Bellagio, LLC v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 7, 2017 Decided July 18, 2017

No. 16–1191

BELLAGIO, LLC, D/B/A BELLAGIO LAS VEGAS, ET AL.,

PETITIONERS

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with 16-1192, 16-1256, 16-1258

On Petitions for Review and Cross-Applications

for Enforcement of Orders of

the National Labor Relations Board

Paul T. Trimmer argued the cause for the petitioners.

Gary C. Moss was with him on the briefs.

David Casserly, Attorney, National Labor Relations

Board, argued the cause for the respondent. Richard F.

Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy

General Counsel, John H. Ferguson, Associate General

Counsel, Linda Dreeben, Deputy Associate General Counsel,

Usha Dheenan, Supervisory Attorney, and Marni Von Wilpert,

Attorney, were with him on the brief.

2

Before: HENDERSON and SRINIVASAN, Circuit Judges, and

GINSBURG, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge HENDERSON.

Opinion concurring in part and dissenting in part filed by

Circuit Judge SRINIVASAN.

KAREN LECRAFT HENDERSON, Circuit Judge:

“In Vegas, everybody’s gotta watch everybody

else. Since the players are looking to beat the

casino, the dealers are watching the players.

The boxmen are watching the dealers. The

floormen are watching the boxmen. The pit

bosses are watching the floormen. The shift

bosses are watching the pit bosses. The casino

manager is watching the shift bosses. I’m

watching the casino manager. And the eye in

the sky is watching us all.”

—Sam “Ace” Rothstein, CASINO (Universal Pictures 1995).

Because they are luxury casino resorts, petitioners

Bellagio and The Mirage (collectively, casinos) have

extraordinary security needs. Each has a high-end jeweler.

Bellagio boasts an art gallery that has displayed Fabergé eggs

and the works of Picasso. Both casinos house an array of slot

machines, gaming tables, count rooms and cages containing

vast amounts of cash and cash-equivalent gaming chips. To

protect all of that valuable property—not to mention the

property and physical safety of guests who hope to win big or

have a good time trying—each of the casinos relies on a

sophisticated network of surveillance cameras, locks, alarms

and computers. The equipment is essential for deterring,

detecting and recording wrongdoing, including misdeeds at the

3

hands of the casinos’ own employees. And when those

employees are suspected of wrongdoing, the casinos use

hidden cameras to conduct targeted investigations.

We must decide whether the surveillance technicians

(techs) who control the casinos’ surveillance, access and alarm

systems and help to investigate errant employees are “guards”

under section 9(b)(3) of the National Labor Relations Act

(Act), 29 U.S.C. § 159(b)(3). Designed to avert employee

conflicts of interest, section 9(b)(3) precludes the National

Labor Relations Board (Board) from certifying a union to

represent “guards” who “enforce,” against colleagues and other

persons, “rules to protect property of the employer or to protect

the safety of persons on the employer’s premises[.]” Id. The

Board’s Regional Director found that the techs do not enforce

such rules and so are not guards. Thereafter, the Board

certified the International Union of Operating Engineers Local

501 (Union)—which represents several non-guard employees

of the casinos—as the exclusive collective-bargaining

representative for a unit of techs at each casino. The casinos

refused to bargain with the Union. The Board concluded that

the casinos thereby violated section 8(a)(1) and (5) of the Act,

29 U.S.C. § 158(a)(1), (5). 1 In two materially identical

1

Section 8(a)(1) makes it “an unfair labor practice for an

employer . . . to interfere with, restrain, or coerce employees in the

exercise of the rights guaranteed in” section 7, including the right “to

bargain collectively through representatives of their own

choosing[.]” 29 U.S.C. §§ 157, 158(a)(1). Section 8(a)(5) makes

it “an unfair labor practice for an employer . . . to refuse to bargain

collectively with the representatives of his employees[.]” Id.

§ 158(a)(5). “Because of the overlap in provisions, an employer

who violates section 8(a)(5) also, derivatively, violates section

8(a)(1).” Scomas of Sausalito, LLC v. NLRB, 849 F.3d 1147, 1153

n.3 (D.C. Cir. 2017) (internal quotation omitted).

4

decisions, it ordered each casino to recognize and bargain with

the Union.

The casinos petition for review of the Board’s orders.

The Board seeks enforcement. We grant the casinos’

petitions, deny the Board’s cross-applications for enforcement

and vacate the Board’s decisions and orders, which are contrary

to the record evidence considered as a whole. 29 U.S.C.

§ 160(e), (f). On our view of the record, the techs’ day-to-day

duties—sensitive ones peculiar to the modern gaming

industry—call for them to enforce against coworkers and

others the rules that protect the casinos’ property and guests.

Accordingly, under section 9(b)(3), the techs are guards who

can be represented only by an all-guard union.

I. BACKGROUND

Guard status is a “factual question[]” tied to the particulars

of each case. Burns Int’l Sec. Servs., 278 NLRB 565, 569

(1986). Whether specific employees are guards “can be

answered only by carefully examining their duties.” Id. We

therefore discuss the techs’ duties in detail, drawing our

descriptions from the testimony that casino personnel gave

during representation hearings conducted by a Board hearing

officer. We then summarize the Board proceedings.

A. THE TECHS’ DUTIES IN CONTEXT

MGM Resorts International owns and operates several

casino resorts in Las Vegas, Nevada, including petitioners

Bellagio and The Mirage. For the most part we do not

differentiate between the two casinos because their practices,

as relevant to this case, are all but identical.

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1. Surveillance and security

Each of the two casinos has a surveillance department and

a security department. As required by Nevada law—which

provides that a licensed casino must have a “surveillance

system . . . to assist the licensee and the state in safeguarding

the licensee’s assets [and] in deterring, detecting and

prosecuting criminal acts,” NEV. GAMING REG. 5.160(2)—each

casino’s surveillance department uses a network of high-tech

cameras to oversee slot machines, gaming tables, count rooms

and cashier cages. The cameras transmit live footage to a

monitor room, where two to four surveillance operators per

shift watch the footage in real time for suspicious activity, and

to a server room, where the footage is stored on a “really fancy”

“s[o]uped-up” computer system for future use. Mirage Tr. 54.

