MCPc Inc. v. National Labor Relations Board

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

Nos. 14-1379 and 14-1731

_____________

MCPC INC.,

Petitioner in No. 14-1379

v.

NATIONAL LABOR RELATIONS BOARD,

Petitioner in No. 14-1731

_______________

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

(No. 6-CA-063690)

_______________

Argued: December 11, 2014

Before: FUENTES, FISHER, and KRAUSE, Circuit Judges.

(Filed: February 12, 2016)

_______________

Dean F. Falavolito, Esq. [ARGUED]

Margolis Edelstein

525 William Penn Place

Suite 3300

Pittsburgh, PA 15219

Counsel for MCPc, Inc.

Julie B. Broido, Esq.

Linda Dreeben, Esq.

Gregory P. Lauro, Esq. [ARGUED]

National Labor Relations Board

1015 Half Street SE

Washington, DC 20570

Counsel for the National Labor Relations Board

_______________

OPINION OF THE COURT

_______________

KRAUSE, Circuit Judge.

The National Labor Relations Act prohibits employers

from discharging union or non-union employees for

exercising their organization and collective bargaining rights,

including their right to engage in concerted activities for the

purpose of mutual aid and protection. MCPc, Inc. appeals the

decision and order of the National Labor Relations Board

holding that MCPc violated the Act by discharging Jason

Galanter for concerted activity, and the Board cross-appeals

for enforcement of its order. Our resolution of these issues

provides us occasion to clarify both the definition of

2

“concerted activity” and the test for determining whether that

activity formed the basis for an employee’s allegedly

discriminatory discharge. For the reasons set forth below, we

will affirm and enforce in part, vacate in part, and remand to

the Board for further consideration in light of this opinion.

I. Background

A. Factual History

MCPc provides computer consulting, technology, and

organizational services from offices in several states. Among

MCPc’s specialties is the creation of complex telephony

systems that allow companies to receive and appropriately

route inbound customer calls. MCPc generally employs

solution architects to design these technology solutions for

client companies, and delivery engineers to implement the

solutions. However, because of a company-wide shortage of

engineers, Galanter, a senior solutions architect based in

MCPc’s Pittsburgh office, was tasked with not only designing

but also implementing a call center at one of the company’s

locations in Buffalo.

Domenic Del Balso, MCPc’s director of engineering,

visited the Pittsburgh office from Cleveland once or twice a

month and often took available employees out to lunch on

these occasions for “team building” purposes. MCPc, Inc.,

360 N.L.R.B. No. 39, 2014 WL 495815, at *1 (Feb. 6, 2014).

One such lunch took place on February 24, 2011 and included

Galanter; Jeremy Farmer, who was another solutions

architect; and Dan Tamburino and Brian Sawyers, both of

whom were engineers. At the lunch, the attendees discussed

how busy everyone was because of the engineer shortage.

During this discussion, Galanter told Del Balso that he was

3

working many hours a week, urged him to hire additional

engineers to alleviate the employees’ unduly heavy

workloads, and—most pertinent to this case—stated that

MCPc could have hired several additional engineers with the

$400,000 salary MCPc was paying Peter DeMarco, a recently

hired executive. Tamburino and Sawyers expressed

agreement with Galanter.

After the February 24th lunch, Mike Trebilcock, the

company’s Chief Executive Officer, was informed of

Galanter’s comments regarding executive compensation.

Because DeMarco had indeed been recently hired by MCPc

for what was at the time an unprecedented company salary of

$400,000, and because not many people within the company

had access to the information in the company’s computer

systems about executive compensation, Trebilcock became

concerned about a possible breach of confidential files. He

directed Beth Stec, vice president of human resources and

communication, to review Galanter’s access to MCPc’s

computer records, and he was subsequently informed that, in

connection with Galanter’s implementation of the Buffalo call

center project, Galanter indeed had obtained global access

privileges and thus had the ability to view on MCPc’s

computer systems confidential files normally restricted to

human resources and information technology personnel.

On March 4, 2011, eight days after the Del Balso

lunch, Galanter was asked to travel to the Cleveland office for

what turned out to be a face-to-face meeting with Trebilcock

and Stec. During the meeting, Trebilcock asked Galanter

where he had obtained the salary information that he had

mentioned at the February 24th lunch. Galanter provided a

number of explanations in quick succession. First Galanter

asserted that no one had supplied him the information and

4

attributed his knowledge to what he had found on the

Internet1—though at the subsequent hearing before the

Administrative Law Judge (ALJ), Trebilcock testified that he

“never heard that.” Id.; J.A. 113a. Galanter also told

Trebilcock that the salary information was a topic of “water

cooler” conversation among many employees. MCPc, Inc.,

360 N.L.R.B. No. 39, at *8. Galanter then switched gears and

advised that he might have heard the salary information from

Nancy Damin and Greg Jurkowski, two sales representatives

from the Buffalo office.

To verify this last explanation, Trebilcock left the

room and called Damin and Jurkowski, both of whom were

longtime, trusted MCPc employees. Trebilcock was able to

reach Damin, who had no knowledge of the salary at issue

and denied giving Galanter any such information.2 In light of

Damin’s disavowal, Galanter’s shifting explanations, and

Galanter’s access to MCPc’s confidential human resources

files, Trebilcock concluded that Galanter was lying about how

he had obtained the salary information and accused him of

disclosing Peter DeMarco’s confidential compensation.

1

At the hearing before the Administrative Law Judge

(ALJ), Galanter more specifically explained that he

conducted an Internet search for the salary that a particular

MCPc executive received during the executive’s prior tenure

at another company. Galanter stated that he used this number

to “ballpark[]” what a similarly positioned MCPc executive

would make. J.A. 89a.

2

Trebilcock was able to speak later with Jurkowski,

who also denied providing Galanter any information about

executive compensation.

5

Galanter admitted to mentioning a compensation amount of

$400,000 at the lunch but contended that he had been

referring to a different executive, Andy Jones,3 and that his

access to the company’s computer system was appropriate to

his assigned project. Trebilcock stated that MCPc and

Galanter needed to “divorce” and left the room. MCPc, Inc.,

360 N.L.R.B. No. 39, at *8. Jeff Kaiser, MCPc’s information

technology manager, conducted an audit of Galanter’s

personal computer “to make sure that he wasn’t taking with

him any MCPc proprietary information or files,” and Galanter

was escorted from the building.4 J.A. 116a.

B. Procedural History

On December 30, 2011, the Board’s General Counsel

issued a complaint alleging that MCPc had violated § 8(a)(1)

of the National Labor Relations Act, 29 U.S.C. § 158(a)(1),

by discharging Galanter for complaining about working

conditions, which the General Counsel described as protected

concerted activity under § 7 of the Act, id. § 157, as well as

3

Galanter also testified at the hearing that he named

Jones, not DeMarco, during the lunch, but the ALJ

determined that Galanter had named DeMarco based on what

the ALJ determined to be the more credible testimony of

another lunch attendee, Farmer.

4

The ALJ determined that the “clear inference from

Kaiser’s audit” was that no confidential information had been

stored on Galanter’s personal computer. MCPc, Inc., 360

N.L.R.B. No. 39, at *8 n.24.

6

for maintaining an overbroad confidentiality policy.5

Following a hearing, the ALJ applied the test approved by

NLRB v. Burnup & Sims, Inc., 379 U.S. 21 (1964), which

provides that Ҥ 8(a)(1) is violated if an employee is

discharged for misconduct arising out of a protected activity,

despite the employer’s good faith, when it is shown that the

misconduct never occurred.” MCPc, Inc., 360 N.L.R.B. No.

39, at *16 (quoting Burnup & Sims, Inc., 379 U.S. at 23).

Because the ALJ determined that Galanter was discharged for

accessing MCPc’s confidential files after engaging in

protected activity at the February 24th lunch and found that

Galanter did not in fact access the files, the ALJ concluded

that his discharge constituted an unfair labor practice and

recommended that MCPc be ordered to cease and desist and

to take affirmative remedial action, including offering

Galanter full reinstatement and back pay.

MCPc filed exceptions to the ALJ’s findings and a

supporting brief, in which MCPc emphasized that Galanter

was discharged not only for improperly accessing confidential

salary information and sharing that information with other

employees but also for his dishonesty to Trebilcock. The

General Counsel filed an answering brief defending the ALJ’s

findings and recommendations.

In a decision issued on February 6, 2014, the Board

concluded that MCPc’s policy barring discussion of

confidential information was overbroad in violation of the

Act and could not constitute a valid ground for termination.

As to whether MCPc had in fact lawfully discharged Galanter

5

MCPc and the Board reached an agreement regarding

the language of the confidentiality policy prior to this appeal.

7

for improperly obtaining confidential company information,

the Board held that the Burnup & Sims test was inapplicable

because Galanter had allegedly accessed the files prior to,

rather than in the course of, his protected activity, and thus

was not terminated for committing misconduct “arising out

of” a protected activity. The Board concluded, however, that

even assuming the Burnup & Sims test applied, and further

assuming that MCPc discharged Galanter because it honestly

believed he had accessed confidential files, MCPc had

violated the statute because, as the ALJ found, Galanter had

not committed this misconduct. On this basis, and without

reaching MCPc’s purported primary rationale for terminating

Galanter—his alleged dishonesty about where he had

obtained the salary information—the Board affirmed the

ALJ’s holding that MCPc had discharged Galanter for his

protected concerted activity in violation of § 8(a)(1) and

ordered, among other things, that MCPc reinstate Galanter

and award back pay. MCPc timely filed a petition for review

and the Board cross-applied for enforcement of its order.

II. Jurisdiction and Standard of Review

The Board had jurisdiction to hear and issue a final

order in this matter under 29 U.S.C. § 160(a)-(c). We have

jurisdiction over MCPc’s petition for review and the Board’s

cross-petition for enforcement pursuant to 29 U.S.C. § 160(e)

and (f).

We must accept the Board’s factual findings and the

reasonable inferences derived from those findings if they are

“supported by substantial evidence on the record considered

as a whole.” 29 U.S.C. § 160(f); see Stardyne, Inc. v. NLRB,

41 F.3d 141, 151 (3d Cir. 1994). “Substantial evidence is

more than a scintilla. It means such relevant evidence as a

8

reasonable mind might accept as adequate to support a

conclusion.” Tri-State Truck Serv., Inc. v. NLRB, 616 F.2d

65, 69 (3d Cir. 1980) (quoting Consol. Edison Co. of N.Y. v.

NLRB, 305 U.S. 197, 229 (1938)) (internal quotation marks

omitted). The substantiality of the evidence, however, must

“take into account whatever in the record fairly detracts from

its weight,” id. (quoting Universal Camera Corp. v. NLRB,

340 U.S. 474, 488 (1951)) (internal quotation marks omitted),

and “where there is a lack of substantial evidence in the

record to support the Board’s order, we will deny

enforcement,” NLRB v. N.Y.-Keansburg-Long Branch Bus

Co., 578 F.2d 472, 476 (3d Cir. 1978).

The Board’s legal determinations are subject to

plenary review, but we will uphold the Board’s interpretations

of the Act if they are reasonable. Mars Home for Youth v.

NLRB, 666 F.3d 850, 853 (3d Cir. 2011) (citation omitted).

We conduct this analysis using the ALJ’s findings of fact

where, as here, the Board adopts those findings.6 Trafford

Distrib. Ctr. v. NLRB, 478 F.3d 172, 179 (3d Cir. 2007)

(citation omitted).

III. Discussion

Section 7 of the Act affords employees a number of

organization and collective bargaining rights, including the

right “to engage in [] concerted activities for the purpose of . .

. mutual aid or protection.” 29 U.S.C. § 157. Section 8(a)(1)

enforces this guarantee by deeming it “an unfair labor

6

Because the Board made no independent findings, we

hereafter refer to the ALJ’s factual findings.

9

practice for an employer to interfere with, restrain, or coerce

employees in the exercise” of their § 7 rights. Id. § 158(a)(1).

MCPc argues that there is no substantial evidence on

the record as a whole to support the Board’s determination

that Galanter engaged in activity protected under the Act.

MCPc further contends that even if Galanter engaged in such

activity, it was not the basis for Galanter’s discharge.

