noting that the Board has acknowledged that Airborne Freight “held that the essential element in the joint-employer analysis is whether a putative joint employer’s control over employment matters is direct and immediate”
How later courts described this case
- noting that the Board has acknowledged that Airborne Freight “held that the essential element in the joint-employer analysis is whether a putative joint employer’s control over employment matters is direct and immediate”
- holding that the National Labor Relations Board failed to acknowledge and grapple with its prior cases
- declining to enforce a Board order that “appear[ed] to be inconsistent with its precedents, without addressing those precedents or explaining why they do not govern”
- applying Chenery to the NLRB
Written by the judges who cited it.
The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 23, 2017 Decided August 4, 2017
No. 15-1112
NATIONAL LABOR RELATIONS BOARD,
PETITIONER
v.
CNN AMERICA, INC.,
RESPONDENT
NATIONAL ASSOCIATION OF BROADCAST EMPLOYEES AND
TECHNICIANS - COMMUNICATIONS WORKERS OF AMERICA,
LOCAL UNION NO. 11 AND NATIONAL ASSOCIATION OF
BROADCAST EMPLOYEES AND TECHNICIANS -
COMMUNICATIONS WORKERS OF AMERICA, LOCAL UNION NO.
31,
INTERVENORS
Consolidated with 15-1209
On Application for Enforcement and Cross-Petition
For Review of an Order of the
National Labor Relations Board
Kannon K. Shanmugam argued the cause for CNN America,
Inc. With him on the briefs were Kevin T. Baine, Paul Mogin,
and Zachary D. Fasman.
2
Maurice Baskin, Michael J. Lotito, and Elizabeth Parry
were on the brief for amici curiae Chamber of Commerce of the
United States of America, et al. in support of CNN America.
Joan E. Hoyte-Hayes, Supervisory Attorney, National
Labor Relations Board, argued the cause for the National Labor
Relations Board. With her on the brief were Richard F. Griffin,
Jr., General Counsel, John H. Ferguson, Associate General
Counsel, and Linda Dreeben, Deputy Associate General
Counsel. Usha Dheenan, Attorney, entered an appearance.
Keith R. Bolek argued the cause for intervenors. With him
on the brief was Patricia McConnell.
Before: GARLAND, Chief Judge, and KAVANAUGH and
PILLARD, Circuit Judges.
Opinion for the Court filed by Chief Judge GARLAND.
Opinion concurring in Parts II and V and dissenting in part
filed by Circuit Judge KAVANAUGH.
GARLAND, Chief Judge: For many years, Cable News
Network (CNN) used outside contractors to provide technicians
to operate the electronic equipment at its Washington, D.C. and
New York City bureaus. In 2003, CNN changed that
longstanding arrangement, terminating its latest contracts and
hiring a new in-house workforce. The National Labor Relations
Board found that CNN’s replacement of its unionized contractor
with a nonunion, in-house workforce violated the National
Labor Relations Act in several respects.
3
The Board now applies for enforcement of its decision and
order. CNN cross-petitions for review. For the reasons set forth
below, we grant each request in part and deny each in part.
I
CNN is a leading television and online news provider. Its
Washington, D.C. and New York City bureaus, from their
inception, relied on outside contractors to operate the equipment
necessary to produce and broadcast the news. Pursuant to
exclusive service contracts -- known as Electronic News
Gathering Service Agreements -- camera operators, sound
technicians, studio technicians, and broadcast engineers
(hereinafter, “technicians”) employed by the contractors
performed much of the technical work at both bureaus.
Those technicians were consistently represented by a union.
In 1982, the Board certified the National Association of
Broadcast Employees and Technicians (hereinafter, “the union”)
as the collective-bargaining representative of the technicians
staffing the Washington bureau. In 1985, the Board certified the
same union to represent the New York bureau’s technicians.
Over the following years, the union and the contracting
companies employing the technicians entered into successive
collective-bargaining agreements. When CNN switched
contracting companies -- which happened several times -- the
new company would hire nearly all of its predecessor’s
employees and continue to recognize the union.
In 1997, Asgard Entertainment Group successfully bid for
the Washington contract and created Team Video Services
(TVS) for the sole purpose of staffing the Service Agreement
with CNN. In 2001, Asgard won the New York contract, which
it also serviced through TVS. The Service Agreements at the
two bureaus were materially identical. Broadly, they required
4
TVS to furnish CNN with technicians, as well as supervisors for
those technicians, in exchange for CNN covering TVS’ labor
expenses and paying a monthly management fee. The Service
Agreements provided that TVS would supply full-time
technicians for at least 40 hours per week, in addition to part-
time technicians available 24/7 as needed by CNN. They also
provided that CNN: could require changes in TVS staffing
levels; could audit TVS’ books without cause or notice; would
fund a 4% increase in salary expenses per year; would provide
all equipment used by TVS technicians; and had the sole option
to renew the agreement and could terminate it for any reason
upon four weeks’ notice.
On September 29, 2003, CNN announced that it was
terminating its contracts with TVS and would begin directly
hiring employees to perform the camera, studio, and engineering
work at the Washington and New York bureaus. CNN
expressed appreciation for TVS’ performance and service. It
said, however, that it wanted a new workforce to allow it to take
advantage of technological developments in the industry,
particularly computer-related technology. When the union
requested recognition and bargaining, and asked to discuss
future employment prospects for bargaining-unit employees,
CNN denied the requests.
CNN named the process by which it would directly hire its
new workforce the “Bureau Staffing Project.” According to
CNN executives, the company planned to use a multistep
“behavioral interviewing process” to hire over 200 skilled
technicians for the two bureaus. Former TVS employees could
apply for the new jobs, but they would have to go through the
Staffing Project’s interviewing process. In the end, more than
100 TVS bargaining-unit employees were not hired and lost
their jobs.
5
Three months after CNN officially terminated the Service
Agreements, the union filed unfair-labor-practice charges with
the National Labor Relations Board (NLRB). Three years later,
in 2007, the Board’s General Counsel filed his own complaint
against CNN. In November 2008, after an 82-day trial, an
administrative law judge (ALJ) ruled against CNN in an 83-page
opinion.
The ALJ first determined that CNN had been a joint
employer of TVS’ employees before the termination of the
Service Agreements and was thus bound by TVS’ collective-
bargaining agreements with the union. He further determined
that CNN became a successor employer after it terminated TVS
and hired a new workforce. The ALJ found that “the reasons
given by CNN for its termination of its contracts with [TVS] and
its implementation of the Bureau Staffing Project [were]
pretextual. A major motive in these decisions was CNN’s desire
to operate its Washington and New York bureaus without a
union.” CNN America, Inc., 361 NLRB No. 47, at 51 (2008)
(ALJ Op.). The ALJ also found that “the Bureau Staffing
Project was a sham process,” during which “CNN engaged in
widespread and blatant discrimination against [TVS] bargaining
unit members.” Id. at 50. “CNN did so,” the ALJ found, “with
the objective of depriving employees of [union] representation.”
Id. On the basis of these findings, and others discussed below,
the ALJ determined that CNN committed multiple violations of
the National Labor Relations Act (NLRA).
CNN appealed to the Board, which finally issued its
decision in 2014, affirming the ALJ in all relevant respects.
CNN America, Inc., 361 NLRB No. 47, at 1 & n.1 (2014) (Board
Op.). The Board found that, as a joint employer, CNN: violated
NLRA § 8(a)(3) and (1), 29 U.S.C. § 158(a)(3), (1), by
terminating the Service Agreements out of anti-union animus;
and violated § 8(a)(5) and (1), id. § 158(a)(5), (1), by failing to
6
bargain with the union about its decision to terminate those
agreements. The Board further found that, as a successor
employer, CNN violated § 8(a)(5) and (1) by failing to
recognize and bargain with the union and unilaterally changing
the employees’ terms and conditions of employment. The Board
also found that CNN: violated § 8(a)(3) and (1) by
discriminating against union members in its hiring process; and
violated § 8(a)(1) on four occasions by making coercive
statements through its supervisors.
As a remedy for those violations, the Board ordered that,
among other things, CNN: (1) provide backpay and benefits to
all TVS technicians who either lost their jobs or received
reduced wages as a result of CNN’s violations; (2) reinstate and
provide necessary training to all TVS technicians who were
discharged and not hired by CNN; and (3) recognize and bargain
with the union.1
CNN filed a motion for reconsideration, which the Board
denied. CNN America, Inc., 362 NLRB No. 38 (2015). The
Board now applies for enforcement of its decision and order,
and CNN cross-petitions for review. The union has intervened
in support of the Board.
1
Member Miscimarra concurred in part and dissented in part. He
concluded that CNN: (1) did not qualify as a joint employer and
therefore did not violate the NLRA by terminating the Service
Agreements, 361 NLRB No. 47, at 31-42; (2) did qualify as a
successor employer, however, and therefore had an obligation to
bargain with the union once it hired its new workforce, id. at 28 n.1;
(3) violated § 8(a)(3) through some individual discriminatory hiring
decisions, but not through a general hiring scheme motivated by anti-
union animus, id.; and (4) violated § 8(a)(1) through three coercive
statements by supervisors, id. He also dissented in part from the
Board’s remedial order. Id. at 29.