Stored footage is critical because hundreds of cameras (about

1,100 at Bellagio and 700 at The Mirage) canvass the gaming

floor; the few on-duty operators cannot see everything as it

happens.

Ultimately, the surveillance department’s job is to protect

the casino’s property and guests “according to policy and

procedure,” especially by ensuring that dealers and players do

not cheat the games. Mirage Tr. 32. The security department

has the same job but with an additional focus on non-gaming

areas such as the jewelers and art gallery, retail and recreational

areas, hotel towers, parking garages and employee-only

locations. In other words, security officers patrol the entire

resort for potential threats to the “security of the guests, the

employees and the property itself.” Id. at 172. A second

camera system, not subject to gaming regulations, covers the

non-gaming areas. The security officers monitor non-gaming

video feeds in their own monitor room. The officers on patrol

respond to reports from that room and from the surveillance

department’s monitor room. In the event of cheating or a

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safety threat, the officers take appropriate action such as

restraining a patron or escorting him off the property.

2. The techs

The techs work with both the surveillance and security

departments and have wide-ranging duties. They are charged

with designing, installing and maintaining the surveillance

department’s gaming-floor camera system in a manner that

complies with Nevada gaming regulations. Maintenance does

not mean merely fixing broken equipment. The gaming-floor

setup is often in flux. On the frequent occasions when slot

machines and table games are moved, the techs must adjust the

camera coverage so that it still captures all of the legally

required information, including the identity of dealers and

players, card ranks and suits, bets, payouts and the like. By

law, the coverage must be adequate to prevent cheating. Thus,

the techs are in frequent and direct contact with both the

surveillance monitor room and Nevada’s Gaming Control

Board, proposing coverage, taking pictures, making

submissions on deadline and obtaining the necessary

regulatory approvals.2

2

As an example, Bellagio techs in 2015 designed and installed

ad hoc surveillance coverage for a Super Bowl party involving an

auxiliary sports book and gaming pit. One of the techs was in direct

communication with the Gaming Control Board, forwarded a

proposed layout and obtained the necessary regulatory approval.

That was consistent with standard practice: about once a month on

average the techs must configure and get regulatory approval for

coverage of a special gaming event. See, e.g., Mirage Tr. 66-68

(auxiliary betting stations for fight between Floyd Mayweather and

Manny Pacquiao); Bellagio Tr. 75-83 ($500,000 baccarat

tournament).

7

The techs also oversee the server room and are solely

responsible for the elaborate computer system that manages

“[b]asically every aspect of . . . digital surveillance,” including

not only the surveillance department’s cameras but the security

department’s as well. Bellagio Tr. 58. No one except the

techs and the surveillance director work on that computer

system or on the cameras and related equipment maintained

throughout the casino. And because the techs and the

surveillance director are “the keepers of the system,” id. at 101,

only they can unilaterally turn video feeds on and off; add and

delete cameras and users; restrict a user’s access to particular

views and footage; stop cameras from recording; and delete

footage from the server. The surveillance operators and

security officers have no such authority. In practical terms,

then, a tech can significantly affect what an operator or officer

sees on video at any given moment.

The surveillance operators and security officers rely on

and communicate daily with the techs. The operators and

officers report any problem with coverage or equipment so that

the techs can correct it. The techs train the operators and

officers on how to use the computers, change camera views and

archive video files. The techs also help the operators and

officers extract footage from the server for evidentiary use.

And if tampering with a camera is suspected, the techs, not the

operators or officers, are the ones who investigate.3

3

Surveillance operators and security officers are on-site 24

hours a day, whereas the techs’ on-site hours run between about 3:00

a.m. and 2:00 p.m., when their work on the gaming floor is least

likely to interfere with business. But because the surveillance

system is “vital” to operations, Bellagio Tr. 122, because

malfunctions can “jeopardize” the casinos’ gaming licenses, id. at

8

Moreover, the techs’ duties reach well beyond everyday

camera coverage. The techs maintain each casino’s electronic

access system. The access system consists of code-activated

magnetic locks that control access to “sensitive area[s]” like the

server room, the monitor rooms, the art gallery, executive

offices, count rooms and the main casino cage — the last of

which is subject to especially restrictive controls because it is

“the hub of all gaming funds” and is much “like [a] bank” in

the amount of money it houses. Mirage Tr. 58; Bellagio Tr.

89, 93. Only the techs and the surveillance director have

electronic control over the access system. Accordingly, and

although they act at the direction of human resources and other

supervisory personnel, only the techs and the surveillance

director can program the codes that limit each employee’s

access to specific locations within the casino. The techs

themselves have full access to all areas because they must tend

to cameras and equipment “almost everywhere.” Bellagio Tr.

145.

As with the access system, the techs install and maintain

computerized alarm systems for jewelry, art displays, count

rooms and cages. No other employees do such work. The

techs have the ability to arm and disarm the alarms. And if a

miscreant defeats an alarm, the techs investigate how he did so.

Finally, and perhaps most importantly for our purpose,

techs often participate in targeted investigations of fellow

employees suspected of wrongdoing. In the typical

investigation—known as an “integrity check,” a “special

operation[]” or simply a “special[],” Bellagio Tr. 105, 177,

183—the tech either installs a purpose-built covert camera

somewhere in the target employee’s work area or “lock[s]” an

38, and because no one else can perform the techs’ work, at least one

tech remains on call at all times.

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existing camera onto the area without the employee’s

knowledge. 4 Mirage Tr. 110-11. Special operations are

conducted, on average, about once or twice per month.