Addressing these issues in turn, we will affirm the Board’s

determination that Galanter engaged in protected concerted

activity during the February 24th lunch, but we will remand

for further proceedings because the Board failed to apply the

correct legal test in determining whether Galanter was

discharged for that protected activity or whether he was

discharged for his alleged misconduct, irrespective of any

protected activity.

A.

Determining whether Galanter’s conduct was protected

under the Act requires addressing the threshold question of

whether it was “concerted.” See NLRB v. City Disposal Sys.

Inc., 465 U.S. 822, 840 (1984). Although the term “clearly

enough embraces the activities of employees who have joined

together in order to achieve common goals,” the Act does not

detail, and the courts have not been entirely clear or

consistent in articulating, “the precise manner in which

particular actions of an individual employee must be linked to

the actions of fellow employees in order to permit it to be said

that the individual is engaged in concerted activity.” Id. at

830-31. In order to determine whether Galanter’s conduct

falls under the protections of the Act, we must therefore first

distill from the relevant case law the defining characteristics

of “concerted” conduct.

10

1.

The Board has the authority to broadly construe

“concerted activity” and has interpreted the term to cover not

only the union and pre-union efforts of groups of employees

seeking to protect their rights but also certain actions

undertaken by individuals in the unionized and non-unionized

workplace. See, e.g., D & D Distrib. Co. v. NLRB, 801 F.2d

636, 640 (3d Cir. 1986); Hugh H. Wilson Corp., 414 F.2d at

1347-48. As the Board stated in Meyers Industries, Inc.

(Meyers II), 281 N.L.R.B. 882 (1986), it recognizes

individual conduct as “concerted” both where “individual

employees seek to initiate or to induce or to prepare for group

action” and where “individual employees bring[] truly group

complaints to the attention of management.” Id. at 887. That

these two forms of individual conduct may rise to the level of

concerted activity is well accepted among the Courts of

Appeals. Thus, in City Disposal Systems, the Supreme Court

observed that while some Courts of Appeals had incorrectly

rejected the proposition that an individual’s assertion of a

right contained in a collective bargaining agreement may

constitute “concerted” conduct, even those courts had

recognized that individual conduct qualifies as concerted

where an employee intends to induce group activity or serves

as a representative of at least one fellow employee. City

Disposal Sys., 465 U.S. at 831.

Our Court has had occasion to consider both categories

of individual conduct when elucidating the kinds of employee

action protected under the Act. For example, in Mushroom

Transportation Co. v. NLRB, 330 F.2d 683 (3d Cir. 1964), we

recognized that activity may be concerted “although it

involves only a speaker and a listener” if the individual

engages in it “with the object of initiating or inducing or

11

preparing for group action or [] it ha[s] some relation to group

action in the interest of the employees.” We held that the

employee in that case, however, engaged in “mere griping”

and not concerted activity when he privately dispensed advice

to employees “without involving fellow workers or union

representation to protect or improve his own status or

working position.” Id. at 683, 685 (internal quotation marks

omitted). And although we have recognized that an

individual employee may engage in concerted activity when

he complains to management, we have done so specifically

where the action was taken with the apparent imprimatur of

coworkers. See Frank Briscoe, Inc. v. NLRB, 637 F.2d 946,

949 (3d Cir. 1981) (concluding activity was concerted where

five complainants individually filed similar charges of racial

discrimination within days of being collectively laid off and

in their complaints referred to the same mistreatment of other

employees).

Galanter’s conduct does not fit neatly into the

paradigm of either Mushroom Transportation or Frank

Briscoe. Instead, Galanter appears to have complained to

management to improve his working position without the

imprimatur of other employees but arguably also to induce

group action in the interest of those employees. MCPc posits

that without evidence of prior coordination with his

coworkers, Galanter’s statements about the engineer shortage

should be deemed “mere griping,” unprotected under

Mushroom Transportation. MCPc’s Br. at 15-17 (quoting

Mushroom Transp. Co., 330 F.2d at 684-85) (internal

quotation marks omitted). MCPc, in other words, would have

us treat the varieties of “concerted activity” at issue in

Mushroom Transportation and Frank Briscoe as the exclusive

categories of activity protected in this Circuit. This we

12

decline to do, as the touchstone for an individual’s concerted

activity under Meyers and our Court’s precedent remains

whether the employee intends to induce group activity or

whether the employee’s action bears some relation to group

action in the interest of the employees. Our applications of

this test to the particular fact patterns presented in Mushroom

Transportation and Frank Briscoe were not intended either to

alter the test itself or to foreclose a determination that an

individual engages in concerted activity when he expresses

grievances to management about a matter of general

employee interest in a group meeting context such as this one.

Indeed, a long line of decisions by the Board and other

Circuits indicates that such conduct may satisfy the test for

concerted activity. For instance, in Whittaker Corp., 289

N.L.R.B. 933 (1988), the Board ruled that a lone employee

had engaged in concerted activity when, without conferring in

advance with his fellow employees, he contested the

suspension of the customary annual wage increase during a

group meeting called by management to discuss the policy

change. Id. at 934; see also NLRB v. Caval Tool Div., 262

F.3d 184, 190 (2d Cir. 2001) (affirming the Board’s holding

that an employee engaged in concerted activity when he made

statements about the company’s new break policy at an

employee meeting called by the employer to address the

policy); NLRB v. Talsol Corp., 155 F.3d 785, 797 (6th Cir.

1998) (holding that an employee’s comments about safety at a

group meeting attended by employees and management

constituted concerted activity because the meeting was

conducted to address plant safety concerns, the employee’s

questions were on the topic of safety, and the context

indicated that the employee’s statements were “[c]learly . . .

not purely personal gripes”); Rockwell Int’l Corp. v. NLRB,

13

814 F.2d 1530, 1535 (11th Cir. 1987) (upholding the Board’s

conclusion that an employee engaged in concerted activity

when she objected to the employer’s noise lecture during an

employee meeting arranged to discuss the issue).