7
II
The Board first had to decide whether CNN was a joint
employer of TVS’ employees. The Board’s affirmative answer
to that question led it to find that CNN committed two unfair
labor practices: terminating the Service Agreements due to anti-
union animus, in violation of § 8(a)(3) and (1); and failing to
bargain with the union before terminating the Service
Agreements, in violation of § 8(a)(5) and (1). If, as CNN
argues, the Board wrongly concluded that CNN was a joint
employer, then those two unfair-labor-practice findings must fall
away. This is so because, if CNN was not a joint employer of
TVS’ employees, it would not have been bound by the
collective-bargaining agreement between TVS and the union,
and its termination of the Service Agreements would thus have
been lawful. See Computer Assocs. Int’l, Inc. v. NLRB, 282 F.3d
849, 852-53 (D.C. Cir. 2002); see also Computer Assocs. Int’l,
Inc., 324 NLRB 285, 286 (1997) (“[A]n employer does not
violate Section 8(a)(3) by ceasing to do business with another
employer because of the union or nonunion activity of the
latter’s employees.”), enforcement denied on other grounds, 282
F.3d 849 (D.C. Cir. 2002).
We conclude that the Board’s determination that CNN and
TVS were joint employers cannot stand. This is not because we
find that the two companies lacked a joint-employer
relationship. Rather, it is because the Board applied a standard
for determining whether companies are joint employers that
appears to be inconsistent with its precedents, without
addressing those precedents or explaining why they do not
govern. Our conclusion does not bar the Board from finding
CNN to be a joint employer by applying a different standard or
sufficiently explaining the one it did apply. It means only that
we cannot enforce the Board’s determination in this proceeding.
8
A
Citing two 1984 decisions, the Board began its joint-
employer analysis by setting forth the governing standard it
intended to apply: “The Board will find that two separate
entities are joint employers of a single workforce if the evidence
shows that they ‘share or codetermine those matters governing
the essential terms and conditions of employment.’” CNN
America, Inc., 361 NLRB No. 47, at 3 (quoting TLI, Inc., 271
NLRB 798, 803 (1984)) (emphasis added); see id. (citing Laerco
Transp., 269 NLRB 324, 325 (1984)); see also ALJ Op., 361
NLRB No. 47, at 52-53.
In two sentences in a footnote, the Board acknowledged that
its subsequent 2002 opinion in Airborne Express “stated that the
test for joint-employer status requires ‘direct and immediate’
control by the putative joint employer over employment
matters.” 361 NLRB No. 47, at 3 n.7 (quoting Airborne
Express, 338 NLRB 597, 597 n.1) (emphasis added). But the
Board noted that the case Airborne Express cited for that
proposition, TLI, Inc., had “ma[de] no mention that control over
employment matters must be direct and immediate.” Id.
Apparently sidestepping the “direct and immediate” control
requirement, which it never mentioned again, the Board
concluded that CNN and TVS were joint employers.2
The Board’s decision was issued by a three-member panel.
After the panel’s decision, but before the briefing of this appeal,
the full Board sat in another case to consider “its current
standard for assessing joint-employer status.” Browning-Ferris,
362 NLRB No. 186, at 1 (2015). In Browning-Ferris, the full
Board canvassed a 30-year history of its joint-employer cases --
2
The NLRB’s appellate brief acknowledges that the Board did
not apply the “direct and immediate” control standard. NLRB Br. 28.
9
a period beginning with TLI and Laerco Transportation and
running through Browning-Ferris itself -- and concluded that the
prevailing standard during that period required an employer’s
exercise of “direct [and] immediate” control. Id. at 13. “Most
significantly,” the Board said,
the Board’s decisions have implicitly repudiated . . .
reliance on reserved control and indirect control as
indicia of joint-employer status. The Board has
foreclosed consideration of a putative employer’s right
to control workers, and has instead focused exclusively
on its actual exercise of that control -- and required its
exercise to be direct, immediate, and not “limited and
routine.”
Browning-Ferris, 362 NLRB No. 186, at 13. Among other
cases, the Board said, Airborne Express had “held that ‘[t]he
essential element in [the joint-employer] analysis is whether a
putative joint employer’s control over employment matters is
direct and immediate.’” Id. at 14 (quoting Airborne Express,
338 NLRB at 597 n.1) (emphasis added).
Having established that the existing standard was “direct
and immediate” control, Browning-Ferris then went on to
criticize that standard. Following an extensive discussion, the
Board concluded that “the current joint-employer standard is not
mandated by the Act and . . . does not best serve the Act’s
policies.” Id. at 15. “[W]e will no longer require,” the Board
continued, “that a joint employer not only possess the authority
to control employees’ terms and conditions of employment, but
must also exercise that authority, and do so directly,
immediately, and not in a ‘limited and routine’ manner.” Id. at
19. “Accordingly, we overrule Laerco, TLI, A&M Property,
and Airborne Express, . . . and other Board decisions, to the
extent that they are inconsistent with our decision today. The
10
right to control, in the common-law sense, is probative of
joint-employer status, as is the actual exercise of control,
whether direct or indirect.” Id. Under its revised standard, the
Board said, “two or more entities are joint employers of a single
work force if they are both employers within the meaning of the
common law, and if they share or codetermine those matters
governing the essential terms and conditions of employment.”
Id.
B
The difference between the case now before us and
Browning-Ferris should be apparent. In Browning-Ferris, the
Board carefully examined three decades of its precedents and
concluded that the joint-employer standard they reflected
required “direct and immediate” control. It then criticized that
standard. Thereafter, it forthrightly overruled those cases and
set forth, as “a new rule” for identifying joint employment, a
standard quite similar to the one the Board in the case before us
claimed had been the standard all along. Id. at 3; see id. at 19.
This an agency may do, as long as it provides a reasoned
explanation for its change of course. See FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009). In fact, whether the
Board did so in Browning-Ferris is a question at issue in a
petition for review of that decision that is currently pending
before another panel of this court. See Browning-Ferris Indus.
of Cal. v. NLRB, No. 16-1028 (D.C. Cir. filed Jan. 20, 2016).
In the case on review here, however, the Board did none of
those things. In characterizing the prevailing joint-employer
standard, it did not grapple with its precedents in the manner of
Browning-Ferris. It did not explain why it thought precedents
that seemed to “focus[] exclusively on [the employer’s] actual
exercise of . . . control -- and require[] its exercise to be direct
[and] immediate,” Browning-Ferris, 362 NLRB No. 186, at 13,
11
instead supported a more flexible “share or codetermine”
standard.3 Indeed, it did not even mention many of the
important precedents at all, including those that expressly used
the “direct and immediate” control formulation.4 Nor did the
Board mention the fact that, just three months earlier, its own
General Counsel’s amicus brief in Browning-Ferris had said:
“[T]he Board [has] made clear that the essential element in its
current analysis is ‘whether a putative joint employer’s control
over employment matters is direct and immediate.’” Amicus
Brief of the General Counsel at 8, Browning-Ferris Indus.,
Docket No. 32-RC-109684 (June 26, 2014) (quoting Airborne
Express, 338 NLRB at 597 n.1) (emphasis added in brief). And
because it did not acknowledge the precedent suggesting that
3
See, e.g., Flagstaff Med. Ctr., 357 NLRB 659, 666-67 (2011)
(finding no joint-employer status where an entity made
recommendations about which employees to hire and fire, supervised
employees daily, and evaluated employee performance); Am. Prop.
Holding Corp., 350 NLRB 998, 1000-01 (2007) (finding no joint-
employer status where a company had the right to approve hiring
decisions and supervised employees onsite); G. Wes Ltd. Co., 309
NLRB 225, 226 (1992) (finding no joint-employer status where a
company supervised employees onsite on a daily basis); So. Cal. Gas
Co., 302 NLRB 456, 461-62 (1991) (finding no joint-employer status
where a company provided detailed specifications of work to be done,
directed employees as to where and when to perform, and gave out
assignments).
4
See In re Wiers Int’l Trucks, 353 NLRB 475, 487 (2008) (“The
essential element in this analysis is whether the putative joint
employer’s control over employment matters is direct and immediate.”
(quoting Airborne Express, 338 NLRB at 597 n.1)); Summit Express,
Inc., 350 NLRB 592, 592 n.3 (2007) (“[W]e find that the contract
terms, by themselves, do not establish direct and immediate control
over the terms and conditions of employment . . . required to prove a
joint employer relationship . . . .”).
12
“direct and immediate” control was the existing standard, it
certainly did not forthrightly overrule it.5
Such “[s]ilence in the face of inconvenient precedent is not
acceptable.” Jicarilla Apache Nation v. Dep’t of Interior, 613
F.3d 1112, 1120 (D.C. Cir. 2010). “An agency’s failure to come
to grips with conflicting precedent constitutes ‘an inexcusable
departure from the essential requirement of reasoned decision
making.’” Ramaprakash v. FAA, 346 F.3d 1121, 1125 (D.C.
