National Labor Relations Board v. Southwest Regional Council of Carpenters

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 14, 2012 Decided June 21, 2016

No. 11-1212

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

v.

SOUTHWEST REGIONAL COUNCIL OF CARPENTERS AND

GARNER/MORRISON LLC,

PETITIONERS

Consolidated with 11-1445, 11-1446

On Petitions for Review and Cross-Application for

Enforcement of Orders of the National Labor Relations Board

James A. Bowles argued the cause for petitioners. With

him on the brief was Daniel M. Shanley.

Nina Schichor, Attorney, National Labor Relations Board,

argued the cause for respondent. With her on the brief were

John H. Ferguson, Associate General Counsel, Linda

Dreeben, Deputy Associate General Counsel, and Julie

Broido, Supervisory Attorney. Jeffrey W. Burritt, Attorney,

entered an appearance.

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Before: GRIFFITH, Circuit Judge, WILLIAMS and

SENTELLE, Senior Circuit Judges.

GRIFFITH, Circuit Judge: This matter comes before us on

petitions for review and cross-application for enforcement of

orders of the National Labor Relations Board finding that both

the company and the union committed unfair labor practices.

After oral argument, we held this case in abeyance pending the

Supreme Court’s consideration of the validity of the

President’s recess appointments to fill vacancies on the Board

in NLRB v. Noel Canning, 134 S. Ct. 2550 (2014). Member

Becker, who was on the Board panel in this case, had been

appointed to the Board by the President during a 17-day

intra-session recess of the Senate. Following the Supreme

Court’s decision, this court held that Becker’s appointment

was valid. See Mathew Enter. v. NLRB, 771 F.3d 812, 814

(D.C. Cir. 2014). Following that decision, we removed this

case from abeyance. We now hold that the Board’s orders

failed to provide a reasoned justification for departing from

precedent and we grant the petitions for review, vacate the

orders, and remand.

I

Garner/Morrison, LLC (G/M) is a construction company

that provides drywall installation and painting services for

office buildings and commercial construction sites. Founded in

November 2003 by its current owners, Cliff Garner, his son

Gary Travis Garner, and Chris Morrison, G/M hired its first

employee, a carpenter, in December 2003 and immediately

entered into a collective-bargaining agreement with the

Southwest Regional Council of Carpenters (the Carpenters

Union). The agreement established the Carpenters Union as the

bargaining representative of any carpenter hired by G/M, as

well as any painters or tapers the company employed unless

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they were covered by a separate agreement with the

International Union of Painters and Allied Trades (the Painters

Union).

In April 2004, G/M hired painters and tapers who were not

already covered by a collective-bargaining agreement. In short

order, G/M entered into an agreement with the Painters Union

that covered those new hires. The agreements were set to last

until March 31, 2007. As that date approached, G/M, which

had grown dissatisfied with the Painters Union, began to

explore whether the Carpenters Union would cover its painters

and tapers. Representatives of the Carpenters Union told the

management of G/M that once the company’s agreements with

the Painters Union expired, the Carpenters Union, pursuant to

its agreement with G/M, would automatically offer health and

pension benefits to the newly hired painters and tapers. G/M

decided to let its collective-bargaining agreements with the

Painters Union expire and asked the Carpenters Union to meet

with the company’s painters and tapers.

The Carpenters Union scheduled a meeting for April 2,

2007, after working hours, in a hotel conference room. The

Union chose the time and place of the meeting and paid for the

conference room. G/M encouraged painters and tapers to go to

the meeting, but in no sense was their attendance mandatory.

All but one or two of the 25 or so painters and tapers at G/M

attended. Also present were 15 or 16 representatives from the

Carpenters Union, three employees from a health insurance

company that worked with the Carpenters Union, the three

owners of G/M, and one of their superintendents.

The conference room where the meeting was held was

large—about 75 feet long by 50 feet wide. At the front of the

room, several representatives of the Carpenters Union sat at a

table. G/M’s three owners and a superintendent sat in the first

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row of seats. The painters and tapers sat in rows behind them.

At two tables at the back of the room—some 65 feet away from

the front table—sat other representatives of the Carpenters

Union and employees of the health insurer.