Notably for purposes of the case before us, the Board

and other Courts of Appeals have extended this line of

reasoning to the lone employee who complains to

management in a less organized group context and who, in so

doing, successfully attracts the impromptu support of at least

one fellow employee. In Worldmark by Wyndham, 356

N.L.R.B. No. 104, 2011 WL 757874 (Mar. 2, 2011), for

example, the Board held that an employee engaged in

concerted activity when he protested a change in the

company’s dress code on the sales floor in front of other sales

representatives, finding that “any doubt about the concerted

nature of [the employee’s] action is removed by [a second

employee] joining that action.” Id. at *3; see also Kiewit

Power Constructors Co. v. NLRB, 652 F.3d 22, 24-26 (D.C.

Cir. 2011) (affirming the Board’s holding of protected

concerted activity where, first, one union member and then

another objected to management’s attempt to issue

individualized warnings about a new break policy in front of

other employees while the protesting employees were on the

job). Although merely complaining in a group setting would

surely not be sufficient in itself to transform an individual

grievance into concerted activity, we rely on Worldmark by

Wyndham for the narrow proposition that in such

circumstances a lack of prior planning does not foreclose a

finding of concerted activity, where the individual’s

statements further a common interest or by their terms seek to

induce group action in the common interest.

14

Against the backdrop of these cases, we conclude

Galanter engaged in concerted activity when he

communicated his dissatisfaction about shared working

conditions to a member of MCPc’s management during the

February 24th lunch. Although the lunch was not organized

for the express purpose of discussing any particular company

policy, it nonetheless was a “team building” lunch that

provided a group forum within which Galantar could relay to

management complaints shared by other employees about

workplace conditions they wished to see improved. See

MCPc, Inc., 360 N.L.R.B. No. 39, at *1; J.A. 108a. And

much as the Board reasoned in Worldmark by Wyndham, 356

N.L.R.B. No. 104, at *3, any doubt as to whether Galanter’s

statements qualify as concerted activity is dispelled by the

fact that two other employees expressed their agreement

when Galanter urged MCPc to hire more engineers and

contended that the company had the financial ability to do so.

MCPc marshals a number of arguments to support its

position that Galanter’s statements did not constitute

concerted activity, but we find them unpersuasive. First,

contrary to MCPc’s assertions, prior group action is not

required to support the conclusion that Galanter engaged in

concerted activity. Consistently, “[t]he Board has found

concerted activity when a second employee joins an

individual employee’s protest without requiring evidence of a

previous plan to act in concert.” Id. at *4 (citations omitted).

On a related note, the appointment of a spokesperson may be

helpful insofar as it tends to support an inference of group

action or preparation for group action, but MCPc is incorrect

in characterizing it as a requirement. Rather, the Board has

found concerted activity “where an individual, not a

15

designated spokesman, [has] brought a group complaint to the

attention of management.” Meyers II, 281 N.L.R.B. at 886.

Second, although MCPc draws on certain language in

Mushroom Transportation to argue that Galanter was

required to contemplate group action after the team building

lunch, the issue in that case was whether private advice

dispensed by one employee to another exhibited any of the

purpose required for concerted activity. See Mushroom

Transp. Co., 330 F.2d at 685. Here, in contrast, Galanter’s

purpose is apparent from not only the content but also the

circumstances of his complaint, which was directed at

management in a manner and setting indicating an intent to

garner employee support. That Galanter lacked plans to

pursue the issue after the lunch does not alter the concerted

character of his activity at the lunch.

Third, that an employee expresses grievances that are

well known or widely held does not undermine the concerted

nature of his activity. MCPc argues that, when considered in

conjunction with his failure to organize other employees

before or after the lunch, the fact that the engineer shortage

was a problem already acknowledged and in the process of

being addressed by management is fatal to Galanter’s

contention that his complaints constituted concerted activity.

We disagree. That the engineer shortage was a subject of

general concern within the company, if anything, supports

rather than undercuts the ALJ’s conclusion that Galanter

voiced his grievances for the benefit of others as well as

himself. See Hugh H. Wilson Corp., 414 F.2d at 1350 (“Even

though the employees had not communicated that a ‘group’

had existed, and management may have inferred that it was

dealing with individual gripes, the consensus of the affected,

unhappy employees was sufficient to support a finding that

16

the activity was in concert and, therefore, protected.”

(describing NLRB v. Guernsey-Muskingum Elec. Co-op., Inc.,

285 F.2d 8 (6th Cir. 1960)).

In short, MCPc’s arguments fail because they espouse

an unduly cramped interpretation of concerted activity under

§ 7—one that assesses concerted activity in terms of isolated

points of conduct rather than the totality of the circumstances.

See id. at 1354 (rejecting the employer’s evaluation of the

character of each employee statement and act in isolation and

instead finding that “[i]t is the totality of [the employees’]

conduct” that supports a finding of concerted activity); cf.

City Disposal Sys., 465 U.S. at 831 (observing that the

language of § 7 is not narrowly confined to two or more

employees working toward a common goal and holding that

the Board reasonably concluded that a lone employee’s

invocation of a right grounded in his collective-bargaining

agreement is a concerted activity).

When synthesized, the relevant precedent from our

Court and the Board reflects that the benchmark for

determining whether an employee’s conduct falls within the

broad scope of concerted activity is the intent to induce or

effect group action in furtherance of group interests. Where

the ALJ and the Board found that Galanter’s complaints about

excessive workloads at the February 24th team building lunch

related to improving working conditions for not only himself

but also his coworkers and evinced an intent to galvanize his

fellow employees into action, the complaints cannot be

dismissed as “mere griping” about a condition of

employment, except in the absence of substantial supporting

evidence. Mushroom Transp. Co., 330 F.2d at 685 (internal

quotation marks omitted). We therefore agree with the Board

17

that those complaints constituted concerted activity under §

7.7

2.

Having concluded that Galanter’s statements were

concerted, we have little difficulty determining that these

statements were also protected. Concerted activity is

protected under § 7 as long as it is undertaken “for the

purpose of collective bargaining or other mutual aid or

protection,” 29 U.S.C. § 157 (1976), and actions taken for

mutual aid or protection include those intended to improve

conditions of employment, see Asplundh Tree Expert Co. v.

NLRB, 365 F.3d 168, 172 n.3 (3d Cir. 2004). Galanter’s

complaints to Del Balso about the effect of the engineer

shortage on the employees’ quality of life clearly related to

improving employee work conditions and were not

“unlawful, violent, or in breach of contract” and thus did not

“fall outside the shelter of [§] 7.” Wheeling-Pittsburgh Steel

Corp. v. NLRB, 618 F.2d 1009, 1018 (3d Cir. 1980) (quoting

NLRB v. Wash. Aluminum Co., 370 U.S. 9, 17 (1962)).