Because the tech has to devise coverage that will capture the

suspected misconduct, he is usually given “[s]pecifics” like the

“nature” of the misconduct and “what kind of employee” is

suspected of it. Id. at 105-06; see id. at 164, 190, 195 (tech

typically knows why he is setting up coverage in specific area);

but see id. at 106 (tech typically is not given target employee’s

name).

Although a tech’s role in a special operation is limited to

ensuring proper coverage and retrieving footage afterward, his

participation is essential: no other employees devise and install

secret cameras. Also, the surveillance and security personnel

conducting the investigation count on the tech to coordinate

with them, especially to maintain secrecy. Just as “what

happens in Vegas stays in Vegas,” see History of Las Vegas,

LAS VEGAS CONVENTION AND VISITORS AUTHORITY,

www.lvcva.com/stats-and-facts/history-of-las-vegas/ (noting

tagline coined in 2003), the casinos have a “policy” that

“whatever happens in surveillance doesn’t leave,” Bellagio Tr.

139-40. During a special operation, a tech is not to disclose

its existence to personnel who do not need to know about it.

4

Again as an example, The Mirage’s techs in 2015 hid a

camera inside a clock radio within a staged guest room to catch a

housekeeper stealing items planted in the room. That was consistent

with standard practice. See, e.g., Mirage Tr. 92-94 (techs installed

covert camera in air duct to investigate graveyard-shift supervisor

suspected of sleeping on job); id. at 196-98 (techs installed covert

camera in ceiling to investigate security employee suspected of

stealing lost-and-found items); Bellagio Tr. 179-81 (techs installed

covert camera in ceiling to investigate poker dealer suspected of

stealing from coworkers).

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Indeed, to ensure that the operation is not compromised, the

tech must sometimes use his control over the computer system

to “cut off” video coverage to some employees and tell them a

“story” that the system is malfunctioning. Id. at 175-76.

The foregoing duties are sensitive and important enough

that the techs are considered “key employees” under Nevada’s

gaming regulations. Mirage Tr. 50-51. A key employee is

one who has “the power to exercise a significant influence over

decisions concerning any part of the operation of a gaming

licensee . . . .” NEV. GAMING REG. 3.110(1). Casinos subject

key employees to special restrictions and background checks.

And so it is with the techs. Because of the techs’

comprehensive knowledge and access, the casinos must put

“quite a bit of trust . . . in [their] integrity.” Bellagio Tr. 138.

The techs are therefore subject to more stringent background

checks than are most other employees, including security

officers.

Having detailed what the techs do, we complete the picture

by describing what they do not do. Unlike a security officer,

a tech does not carry a weapon or handcuffs; does not patrol

the resort for misconduct; does not restrain an unruly guest; and

does not physically confront a cheater or a thief. Unlike an

officer or surveillance operator, a tech does not watch live

feeds or stored footage for wrongdoing and does not document

it.5 And when a tech participates in a special operation, he

does not confront or interview the targeted employee.

5

Like all other employees, however, a tech is expected to

report suspicious activity when he encounters it.

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B. THE BOARD PROCEEDINGS

The Union petitioned the Board for certification under

section 9(c) of the Act, 29 U.S.C. § 159(c), seeking to represent

a bargaining unit of all the techs at each of the two casinos.

On each of its two petitions, the Union did not fill out Box 7,

which asked whether it had requested recognition from the

respective casino and what the result was. The casinos moved

to dismiss the petitions, relying on 29 C.F.R. § 102.61(a). In

pertinent part, section 102.61(a) provides that “[a] petition for

certification . . . shall contain . . . [a] statement that the

employer declines to recognize the petitioner as the

representative” of the bargaining unit the petitioner claims is

appropriate. Id. § 102.61(a)(8). The Board’s Regional

Director denied the casinos’ motions, rejecting their argument

that section 102.61(a) required dismissal.

The casinos then opposed the petitions on the merits. As

relevant here, they argued that the techs are guards under

section 9(b)(3) of the Act, precluding the Board from certifying

the Union as the techs’ representative because the Union

represents non-guard employees.6

A hearing officer conducted hearings on both of the

Union’s petitions. At the outset, the Union asked the casinos

for recognition. The casinos declined. Casino personnel

then testified to the techs’ duties as described above.

6

The casinos also argued that the techs are “confidential

employees.” See NLRB v. Hendricks Cty. Rural Elec. Membership

Corp., 454 U.S. 170 (1981). They renew that contention here but

we do not consider it in light of our conclusion that the techs are

guards.

12

After reviewing the testimony, the Regional Director

concluded that the techs are not guards, reasoning that their

“responsibilities are limited to the installation, modification,

removal, and maintenance of the video monitoring system.”

Joint Appendix (JA) 438, 881. In the Regional Director’s

view, the techs do not “enforce rules to protect property or

persons” because they “make no rounds, and are required to

watch for nothing other than issues affecting the surveillance

system.” JA 438-39, 881. The Regional Director noted the

techs’ role in special investigations and their control over other

employees’ access to the surveillance system and to sensitive

areas within the casino. But he gave no weight to those facts

and stated that installing cameras “to assist others” in enforcing

rules is “insufficient” for guard status. JA 439, 881.

The Regional Director found Bellagio’s techs to be one

appropriate bargaining unit and The Mirage’s techs to be

another. He ordered that a representation election be

conducted for each unit. In each case, the techs voted for the

Union, which was thereafter certified as the exclusive

collective-bargaining representative for each unit. The

casinos sought review before the Board, which denied it on the

ground that the casinos had “raise[d] no substantial issues.”

JA 443, 885. In a footnote, the Board “agree[d]” with the

Regional Director’s analysis of the guard issue. JA 443 n.1,

885 n.1. It added that “the Board and the courts have long

rejected the notion that individuals should be deemed guards

because their installation or maintenance of equipment is an

integral part of a larger security system that other individuals

actually operate.” Id. (citing Wells Fargo Alarm Servs. v.