As the meeting began, G/M owner Morrison told the

painters and tapers to listen to the Carpenters Union’s

presentation, which the company thought was “a good deal.” It

was the view of the company, he explained, that the Carpenters

Union was a “better choice” for the employees than the

Painters Union and “probably the way we want to go.”

Morrison’s comments endorsing the Carpenters Union took no

more than a few minutes. Following his remarks,

representatives of the Carpenters Union made their case for

why the painters and tapers should join with them, highlighting

the insurance benefits provided by the Carpenters Union, as

well as the wages the painters and tapers would receive if they

joined. They also explained how to pay dues. Their

presentation took about an hour, including time for questions

and answers. Finally, they told the painters and tapers that there

would be a sign-up in the back of the conference room. At that

point, the painters and tapers went to the back of the room

where agents from the health insurance company gave them

information on the benefits packages available through the

Carpenters Union, and Carpenters Union representatives urged

the employees to sign union authorization cards to signal that

they wanted to “designate the [Carpenters] [U]nion as their

collective-bargaining representative.” Pa. State Educ.

Ass’n-NEA v. NLRB, 79 F.3d 139, 143 (D.C. Cir. 1996).

During this entire time, the G/M owners and

superintendent stayed at the front of the room. They did not

join their employees in the back of the room with the

representatives of the Carpenters Union and the insurance

company. From about 60 or 70 feet away, the owners said that

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they could see the employees’ movements in the back of the

room, but they could not hear their conversations or see

whether they were signing authorization cards. After the

painters and tapers had spent several minutes with them in the

back of the room, the representatives of the Carpenters Union

walked to the front of the room and gave Morrison and fellow

owner Travis Garner signed union authorization cards from the

majority of G/M’s painters and tapers. They asked for

recognition of the Carpenters Union as the exclusive

bargaining agent of G/M’s painters and tapers. See 29 U.S.C.

§ 159(a). The owners of G/M signed an agreement on the spot.

That very day, the Painters Union filed election petitions

with the Board seeking to represent G/M’s painters and tapers

once again. The Painters Union faxed the petitions to G/M’s

office at the same time representatives of the Carpenters Union

were meeting with G/M’s owners and employees in the

conference room of the hotel. The G/M owners did not see the

petitions until they returned from the meeting, where they had

already signed an agreement that the Carpenters Union would

represent the painters and tapers.

The Painters Union filed an unfair labor practice charge

with the Board, and the General Counsel issued a complaint

alleging that G/M violated section 8(a)(1) of the NLRA by

engaging in unlawful surveillance of the painters and tapers at

the April 2 meeting. An employer’s surveillance of employees

is unlawful under section 8(a)(1) where it “interfere[s] with,

restrain[s], or coerce[s] employees in the exercise” of their

collective-bargaining rights. 29 U.S.C. § 158(a)(1); see also

Gold Coast Rest. Corp. v. NLRB, 995 F.2d 257, 266 (D.C. Cir.

1993), amended, No. 91-1533, 1993 WL 444597 (D.C. Cir.

Oct. 25, 1993). The complaint also alleged that G/M violated

section 8(a)(2) of the NLRA, which prohibits an employer

from unlawfully assisting a union, by being present at the

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meeting while the Carpenters Union collected authorization

cards and unlawfully recognizing the Carpenters Union as the

bargaining representative of the painters and tapers. See 29

U.S.C. § 158(a)(2). Finally, the complaint alleged that the

Carpenters Union improperly accepted G/M’s unlawful

recognition and assistance. See id. § 158(b)(1)(A).

After a two-day hearing, the ALJ recommended

dismissing the complaint. As to the allegation of unlawful

surveillance, the ALJ found that the presence of the company’s

owners at the meeting “had no tendency whatsoever toward

interfering with, restraining, or coercing the painters and tapers

in the exercise of their rights” under section 8(a)(1). As to the

section 8(a)(2) charge, the ALJ found “no evidence whatsoever

of illegal assistance” by G/M because the Carpenters Union

paid for the hotel and ran the meeting. And given that G/M did

not provide any illegal assistance, the ALJ concluded that the

Carpenters Union could not have unlawfully accepted such

assistance under section 8(b)(1)(A).