Indeed, the ALJ explicitly found that Galanter’s statements

lacked “any malicious dimension” and that this was “crucial”

in establishing that his particular communications fell under

the auspices of the Act. MCPc, Inc., 360 N.L.R.B. No. 39, at

*14. Galanter’s concerted activity was therefore protected

under the Act.

7

We need not address whether Galanter’s mention of

DeMarco’s salary information constituted protected activity

as his complaints about the engineer shortage were protected

even without this reference to a particular executive

compensation figure.

18

B.

We turn next to whether substantial evidence supports

the Board’s conclusion that Galanter’s protected statements at

the February 24th lunch formed the basis for his discharge.8

MCPc challenges this conclusion on the ground that it

terminated Galanter for (1) improperly obtaining confidential

salary information; (2) disseminating that information; and

(3) lying to the CEO about where he had obtained the

information.9 MCPc’s Br. at 33, 49; see also J.A. 79a; Oral

Arg. at 13:53, available at

http://www2.ca3.uscourts.gov/oralargument/audio/14-

1379MCPCIncv.NLRB.mp3.

As an initial matter, we conclude that the Board

reasonably dismissed the second of these rationales because

8

Because MCPc does not contend that it lacked

“knowledge, or reason to know, that the employee activities

have coalesced into group action for mutual aid or protection”

as required to violate § 8(a)(1), the knowledge requirement is

not a point of dispute in this case. Tri-State Truck Serv., Inc.,

616 F.2d at 71. In any event, as Galanter complained to

management and multiple employees agreed with his

complaints in the presence of management, implicit in our

conclusion that Galanter engaged in concerted activity is that

MCPc had the requisite knowledge of the concerted nature of

the activity.

9

Though MCPc emphasizes Galanter’s alleged

dishonesty, we address the first two of these rationales for

Galanter’s discharge because MCPc characterizes them as at

least contributing factors in his termination.

19

MCPc’s policy of barring employees from disseminating

confidential information was overbroad in violation of the

Act. To defend a discharge based on a rule that even “has the

tendency to inhibit [protected] activity,” an employer must

show “legitimate and substantial business justifications” for

the rule. Jeanette Corp. v. N.L.R.B., 532 F.2d 916, 918 (3d

Cir. 1976) (quoting N.L.R.B. v. Fleetwood Trailer Co., 389

U.S. 375, 378 (1967)). Not surprisingly, MCPc failed to

make such a showing here as to its confidentiality policy, as

rational employees could interpret that policy not merely to

inhibit but to prohibit certain protected activities, including

wage discussions, rendering it “prima facie violative of [§]

8(a)(1)” and incapable of sustaining a discharge. Id.

The other explanations offered by MCPc—that

Galanter was discharged for improperly obtaining

confidential salary information and for lying about where he

obtained the information—could constitute legitimate

business justifications for MCPc’s decision, but the ALJ and

Board applied the wrong legal test in analyzing the first

rationale and did not apply any test to the second. Because

the ALJ and Board’s rejection of these rationales may have

stemmed from confusion as to the appropriate analytical

framework, we address the choice of test before turning to its

application in this case.

1.

Where an employer argues that it discharged the

employee for reasons unrelated to his protected activity, such

as tardiness or poor work performance, we rely on the so-

called “mixed motive” or “dual motive” discharge test set

forth by the Board in Wright Line, 251 N.L.R.B. 1083 (1980),

enforced on other grounds, 662 F.2d 899 (1st Cir. 1981), and

20

approved by the Supreme Court in NLRB v. Transportation

Management Corp., 462 U.S. 393, 397-404 (1983), abrogated

by Dir., Office of Workers’ Comp. Programs v. Greenwich

Collieries, 512 U.S. 267 (1994). “Under this test, if the

General Counsel makes a prima facie showing that protected

conduct was a motivating factor in the employer’s decision,

the burden shifts to the employer to demonstrate that the

‘same action would have taken place even in the absence of

the protected conduct.’” NLRB v. Alan Motor Lines Inc., 937

F.2d 887, 889 (3d Cir. 1991) (quoting Wright Line, 251

N.L.R.B. at 20-21); accord D & D Distrib. Co. v. NLRB, 801

F.2d 636, 642 (3d Cir. 1986) (citing Transp. Mgmt. Corp.,

462 U.S. at 401-02). Wright Line is designed to preserve

what has long been recognized as the employer’s general

freedom to discharge an employee “for a good reason, a poor

reason, or no reason at all, so long as the terms of the [Act]

are not violated.” See Meyers Indus. (Meyers I), 268

N.L.R.B. 493, 497 n.23 (1984) (quoting NLRB v. Condenser

Corp. of America, 128 F.2d 67, 75 (3d Cir. 1942)).

We take a different approach in those “special

circumstances” where the employee is discharged for

allegedly engaging in misconduct during his protected

activities, id., providing employees heightened protection

against meritless suspicions of misconduct allegedly

committed in the course of these activities to prevent the

activities from “acquir[ing] a precarious status,” Burnup &

Sims, Inc., 379 U.S. 23. In such cases, an employer’s good

faith that an employee committed misconduct is not the last

word on the lawfulness of its adverse employment action:

“[§] 8(a)(1) is violated if it is shown that the discharged

employee was at the time engaged in a protected activity, that

the employer knew it was such, that the basis of the discharge

21

was an alleged act of misconduct in the course of that

activity, and that the employee was not, in fact, guilty of that

misconduct.” Tri-State Truck Serv., Inc., 616 F.2d at 69

(quoting Burnup & Sims, 379 U.S. at 23). Under this test,

after the employer carries its burden of showing that it held an

honest belief that the employee engaged in misconduct, the

burden then shifts to the General Counsel to “affirmatively

show that the misconduct did not in fact occur.” Pepsi-Cola

Co., 330 N.L.R.B. 474 (2000).

