Windsor Redding Care Center, LLC v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 15, 2019 Decided December 10, 2019

No. 18-1299

WINDSOR REDDING CARE CENTER, LLC,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 2015, AS

SUCCESSOR TO SEIU UNITED HEALTHCARE WORKERS-WEST,

CTW, CLC,

INTERVENOR

Consolidated with 19-1010

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

John J. Manier argued the cause for petitioner. With him

on the briefs was John B. Golper.

Michael R. Hickson, Attorney, National Labor Relations

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

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were Peter B. Robb, General Counsel, David Habenstreit,

Acting Deputy Associate General Counsel, and Elizabeth

Heaney, Supervisory Attorney.

David A. Rosenfeld was on the brief for intervenor Service

Employees International Union Local 2015 in support of

respondent.

Before: HENDERSON and ROGERS, Circuit Judges, and

EDWARDS, Senior Circuit Judge.

Opinion for the Court by Circuit Judge Rogers.

ROGERS, Circuit Judge: The National Labor Relations

Board found that Windsor Redding Care Center (“the

Company”) violated Sections 8(a)(1) and 8(a)(3) of the

National Labor Relations Act by suspending and discharging

one of its employees, Angelia Rowland. The Company

petitions for review of that finding, and the Board has applied

for enforcement of its Order, which includes matters not

contested by the Company. The issue before the court is

whether the Board’s finding that the Company suspended and

discharged Rowland because she engaged in protected activity

is unsupported by substantial evidence on the record, which

includes contrary findings of the administrative law judge

(“ALJ”) and the evidence relied on by the dissenting Member

of the Board. Although the Board is not obliged to agree with

either the judge or its dissenting Member, the Board is

obligated to confront evidence detracting from its conclusions,

particularly where the dissenting Member has offered a non-

frivolous analysis. For the following reasons, we grant the

Company’s petition and deny the Board’s application for

enforcement of its Order as it relates to Rowland.

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I.

In view of our conclusion that the Board’s decision

relating to the Company’s suspension and discharge of Angelia

Rowland was unsupported by substantial evidence, we set forth

the record evidence in some detail. First, certain evidence is

undisputed. The Company is a skilled nursing home in

Redding, California. Its nurse employees, among others, are

unionized and represented by the Service Employees

International Union United Service Workers-West (“the

Union”). Rowland was a nurse employed by the Company for

approximately eleven and a half years, and was well-regarded.

She was also visibly involved in the Union’s activities,

campaigning for the Union before the election, demonstrating

pro-Union signs in her car in the Company parking lot, and

participating in collective bargaining as a member of the

Union’s bargaining committee.

Further, on May 24, 2012, Rowland accompanied

“Resident B,” a patient of the Company, to an off-site doctor’s

appointment. Rowland and Resident B were transported to the

doctor’s office in a van driven by Lewis Johnson, who was

employed by a third-party company. Resident B was known to

be a difficult patient; she regularly yells and curses at her

caregivers. According to Rowland’s testimony, which was

corroborated by other Company employees, Resident B often

says “knock it off” and “I’ll beat your ass” and sometimes says

those two phrases in combination. Tr. 318:20–25 (Aug. 21,

2012). The ALJ found that Resident B is “prone to frequent,

sometimes near constant, outbursts of yelling, screaming, and

threatening, accompanied by the use of profanity. Sometimes

those outbursts also include threats of bodily harm.” ALJ Dec.

at 10. Rowland and the Company also agreed that Resident B

often varies the sound and volume of her voice.

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Second, the relevant disputed facts relate to what happened

when Rowland and Resident B were entering the doctor’s

office and Resident B was shouting and cursing. Terra

Pagnano, a doctor’s office employee at the front desk when

Rowland and Resident B were entering, testified that she heard

— but did not see — Rowland tell Resident B in response, “If

you don’t knock that off, I’m going to beat your ass.” Tr.

