 U.S. 270, 274 n.4

(1973); Deming Div., Crane Co., 225 N.L.R.B. 657, 659

(1976). A review of the two written statements cited by the

company shows that they neither allege, nor even suggest,

any conditioning of the waiver on the employees’ pre-election

support for the union; there is no evidence that the union’s

fee waiver was not available to all employees on equal terms.

The company also argues that the union’s promise—con-

tained in the ‘‘Steelworkers Guarantee’’ flier—to initially

waive the employees’ dues similarly amounted to an improper

economic inducement. But there is no evidence that any

company employees, at the time of the campaign, owed any

dues to the union. Thus, the union’s deferral of dues until

the signing of a contract was not an improper conferral of

economic benefits. Cf. McCarty Processors, Inc., 286

N.L.R.B. 703, 703 (1987); Loubella Extendables, Inc., 206

N.L.R.B. 183, 183–84 (1973).

And with respect to the union’s alleged promise to fund a

raise for employees, the company has tendered no evidence

fact subjected the objectionable statements to a more searching

examination. See Pearson Education, Inc., 336 NLRB 92 (October

31, 2001), affirmed in Pearson Education Inc. v. NLRB, F.3d

(D.C. Cir. 2004). Majestic makes no claim of coercion, and in

any event we are without jurisdiction under NLRA section 10(e) to

examine any possible inconsistency in the Board’s decision.

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that the union actually made any such promise. The Board

therefore did not abuse its discretion by overruling these

objections without an evidentiary hearing.

C. Voter Intimidation

Finally, the company argues that the union impaired the

fairness of the election by the unlawful intimidation of non-

union supporters. The company’s evidence in support of this

allegation is—in its entirety—as follows:

[A]t the change of shifts at 4 pm [conduct occurred that

was] directed at the no voters—me, Gary Metros, and

Jeff Brolmsa. It happened about 3 times. It was about

2 weeks prior to the election. As the swing shift came

in, there was obvious yes voters. As they came into the

shop, Marty Torrez would shout: it’s time to light them

up fellas. The other yes voters that we were aware of

(Ray , and Albert ,) would start laughingTTTT

That was it as far as that goes. (Sanchez Affidavit).

The company argues, on the basis of this scant evidence, that

the Board should have set aside the election or held a hearing

to determine the extent of the intimidation. We disagree.

That employee’s conduct does not satisfy the standard for

intimidation that applies to conduct not attributable to the

union. His single cited comment was not ‘‘so aggravated as

to create a general atmosphere of fear and reprisal rendering

a free election impossible.’’ Overnite Transp. Co. v. NLRB,

140 F.3d 259, 264 (D.C. Cir. 1998) (internal quotations and

citation omitted). The Board therefore did not abuse its

discretion in overruling this objection without an evidentiary

hearing.

III. Conclusion

For the reasons set forth above, we deny the petition and

affirm the Board’s decision.