The ALJ applied the Burnup & Sims framework to

MCPc’s allegation that Galanter improperly accessed

confidential company information, reasoning that Galanter’s

alleged misconduct was not wholly unconnected to Galanter’s

February 24th statements so as to warrant the application of

Wright Line. The Board, in contrast, determined that Burnup

& Sims did not apply because Galanter allegedly accessed the

confidential records not in the course of the February 24th

lunch but prior to it. As for MCPc’s primary rationale for

discharging Galanter—his alleged dishonesty to Trebilcock—

neither the ALJ nor the Board acknowledged the need to

apply any test.10

10

The ALJ observed in a brief footnote that “[t]he

Company’s only contention that could qualify for Wright Line

analysis,” its allegation that Galanter had been discharged for

unrelated job performance, was pretextual and hence would

fail the Wright Line test. MCPc, Inc., 360 N.L.R.B. No. 39, at

*16. n.29. For the reasons set forth below, we conclude that

Wright Line is more broadly applicable than the ALJ

recognized, including to the contention that Galanter was

discharged for dishonesty. As to the question of job

performance, MCPc contends that it never argued that

22

We agree with the Board’s determination that, because

the misconduct did not take place during Galanter’s protected

discussion with management, Burnup & Sims is not the

correct test for analyzing his alleged improper access to

confidential company salary information. And although the

Board did not address MCPc’s charge that Galanter lied to

Trebilcock, we conclude that, for the same reason, Burnup &

Sims is not the appropriate framework for assessing

Galanter’s alleged dishonesty, which purportedly took place

after the protected activity. We recognize that in Burnup &

Sims the Supreme Court’s descriptions of the misconduct to

which the test applies alternated between misconduct “arising

out of” protected activity and misconduct occurring “in the

course of” protected activity, but close examination of the

Court’s reasoning reveals that both phrases refer narrowly to

misconduct that occurs during protected activity.

Specifically, in Burnup & Sims, to support the

observation that the Board has repeatedly ruled that an

employee should not be discharged for supposed misconduct

“arising out of a protected activity” if the misconduct did not

occur, the Supreme Court cited only Board cases involving

misconduct that allegedly took place while protected strike

activities were ongoing. See Burnup & Sims, 379 U.S. at 23

(citing Mid-Continent Petroleum Corp., 54 N.L.R.B. 912,

933-34 (1944) (where union members allegedly committed

unlawful seizure of company property and engaged in acts of

Galanter was discharged for the quality of his work and that it

introduced evidence of problems with Galanter’s work

performance at the hearing simply “in order to refute

counsel’s depiction of [Galanter] as a model employee.” J.A.

32a.

23

violence during a strike); Standard Oil Co. of Cal., 91

N.L.R.B. 783, 790-91 (1950) (where strikers were allegedly

discharged for acts such as throwing rocks during a strike);

Rubin Bros. Footwear, Inc., 99 N.L.R.B. 610, 610-12 (1952)

(where striker was allegedly violent toward another employee

attempting to return to work during the strike)). And in the

years since, the Board has consistently emphasized that

Burnup & Sims applies exclusively when the misconduct

occurs during protected activities, while Wright Line

generally does not apply. See, e.g., Yuker Constr. Co., 335

N.L.R.B. 1072, 1073 (2001) (finding that Burnup & Sims did

not apply where the alleged misconduct occurred during a

particular portion of the conversation that the Board deemed

unprotected); KSM Indus., Inc., 336 N.L.R.B. 133, 136 n.3

(2001) (observing that Wright Line does not apply where a

striker is discharged “for alleged misconduct during a

protected activity”).

The Board’s conclusion that Burnup & Sims does not

apply in this case also comports with its recent decision in

Fresenius USA Manufacturing, Inc., 362 N.L.R.B. No. 130,

2015 WL 3932160 (June 24, 2015). There, the Board applied

Wright Line to determine that, even assuming that the vulgar,

arguably threatening statements that a union supporter had

written on union newsletters in the employee break room

constituted protected activity, the employer had lawfully

discharged the employee for his dishonesty during the

legitimate company investigation that followed. Id. at *3. In

addition, we find instructive the D.C. Circuit’s approach in

Frazier Industrial Co. v. NLRB, 213 F.3d 750 (D.C. Cir.

2000). That court applied an analysis consistent with Burnup

& Sims to the employer’s first stated rationale for discharging

a union organizer—that the employee had allegedly harassed

24

workers while attempting to persuade them to sign union

cards; however, with respect to the employer’s second

rationale—that the employee was insubordinate and dishonest

to management about his protected activities—the D.C.

Circuit applied a Wright Line analysis because the alleged

dishonesty did not occur during the protected union

solicitation. Id. at 756-59; see also Shamrock Foods v.

NLRB, 346 F.3d 1130, 1136 (D.C. Cir. 2003) (explaining that

its Frazier analysis was consistent with the application of

Burnup & Sims for misconduct during protected activity and

Wright Line for misconduct that postdated the protected

activity).

Based on the foregoing, we hold that Wright Line is

the appropriate test for assessing whether, as MCPc contends,

it terminated Galanter for allegedly obtaining confidential

files in advance of the February 24th lunch and for his alleged

dishonesty to Trebilcock eight days after the lunch.11

11

This is not a case in which the employer’s motive

for questioning the employee was allegedly entirely unlawful,

such that the interrogation was itself a violation of the Act

and the employee’s alleged dishonesty therefore immaterial

for purposes of determining the lawfulness of the discharge.

Cf. 800 River Rd. Operating Co. LLC v. NLRB, 784 F.3d 902,

915 n.6 (3d Cir. 2015) (emphasizing that a legitimate internal

investigation does not necessarily constitute a violation of the

Act and that an employer’s justification for employee

interviews may overcome the coercive effect of an interview

on employees’ union activities). In such circumstances,

Wright Line is inapplicable, for an employee is under no

obligation to respond to unlawful questions about protected

activities, and even dishonesty in response to such questions

25

2.

Although it may be that in rejecting Burnup & Sims,

the Board meant to invoke Wright Line as the appropriate test

for analyzing the lawfulness of Galanter’s discharge, the

Board neither noted the applicability of Wright Line nor

applied it in this case. Instead, after acknowledging that the

ALJ had incorrectly applied Burnup & Sims to determine that

Galanter’s discharge was unlawful, the Board rested its

decision on the rationale that “even assuming the applicability

of Burnup & Sims,” MCPc would not prevail.12 MCPc, Inc.,

360 N.L.R.B. No. 39, at *2. Thus, whether or not we agreed

that substantial evidence in the record supported the Board’s

ultimate disposition, our disagreement with Board’s rationale

has been held an unlawful ground for discharging the

employee. See Spartan Plastics, 269 N.L.R.B. 546, 552

(1984).