797:4–5 (Aug. 23, 2012). Two other doctor’s office employees

at the front desk testified that they heard the same thing. The

doctor’s office employees were shocked, and Pagnano called

Jane Thimmesch, the Company’s Director of Nursing, to report

what they had heard. Thimmesch passed along that information

to Anne Gilles, an administrator at the Company and

Rowland’s supervisor. Gilles immediately went to the doctor’s

office and interviewed two of the three employees who claimed

to have heard Rowland threaten Resident B. She impressed

upon them the gravity of their accusation and asked them to

repeat their story multiple times. Gilles also spoke with

Johnson, the van driver; at the time, he was preoccupied with

an electronic device and was terse. Johnson testified that he

told Gilles that he “didn’t see anything” happen between

Rowland and Resident B. Tr. 457:14–24 (Aug. 22, 2012).

Third, what happened thereafter is also largely undisputed.

When Rowland returned to the Company facility, Thimmesch

asked her to meet with Gilles. Rowland brought a Union

representative with her to the meeting, at which Gilles

informed her of the accusations against her and notified her that

she would be suspended pending an investigation, pursuant to

the Company’s elder-abuse policies. Rowland denied yelling

anything at Resident B in the doctor’s office.

The following day, May 25, Gilles returned to the doctor’s

office and spoke with the three employees who had accused

Rowland of threatening Resident B. Gilles again impressed

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upon them the gravity of their accusations. In light of Resident

B’s known habit of speaking in different voices, Gilles also

asked them if they were sure that it wasn’t Resident B that they

had heard make the threat. The employees confirmed their

stories and provided written statements to Gilles.

Also on May 25, Rowland came to the Company facility

to have Gilles officially approve her absence, as a result of her

suspension. Another Company employee, Alice Martinez,

accompanied Rowland. At some point during the meeting, talk

turned to the Union — specifically, to the signs that Union

members displayed in their vehicles, which referenced an

ongoing bargaining dispute. Rowland was surprised that the

conversation, which she expected to be about her suspension

and the investigation, had veered into Union matters, and

eventually Martinez interrupted to remind Gilles that the

meeting was about Rowland’s job. Martinez testified that

Gilles responded: “Oh no. This is about the Union. This is all

about the Union.” Tr. 483:9–10 (Aug. 22, 2012).

Later on May 25, Gilles had a conference call with two

human resources employees and her supervisor, Ken Cess.

They collectively decided to terminate Rowland’s

employment. On May 29, Rowland, accompanied by a Union

representative, met with Gilles and Thimmesch and was

informed that her employment was being terminated. At the

meeting, Rowland provided a written statement denying the

allegations against her and stating that she believed the

suspension and termination were motivated by her Union

support and involvement. Toward the end of the meeting,

Gilles asked Rowland what the van driver had been doing

during the May 25 incident. Rowland replied that she had

covered that in the May 25 meeting and Rowland added a

handwritten note to the notice of termination objecting to

Gilles’s failure to interview the driver.

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The day after Rowland’s employment was terminated,

Gilles continued her investigation into the incident by calling

Johnson’s dispatcher. The dispatcher told Gilles that Johnson

had told her that Resident B was yelling the entire time but that

he did not hear Rowland say anything. Cess also investigated

the incident following the discharge; he testified his concern

was that an unfair labor practice charge might result, given that

the discharge occurred in the midst of the Company’s

bargaining efforts with the Union. He attempted to speak with

Johnson and also drove to the doctor’s office and interviewed

two of the three employees who accused Rowland of

threatening Resident B. Neither party’s investigations gave

them reason to second-guess the decision to fire Rowland.

II.

Section 7 of the National Labor Relations Act guarantees

employees “the right to self-organization, to form, join, or

assist labor organizations, to bargain collectively . . . , and to

engage in other concerted activities.” 29 U.S.C. § 157. Section

8(a)(1) of the Act declares it an unfair labor practice for an

employer “to interfere with, restrain, or coerce employees in

the exercise” of those Section 7 rights. Id. § 158(a)(1). Section

8(a)(3) of the Act declares it an unfair labor practice for an

employer “to encourage or discourage membership in any labor

organization” “by discrimination in regard to hire or tenure of

employment or any term or condition of employment.” Id.