The Painters Union and the General Counsel filed

exceptions to the ALJ’s decision. A two-member panel of the

Board reversed the ALJ, concluding that G/M had engaged in

unlawful surveillance and had provided unlawful assistance to

the Carpenters Union, which the Carpenters Union unlawfully

accepted. Garner/Morrison, LLC, 353 N.L.R.B. No. 78 (2009).

G/M and the Carpenters Union petitioned for review in this

court. In light of the Supreme Court’s decision in New Process

Steel, L.P. v. NLRB, 130 S. Ct. 2635 (2010), which held that

Board panels with only two members lack authority to issue

decisions, we remanded the case to the Board for decision by a

three-member panel.

On remand, a panel of Chairman Liebman and members

Becker and Pearce unanimously adopted the Board’s previous

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decision, finding that the critical evidence that established a

violation of section 8(a)(1) was the G/M owners’ “presen[ce]

in the room while the employees were solicited to sign the

Carpenters’ documents and while employees responded to that

solicitation by proceeding to the back of the room where

documents were signed.” Garner/Morrison, LLC, 356

N.L.R.B. No. 163 (2011) (citing Morehead City Garment Co.,

94 N.L.R.B. No. 45 (1951)). The Board concluded that, “even

assuming the [G/M] executives could not see the exact

documents that were signed,” their presence “constituted

unlawful surveillance for the purpose of influencing

employees to switch their allegiance to the Carpenters.” Id.

And, due to “the unlawful surveillance that tainted acquisition

of a majority” of employees supporting the Carpenters Union,

the Board concluded that G/M unlawfully assisted the

Carpenters Union, which unlawfully accepted that help. To

remedy these unfair labor practices, the Board issued an order

that G/M cease recognition of the Carpenters Union as the

representative of the painters and tapers. Id.

G/M and the Carpenters Union filed a motion for

reconsideration, arguing that the Board’s determination had

ignored its holding in Coamo Knitting Mills, Inc., 150

N.L.R.B. No. 35 (1964), which was on point and controlling.

The Board thought otherwise, concluding that Coamo was a

much different case.

G/M and the Carpenters Union petition for review and the

Board cross-applies for enforcement of its orders. We have

jurisdiction under 29 U.S.C. § 160(e), (f).

II

We give “a very high degree of deference to

administrative adjudications by the NLRB.” Bally’s Park

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Place, Inc. v. NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011). But

our deference is not absolute. We will overturn the Board if its

“factual findings are not supported by substantial evidence,” or

if it “acted arbitrarily or otherwise erred in applying

established law to the facts of the case.” Comau, Inc. v. NLRB,

671 F.3d 1232, 1236 (D.C. Cir. 2012). A decision of the Board

that “departs from established precedent without a reasoned

explanation” is arbitrary. Id. Of course, the Board need not

address “every conceivably relevant line of precedent in [its]

archives,” but it must discuss “precedent directly on point.”

Lone Mountain Processing, Inc. v. Sec’y of Labor, 709 F.3d

1161, 1164 (D.C. Cir. 2013).

G/M and the Carpenters Union argue that the Board’s

decision was arbitrary and capricious because the Board did

not provide a reasoned justification for its departure from

Coamo Knitting Mills. We agree.

In Coamo, the General Counsel alleged that the company

had provided unlawful assistance and support to a union that

the union unlawfully accepted. 150 N.L.R.B. No. 35 at 583,

589. The charges stemmed in part from a meeting of the union

and the company’s employees. The Board found that the day

before the meeting, the company’s vice president urged his

employees to join the union. At the meeting, the vice president

introduced the union representative, then left, but another

member of management stayed. After a union representative

made his pitch to the employees to join the union, his

associates gave them authorization cards. Enough employees

signed the authorization cards to gain majority support for the

union. All this took place in the presence of a member of

company management. Id. at 581-82, 586.

At the trial, the examiner (now called an ALJ) determined

that the company and the union violated NLRA section 8, in

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part because the presence of management at the meeting

“necessarily had a coercive effect” on the employees. Id. at

589. The Board, however, disagreed. The representative of

management who stayed at the meeting testified that he could

not see the employees signing cards. Another witness

corroborated his testimony. Id. at 581-82. Further, company

management “made no attempt to ascertain which employees

even attended the meeting.” Id. at 582. According to the Board,

the “mere presence” of a member of management was not

coercive and therefore did not violate section 8. Id. at 582-83.

Coamo closely resembles this case. In both, the union held

a meeting for the company’s employees. In both, management

made statements in support of the union. In both, management

was present while union representatives spoke to employees

about why they should join the union and urged the employees

to sign union authorization cards. And in both, the signing of

those cards led to majority support for the union. Importantly,

in neither case did the Board conclude that the company

representative(s) saw what the employees were signing.

Not only are the facts in Coamo similar to the facts here,

but the legal issues in Coamo mirror those here. In both cases,

the Board examined whether the presence of management at a

union meeting where employees signed authorization cards

violated section 8(a)(1) and (a)(2). In both cases, the Board

looked at whether that conduct resulted in the union accepting

unlawful assistance under section 8(b)(1)(A).

The similarities between Coamo and the present case are

“significant enough” that the Board needed to provide a

reasoned explanation why Coamo “does not apply, or why

departure from [Coamo] is warranted.” Lone Mountain, 709

F.3d at 1164. The Board attempted to distinguish this case

from Coamo on the ground that Coamo did not involve a claim

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of unlawful surveillance. Although the Board in Coamo never

used the phrase “unlawful surveillance,” that is a distinction

without a difference. “Unlawful surveillance” is not a separate

statutory violation or cause of action in the NLRA. Section 8 of

the NLRA does not mention “unlawful surveillance”; instead it

prohibits an employer from “interfer[ing] with, restrain[ing],

or coerc[ing] employees in the exercise” of their protected

rights, 29 U.S.C. § 158(a)(1), and from “dominat[ing] or

interfer[ing] with the formation or administration of any labor

organization,” id. § 158(a)(2). As used by the Board and this

court, “unlawful surveillance” is simply shorthand for a type of

conduct that “interferes with, restrains or coerces the employee

in the exercise of protected organizational activities.” Gold

Coast, 995 F.2d at 266. The Board evaluated nearly identical

conduct and the same legal questions here and in Coamo. The

only material difference was the result. Without any other

justification for distinguishing Coamo, the Board’s decision

cannot stand.

In its brief to this court, the Board offers new reasons for

not following Coamo in this case. The Board contends that the

facts here are “starkly different” from those in Coamo because

G/M “corralled its employees to an off-site meeting” where all

the G/M owners “could watch as the Carpenters solicited

employees to sign cards.” Resp’t Br. at 29. Even if the Board

had explained the relevance of these alleged factual

differences, we cannot address this argument because it did not

appear in the Board’s orders below. We “may consider only the

Board’s own reasons, not the rationalizations of counsel.”

Charlotte Amphitheater Corp. v. NLRB, 82 F.3d 1074, 1080

(D.C. Cir. 1996) (citing SEC v. Chenery Corp., 318 U.S. 80, 95

(1943)). The Board’s order denying reconsideration relies

solely on the absence of a claim of unlawful surveillance in

distinguishing Coamo, not on any factual differences between

the cases. Accordingly, we “reject[ ] the temptation to supply

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reasons to support the Board’s decision that the Board itself has

not offered.” Detroit Newspaper Agency v. NLRB, 435 F.3d

302, 311 (D.C. Cir. 2006). We note, however, that nothing

precludes the Board from making such a distinction on remand

if supported by the record. See Lone Mountain, 709 F.3d at

1164.

G/M and the Carpenters Union also assert that the Board’s

decision was not based on substantial evidence and the Board’s

remedy was improper. Because we hold that the Board did not

adequately distinguish Coamo and grant the petitions for

review on that ground, we need not reach the remaining

arguments.

III

We grant the petitions for review, deny the Board’s

cross-application for enforcement, vacate the Board’s orders,

and remand.