12

The Board may have declined to apply Wright Line

on the grounds that MCPc “failed to except” to the ALJ’s

rejection of its Wright Line argument. See MCPc, Inc., 360

N.L.R.B. No. 39, at *2 n.8. But MCPc preserved its

argument that its stated rationales for Galanter’s discharge,

including Galanter’s dishonesty, were not pretextual, and, in

assessing any claim properly before it, the Board must apply

the correct legal standard to the relevant facts, Auciello Iron

Works, Inc., 317 N.L.R.B. 364, 366 (1995). In the same vein,

as the reviewing court, we “retain[] the independent power to

identify and apply the proper construction of governing law.”

Haybarger v. Lawrence Cnty. Adult Prob. & Parole, 667 F.3d

408, 413 n.3 (3d Cir. 2012) (alteration in original) (quoting

Kamen v. Kemper Fin. Servs., 500 U.S. 90, 99 (1991)).

26

would prevent us from affirming. See Konan v. Att’y Gen.,

432 F.3d 497, 501 (3d Cir. 2005) (“It is a bedrock principle of

administrative law that judicial review of an agency’s

decision is limited to the rationale that the agency provides.”).

Given the nature of the Board’s error, generally the

“proper course” would be to remand to the Board for

application of the correct legal test. Yusupov v. Att’y Gen.,

650 F.3d 968, 993 (3d Cir. 2011) (quoting Kang v. Att’y Gen.,

611 F.3d 157, 168 (3d Cir. 2010)). We deviate from this

practice, however, in “rare circumstances where application

of the correct legal principles to the record could lead only to

the same conclusion,” such that “there is no need to require

agency reconsideration.” Id. (internal quotation marks

omitted). We must consider whether this case presents that

rare circumstance, given the limited nature of the showing

MCPc must make to prevail under Wright Line and the

significant evidence in the record supporting MCPc’s

contention that it fired Galanter for improperly accessing

confidential information or, alternatively, for his dishonesty

to Trebilcock.

Under Wright Line, to credit MCPc’s contention that it

did not discharge Galanter for his statements at the February

24th lunch, the ALJ did not need to determine whether

Galanter actually improperly accessed confidential salary

information, or whether he was dishonest or simply misspoke

“under the heat of the CEO’s repeated questioning,”

N.L.R.B.’s Br. at 31. Once the General Counsel showed an

improper motivation for Galanter’s discharge, all that

remained was for the ALJ to determine whether Galanter

would have been fired on account of his alleged misconduct

regardless of any forbidden motivation. See Transp. Mgmt.

Corp., 462 U.S. at 401.

27

As for the evidence in the record supporting such a

determination, we take particular note of (1) the ALJ’s own

findings as to Galanter’s demeanor and statements while

being questioned by Trebilcock, which are consistent with the

testimony offered by both Galanter and Trebilcock, (2) the

ALJ’s finding that Galanter misled Trebilcock and, by

extension, the court, about the identity of the executive he

named during the February 24th lunch, and (3) physical

evidence tending to undermine Galanter’s assertion that he

obtained the salary information from the Internet.

First, and most significantly, the ALJ found that

Galanter was “purposely vague and evasive” when Trebilcock

questioned him about the source of the salary information and

that he gave “inconsisten[t]” statements to Trebilcock during

their meeting in Cleveland. MCPc, Inc., 360 N.L.R.B. No.

39, at *8 n.23. These findings align with Trebilcock’s

testimony about the factors that led him to conclude Galanter

was untrustworthy and should be discharged: Galanter

refused to provide a straight answer about where he had

obtained the salary information; Galanter had global access to

MCPc’s computer systems, including human resources data;

and, upon questioning, Galanter falsely implicated two

employees whom Trebilcock “trust[ed] . . . greatly” and who

had worked for MCPc for 15 years. J.A. 113a. Thus,

Trebilcock explained, because “everything . . . add[ed] up to a

lack of trust” and the heart of MCPc’s business was

maintaining the “integrity” of its customers’ data, Trebilcock

decided that he “could not move forward” with Galanter. J.A.

113a.

Moreover, Galanter’s equivocations are apparent from

his own testimony. Galanter acknowledged that he provided

Trebilcock shifting explanations for the source of the salary

28

information, including that no one had given him the

information, that it was available on the Internet, and that it

came from general “water cooler” talk among employees.

J.A. 90a. Upon further questioning by Trebilcock, Galanter

offered that the information may have come from Damin and

Jurkowski, and then, on cross examination, admitted that

neither employee had actually provided him the salary

information and expressed uncertainty as to whether he had

ever even discussed the topic of the executive’s salary with

them.

Second, the ALJ also determined that Galanter misled

Trebilcock about the identity of the executive Galanter had

named at the lunch. Concluding that, at the February 24th

lunch, Galanter had mentioned not Andy Jones but Peter

DeMarco, the executive recently hired at a salary of

$400,000, the ALJ decided that “it [was] more likely that

[Galanter] only invoked Jones’ [sic] name when confronted

by Trebilcock.” MCPc, Inc., 360 N.L.R.B. No. 39, at *8

nn.16, 22. In short, the ALJ found that Galanter provided

Trebilcock an untrue statement, a conclusion that should have

been deemed relevant in assessing MCPc’s assertion that

Galanter was fired for lying to Trebilcock. The ALJ’s finding

also bears on Galanter’s accuracy, if not honesty, under oath,

since Galanter also testified during the hearing that he never

mentioned DeMarco’s name.

Third, Galanter offered into evidence as Exhibit 6 a

printout of the website that he visited containing data that he

allegedly used to estimate the named MCPc executive’s

salary. As MCPc highlighted in its cross-examination of

Galanter, however, that printout bears a copyright date of

2012—thus on its face appearing to discredit Galanter’s

contention that he relied on this page over one year earlier at

29

the February 24, 2011 lunch. Although whether Galanter

actually gained improper access to the confidential company

files is not dispositive under Wright Line, which focuses on

the employer’s motivation for its adverse employment action,

the possibility that Galanter was fabricating evidence post-

hoc or giving false testimony seems highly relevant to the

ALJ’s credibility findings.