Cir. 2003) (quoting Columbia Broad. Sys. v. FCC, 454 F.2d
1018, 1027 (D.C. Cir. 1971)). Indeed, it is “elementary that an
agency must conform to its prior decisions or explain the reason
for its departure from such precedent.” Gilbert v. NLRB, 56
F.3d 1438, 1445 (D.C. Cir. 1995). “[A]n agency changing its
course must supply a reasoned analysis indicating that prior
policies and standards are being deliberately changed, not
casually ignored, and if an agency glosses over or swerves from
prior precedents without discussion it may cross the line from
the tolerably terse to the intolerably mute.” Greater Boston
Television Corp. v. FCC, 444 F.2d 841, 852 (D.C. Cir. 1970).6
Because the Board crossed that line here, we must set aside its
finding that CNN was a joint employer. See, e.g., E.I. Du Pont
De Nemours & Co. v. NLRB, 682 F.3d 65, 70 (D.C. Cir. 2012).
5
Nor has this court overruled it. In Dunkin’ Donuts Mid-Atlantic
Distribution Center, Inc. v. NLRB, we did enforce the Board’s joint-
employer finding without invoking the “direct and immediate” control
requirement. 363 F.3d 437, 440-41 (D.C. Cir. 2004) (enforcing In re
Aldworth Co., 338 NLRB 137 (2002)). But the Board decision on
review in that case predated Airborne Express, and no party argued
that “direct and immediate” control was the proper standard.
6
See Fox Television Stations, Inc., 556 U.S. at 515; LePage’s
2000, Inc. v. Postal Regulatory Comm’n, 642 F.3d 225, 233 (D.C. Cir.
2011); Dillmon v. Nat’l Transp. Safety Bd., 588 F.3d 1085, 1089-90
(D.C. Cir. 2009).
13
And as a consequence, we must vacate the two unfair-labor-
practice findings that rested on CNN’s joint-employer status.
See Computer Assocs. Int’l, 282 F.3d at 853.
We emphasize that nothing in our holding in this case
precludes the Board from adopting a “share or codetermine”
standard that takes into account a putative employer’s indirect
control of a group of workers. As we have noted, the validity of
the Board’s rejection of the “direct and immediate” control
requirement in Browning-Ferris is at issue in the pending
petition for review of that decision. Nor does anything in our
holding preclude the Board, on remand, from applying the
“direct and immediate” control standard and concluding that
CNN satisfied that standard. But it did not do so in the
proceedings in this case, and this court lacks authority to resolve
the case by applying that standard itself. As the Supreme Court
held over 70 years ago in SEC v. Chenery Corp., “[t]he grounds
upon which an administrative order must be judged are those
upon which the record discloses that its action was based.” 318
U.S. 80, 87 (1943); see Michigan v. EPA, 135 S. Ct. 2699, 2710
(2015); see also Williams Gas Processing - Gulf Coast Co. v.
FERC, 373 F.3d 1335, 1345 (D.C. Cir. 2004) (“It is axiomatic
that we may uphold agency orders based only on reasoning that
is fairly stated by the agency in the order under review . . . .”).
III
Although we cannot affirm the NLRB’s finding that CNN
was a joint employer with TVS, the Board’s three remaining
unfair-labor-practice findings do not depend on CNN’s joint-
employer status. The first of the three survives if CNN was a
successor employer to TVS, even if the two were not joint
employers. The Board found that CNN was a successor, and on
that basis found that CNN violated NLRA § 8(a)(5) and (1) by
failing to bargain with the union after it completed its hiring and
14
became the technicians’ employer. “When the Board concludes
that a violation of the NLRA has occurred, we must uphold that
finding unless it ‘has no rational basis’ or is ‘unsupported by
substantial evidence.’” Bally’s Park Place, Inc. v. NLRB, 646
F.3d 929, 935 (D.C. Cir. 2011) (quoting United Mine Workers
of Am., Dist. 31 v. NLRB, 879 F.2d 939, 942 (D.C. Cir. 1989));
see 29 U.S.C. § 160(e). And because the Board largely adopted
“the ALJ’s findings and conclusions as its own, we apply the
same deferential standard to those findings and conclusions.”
Weigand v. NLRB, 783 F.3d 889, 895 (D.C. Cir. 2015).
NLRA § 8(a)(5) makes it an unfair labor practice for an
employer “to refuse to bargain collectively with the
representatives of [its] employees.” 29 U.S.C. § 158(a)(5). A
new employer, however, “generally assumes an obligation to
bargain with the representative of its predecessor’s employees
only if the new employer is considered a ‘successor’ to the old.”
Waterbury Hotel Mgmt., LLC v. NLRB, 314 F.3d 645, 653 (D.C.
Cir. 2003). An entity qualifies as a successor employer when:
(1) it “does not make a ‘significant change’ in the ‘essential
nature’ of the business, and (2) ‘a majority of the new
[employer’s] employees were employed by the predecessor.’”
Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1005
(D.C. Cir. 1998) (quoting Elastic Stop Nut Div. of Harvard
Indus., Inc. v. NLRB, 921 F.2d 1275, 1281 (D.C. Cir. 1990)); see
Waterbury Hotel Mgmt., LLC, 314 F.3d at 653; see also Fall
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 41-43
(1987).
CNN does not contend that it made a significant change in
the essential nature of TVS’ operations. And for good reason.
As the Board found, after CNN took over from TVS, “CNN
continued the same business operations with employees who
performed the same work, at the same locations, and using the
same equipment, as the TVS technicians.” Board Op., 361
15
NLRB No. 47, at 21; see also ALJ Op., 361 NLRB No. 47, at
108. The only question, then, is whether a majority of CNN’s
new employees were previously employed by TVS.
Normally, answering this question requires an exercise in
counting. But when “a successor refuses to hire predecessor
employees because of anti-union animus, the Board presumes
that but for such discrimination, the successor would have hired
a majority of incumbent employees.” Waterbury Hotel Mgmt.,
LLC, 314 F.3d at 655; see Capital Cleaning Contractors, Inc.,
147 F.3d at 1008. “In effect, when a successor refuses to hire its
predecessor’s employees based upon anti-union animus, the
successor loses the right unilaterally to set the initial terms and
conditions of employment; it must first bargain with the union.”
Capital Cleaning Contractors, Inc., 147 F.3d at 1008. The
Board took this tack in finding that CNN was a successor
employer -- and thus violated § 8(a)(5) by refusing to bargain --
because it determined that CNN discriminated against TVS
employees (who were invariably union members) in its hiring
process. See Board Op., 361 NLRB No. 47, at 18, 21.7
To determine whether an employer engaged in
discriminatory hiring, the Board employs a burden-shifting
analysis known as the Wright Line test. See Wright Line, 251
7
The Board and ALJ also found that CNN was a successor
employer because the historical bargaining unit at each TVS bureau --
consisting of field camera, field audio, engineering, and studio
technical employees, ALJ Op., 361 NLRB No. 47, at 49-50 --
remained appropriate, and a majority of each unit’s employees were
previously employed by TVS. See Board Op., 361 NLRB No. 47, at
1 n.1 & 18 n.36; ALJ Op., 361 NLRB No. 47, at 105, 108. Member
Miscimarra agreed that the record supports this finding, 361 NLRB
No. 47, at 28 n.1, 42 & n.24, as do we. As a consequence, CNN
incurred a duty to bargain as a successor employer even absent
discrimination.
16
NLRB 1083 (1980), enforced, 662 F.2d 899 (1st Cir. 1981).8
First, the General Counsel must show that the employer’s hiring
decisions were “motivated by anti-union considerations.”
Waterbury Hotel Mgmt., LLC, 314 F.3d at 651 (quoting
Teamsters Local Union No. 171 v. NLRB, 863 F.2d 946, 955
(D.C. Cir. 1988)). “The Board may rely on both direct and
circumstantial evidence in resolving this question of fact.” Id.
“Once the General Counsel has established that the employer
was in fact motivated by anti-union animus, the Board must find
a violation of the Act unless the employer can show that ‘it
would have taken the [same] action regardless of the existence
of such animus.’” Id. (quoting Elastic Stop Nut Div. of Harvard
Indus., Inc., 921 F.2d at 1280).
In this case, the Board found that the “evidence of
animus . . . [was] overwhelming, as [was] the evidence that
CNN’s explanations for its conduct were pretextual.” Board
Op., 361 NLRB No. 47, at 18. It therefore concluded that
CNN’s failure to hire over 100 TVS technicians was unlawfully
discriminatory. We review NLRB findings of discriminatory
motive with considerable deference. Fort Dearborn Co. v.
NLRB, 827 F.3d 1067, 1072 (D.C. Cir. 2016) (“Our review of
the Board’s conclusions as to discriminatory motive is even
more deferential, ‘because most evidence of motive is
circumstantial.’” (quoting Inova Health Sys. v. NLRB, 795 F.3d
8
See also NLRB v. Transp. Mgmt. Corp., 462 U.S. 393, 401-04
(1983) (approving Wright Line test); Shamrock Foods Co. v. NLRB,
346 F.3d 1130, 1135 (D.C. Cir. 2003); Tasty Baking Co. v. NLRB, 254
F.3d 114, 125-26 (D.C. Cir. 2001).
17
68, 80 (D.C. Cir. 2015))).9 As discussed below, we conclude
that substantial evidence supports the Board’s findings.