NLRB, 533 F.2d 121, 124 (3d Cir. 1976); Am. Dist. Tel. Co.,

160 NLRB 1130, 1138 (1966)).

The casinos could not seek judicial review at that point,

see Magnesium Casting Co. v. NLRB, 401 U.S. 137, 139

13

(1971), so they refused to bargain with the Union and renewed

their claims in defense against the Union’s unfair labor practice

claims. In May 2016, the Board issued two materially

identical decisions concluding that each casino violated section

8(a)(1) and (5) of the Act by refusing to bargain. In each

instance, it ordered the respective casino to recognize and

bargain with the Union.

II. ANALYSIS

The casinos now seek review in this Court, urging that (1)

the Union’s petitions should have been dismissed for failure to

comply with 29 C.F.R. § 102.61(a); and (2) the techs are guards

under section 9(b)(3) of the Act. We reject the first claim but

agree with the second.

A. THE CASINOS’ PROCEDURAL OBJECTION

The casinos’ objection under section 102.61(a) need not

detain us long. As noted, the provision states in relevant part

that “[a] petition for certification . . . shall contain . . . [a]

statement that the employer declines to recognize the petitioner

as the representative” of the bargaining unit the petitioner

claims is appropriate. 29 C.F.R. § 102.61(a)(8). The casinos

argue that “shall” means compliance is mandatory. That may

well be so. See Alabama v. Bozeman, 533 U.S. 146, 153

(2001) (“The word ‘shall’ is ordinarily the language of

command.” (some internal quotations omitted)). And there is

no disputing that the Union’s certification petitions fell short.

Box 7 of the standard-form petition asks whether and when the

petitioner requested recognition and if the employer declined

or simply did not respond. Here, the Union left Box 7 blank.

But the casinos cite no authority for the proposition that

dismissal is always the remedy for a non-compliant petition.

They contend that “[p]rocedural due process requires the

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[Board] to adhere to its own rules.” Br. of Pet’rs 41.

Assuming arguendo they are correct, the assertion gets them

nowhere; the text of section 102.61(a) does not dictate

dismissal for a violation, let alone a de minimis violation cured

at the representation hearing.7 That is what happened at the

hearings here: the Union sought recognition and the casinos

declined. The casinos do not contest that the violation was

thereby cured. Indeed, they conceded at oral argument that

they suffered no prejudice. Oral Arg. Recording 2:00-2:26,

5:55-5:57.

The Board has held that a union’s failure to state in a

certification petition that “it has requested recognition and the

employer has declined” may be cured at the representation

hearing. Aria Resort & Casino, LLC, 363 NLRB No. 24, at 1

(2015). Similarly, at least one court of appeals has concluded

that “it would be [a] senseless technicality” to require dismissal

“where the demand and refusal of recognition [is] established

at the hearing itself.” NLRB v. Superior Cable Corp., 246

F.2d 539, 540 (4th Cir. 1957) (per curiam). We see no good

reason to part company with the Board and a sister circuit on

this issue, especially in view of the deference we owe the

Board’s interpretation of its own regulation. Rush Univ. Med.

7

The lack of a text-mandated consequence in section

102.61(a) distinguishes it from section 102.62(d), which the casinos

also cite. Section 102.62(d) provides that an employer’s violation

of certain voting procedures “shall be grounds for setting aside the

election whenever proper and timely objections are filed.” Section

102.62(d) thus makes section 102.61(a)’s silence more deafening:

the Board plainly “knows how to” mandate a particular remedy

“when it wants to.” Atl. Sounding Co. v. Townsend, 557 U.S. 404,

416 (2009) (internal quotation omitted).

15

Ctr. v. NLRB, 833 F.3d 202, 206-07 (D.C. Cir. 2016); see Auer

v. Robbins, 519 U.S. 452, 461 (1997).

B. THE TECHS’ GUARD STATUS

That brings us to the gravamen of the case. Are the

casinos’ surveillance technicians “guards” under section

9(b)(3) of the Act? Because the question is predominantly

factual, Burns Int’l Sec. Servs., 278 NLRB at 569, we will

disturb the Board’s determination only if it is “[un]supported

by substantial evidence on the record considered as a whole,”

29 U.S.C. § 160(e), (f); see Local 851, Int’l Bhd. of Teamsters

v. NLRB, 732 F.2d 43, 44 (2d Cir. 1984) (per curiam). The

standard is deferential but not abject: “We may not find

substantial evidence merely on the basis of evidence which in

and of itself justified the Board’s decision, without taking into

account contradictory evidence or evidence from which

conflicting inferences could be drawn.” NLRB v. Tito

Contractors, Inc., 847 F.3d 724, 732-33 (D.C. Cir. 2017)

(internal quotations and brackets omitted); see Universal

Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) (“The

substantiality of evidence must take into account whatever in

the record fairly detracts from its weight.”).

1. Section 9(b)(3)

We cannot properly appraise the evidence of the techs’

guard status without first understanding what a guard is. So

“[w]e begin, as we must, with the text of the statute.”

NetCoalition v. SEC, 715 F.3d 342, 348 (D.C. Cir. 2013).

Section 9(b)(3) of the Act precludes the Board from

decid[ing] that any unit is appropriate for

[collective-bargaining] purposes if it includes,

together with other employees, any individual

employed as a guard to enforce against

16

employees and other persons rules to protect

property of the employer or to protect the safety

of persons on the employer’s premises; but no

labor organization shall be certified as the

representative of employees in a bargaining unit

of guards if such organization admits to

membership, or is affiliated directly or

indirectly with an organization which admits to

membership, employees other than guards.

29 U.S.C. § 159(b)(3). The Board concedes that the Union

“admits to membership . . . employees other than guards,” id.,

and that the Union therefore cannot represent the techs if they

are guards, Br. of Resp’t 23; see Truck Drivers Local Union

No. 807 v. NLRB, 755 F.2d 5, 8 (2d Cir. 1985) (noting that

second clause of section 9(b)(3) “denies” union representing

non-guards “the right to be certified as a representative of a unit

of guards”). The question, then, is whether a tech is an

“individual employed as a guard to enforce against employees

and other persons rules to protect property of the employer or

to protect the safety of persons on the employer’s premises.”

29 U.S.C. § 159(b)(3).

As a threshold matter, the casinos contend that a tech is a

guard if he is an “individual employed . . . to enforce . . . rules

to protect property of the employer” or if he is an “individual

employed . . . to protect the safety of persons on the employer’s

premises.” On the casinos’ interpretation, an employee who

protects patron safety can be a guard even if he does not

“enforce . . . rules.” The casinos forfeited that contention by

waiting until their reply brief to advance it. Bartko v. SEC,

845 F.3d 1217, 1225 n.7 (D.C. Cir. 2017). In any case, their

interpretation is unsound. It ignores the “rule of the last

antecedent,” under which we presume—absent indicia to the

contrary—that a modifier does not reach back to a previous

17

phrase if it can be read to modify a more proximal one.

Barnhart v. Thomas, 540 U.S. 20, 26 (2003) (internal quotation

omitted). In section 9(b)(3), the phrase “to protect the safety

of persons on the employer’s premises” does not reach back to

modify “individual employed as a guard”; instead it describes

the “rules” “enforce[d]” by that individual. After all, the same

sentence first mentions “rules to protect property of the

employer.” 29 U.S.C. § 159(b)(3) (emphasis added). It

makes sense to read the second iteration of “to protect” in

parallel fashion — i.e., to modify “rules” just as the first

iteration of “to protect” does. Cf. Mills Music, Inc. v. Snyder,

469 U.S. 153, 164-65 (1985) (“It is logical to assume that the

same word has the same meaning when it is . . . used earlier in

the same sentence.”). In short, some guards enforce rules to

protect the employer’s property and other guards enforce rules

to protect people on the premises. But an employee cannot be

a guard unless he enforces rules, be they the former kind or the

latter (or both).

Because a tech is a guard only if he “enforce[s] . . . rules”

to protect the casinos’ property or patrons, we examine the

meaning of “enforce.” The leading law dictionary gives it a

broad definition: to “enforce” rules is “[t]o give force or effect

to” them. BLACK’S LAW DICTIONARY 645 (10th ed. 2014).

Similarly, the Board has long construed the concept “very

broadly” in a manner that does not require “personal

confrontation.” McDonnell Aircraft Co. v. NLRB, 827 F.2d

324, 327 (8th Cir. 1987) (citing Board cases). In Wright

Memorial Hospital, 255 NLRB 1319 (1980), for instance, the

Board concluded that ambulance drivers who were “on the

lookout for fire, theft, vandalism, and unauthorized personnel”

were guards. Id. at 1320. In the Board’s view, it did not

matter that when the drivers “discover[ed] an irregularity or

violation,” they took “no action on their own” but instead

informed a department head. Id. The Board deemed it

18

“sufficient” that the drivers had “responsibility to observe and

report infractions, as this is an essential step in the procedure

for enforcement of hospital rules.” 8 Id.; see id. (“It is

immaterial that [the drivers] do not themselves enforce these

rules.”).

The Board applied the same expansive interpretation in

MGM Grand Hotel, 274 NLRB 139 (1985). It held that the

operators of an electronic fire and security system at a Las

Vegas hotel were guards. Id. at 139-40. Two operators per

shift “monitor[ed] door exit alarms, stairwell motion detectors,

a watch tour system, and other systems.” Id. at 139. The

operators were only to observe and report; they left it to

security officers to “deal[] with cheating, injury, theft,

misconduct, and illness.” Id. Much as in Wright Memorial

Hospital, the Board reasoned that the operators’ lack of direct

contact with wrongdoers did “not detract from their guard

status” because they performed “an essential step in the

procedure for the enforcement of the employer’s rules.” Id. at

140 n.10 (brackets omitted) (quoting A.W. Schlesinger

Geriatric Ctr., 267 NLRB 1363, 1364 (1983)).

Congressional intent, discernible from plain language,

supports the broad interpretation in Wright Memorial Hospital

and MGM Grand Hotel. The statute provides that a guard is

someone who enforces rules “against employees and other

persons.” 29 U.S.C. § 159(b)(3) (emphasis added). The

Congress’s purpose in passing section 9(b)(3) was “to

minimize the danger of divided loyalty that arises when a guard

8

The Board’s expansive interpretation has led to guard status

for a diverse array of employees, not only quintessential guards like

security officers. See McDonnell Aircraft, 827 F.2d at 326 (citing

cases involving, e.g., “unarmed courier service drivers,” “fitting

room checkers,” “timekeepers” and “receptionists”).

19

is called upon to enforce the rules of his employer against a

fellow union member.” Drivers, Chauffeurs, Warehousemen

& Helpers v. NLRB, 553 F.2d 1368, 1373 (D.C. Cir. 1977)

(Drivers & Chauffeurs); see BPS Guard Servs., Inc. v. NLRB,

942 F.2d 519, 526 (8th Cir. 1991) (“danger of divided loyalty”

is “measuring stick of Section 9(b)(3) status” (internal

quotation omitted)). And monitoring one’s fellow union

members can result in conflicts of interest without personal

confrontation.

In its brief and at oral argument, the Board suggested the

Congress’s purpose is implicated only “during periods of

strikes or labor unrest.” Br. of Resp’t 23-24; see Oral Arg.

Recording 23:29-23:39 (“[T]he question of divided loyalty is

actually as to whether these guards would, say, refuse to cross

a picket line or refuse to actually enforce a rule against another

employee.”); id. at 27:01-27:05 (“[T]he policy stems from

workplace disputes . . . .”). Granted, the Congress “may have

had plant guards primarily in mind” when it enacted section

9(b)(3), inasmuch as it was “[r]eacting to” United States

Supreme Court cases involving plant-protection employees.