All of this evidence together supports MCPc’s

contention that it would have discharged Galanter regardless

of his statements at the February 24th lunch for improperly

obtaining salary information and then being dishonest about

his behavior. The ALJ nonetheless rejected MCPc’s

explanations as pretextual, apparently crediting Galanter’s

testimony over Trebilcock’s, and the Board adopted this

finding. Although we give conclusive effect to such findings

where supported by substantial evidence, Trafford Distrib.

Ctr. v. NLRB, 478 F.3d at 179, whether evidence is

substantial turns in part on whether due consideration has

been given to those portions of the record supporting the

contrary result. Tri-State Truck Serv., Inc., 616 F.2d at 69.

Here, certain aspects of the ALJ’s findings raise concerns

under this standard, including internal inconsistencies in those

findings, potentially significant misstatements of the record,

and the ALJ’s failure to address Exhibit 6.

Most glaringly, the ALJ’s rejection of MCPc’s stated

reasons for terminating Galanter as “merely a pretext

designed to manufacture [his] termination for unlawful

motives,” MCPc, Inc., 360 N.L.R.B. No. 39, at *16 (alteration

in original) (internal quotation marks omitted), conflicts with

its own extensive findings as to Galanter’s “inconsisten[t],”

“purposely vague and evasive” responses to Trebilcock. Id.

at *8 n.23.

30

In addition, the ALJ appears to have misapprehended

critical portions of the record. For instance, citing to pages

26-29 of the hearing transcript, the ALJ found that the audit

of MCPc’s systems “corroborated Galanter’s contention that

he did not engage in any unauthorized access of Company

files” and “undermine[d] the testimony of Company

witnesses who assumed that he did because of his access.”

Id. at *7 n.13. The testimony cited for this proposition,

however, is Galanter’s self-serving denial that he improperly

accessed the confidential information. Meanwhile, the

testimony of MCPc’s information technology manager, Jeff

Kaiser, actually was that the audit did show that Galanter had

access rights to confidential files to which he should not have

had access. Specifically, although MCPc could not determine

from the available data how Galanter had obtained the access

rights and whether Galanter had in fact exercised those rights,

Kaiser explained that Galanter had the technical capability to

grant access rights to himself using the administrative rights

that he was provided for purposes of implementing the call

center project.

In another instance, the ALJ appears to have placed

great weight on his belief that “[n]otwithstanding Galanter’s

inconsistencies as to his statements at the meeting, Trebilcock

conceded that he made the ‘gut feeling’ remark”—referring to

Galanter’s testimony that, just before firing him, Trebilcock

admitted to having a “gut feeling” that Galanter “didn’t do

anything wrong here.” Id. at *8 & n.23. Trebilcock’s

testimony, however, reflects no such concession. On the

contrary, Trebilcock testified that “my gut was telling me that

. . . everything was adding up to a lack of trust,” based on

“the fact that he had access to the [salary] information, and he

had already comprised [sic] two employees that have been

31

part of the organization for 15 years, you know, in effect lied

about that in my mind because I trust both of them greatly.”

J.A. 113a. Due consideration of the actual testimony

provided by these witnesses might have led the ALJ or the

Board to a different conclusion.

Lastly, neither the ALJ nor the Board addressed

Exhibit 6, the printout of the webpage that Galanter described

as the source of his information about the $400,000 salary

several weeks prior to the February 24, 2011 lunch but which

bore a 2012 copyright date. Although it is possible that the

date discrepancy on Exhibit 6 resulted from an automatic

update on the website in question, the ALJ made no such

finding and, indeed, no mention whatsoever of this evidence

in his decision.

In sum, the ALJ and Board’s determination that

Galanter was terminated for his protected statements at the

February 24th lunch does not appear to take into account

significant countervailing evidence in the record indicating

that MCPc would have discharged Galanter regardless of his

statements because it believed that he engaged in improper

data access, dishonesty, or both. See Tri-State Truck Serv.,

616 F.2d at 69 (citing Universal Camera Corp., 340 U.S. at

488).

That said, we are not persuaded that this is the

exceptional case where “there is no need to require agency

reconsideration.”13 Yusupov, 650 F.3d at 993. To prevail on

13

We do not suggest what conclusion the Board

should reach, in applying the correct test, as to whether

Galanter was discharged for engaging in protected activity.

Rather, we offer the observations above to illustrate why

32

a Wright Line defense, an employer must show that it has

applied its disciplinary rules regarding the conduct at issue

“consistently and evenly.” Septix Waste, Inc., 346 N.L.R.B.

494, 496 (2006). Thus the Board’s past decisions and our

own precedent suggest it also would be appropriate to remand

for the Board to take into account evidence of MCPc’s

expectations regarding employee integrity and honesty as set

forth in its policies, as well as its past practices in imposing

disciplinary measures for misconduct or dishonesty of the

kind alleged here. See Hanlon & Wilson Co. v. N.L.R.B, 738

F.2d 606, 616-18 (3rd Cir. 1984); D & D Distrib. Co., 801

F.2d at 642-43.

IV. Conclusion

For the foregoing reasons, while we agree with the

Board’s conclusion that Galanter engaged in protected

concerted activity during the February 24th lunch, we will

vacate and remand for the Board to consider under Wright

Line whether that activity or MCPc’s belief that Galanter

further agency consideration is appropriate. Among other

things, in reweighing the evidence under the proper legal

framework on remand, the Board may consider MCPc’s

original position statement, which asserted that MCPc

terminated Galanter for disclosing confidential salary

information, and which the Board’s General Counsel cites as

a clear admission as to the real reason for Galanter’s

discharge, N.L.R.B.’s Br. at 13. Although MCPc has argued

on appeal that it was improper for the ALJ to consider the

position statement, the Board’s case law is to the contrary.

See United Scrap Metal, Inc., 344 N.L.R.B. 467, 468-69 &

n.5 (2005).

33

engaged in misconduct or dishonesty formed the basis for his

discharge.

34