A
To support its determination that anti-union animus
motivated CNN’s hiring decisions, the Board pointed to several
kinds of evidence.
To begin, the Board found that CNN supervisors
deliberately renamed every bargaining-unit job category,
merged job functions, and drafted new position qualifications
with the “purpose of getting out from under the Union’s
jurisdiction” and of “minimizing the significance of the [TVS
employees’] prior experience when they applied for the ‘new’
jobs.” Board Op., 361 NLRB No. 47, at 19. Camera and audio
field technicians became photojournalists; engineers combined
duties with information-technology specialists to form the new
BIT/Engineering division; and studio, control room, and quality-
control technicians became studio operators, audio designers,
and floor directors. Id. at 9. In practice, however, those title
changes were devoid of substance: new CNN employees
performed the same duties and used the same equipment and
technology as the former TVS employees. See ALJ Op., 361
NLRB No. 47, at 51, 108.
Regarding the newly required “qualifications,” CNN
claimed, for example, that photojournalists would need to be
more adept at “nonlinear editing” -- that is, editing on a
computer rather than on tape, id. at 73 -- than were TVS’ field
technicians. The ALJ found, however, that CNN’s emphasis on
9
See, e.g., Traction Wholesale Ctr. Co. v. NLRB, 216 F.3d 92, 99
(D.C. Cir. 2000); Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727,
734 (D.C. Cir. 2000).
18
nonlinear editing was pretextual because the skill was only
“marginally important to the performance” of the relevant jobs
and was one that TVS “applicants could have acquired with
minimal training.” Id. at 62; see id. at 73. Indeed, the
supervisor who orchestrated these qualification changes revealed
his true motive in an email to other supervisors, writing: “the
Photojournalist [position qualifications] . . . should emphasize
the use of DV cameras (since this isn’t within NABET [union]
jurisdiction now).” Id. at 73 (emphasis added).
On the basis of a detailed examination of the hiring
experience of a large number of specific applicants in both D.C.
and New York, see id. at 64-101, the ALJ also found
“[c]ompelling evidence that the Bureau Staffing Project was a
sham,” id. at 64. Non-TVS applicants consistently received
preferential treatment over TVS applicants, who were union
members. See id. at 62. Hiring managers interviewed non-TVS
applicants who either had been deemed unqualified by recruiters
or had never been screened at all. Board Op., 361 NLRB No.
47, at 19. Non-TVS employees who had never even applied for
positions were interviewed and hired. ALJ Op., 361 NLRB No.
47, at 62. An entire category of nonunion engineers who had
previously worked as CNN satellite truck operators received
jobs without undergoing the “behavioral interviewing process”
that CNN touted as objective and impartial. Board Op., 361
NLRB No. 47, at 19 n.38; see ALJ Op., 361 NLRB No. 47, at
65-66. Hiring managers rarely, if ever, consulted with CNN
supervisors who were familiar with the work of TVS camera
operators, but when they did, “they ignored favorable
assessments they received.” Board Op., 361 NLRB No. 47, at
19. At the same time, they routinely solicited favorable
assessments of non-TVS applicants. Id.; see ALJ Op., 361
NLRB No. 47, at 72. In light of this and similar evidence, the
Board reasonably concluded that “CNN’s hiring managers’
inconsistent application of their ostensibly objective guidelines
19
of ‘behavioral interviewing’ evinced discriminatory motivation.”
Board Op., 361 NLRB No. 47, at 20.10
There was also considerable evidence of “disparate
treatment in favor of non-TVS applicants with little experience.”
ALJ Op., 361 NLRB No. 47, at 62. This was sometimes done
under the guise of the so-called “growth candidate” program,
where non-TVS applicants, “many lacking in the skills
necessary for their positions, were often hired over much higher-
rated TVS employees.” Board Op., 361 NLRB No. 47, at 20.
The Board found that “CNN’s emphasis on growth candidates
[was] a poorly concealed effort to refuse to hire TVS
employees.” Id.; see ALJ Op., 361 NLRB No. 47, at 75 (“[T]he
designation of ‘growth candidates’ was a device by which to
avoid hiring too many TVS bargaining unit members . . . .”).11
10
In further support of his characterization of the Bureau Staffing
Project as a sham, the ALJ noted that “CNN conducted a secret hiring
process apart from the [Bureau Staffing Project] that none of its
witnesses mentioned when testifying,” in which CNN hired
individuals “who did not participate in the [Bureau Staffing Project]
process.” ALJ Op., 361 NLRB No. 47, at 66-67. The ALJ also
credited the testimony of an independent human-resources expert
CNN employed to coordinate the Washington hiring, who testified
that she noticed red flags throughout CNN’s hiring process: for
example, supervisors inexplicably altered spreadsheets calculating
applicant scores and turned a blind eye to negative professional
references for non-TVS applicants. Board Op., 361 NLRB No. 47, at
20; see ALJ Op., 361 NLRB No. 47, at 64 n.42 (noting that “[t]he
record also shows that applicants’ interview scores were sometimes
changed for unexplained reasons”).
11
See also ALJ Op., 361 NLRB No. 47, at 64 (“In several cases,
high-level CNN officials directed the hiring of inexperienced
applicants over much more experienced, qualified [TVS] unit
employees.”); id. at 68 (“[T]here appears to be no correlation between
20
But the evidence upon which the Board relied was not
merely circumstantial. In addition to the above, the Board
pointed to statements by four CNN supervisors that provided
direct evidence of the employer’s overt, anti-union bias. See
Waterbury Hotel Mgmt., LLC, 314 F.3d at 652 (concluding that
it was proper to infer from supervisor statements that “hiring
decisions were motivated by anti-union animus”); see also W &
M Props. of Conn., Inc. v. NLRB, 514 F.3d 1341, 1349 (D.C.
Cir. 2008) (same).
First, the photojournalist manager at the New York bureau,
Jeff Kinney, told a former TVS cameraman “that because of his
prior relationship with [TVS] and the Union, CNN was not
going to be able to offer him freelance work.” ALJ Op., 361
NLRB No. 47, at 61. Second, New York operations manager
Lou Strauss made clear that CNN had no intention of
recognizing a union, confirming that employees could safely
assume that the union “won’t be back at CNN.” Board Op., 361
NLRB No. 47, at 19 n.37; see ALJ Op., 361 NLRB No. 47, at
61. Third, Washington executive producer Danielle Whelton
emphasized to a TVS cameraman that there would be “no
union” at the Washington bureau following the termination of
the Service Agreements. Board Op., 361 NLRB No. 47, at 19
n.37; see ALJ Op., 361 NLRB No. 47, at 59.
Finally, on the day CNN publicly announced the
termination of the Service Agreements, New York bureau chief
an applicant’s interview scores and their ranking at the debriefing
sessions.”); id. at 99 (“It is virtually impossible in certain cases to
discern any relationship between CNN’s hiring decisions, the scores
applicants received during their interviews and the entries [CNN
hiring managers made] on the butcher blocks.”).
21
Karen Curry called a meeting to address employees. She told
them that CNN had opted to terminate the Service Agreements
because TVS “came with rules and regulations,” and that by
“getting rid of [TVS], [CNN] can have more control of the
technical people.” Board Op., 361 NLRB No. 47, at 19 n.37.
Interpreting this statement in the context provided by an
employee who attended the meeting, the ALJ found that Curry
“was communicating at least implicitly an intention to get rid of
[the union]” and “impart[ing] a coercive message to CNN
employees . . . that CNN in general will not tolerate a union.”
ALJ Op., 361 NLRB No. 47, at 59.12
Together, CNN’s manipulation of job titles and
qualifications, its frequent deviations from its vaunted Bureau
Staffing Project and “behavioral interviewing” protocols to
favor non-TVS applicants, and anti-union statements by CNN
supervisors, were more than sufficient evidence of anti-union
animus to satisfy the General Counsel’s threshold burden.
Added to this, as further evidence of animus, was the pretextual
nature of the justifications CNN gave for its hiring decisions,
which we discuss in Part III.C below.
B
To resist the conclusion that it was motivated by anti-union
animus, CNN advances the following arguments.
1. CNN maintains that the Board improperly cited CNN’s
termination of the Service Agreements with TVS as evidence of
discriminatory hiring. Its argument amounts to the following
syllogism: CNN was not a joint employer. Because it was not
12
See also ALJ Op., 361 NLRB No. 47, at 60 (finding further
evidence of animus in Washington bureau chief Kross’ statement that
“[the Union] would not be a part of CNN after [December 5]”).
22
a joint employer, its decision to terminate the Service
Agreements was legal. And because the decision to terminate
was legal, that decision cannot evidence animus.