Drivers & Chauffeurs, 553 F.2d at 1373 (internal quotation

omitted) (citing NLRB v. Jones & Laughlin Steel Corp., 331

U.S. 416 (1947); NLRB v. E.C. Atkins & Co., 331 U.S. 398

(1947)). But as we pointed out in Drivers & Chauffeurs,

nothing in the statutory language suggests the Congress “was

blind to the potential for conflict inherent in [other]

employment contexts.” Id.; see id. at 1373-74 n.11 (no

indication “that Congress intended to draft a provision limited

to the facts of” Jones & Laughlin and Atkins). And, notably,

neither Wright Memorial Hospital nor MGM Grand Hotel

involved plant protection or labor unrest.

20

2. The evidence as a whole

With the foregoing principles in mind, we turn back to the

record evidence. Taken as a whole, it demonstrates that the

techs perform “an essential step in the . . . enforcement” of rules

to protect the casinos’ property and patrons, including

enforcement against their fellow employees. MGM Grand

Hotel, 274 NLRB at 140 n.10 (internal quotation omitted);

Wright Mem’l Hosp., 255 NLRB at 1320.

To recap just the highlights, the techs maintain

comprehensive camera coverage of each resort, including the

ever-changing gaming floor; they control access to all sensitive

areas of each casino and have access to all areas themselves;

they maintain alarm systems for the most valuable property in

each casino; and they help spy on fellow employees suspected

of misconduct. The Regional Director minimized these duties

because they require “mak[ing] no rounds” and “watch[ing] for

nothing other than issues affecting the surveillance system.”

JA 439, 881. The Board “agree[d]” with the Regional

Director and discounted the fact that the techs’ duties are “an

integral part of a larger security system.” JA 443 n.1, 885 n.1

(citing Wells Fargo Alarm Servs., 533 F.2d at 124; Am. Dist.

Tel. Co., 160 NLRB at 1138). We see at least four problems

with the Board’s analysis.

First, it gives no weight to evidence that the surveillance

operators and security officers in the monitor rooms cannot

properly do their jobs without the techs. See, e.g., Mirage Tr.

115 (Q: “[C]an the surveillance operator[s] perform their job

without the surveillance techs?” A: “No.”); id. at 217 (Q: “Can

the security department perform its function . . . without the

surveillance techs?” A: “No.”). That the techs do not

themselves observe, report and respond to misconduct is

therefore not dispositive: they are “essential” to the process.

21

MGM Grand Hotel, 274 NLRB at 140 n.10; Wright Mem’l

Hosp., 255 NLRB at 1320.

Moreover, the surveillance operators and security officers

cannot watch every live camera feed. That fact heightens the

importance of stored footage, which the techs aid in extracting;

it also helps illustrate the deterrent function that the cameras

serve even apart from the monitor-room operators and officers.

Consider Bellagio’s frequent tournaments, like the $500,000

baccarat tournament it held in June 2015. See supra note 2.

In such tournaments, players face off against one another in an

attempt to win money from a sizable prize pool. It is not

“unheard of” for a player to cheat by “pilfer[ing] chips” from

an opponent when no one is looking. Bellagio Tr. 83.

Because the casino does not post a security officer to each

table, “the cameras are the sole means of detecting that kind of

theft.” Id. at 84. If the surveillance operators in the monitor

room do not see the misconduct when it occurs, the stored

footage can be reviewed afterward to resolve any dispute. Just

as significantly, the cameras help “prevent” such disputes in

the first place because the players know they are being watched

and are less likely to cheat than they would be otherwise. Id.

at 83; see id. at 126 (“We’re in a casino. . . . Everybody’s

basically aware . . . that cameras are present.”).

In short, camera coverage protects the players’ property

and safety. This commonsense observation applies similarly

to the casinos’ property: the existence of the camera coverage

discourages dealer dishonesty and encourages dealer accuracy,

just as the presence of the alarm system deters robbery.

The techs are critical to the deterrence because they are

critical to the technology. The techs, not the surveillance

operators and security officers, investigate any tampering with

the cameras — which are themselves casino property. The

22

techs, not the operators and officers, coordinate with regulators

to maintain conforming coverage and ensure the continued

validity of the casinos’ gaming licenses. The Board does not

argue that the full range of the techs’ work could just as easily

be performed by other personnel such as the operators or

officers. Nor could such an argument succeed on this record:

the surveillance and security networks, comprised of high-tech

cameras and a “really fancy” “s[o]uped-up” computer system,

Mirage Tr. 54, are complicated enough that the techs train the

operators and officers on how to use them.

Second, the Board gives too little weight to the type of

employer we are discussing. In the agency proceedings it

invoked two cases, respectively 41 and 51 years old, that

necessarily did not involve ultramodern luxury casinos. JA

443 n.1, 885 n.1 (citing Wells Fargo Alarm Servs., 533 F.2d at

124; Am. Dist. Tel. Co., 160 NLRB at 1138). In MGM Grand

Hotel, decided in 1985, the Board itself distinguished both

cases, partly because they had “not contemplated” the

“technological advance” embodied in MGM’s “vastly

sophisticated” security system. 274 NLRB at 140 & nn.8-9.

That observation applies with greater force 32 years later to

surveillance and security networks that are more sophisticated

still.

The casinos’ networks protect high-end jewelry, priceless

art, stockpiles of cash and the personal safety of revelrous

guests who are not always vigilant regarding their own

wellbeing. In that regard, the casinos are nigh sui generis.

The closest analog we can think of is a bank.9 Cf. Mirage Tr.

9

Indeed, for some purposes under United States Code title 31

(“Money and Finance”), a licensed luxury casino is deemed a

“financial institution” much like a bank or credit union. See 31

U.S.C. § 5312(a)(2)(X).