§ 158(a)(3). When an employer claims to have discharged an

employee for legitimate reasons and not because she engaged

in activities protected by Section 7, the Board applies the two-

step inquiry of Wright Line. See NLRB v. Transp. Mgmt. Corp.,

462 U.S. 393, 400–04 (1983). At step one, the General Counsel

for the Board must make out a prima facie case that the

employee’s protected activity was a motivating factor in the

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employer’s decision to fire her. See Inova Health Sys. v. NLRB,

795 F.3d 68, 80 (D.C. Cir. 2015). If the General Counsel

carries that burden, the analysis proceeds to step two, at which

“the burden of persuasion shifts to the employer ‘to show that

it would have taken the same action in the absence of the

unlawful motive.’” Id. (quoting Bally’s Park Place, Inc. v.

NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011)).

In 2012, following Rowland’s discharge, the Union filed

an unfair labor practice charge with the Board, and the

Regional Director issued a complaint alleging, among other

things, that the Company had violated Section 8(a)(1) and

8(a)(3) of the Act by terminating Rowland. An ALJ held an

evidentiary hearing and determined that the Company had not

violated the Act. Relying heavily on Gilles’s “it’s all about the

Union” comment, the ALJ decided that the Board’s General

Counsel had satisfied his burden under Wright Line of making

out a prima facie case that anti-Union animus was a motivating

factor in Rowland’s discharge. The ALJ then determined that

the Company had carried its burden under the second step of

Wright Line by showing that it would have discharged

Rowland notwithstanding her Union activities. In so doing, the

ALJ found that the Company’s “investigation reasonably

concluded that [Rowland] had committed the offense of which

she was accused,” ALJ Dec. at 21, that the misconduct of which

Rowland was accused had in fact occurred, and that that

incident gave the Company good reason to fire her, in light of

the company’s well-established zero-tolerance policy

regarding “willful abuse” of residents. Indeed, Rowland

herself acknowledged in her testimony before the ALJ that if

she had made the threat of which she was accused, it would

have been appropriate for the Company to terminate her

employment. Tr. 392:8–12 (Aug. 22, 2012). The ALJ further

found that the Company’s investigation had not been

superficial and that the Company had not engaged in disparate

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treatment of employees based on their involvement with the

Union. The General Counsel filed objections to the ALJ’s

findings and a brief in support of those objections. The

Company did not file any objections but did file a brief

responding to the General Counsel’s.

Two Members of the Board concluded that the Company

had not carried its Wright Line step-two burden of showing that

it would have fired Rowland even if she had not engaged in

protected Section 7 activity. The Board majority (hereinafter

“the Board”) rested that conclusion on two subsidiary

determinations. First, it found that comparator evidence

showed that employees who had committed similar offenses

had not been disciplined as harshly as Rowland. Specifically,

the Board found that Nancy Antonson was similarly situated to

Rowland and yet had not been disciplined following an

allegation of elder abuse. Antonson was accused by a patient

she was caring for of repeatedly handling her roughly, despite

requests to be gentler. The Company investigated the

allegation but ultimately gave her only a warning. The Board

found that this more lenient treatment, in the face of an

allegation of misconduct that was arguably as serious as that

against Rowland, indicated that the incident with Resident B

was not the Company’s actual motivation for discharging

Rowland. Second, the Board determined that the continuation

of Cess’s and Gilles’s investigations after Rowland’s firing

indicated that the Company harbored doubts that Rowland

committed the misconduct of which she was accused even as it

discharged her, suggesting that the alleged misconduct was not

the real reason for the discharge.

The dissenting Member would have affirmed the findings

of the ALJ, “see[ing] no reason to reject the [ALJ’s] thorough,

painstaking analysis.” