Highlands Hospital Corp. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 23, 2007 Decided November 30, 2007

No. 06-1336

HIGHLANDS HOSPITAL CORPORATION, INC., D/B/A HIGHLANDS

REGIONAL MEDICAL CENTER,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with

06-1383

On Petition for Review

and Cross-Application for Enforcement

of an Order of the National Labor Relations Board

Vincent Candiello argued the cause and filed the briefs for

petitioner.

Stacy G. Zimmerman, Attorney, National Labor Relations

Board, argued the cause for respondent. With her on the brief

were Ronald E. Meisburg, General Counsel, John H. Ferguson,

Associate General Counsel, Linda Dreeben, Assistant General

Counsel, and David Habenstreit, Supervisory Attorney.

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Before: ROGERS, TATEL, and KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge: The National Labor Relations Board

found that an employer’s withdrawal of recognition from a

union violated the National Labor Relations Act. The employer

now argues it had a right to withdraw recognition because the

union had lost majority support. Because substantial evidence

supports the Board’s finding that the employer failed to prove

actual loss of majority support, we deny the petition for review

and grant the Board’s cross-application for enforcement. The

employer also contends that the Board abused its discretion by

imposing an affirmative bargaining order, but we lack

jurisdiction to hear this challenge because the employer failed to

raise it before the Board.

I.

The National Labor Relations Board certified Service

Employees International Union, District 1199 in June 1999 to

represent a unit of registered nurses at Highlands Regional

Medical Center (HRMC) in Prestonburg, Kentucky. Two years

later, in September 2001, employees led by one of the nurses,

Ilene Lewis, formed a “Nurses Decertification Committee” to

campaign against union representation. The committee

circulated a petition entitled “Highlands Regional Medical

Center Showing of Interest for Decertification of SEIU Union

Registered Nurses.” On January 2, 2002, Lewis submitted a

decertification petition to the Board, attaching as evidence the

committee’s petition. The Board blocked the petition pending

resolution of unrelated unfair labor charges against HRMC.

A March 11 letter from the nurses’ committee to HRMC

Chief Executive Harold Warman asserted that thirty-eight of

seventy-one nurses had shown “support for decertification” by

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signing the petition, while “a number” of others—allegedly

reluctant to sign for fear of repercussions—had expressed verbal

opposition to the union. Citing only the petition, Warman

notified both the nurses and the union on March 19 that HRMC

would cancel negotiations set to begin the next day and would

withdraw recognition upon expiration of the contract. This is

precisely what HRMC did: on April 12, the day on which the

collective bargaining agreement expired, HRMC withdrew

recognition. Then, without notifying or negotiating with the

union, Warman announced a “significant” increase in hourly

wages for nurses.

The union filed two unfair labor practice charges alleging

violations of the National Labor Relations Act—specifically,

sections 8(a)(1) and (5). 29 U.S.C. § 158(a)(1), (5). Section

8(a)(1) bars employers from interfering with, restraining, or

coercing employees in the exercise of their rights to organize

and bargain collectively, while section 8(a)(5) requires

employers to bargain with employees’ designated union

representatives. Id. The first charge came the day after HRMC

announced its intent to withdraw recognition and cancel

bargaining sessions. The second followed HRMC’s unilateral

wage increase.

Before an administrative law judge, HRMC contended that

both the withdrawal of recognition and pay raise were lawful

because it had shown “actual loss of majority support” for the

union as required by Levitz Furniture Co. of the Pacific, 333

N.L.R.B. 717, 724-25 (2001). At the hearing, the parties

stipulated that on April 12, the date of withdrawal, the

bargaining unit included sixty-eight employees, thirty-four of

whom had signed the petition. One nurse, Shirley Mausser,

testified that she signed only after being told the petition aimed

to preserve employee choice and that she later joined the union

and authorized HRMC to deduct union dues from her pay. Lists

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of employees reviewed weekly by HRMC executives before

April 12 and introduced into evidence identified Mausser as a

union member. To show loss of majority support, HRMC

presented testimony from thirty-five nurses who allegedly

disapproved of the union before withdrawal. Thirty of the

testifying nurses had signed the committee’s petition. Although

five others claimed that they had opposed the union on April 12,

prior to that time none had revealed their views directly to

HRMC managers. Warman, for example, was unable to “recall

or link any particular statement with any particular” member of

the bargaining unit. Highlands Hosp. Corp., 347 N.L.R.B. No.

120, at 12 (Aug. 31, 2006). The ALJ concluded that HRMC’s

evidence failed to prove actual loss of majority support for two

reasons: (1) the showing of interest petition in part reflected

support for an election, without necessarily implying opposition

to the union; and (2) the petition contained valid signatures from

less than half the nurses who were members of the bargaining

unit on April 12. Id. at 2-3.

The Board adopted the ALJ’s findings on both points. As

to the petition’s meaning, the Board stressed that its

text—“showing of interest for decertification”—failed to

indicate clear opposition to the union; that committee members

repeatedly claimed to be seeking an election; and that three

nurses had signed only after being informed the petition’s aim

was an election. Turning to the number of valid signatures, the

Board emphasized that “the parties agree that the petition was

signed by half of the unit members only if the signature of

employee Mausser is counted.” Id. at 4. Because of Mausser’s

“unequivocal, postpetition demonstration of support” for the

union, the Board concluded that the petition “contained an

insufficient number of valid signatures” to show actual loss of

majority support even if it “clearly expressed the signers’ desire

not to be represented.” Id. Finally, the Board disregarded the

trial testimony of the thirty-five nurses “because this evidence

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was not before [HRMC] when it withdrew recognition.” Id. at

4 n.17. On this basis, the Board ruled that HRMC violated the

NLRA by withdrawing recognition and increasing wages

unilaterally. Id. at 3. As remedies, the Board ordered HRMC

to: (1) cease and desist from violating the NLRA; (2) rescind the

unilateral pay increase if the union so requests; (3) let the union

post notices on employee bulletin boards for six months; (4)

provide the union names and addresses of nurses currently in the

bargaining unit; and (5) bargain with the union. Id. at 4-7.

HRMC now challenges the two unfair labor charges

stemming from its withdrawal of recognition, as well as the

Board’s affirmative bargaining order. We accept the Board’s

findings of fact as conclusive if supported by substantial

evidence on the record as a whole. 29 U.S.C. § 160(e). Because

substantial evidence means “‘such relevant evidence as a

reasonable mind might accept as adequate to support a

conclusion,’” we “will reverse for lack of substantial evidence

‘only when the record is so compelling that no reasonable

factfinder could fail to find to the contrary.’” Palace Sports &

Entm’t, Inc. v. NLRB, 411 F.3d 212, 220 (D.C. Cir. 2005)

(quoting Resort Nursing Home v. NLRB, 389 F.3d 1262, 1270

(D.C. Cir. 2004)).

II.

According to longstanding Board policy, unions certified

under NLRA section 9(c), 29 U.S.C. § 159(c), enjoy a

presumption of majority status. Levitz, 333 N.L.R.B. at 720 &

n.17. This presumption is conclusive for up to three years

during the term of a collective bargaining agreement. See

Auciello Iron Works, Inc. v. NLRB, 517 U.S. 781, 786 (1996).

After the agreement expires, however, employers may rebut the

presumption. Levitz, 333 N.L.R.B. at 720 & n.17. Prior to

Levitz, employers could rebut the presumption by showing no

more than good-faith doubt about a union’s majority status

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before withdrawing recognition. See Celanese Corp. of Am., 95

N.L.R.B. 664, 671-72 (1951). But in Allentown Mack Sales &

Service, Inc. v. NLRB, 522 U.S. 359 (1998), the Supreme Court

directed the Board to interpret “doubt” to mean uncertainty, a

less stringent standard than the Board’s prior approach, which

defined doubt as disbelief. Id. at 367, 373-74; Levitz, 333

N.L.R.B. at 723. That said, Allentown Mack recognized the

Board’s discretion to adopt a different test. 522 U.S. at 373-74

(“As a theoretical matter (and leaving aside the question of legal

authority), the Board could certainly have raised the bar for . . .

withdrawal of recognition by imposing a more stringent

requirement than the reasonable-doubt test . . . .”). Capitalizing

on this opportunity, the Board decided in Levitz that requiring

employers to show actual loss of majority support, rather than

good-faith doubt, would better serve the NLRA’s twin goals of

“ensuring employee free choice and promoting stability in

bargaining relationships.” Levitz, 333 N.L.R.B. at 724. In

particular, the Board announced:

[W]e hold that an employer may rebut the continuing

presumption of an incumbent union’s majority status,

and unilaterally withdraw recognition, only on a

showing that the union has, in fact, lost the support of

a majority of the employees in the bargaining unit. . . .

We emphasize that an employer with objective

evidence that the union has lost majority support—for

example, a petition signed by a majority of the

employees in the bargaining unit—withdraws

recognition at its peril. If the union contests the

withdrawal of recognition in an unfair labor practice

proceeding, the employer will have to prove by a

preponderance of the evidence that the union had, in

fact, lost majority support at the time the employer

withdrew recognition. If it fails to do so, it will not

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have rebutted the presumption of majority status, and

the withdrawal of recognition will violate Section

8(a)(5).

Id. at 725.

In this case, HRMC disputes only the application of the

Levitz standard, not its validity. Levitz places the burden on

HRMC to prove by a preponderance of the evidence that on

April 12, the day the collective bargaining agreement expired,

the union “had, in fact, lost majority support.” Id. Given the

deference we owe the Board’s factual findings, substantial

evidence supports its determination that HRMC failed to prove

actual loss of majority support at the time of withdrawal. In

communications with both the union and bargaining unit

employees, HRMC expressly relied on the petition, and only the

petition, to justify its decision to withdraw recognition, and at

the evidentiary hearing, it stipulated that without the signature

of Mausser the petition lacked support from a majority of

nurses. Before withdrawing recognition, moreover, HRMC

executives were aware of Mausser’s support for and

membership in the union. Under Levitz, absent other “objective

evidence” in HRMC’s possession at the time of withdrawal, id.,

HRMC’s stipulation and its knowledge that Mausser had joined

the union dispose of this case.

HRMC insists that it did have additional evidence of loss of

majority support. Specifically, it points to the hearing testimony

of thirty-five nurses, five of whom had declined to sign the

petition but later claimed, after the pay raise, to have opposed

the union. Both the Board and ALJ, however, refused to credit

this testimony, and for good reason: HRMC had no knowledge

of that corroborating evidence on the day it withdrew

recognition. Highlands, 347 N.L.R.B. No. 120, at 4 n.17, 10.

On that crucial date, then, besides the committee’s petition,

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HRMC had only unsubstantiated hearsay assertions that other

employees opposed the union, which “certainly do not establish

the fact of . . . disfavor with the degree of reliability ordinarily

demanded in legal proceedings.” Allentown Mack, 522 U.S. at

369 (emphasis omitted).

HRMC also challenges the alternative basis for the Board’s

decision—that certain nurses believed the petition’s purpose was

to obtain an election. But given our conclusion that the petition

lacked majority support and that HRMC has thus failed to carry

its burden under Levitz, we have no need to address this

challenge.

III.

This brings us to HRMC’s challenge to the bargaining

order. HRMC contends that the Board failed adequately to

justify this “extreme remedy,” which “invades” the rights of

nurses opposed to the union. Pet’r’s Opening Br. 32, 34. In

response, the Board argues that we lack jurisdiction to address

this issue because HRMC failed to raise it before the Board.

NLRA section 10(e) provides that “[n]o objection that has

not been urged before the Board . . . 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); see also Woelke & Romero Framing, Inc. v. NLRB,

456 U.S. 645, 665-66 (1982). In its exceptions to the ALJ’s

decision, HRMC never mentioned the affirmative bargaining

order. It objected only to the “excessive breadth of the remedy

with which the ALJ ordered [HRMC] to comply.” In its briefs

before the Board, moreover, HRMC offered no arguments at all

regarding the ordered remedy.

HRMC’s single reference to the “excessive breadth” of a

remedy with multiple parts is insufficient to satisfy section 10(e)

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because it failed to give the Board “‘adequate notice’ of the

argument it seeks to advance on review.” Am. Postal Workers

Union v. NLRB, 370 F.3d 25, 28 (D.C. Cir. 2004) (quoting Alwin

Mfg. Co. v. NLRB, 192 F.3d 133, 143 (D.C. Cir. 1999)). This

“generalized objection” resembles an exception to a remedial

order “in its entirety,” which we have found too broad to

preserve challenges against affirmative bargaining orders.

Prime Serv., Inc. v. NLRB, 266 F.3d 1233, 1241 (D.C. Cir.

2001). HRMC identifies no extraordinary circumstances to

excuse its failure to preserve this issue with adequate specificity.

To be sure, the Board on its own considered the bargaining order

and found it justified. Highlands, 347 N.L.R.B. No. 120, at 5.

As the Supreme Court has made clear, however, “[t]he § 10(e)

bar applies even though” the Board has decided an issue.

Woelke, 456 U.S. at 666; see also Local 900, Int’l Union of

Elec., Radio & Mach. Workers v. NLRB, 727 F.2d 1184, 1192

(D.C. Cir. 1984) (“[T]he fact that the Board has or has not

discussed an issue raises no necessary inferences with respect to

section 10(e).”). Accordingly, we lack jurisdiction to consider

HRMC’s challenge to the bargaining order.

IV.

For the reasons given above, we deny HRMC’s petition for

review and grant the Board’s cross-application for enforcement.

So ordered.