23

58 (main cage is “like our bank”); Bellagio Tr. 93 (“There’s [a]

. . . lot of money in the cage.”). But even a bank does not have

to contend with scores of live transactions every instant in a

charged entertainment atmosphere. In this unusual setting,

where all-encompassing surveillance is the paramount

protector, the Board assigns too much weight to the fact that

the techs do not “perform traditional guard functions,” Br. of

Resp’t 30, such as carrying weapons, id. at 8-9, 25, and

“mak[ing] rounds,” JA 439, 881.

Third, the Board does not properly account for the fact that

the techs can control what surveillance operators and security

officers see in the monitor rooms. They likewise control

which employees can enter “sensitive area[s]” like the server

room, the monitor rooms, the art gallery, executive offices,

count rooms and the main casino cage. Bellagio Tr. 89. The

techs thereby enforce—i.e., “give . . . effect to,” BLACK’S LAW

DICTIONARY, supra, at 645—their supervisors’ rules for

protecting the casinos’ most valuable property. Other courts

and the Board itself have indicated that control over access to

physical property is relevant to guard status. See, e.g., Local

851, Int’l Bhd. of Teamsters, 732 F.2d at 44 (drivers were

guards where, inter alia, they were “often given keys to the

premises and security vaults of customers”); Wright Mem’l

Hosp., 255 NLRB at 1320 (ambulance drivers were guards

where, inter alia, they “check[ed] to see that doors [were]

locked”). We see no basis for a different approach here.

The Board ignores that, because of the techs’ know-how

and access, the casinos must put “quite a bit of trust . . . in

[their] integrity,” Bellagio Tr. 138, and subject them to

stringent background checks. It does not require a

screenwriter’s imagination to appreciate the risks of sabotage:

the record is replete with testimony about how a dishonest tech

might realistically abuse his position at the expense of his

24

employer. See, e.g., id. at 102, 251-52 (without need for

“anyone’s approval,” tech could “maliciously” “shut cameras

off,” “prevent [them] from recording” or “delete specific

periods of time in the recording stream”); see also, e.g., Mirage

Tr. 119-20, 248-49 (without “being detect[ed],” tech could

enter sensitive areas or grant unauthorized access to others “at

just the push of a button”).

The Board argues that “[t]he potential for sabotage isn’t

enough to make [a tech] a guard.” Oral Arg. Recording 32:10-

32:15. But even assuming the potential for sabotage does not

suffice for guard status, the authority, access and trust conferred

on the techs are relevant. See, e.g., Local 851, Int’l Bhd. of

Teamsters, 732 F.2d at 44 (drivers were guards because, inter

alia, they were “entrusted with a wide variety of valuable

commodities” and were “subjected to security clearance”);

Burns Int’l Sec. Servs., 278 NLRB at 569 (guard status may

“depend largely on the extent to which [the employee]

protect[s] . . . property”).

Fourth, the Board gives no weight to the crucial fact that

the techs help enforce rules against their coworkers, most

obviously during special operations. In a special operation, a

tech installs a secret camera in—or covertly locks an existing

camera onto—a coworker’s work area so that other

surveillance and security personnel can spy on the targeted

employee. In denigrating the tech’s role as “limited,” JA 438-

39, 881, the Regional Director overlooked evidence that the

tech is essential to the operation, Bellagio Tr. 222 (Q: “Would

your investigators be able to perform the types of investigations

that they conduct . . . without video surveillance?” A: “No.”).

His analysis also overlooked that the tech is expected to

maintain the secrecy of the operation, including by cutting off

video coverage to other employees and, if necessary, lying to

them about it.

25

The tech’s duties in a special operation squarely implicate

section 9(b)(3)’s aim of “minimiz[ing] the danger of divided

loyalty that arises when a guard is called upon to enforce the

rules of his employer against a fellow union member.”

Drivers & Chauffeurs, 553 F.2d at 1373. The operation can

lead to serious consequences for the target employee, including

termination and potentially prosecution. If the Union were to

represent both the techs and their target colleagues, the techs

might well feel pressure to tip off fellow Union members about

particular operations.

The Regional Director saw “[n]o evidence . . . that techs

know the identity of the persons being investigated.” JA 436.

We read the record differently. Although the techs typically

are not given the target employee’s name, they are given

“[s]pecifics” like the “nature” of the misconduct, “what kind of

employee” is suspected of it and where it is occurring. Mirage

Tr. 105-06; see id. at 164, 190, 195 (tech typically knows why

he is setting up coverage in specific area); Bellagio Tr. 105 (he

is typically “given details”). That information, it seems to us,

would suffice for a conflicted tech to thwart a proper

investigation.

The Board characterizes wrongful disclosure of such

information as a mere “possibility.” Br. of Resp’t 40. But

Section 9(b)(3) is meant “to minimize the danger of divided

loyalty.” Drivers & Chauffeurs, 553 F.2d at 1373 (emphasis

added). The focus is on minimizing temptation, pressure and

conflict, not on whether the tech will in fact betray the casino.

NLRB v. Brinks, Inc., 843 F.2d 448, 454 (11th Cir. 1988) (under

section 9(b)(3), “the realistic potential for divided loyalties

warrants the complete separation of guard and non-guard

unions” (emphasis in original)); see 29 U.S.C. § 151 (Act is

meant to alleviate “industrial strife”).

26

*****

Considering the record as a whole, we agree with the

casinos: the techs are guards under section 9(b)(3) of the Act

and can be represented only by an all-guard union. Because

the Union represents employees other than guards, it was

improperly certified as the techs’ representative and the Board

erred in concluding that the casinos unfairly refused to bargain.

Accordingly, we grant the casinos’ petitions for review, deny

the Board’s cross-applications for enforcement and vacate the

Board’s May 2016 decisions and orders.10

So ordered.