The conclusion of CNN’s syllogism, however, does not
necessarily follow from its premises. A decision that by itself
does not flout the law can still constitute evidence of an
employer’s underlying anti-union animus. Here, the Board did
not point to the fact of the termination alone, but rather to
“evidence [that] CNN’s claim that it brought the work in-house
in order to keep up with technological change was . . .
pretextually false.” Board Op., 361 NLRB No. 47, at 19. And
as the Board said, there is no dispute that “evidence of pretext
may be used to show discriminatory motivation.” Id. (citing
Lucky Cab Co., 360 NLRB No. 43, at 4-5 (2014)); see Fort
Dearborn Co., 827 F.3d at 1075; Pioneer Hotel, Inc. v. NLRB,
182 F.3d 939, 947-48 (D.C. Cir. 1999).
If the NLRB could reasonably find (and it could) that a
“major motive in [the decision to terminate the contracts] was
CNN’s desire to operate its Washington and New York bureaus
without a union,” ALJ Op., 361 NLRB No. 47, at 51, it could
also reasonably conclude that this same desire carried over into
CNN’s subsequent hiring decisions for those bureaus, see id. at
58 (concluding that “the decision to embark upon the Bureau
Staffing Project was part of an overall plan motivated by
antiunion animus”). Although CNN’s anti-union animus may
not have made the termination decision itself unlawful (because
the Board erred in its joint-employer analysis), there was no
reason to believe that its animus had dissipated by the time the
new hiring began.
But even if animus associated with terminating the Service
Agreements could not be the basis for finding discrimination in
hiring, that would not undermine the Board’s bottom-line
23
conclusion that anti-union animus pervaded CNN’s hiring
process. The Board found that “[t]he evidence of animus in this
case [was] overwhelming.” Board Op., 361 NLRB No. 47, at
18. Although it listed termination of the Service Agreements as
one piece of that evidence, it also pointed to the numerous other
pieces of evidence detailed in Part III.A above, including: the
CNN supervisors’ anti-union statements, the deliberate
modification of position qualifications to “minimiz[e] the
significance of the [TVS employees’] prior experience when
they applied for the ‘new’ jobs,” the “numerous instances of
interviewing / debriefing / hiring disparities that adversely
affected TVS applicants,” and the hiring of “growth candidates
as a poorly concealed effort to refuse to hire TVS employees.”
Id. at 19-20. The Board never suggested that the termination of
the Service Agreements was necessary to its animus finding or
that subtraction of that factor would reduce the “overwhelming”
evidence to a level below the necessary threshold. To the
contrary, the Board stated that the “principal evidence of
[CNN’s] unlawful discrimination” was the manner in which it
staffed the D.C. and New York bureaus, including the position
reclassifications and actual hiring practices. Id. at 19 (emphasis
added).
“[W]hen an agency relies on multiple grounds for its
decision, some of which are invalid, we may nonetheless sustain
the decision as long as one is valid and the agency would clearly
have acted on that ground even if the other were unavailable.”
Bally’s Park Place, Inc., 646 F.3d at 939 (quoting Casino
Airlines, Inc. v. Nat’l Transp. Safety Bd., 439 F.3d 715, 717
(D.C. Cir. 2006) (internal quotation marks omitted)). Whatever
weight the Board accorded to CNN’s termination of the Service
Agreements, that factor clearly “was not necessary to its
24
decision.” Id. We therefore sustain the Board’s conclusion that
CNN’s hiring process proceeded with discriminatory animus.13
2. CNN also argues that it could not have discriminated
against union members because it hired a majority of the TVS
employees who had worked at each bureau. Although
superficially appealing, this theory lacks support in either our
case law or Board precedent. To the contrary, in rejecting an
identical argument, we held that where the record contained
evidence of animus but the employer hired a majority of union
members, “the more reasonable inference is that the Employer’s
discriminatory design ultimately failed, not that it wasn’t tried.”
Great Lakes Chem. Corp. v. NLRB, 967 F.2d 624, 628 (D.C. Cir.
1992).
Here, too, it was reasonable for the Board to infer that CNN
planned to hire a sufficient number of former TVS employees to
lend it an air of impartiality, while avoiding the number that
would impose a bargaining obligation. Specifically, the Board
noted that, although CNN heralded the fact that TVS employees
constituted a majority of the employees it hired for the historical
TVS bargaining units, CNN believed that the historical units
were inappropriate for its new employees. Instead, CNN
assumed that the NLRB would accept a much broader “wall-to
-wall” unit composed of all production staff. Board Op., 361
NLRB No. 47, at 18 n.36. The Board found that CNN
13
Our conclusion that CNN’s termination of the Service
Agreements was not necessary to the Board’s decision is further
supported by our examination of the ALJ decision, with which the
Board agreed. See Board Op., 361 NLRB No. 47, at 1 & n.1. The
ALJ listed a host of reasons for concluding that the Bureau Staffing
Project “was discriminatorily motivated,” but did not expressly
include termination of the Service Agreements among them. ALJ Op.,
361 NLRB No. 47, at 62.
25
endeavored to ensure that former TVS employees would not
make up a majority of that broader unit, and that this deliberate
effort to avoid hiring a union majority ran afoul of § 8(a)(3).
Id.; see Great Lakes Chemical Corp., 967 F.2d at 628; see also
U.S. Marine Corp., 293 NLRB 669, 669-73 (1989) (finding that
an employer who hired a majority of union members
nonetheless acted with animus).14
In a variation of the above argument, CNN points to its
expert’s testimony that it was “actually biased in favor of TVS
unit employees” because those employees were four times more
likely to receive job offers than other applicants. ALJ Op., 361
NLRB No. 47, at 121 n.190. The ALJ, however, rejected this
“startling conclusion” because the expert failed to account for:
(1) the ways in which CNN deviated from its normal hiring
process to accommodate non-TVS applicants; (2) “the
possibility that TVS applicants were better qualified than non-
TVS applicants because they had been doing the jobs for which
they were applying for years”; and (3) “the fact that almost 100
percent of the [nonunion] CNN incumbents who were subjected
to the [Bureau Staffing Project] kept their jobs.” Id. The
expert’s analytical errors -- including her failure to confront
some of the most compelling evidence of CNN’s bias against
TVS employees -- could certainly cause a “reasonable
factfinder” to doubt the validity of her conclusion. Ozburn-
Hessey Logistics, LLC v. NLRB, 833 F.3d 210, 217 (D.C. Cir.
2016) (quoting Bally’s Park Place, Inc., 646 F.3d at 935).
14
The historical bargaining unit at each TVS bureau consisted of
field camera, field audio, engineering, and studio technical employees.
ALJ Op., 361 NLRB No. 47, at 49-50. The Board ultimately
concluded that the historical units, not CNN’s proposed “wall-to-wall”
unit, were appropriate. See supra note 7.
26
In any event, even if CNN’s hiring of union members (or
even union leaders) weighed against a finding of discrimination,
the ALJ and Board reasonably found that the other,
“overwhelming evidence” of discrimination “outweighed” the
hiring numbers. ALJ Op., 361 NLRB No. 47, at 62. Because
the Board fairly regarded the evidence of animus as particularly
strong, it acted within its discretion in determining that such
evidence outweighed the claim of CNN’s expert. See Alden
Leeds, Inc. v. NLRB, 812 F.3d 159, 166 (D.C. Cir. 2016)
(“Although [the employer] argues that the record contains
evidence that is contrary to the Board’s findings and supports its
position, ‘[t]he question before us is not whether substantial
evidence supports the [employer’s] view, but whether it supports
the Board’s.’” (quoting Wayneview Care Ctr. v. NLRB, 664 F.3d
341, 352 (D.C. Cir. 2011))).
3. CNN further claims that, in focusing on its hiring of
applicants who lacked the technical expertise of TVS applicants,
the Board disrespected “CNN’s business judgment to value
[photo]journalistic skills and potential over traditional (and
increasingly irrelevant) technical background.” Reply Br. 18.
That claim is unfair. The ALJ did not dispute CNN’s business
judgment. He simply found no evidence to support CNN’s
contention that non-TVS applicants possessed greater
journalistic skills than TVS applicants. There was, he said, an
“[a]bsence of credible evidence regarding the hiring decisions
made for photojournalists.” ALJ Op., 361 NLRB No. 47, at 68.15
15
See ALJ Op., 361 NLRB No. 47, at 69 (“[T]he deliberations
[about photojournalists] . . . are poorly documented. CNN’s witnesses
generally recall very little of what occurred, and their testimony is
often inconsistent.”); id. (“It is . . . very unclear what actually
transpired . . . [in the hiring of photojournalists] and on what basis the
final decisions were made.”); id. at 88 (“[E]xactly when, how and on
what basis decisions were made with regard to the hiring of New York
27
Nor was there evidence that CNN’s new “photojournalists” had
materially different responsibilities than TVS’ “field
technicians.” See id. at 112. To the contrary, “[m]ost
employees continued to spend most of the day performing the
same tasks and using the same skills they had used in their work
for [TVS].” Id. at 108.16
4. Finally, CNN maintains that, even if anti-union animus
infected specific hiring decisions, the NLRB failed to find that
“CNN had systematically manipulated or disregarded its neutral
hiring policy,” or even “that the [discriminatory] disparities
were widespread.” CNN Br. 60. Although it is true that the
NLRB did not use the phrase “systematically manipulated,” it
used other formulations to the same effect. See, e.g., ALJ Op.,
361 NLRB No. 47, at 55 (“I find that the entire Bureau Staffing
Project was discriminatorily motivated . . . .”); id. at 75-76
(finding that “CNN manipulated its hiring decisions to obtain
. . . a mix of TVS and non-TVS applicants that in conjunction
with CNN’s plan to pack the bargaining unit, would allow it to
decline to recognize [the union]”). And CNN’s claim
notwithstanding, the NLRB did in fact adopt the ALJ’s finding
that the discriminatory disparities were “widespread.” Id. at 50
(“During the [Bureau Staffing Project], CNN engaged in
widespread and blatant discrimination against [TVS] bargaining
photojournalists remains a mystery.”).
16
See ALJ Op., 361 NLRB No. 47, at 109 (“[W]ith regard to the
photojournalists, the evidence shows that for at least 6 months after
the end of the [TVS] contract, all photojournalists were performing the
same work as TVS field technicians for the vast majority of the
workday. The same is true for most photojournalists even after the
first 6 months.” (internal citation omitted)).
28
unit members. CNN did so with the objective of depriving
employees of [union] representation.”).17
CNN insists that the NLRB should have “sought to
quantify” the hiring disparities it found. CNN Br. 60. But we
have affirmed Board findings of generalized animus in hiring
even where the Board did not provide a statistical summary of
the employer’s anti-union practices. See Great Lakes Chemical
Corp., 967 F.2d at 628. Simply put, where there is “broadly
damning . . . evidence that the Employer acted out of general
animus toward the Union” -- whether qualitative or quantitative
-- the Board can presume that “any [union] employee not hired
was turned away because of his union adherence.” Id. For the
reasons discussed above, this case fits the mold.18
***
17
See also Board Op., 361 NLRB No. 47, at 19 (“As the record
. . . shows, . . . there were numerous instances of interviewing /
debriefing / hiring disparities that adversely affected TVS applicants.
In every job category, . . . hiring managers ignored ostensibly
governing protocols intended to ensure the objectivity of the
behavioral interviewing process.”).
18
In any event, the NLRB did in fact quantify the hiring
disparities it found. The ALJ listed the exact number of additional
TVS employees CNN would have hired absent its anti-union
discrimination: 46 additional TVS employees in the Washington
bureau and 63 additional TVS employees in the New York bureau.
ALJ Op., 361 NLRB No. 47, at 102. The ALJ arrived at these
numbers by listing the name of every non-TVS employee who
received a job based on preferential treatment at the expense of a more
qualified TVS employee, and explaining the nature of that preferential
treatment. Id. Thus, CNN’s claim that the NLRB “steadfast[ly]
refus[ed]” to quantify CNN’s hiring irregularities, Reply Br. 24, is
simply incorrect.
29
In sum, despite CNN’s arguments, we remain convinced
that substantial evidence supports the Board’s finding that anti-
union animus was a motivating factor in CNN’s hiring
decisions, thus satisfying the first step of the Wright Line test.
C
“Where, as here, the General Counsel makes a strong
showing of discriminatory motivation, the employer’s rebuttal
burden is substantial.” Bally’s Park Place, Inc., 646 F.3d at
936. To satisfy that Wright Line burden, CNN offered two
neutral justifications for its hiring decisions that assertedly
showed it would have made the same decisions regardless of any
animus. The Board, however, reasonably found that those
justifications were pretextual.
First, CNN contended that it needed to overhaul its
workforce in order to adapt to technological changes in the
television-news industry. But this explanation is belied by the
fact that CNN’s operations did not materially change when the
Service Agreements ended. In representative testimony, one
former TVS employee hired by CNN testified that “everything
in her new job was the same as her TVS job.” Board Op., 361
NLRB No. 47, at 15; see also, e.g., id. at 16; ALJ Op., 361
NLRB No. 47, at 112. And the ALJ found that, “[w]hile CNN
employees performing what was bargaining unit work may use
some newer equipment and may have been given some
additional duties, the work they performed was essentially the
same as the work they performed for [TVS].” ALJ Op., 361
NLRB No. 47, at 108.
Moreover, to the extent that some changes occurred,
“[t]here [wa]s no evidence that any [TVS] employee . . . could
not have adapted to the technological changes that CNN was
undertaking.” Id. at 51. To the contrary, the TVS employees
30
whom CNN hired generally showed more technological
proficiency than the non-TVS hires. See id. at 63. As the Board
noted, the TVS employees “had lived through substantial
technological changes, . . . [and] CNN never terminated or
directed the termination of any TVS unit employee for failing to
keep up with those changes or inability to perform the work.”
Board Op., 361 NLRB No. 47, at 19. Indeed, “when it
terminated the TVS contracts, . . . CNN personnel went out of
their way to praise the abilities of the two bargaining unit work
forces.” Id. In the face of this evidence, it was hardly
unreasonable for the Board to conclude that replacing veteran
technicians with a cohort of inexperienced and underqualified
newcomers was an unlikely strategy for keeping up with a world
of increasing technological complexity.
Second, CNN contended that it based its hiring decisions on
the neutral “behavioral interviewing” process that it adopted at
the outset of the Bureau Staffing Project. But even assuming
this process were facially neutral, we have detailed in Part III.A
how frequently CNN deviated from it to favor non-TVS
applicants. Where, as here, an employer “applied its neutral
criteria inconsistently,” it is reasonable for the Board to
conclude “that the hiring criteria served as little more than
pretext for weeding out . . . union employees.” Waterbury Hotel
Mgmt., LLC, 314 F.3d at 653; see also Board Op., 361 NLRB
No. 47, at 20.19
The Board found that “CNN’s reasons for failing to hire the
TVS technicians were all pretextual, and that it . . . therefore
failed to establish that it would not have hired the technicians
19
See also W & M Props. of Conn., Inc., 514 F.3d at 1349
(affirming Board finding that an employer failed to satisfy its Wright
Line rebuttal burden when it deviated from its alleged “neutral and
objective hiring criteria,” thereby rendering those criteria “illusory”).
31
absent its union animus.” Board Op., 361 NLRB No. 47, at 21.
Because substantial evidence underlies that finding, and because
“continuity of the business enterprise and the work force was
established,” id., we sustain the Board’s finding that CNN was
a successor employer and violated § 8(a)(5) by refusing to
bargain with the union. See Waterbury Hotel Mgmt., LLC, 314
F.3d at 653-55; Capital Cleaning Contractors, Inc., 147 F.3d at
1007.
IV
The Board found that CNN’s discriminatory hiring cost the
company in another respect as well. Such discrimination not
only caused CNN to become a successor employer and therefore
liable for failing to bargain. It also amounted to an independent
violation of NLRA § 8(a)(3).
Section 8(a)(3) makes it an unfair labor practice for an
employer to discriminate in hiring in order to “discourage
membership in any labor organization.” 29 U.S.C. § 158(a)(3).
The Board applies the same Wright Line framework in
determining whether an employer violated § 8(a)(3) through
discriminatory hiring as it applies in determining whether an
employer became a successor employer through discriminatory
hiring. See Waterbury Hotel Mgmt., LLC, 314 F.3d at 651-53,
655 (sustaining finding that an employer violated § 8(a)(3)
because its “hiring decisions were motivated by anti-union
animus,” and that it became a successor employer for the same
reason); Capital Cleaning Contractors, Inc., 147 F.3d at 1005-
07 (same). Accordingly, because we have already sustained the
Board’s successorship finding on the basis of discriminatory
hiring, see supra Part III, we likewise sustain its finding that
CNN violated § 8(a)(3) by discriminating in hiring.
32
V
Finally, the Board found that CNN violated NLRA § 8(a)(1)
through the no-union statements of supervisors Curry, Strauss,
Whelton, and Kinney, the content of which we have already set
forth above. See supra Part III.A. Section 8(a)(1) makes it an
unfair labor practice to “interfere with, restrain, or coerce
employees in the exercise of” their § 7 rights. 29 U.S.C.
§ 158(a)(1).20 An employer’s statement violates § 8(a)(1) if,
“considering the totality of the circumstances, the statement has
a reasonable tendency to coerce or to interfere with those
rights.” Tasty Baking Co., 254 F.3d at 124.
“Ordinarily, an employer’s statement that it will not have a
union at its plant does not violate section 8(a)(1).” Williams
Enters., Inc. v. NLRB, 956 F.2d 1226, 1234 (D.C. Cir. 1992).21
“A successor employer’s statement that it will not have a union
at its plant, however, does violate section 8(a)(1).” Id. Before
conducting its hiring process, a successor employer “does not
know whether it will have a duty to recognize and bargain with
the predecessor’s union because it does not know whether it will
hire a majority of the predecessor’s employees.” Id.
“Therefore, any statement that it will be nonunion ‘indicates to
the applicants that [it] intends to discriminate against the
[predecessor’s] employees to ensure its nonunion status.’” Id.
20
NLRA § 7 provides that “[e]mployees shall have the right to
self-organization, to form, join, or assist labor organizations, to
bargain collectively through representatives of their own choosing,
and to engage in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection.” 29 U.S.C. § 157.
21
Such a statement, however, can provide evidence of a § 8(a)(3)
violation for discriminatory hiring. See supra Part IV.
33
(quoting Kessel Food Markets, Inc., 287 NLRB 426, 429 (1987),
enforced, 868 F.2d 881 (6th Cir. 1989)).
Three of the four supervisor statements -- Curry’s,
Strauss’s, and Whelton’s -- were made before CNN completed
its Bureau Staffing Project hiring. The Board found that each of
those statements gave employees the message, either explicitly
or implicitly, that CNN’s new workforce would not have union
representation. Board Op., 361 NLRB No. 47, at 22-23. Yet, as
a successor employer that had not finished its hiring process,
CNN could not have legitimately known that fact. It was
therefore reasonable for the Board to conclude that the
statements signaled CNN’s intent to discriminate against union
members in its hiring. And that, in turn, was sufficient to
support the conclusion that the statements had a reasonable
tendency to coerce employees, thereby violating § 8(a)(1). See
Williams Enters., Inc., 956 F.2d at 1234.
But what about Kinney’s statement, which he made after
CNN completed its Bureau Staffing Project hiring process? For
a successor employer’s no-union statement to violate § 8(a)(1),
the employer’s hiring process must either be upcoming or
ongoing. See id. If the process has been completed, then the
employer could know with reasonable certainty that its
workforce would lack union representation, so a no-union
statement would not generally suggest coercion. See id.
Although it is true that CNN had finished hiring full-time
employees through the Bureau Staffing Project when Kinney
made his no-union statement to TVS employee Jonathan Smith,
the record shows that CNN was still hiring freelance cameramen
at that time. See ALJ Op., 361 NLRB No. 47, at 61. In
February 2004, after CNN had completed the Bureau Staffing
Project, Smith called Kinney about obtaining freelance camera
work. Id. Kinney told Smith that “CNN was hiring cameramen
34
who owned their own gear.” Id. Smith responded that he had
his own gear, and then asked Kinney “if his membership in the
Union was a problem.” Id. Kinney replied, “[t]hat’s good to
know,” and told Smith that “he would have to check with
‘higher-ups’” before extending Smith an offer, but that Smith
would “be good to have around because of his maturity.” Id.
Three weeks later, “Kinney informed Smith that because of his
prior relationship with [TVS] and the Union, CNN was not
going to be able to offer him freelance work.” Id. Thus,
because the hiring process for freelance cameramen was
ongoing, Kinney’s statement to a freelance applicant that CNN
would not hire him due to his union membership constituted a
fourth violation of § 8(a)(1).
VI
This brings us to CNN’s challenge to the Board’s remedy.
NLRA § 10(c) authorizes the Board, upon finding an unfair
labor practice, “to take such affirmative action including
reinstatement of employees with or without back pay, as will
effectuate the policies of [the Act].” 29 U.S.C. § 160(c). While
the Board has “broad discretionary power under this section to
fashion remedies,” Petrochem Insulation, Inc. v. NLRB, 240
F.3d 26, 34 (D.C. Cir. 2001), its orders must be “truly remedial
and not punitive” because the Board lacks statutory authority to
punish employers for their bad acts, Capital Cleaning
Contractors, Inc., 147 F.3d at 1009. Nor may a remedial order
impose “an undue burden” on an employer by requiring “a
substantial outlay of new capital or otherwise caus[ing] undue
financial hardship.” Regal Cinemas, Inc. v. NLRB, 317 F.3d
300, 315 (D.C. Cir. 2003) (internal quotation marks omitted);
see Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 216
(1964).
35
CNN takes issue with three of the affirmative obligations
the Board imposed in its remedial order: (1) that CNN provide
backpay and benefits to all TVS employees, both those who lost
their jobs and those who were hired at reduced pay, at the wage
rate provided in the TVS collective-bargaining agreements; (2)
that CNN reinstate and provide any necessary training to all
TVS workers who were discharged and not hired by CNN; and
(3) that CNN recognize and bargain with the union as the
exclusive representative of the unit employees. We analyze
these claims one at a time, as each presents its own unique set of
issues.
A
In Capital Cleaning Contractors, Inc. v. NLRB, this court
confronted a Board-ordered backpay remedy materially identical
to that imposed here. Like CNN, the employer in that case took
over a predecessor’s business and discriminatorily refused to
hire its predecessor’s union employees. Capital Cleaning
Contractors, Inc., 147 F.3d at 1005-07. As here, we affirmed
the Board’s findings that the successor employer violated
§ 8(a)(1), (3), and (5). Id. at 1007. To remedy those violations,
the Board ordered the employer to provide backpay to all injured
employees “at the rate set by the [collective-bargaining
agreement] between [the predecessor employer and the union]
for the entire period from the violation . . . until such future time
as [the successor employer] reaches a new agreement or an
impasse with [the union].” Id. at 1010.
The court concluded that the Board’s backpay remedy
exceeded its authority because, rather than “restore the situation
‘as nearly as possible, to that which would have obtained but for
the illegal discrimination,’” id. at 1009 (quoting Sure-Tan, Inc.
v. NLRB, 467 U.S. 883, 900 (1984)), the remedy “[was]
punitive,” id. at 1010. “By engaging in anti-union
36
discrimination,” the court held, “the successor loses only the
right to set initial terms without first bargaining with the union;
it does not lose the right to take an initial bargaining position
with the union and to bargain hard from that point.” Id. at 1011.
Based on this reasoning, the court announced the following
limitation on backpay in successor-employer cases: The Board
may require backpay based on the terms of the predecessor’s
collective-bargaining agreement “only for ‘a period allowing for
a reasonable time of bargaining.’” Id. (quoting Kallmann v.
NLRB, 640 F.2d 1094, 1103 (9th Cir. 1981)). Thereafter,
backpay must be based on the wages the successor employer
“actually paid the new employees who did the work previously
done by the [predecessor’s] employees,” unless the Board can
show that the successor “would have agreed in negotiations with
the Union to pay a higher rate than it had to pay for alternative
labor.” Id.
In the case now before us, the Board ordered CNN to
provide backpay and benefits, under the terms of the TVS
collective-bargaining agreement, to all TVS employees for the
entire period since the termination of the TVS contracts. That
remedy does not comply with the holding of Capital Cleaning.
Nor does the Board’s brief dispute the point. Instead, it argues
that, while the Capital Cleaning limitation applies to successor
employers, it does not apply to joint employers. But whether or
not that is correct, it cannot support the remedy in this case
because we have vacated the Board’s finding that CNN was a
joint employer. Capital Cleaning therefore binds us, and we
remand for the Board to limit its backpay remedy in accordance
with that precedent.
37
B
CNN next challenges the Board’s order that CNN reinstate
the 114 former TVS employees whom it did not hire and
provide those employees with training. CNN contends that this
remedy imposes an “undue and unfair burden” in light of
changes at CNN since 2003, CNN Br. 68, and “has grave First
Amendment implications,” id. at 71.
CNN’s attacks on the Board’s reinstatement remedy are
premature. In denying CNN’s motion for reconsideration, the
Board explained that it was deferring resolution of the challenge
to the reinstatement order to “the compliance phase of this
proceeding.” CNN America, Inc., 362 NLRB No. 38, at 1. This
court has consistently declined to consider challenges to
remedial orders when the Board has “reserve[d] the issue for
later consideration.” Scepter, Inc. v. NLRB, 448 F.3d 388, 391
(D.C. Cir. 2006); accord E.I. Du Pont de Nemours & Co. v.
NLRB, 489 F.3d 1310, 1317 (D.C. Cir. 2007); Ark Las Vegas
Restaurant Corp. v. NLRB, 334 F.3d 99, 107 (D.C. Cir. 2003).
There is no reason to depart from that practice here.
Citing Great Lakes Chemical Corp. v. NLRB, CNN
contends that, despite the forthcoming compliance proceedings,
“it is appropriate at this stage for the Court to review the burdens
that any wide-scale rehiring would impose.” CNN Br. 68 n.9.
But Great Lakes actually stands for the opposite conclusion.
There, after the Board had said it would consider the employer’s
challenge to a reinstatement order in compliance proceedings,
we “reject[ed] as premature [the employer’s] present objection
to the apparent breadth of the Board’s order.” Great Lakes
Chemical Corp., 967 F.2d at 630.
In holding that CNN’s challenge is premature, we express
no view on its merits. If the Board retains a reinstatement order
38
after compliance proceedings, CNN will have the opportunity to
present its arguments in a petition for review of that order. See
id.
C
Finally, CNN challenges the Board’s order to recognize and
bargain with the union. The bargaining order was
impermissible, CNN maintains, because the Board failed to
follow this Circuit’s requirement that such an order be
accompanied by an explanation. We agree.
“This court repeatedly has reminded the Board that an
affirmative bargaining order is an extreme remedy that must be
justified by a reasoned analysis that includes an explicit
balancing of three considerations: (1) the employees’ § 7 rights
[of self-organization and collective bargaining]; (2) whether
other purposes of the Act override the rights of employees to
choose their bargaining representatives; and (3) whether
alternative remedies are adequate to remedy the violations of the
Act.” Vincent Indus. Plastics, Inc., 209 F.3d at 738. “We have
repeatedly held that if the Board wishes to impose an affirmative
bargaining order, it must explain why that remedy is appropriate
given the facts of that particular case.” Lee Lumber & Bldg.
Material Corp. v. NLRB, 117 F.3d 1454, 1461 (D.C. Cir.
1997).22 This requirement applies with full force in the context
22
See, e.g., Scomas of Sausalito, LLC v. NLRB, 849 F.3d 1147,
1156 (D.C. Cir. 2017); Cogburn Health Ctr., Inc. v. NLRB, 437 F.3d
1266, 1273-75 (D.C. Cir. 2006); Douglas Foods Corp. v. NLRB, 251
F.3d 1056, 1065-67 (D.C. Cir. 2001); Flamingo Hilton-Laughlin v.
NLRB, 148 F.3d 1166, 1170-73 (D.C. Cir. 1998); Exxell/Atmos, Inc.
v. NLRB, 28 F.3d 1243, 1248-49 (D.C. Cir. 1994); Caterair Int’l v.
NLRB, 22 F.3d 1114, 1122-23 (D.C. Cir. 1994); Peoples Gas Sys., Inc.
v. NLRB, 629 F.2d 35, 46 (D.C. Cir. 1980).
39
of successor employers and incumbent unions. See Sullivan
Indus. v. NLRB, 957 F.2d 890, 903 (D.C. Cir. 1992) (refusing to
enforce the Board’s order requiring a successor employer to
bargain with a union because “the Board ha[d] not explained
why an affirmative bargaining order -- with its corresponding
decertification bar -- [was] the appropriate remedy in th[at]
case”).
For its part, the Board has long disagreed with our Circuit’s
requirement, see supra note 22, although on occasion its
decisions have nonetheless combined an expression of
disagreement with sufficient explanation to satisfy the
requirement, see, e.g., In re Marion Hosp. Corp., 335 NLRB
1016, 1019-20 (2001), enforced, 321 F.3d 1178 (D.C. Cir.
2003). It did not do so here. Instead, it provided no explanation
whatsoever for the bargaining order it imposed. We are thus left
with no choice but to grant CNN’s petition on this point and
remand for the Board either to vacate the order or provide
sufficient justification. See Lee Lumber & Bldg. Material Corp.,
117 F.3d at 1462 (“Case law in our circuit is as clear as it could
be on this question. The Board, however, continues to ignore us.
We continue to reverse.”).
VII
We deny the Board’s application for enforcement and grant
CNN’s cross-petition with respect to the violations that flow
from the Board’s finding that CNN was a joint employer
because the Board failed to explain its departure from relevant
Board precedents. We do likewise with respect to those
elements of the Board’s remedial order that depart from this
Circuit’s precedents. In all other respects, we grant the Board’s
application and deny CNN’s cross-petition for review.
So ordered.
KAVANAUGH, Circuit Judge, concurring in part and
dissenting in part: The majority opinion concludes that the
Board erred in its analysis of the joint-employer issue. By
contrast, the majority opinion upholds the Board’s analysis on
the successor-employer issue. In my view, the Board erred in
its analysis of both the joint-employer and the successor-
employer issues. I therefore respectfully concur in part and
dissent in part.
* * *
CNN contracted with TVS for certain technical services
related to CNN’s television operations. CNN then decided to
terminate its contracts with TVS and bring those services in-
house. In staffing up, CNN hired about 100 former TVS
employees, most of whom were union members. But CNN
did not consider itself a “successor employer” to TVS and did
not bargain with the union that represented the newly hired
CNN employees. (In the past, TVS had negotiated with the
union representing those employees in the predecessor units at
TVS.)
There are two key issues in this case: (i) Were CNN and
TVS joint employers of the TVS employees such that CNN
could not lawfully terminate the TVS contracts without
bargaining with the TVS employees’ union? (ii) Was CNN a
successor employer to TVS because of CNN’s supposed
discrimination against former TVS employees when CNN
hired for its new in-house positions? The Board said yes to
both questions. The majority opinion concludes that the
Board’s first conclusion is not sustainable on this record, but
the majority opinion upholds the Board’s second conclusion.
I do not think that either of the Board’s conclusions is
sustainable on this record.
First, as the majority opinion persuasively explains, the
Board erroneously concluded that CNN and TVS were joint
2
employers of the TVS employees. The Board did not analyze
the CNN-TVS relationship under the Board’s “direct and
immediate control” test. The Board has long used that test for
determining joint-employer status. And that test was in place
at the time the Board issued its decision in this case. The
Board’s failure to apply that test (or to reasonably explain
why it was not doing so) flouts basic principles of
administrative law, as the majority opinion rightly concludes.
Moreover, in my view, there is no plausible way to apply the
“direct and immediate control” test and conclude that CNN
and TVS were joint employers.
Second, for several independent reasons, I also do not
believe we can sustain the Board’s successor-employer
conclusion on this record. (I therefore respectfully disagree
with the majority opinion on that issue.)
Under Board law, there are two relevant ways in which
an employer may become a successor to the predecessor
employer. First, a new employer is considered a successor
employer when, among other things, a majority of the new
employer’s work force in an appropriate unit consists of
former employees of the predecessor employer. In that
circumstance, a successor employer must bargain with the
union but ordinarily is not bound by the prior collective-
bargaining agreement. Second, a new employer may be
considered a successor employer when it discriminates in
hiring against the prior employer’s union-member employees.
In that circumstance, the new employer may be bound by the
prior collective-bargaining agreement, which may in turn
require back-pay remedies.
Here, in reaching its conclusion that CNN was a
successor employer to TVS, the Board adopted the second
approach. The Board reasoned that CNN had discriminated
3
against union members (the former TVS employees) in hiring
for CNN’s new in-house positions. In reaching that
discrimination conclusion, the Board relied in part on CNN’s
purportedly unlawful termination of its contracts with TVS.
The Board’s conclusion that CNN’s termination of its
contracts with TVS was unlawful in turn rested on the
Board’s conclusion that CNN and TVS were joint employers.
As noted above, however, CNN and TVS were not joint
employers under the “direct and immediate control” test, and
we are remanding that issue back to the Board. It follows that
we should also remand the successor-employer issue. The
Board’s jaundiced view of CNN’s termination of the TVS
contracts clearly infected the Board’s view of CNN’s
subsequent hiring decisions with respect to the former TVS
employees. If the Board on remand were to find that the
termination was lawful, the Board would then have to assess
whether CNN’s lawful termination of the TVS contracts could
somehow still be considered evidence of CNN’s
discrimination against the former TVS employees in its hiring
decisions. The Board has not yet conducted that analysis.
Therefore, I believe we must remand the successor-employer
issue.
The majority opinion disagrees, in part because it does
not believe that the Board’s finding that CNN unlawfully
terminated its contracts with TVS was necessary to the
Board’s successor-employer conclusion. What we know on
this record, however, is that the Board in fact relied on CNN’s
purportedly unlawful termination of its TVS contracts as one
basis for its conclusion that CNN was a successor employer. I
do not think we can airbrush that part of the Board’s analysis
out of the picture. See SEC v. Chenery Corp., 318 U.S. 80,
87-88 (1943).
4
Moreover, even if I am wrong about that point and we
must reach the merits of the successor-employer issue, I
respectfully disagree with the majority opinion’s merits
analysis. I instead agree with Member Miscimarra’s dissent
from the Board’s decision. See CNN America, Inc., 361
NLRB No. 47, at 42 (2014) (Miscimarra, dissenting). On this
record, I do not see substantial evidence that CNN, when
making hiring decisions, discriminated against former TVS
employees. The statistics suggest that CNN favored former
TVS employees. Indeed, CNN hired about 100 former TVS
employees. If CNN really had some nefarious plan to
discriminate against TVS employees in its hiring, CNN’s
purported plan was, in Member Miscimarra’s words, “an
abject failure.” Id. at 31. As Member Miscimarra further
explained: The Board’s “finding of unlawful motivation is
undermined by CNN’s actual hiring of a work force majority
consisting of former TVS employees in both Washington,
D.C., and New York, requiring CNN to recognize and bargain
with the Unions in both locations.” Id. at 41. In short, on this
record, the Board’s conclusion that CNN was a successor
employer because of CNN’s purported discrimination against
union members is not supported by the record and should not
be sustained.
That said, I agree with Member Miscimarra’s further
conclusion that CNN would qualify as a successor employer
under the Board’s traditional successor-employer analysis.
See Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d
999, 1005 (D.C. Cir. 1998). That analysis depends on
whether a majority of employees in the new CNN units were
former TVS (union) employees, and whether the historical
bargaining units remained appropriate at CNN. The answer to
both questions is yes.
5
That raises a natural question: If CNN is a successor
employer, why does it matter which way CNN qualifies as a
successor employer? Money. Lots of money. As noted
above, finding CNN a successor employer under the
traditional test would have dramatically different
consequences in terms of the remedies available in this case.
In particular, under the traditional test, CNN would be subject
to an obligation to bargain with the union going forward.
Under the discrimination finding, however, CNN could also
be liable for tens of millions of dollars of back pay to former
TVS employees. So if CNN qualifies as a successor
employer only under the traditional test and not under the
discrimination test, that would make a huge difference in the
real world. Under my view on the merits of the successor-
employer issue, which was also Member Miscimarra’s view,
CNN qualifies as a successor employer only under the
traditional test. I would therefore remand to the Board for it
to re-determine the appropriate remedies associated with the
proper successor-employer conclusion.
Bottom line: In my view, the Board jumped the rails in
its analysis of both the joint-employer and the successor-
employer issues.