10

Our dissenting colleague would defer to the Board on the

theory that it could reasonably decide the techs do not “compel

obedience to” the casinos’ rules. Dissent at 2 (quoting BLACK’S

LAW DICTIONARY, supra, at 645) (emphasis omitted). But the

Board’s own cases—which take a “very broad[]” view of guard

status—do not require compulsion of obedience. McDonnell

Aircraft Co., 827 F.2d at 326-27 (citing Board cases). After all,

ambulance drivers, fitting room checkers, timekeepers, receptionists

and casino surveillance operators are all guards even though they do

not affirmatively compel obedience to any rules. See supra note 8

and accompanying text; Br. of Resp’t 30 (conceding that casinos’

“surveillance operators . . . perform traditional guard functions”).

The inquiry turns not on compulsion or personal confrontation, see

Dissent at 2 (“direct role”), but on whether a putative guard performs

“an essential step in the procedure for the enforcement of the

employer’s rules.” MGM Grand Hotel, 274 NLRB at 140 n.10

(brackets and internal quotation omitted); see Wright Mem’l Hosp.,

255 NLRB at 1320. We cannot defer to an agency decision that

ignores extensive unrebutted evidence satisfying the agency’s own

governing standard. And, respectfully, the evidence is indeed

extensive that the techs’ duties go well beyond old-fashioned

installation, inspection and repair. Dissent at 1-2 (citing Am. Dist.

Tel. Co., 160 NLRB at 1134, 1138 (1966)).

SRINIVASAN, Circuit Judge, concurring in part and

dissenting in part: For the reasons explained in Part II.A of

the court’s opinion, I agree that the failure of the Union

representing the surveillance techs to seek recognition from

the Casinos prior to filing its certification petitions does not

require the petitions’ dismissal. I respectfully disagree,

though, with my colleagues’ conclusion in Part II.B that the

Board was compelled to conclude that the techs are “guards”

within the meaning of Section 9(b)(3) of the National Labor

Relations Act.

We have explained that, when reviewing the Board’s

determinations about which employees constitute statutory

guards, “[w]e must be particularly wary not to substitute

judgment where . . . the agency’s expertise illuminates the

meaning of an open-ended statutory term.” Drivers,

Chauffeurs, Warehousemen and Helpers, Local 71 v. NLRB,

553 F.2d 1368, 1374 (D.C. Cir. 1977). Here, as my

colleagues explain, ante at 17, whether the techs qualify as

guards under the Act turns on whether they “enforce rules” on

behalf of the Casinos. 29 U.S.C. § 159(b)(3).

In my view, the Board might have reasonably

determined, as my colleagues do, that the techs’ role in

maintaining the Casinos’ surveillance equipment bears a

sufficient connection to the enforcement of Casino rules to

render them guards under the statute. But I also believe the

Board acted reasonably in reaching the opposite conclusion.

Whatever else the techs’ duties entail, their responsibilities

undisputedly do not encompass observing, reporting, or

restraining infractions of the Casinos’ rules. I would sustain

the Board’s conclusion that employees who lack those duties

do not “enforce rules” and thus do not qualify as statutory

guards.

More than a half century ago, the Board staked out its

position that responsibility “for new installations, periodic

2

inspections, and maintenance and repairs of . . . protective

equipment” does not render an employee a guard under the

NLRA. Am. Dist. Tel. Co., 160 NLRB 1130, 1134, 1138

(1966). The Board has maintained that view ever since. For

instance, in MGM Grand Hotel, the Board, while indicating

that employees who “possess and exercise responsibility to

observe and report infractions” qualify as guards, 274 NLRB

139, 140 n.10 (1985) (quoting A.W. Schlesinger Geriatric

Ctr., 267 NLRB 1363, 1364 (1983)), explicitly distinguished

such employees from ones “involved [in] the installation and

maintenance of certain electronic security devices,” id. at 140

n.8. The Board adhered to that line in this case.

The Board’s understanding of what it means to “enforce

rules” is entirely consistent with those words’ ordinary

meaning. My colleagues rely on the definition of “enforce” in

Black’s Law Dictionary. Even that definition, though, readily

accommodates the Board’s interpretation. It is true that the

definition’s first entry speaks in terms of giving “force or

effect” to a rule. BLACK’S LAW DICTIONARY 645 (10th ed.

2014). And had the Board determined that the techs qualify

as guards, it could have attempted to reason that, by

maintaining surveillance equipment, the techs help “give

force or effect to” the Casinos’ rules. But in reaching the

opposite conclusion—that the techs fail to qualify as guards—

the Board maintained full consistency with the definition: the

Board could reason that the techs play an insufficiently direct

role in “giving force or effect” to the Casinos’ rules.

Moreover, the definition states in full: “[t]o give force or

effect to (a law, etc.); to compel obedience to.” Id. (emphasis

added). The Board’s conclusion that employees qualify as

guards only if they observe, report, or restrain infractions

draws support from a conception of “enforce” tied to

“compelling obedience” to rules.

3

Here, because the techs’ duties do not include those

functions, I would sustain the Board’s conclusion that the

techs may be part of the same union as the Casinos’ non-

guard employees. That conclusion is unaffected by the techs’

role in “special operations” investigating co-workers

suspected of misconduct. In that context, the techs’ duties are

confined to ensuring the proper positioning of surveillance

cameras and retrieving the footage. Ante at 9. Other

employees monitor the feed, review the footage, and, if

warranted, interview or confront the subject of the

investigation. In that sense, the techs’ responsibilities in

connection with investigations of co-workers parallel their

duties with regard to surveillance of Casino patrons. If those

functions fail to amount to enforcement of the Casinos’ rules

when directed at patrons, they likewise fall short of

enforcement when directed at co-employees. Respectfully, I

therefore believe the Board acted within its discretion in

concluding that the techs’ duties do not constitute

enforcement of rules within the meaning of the NLRA.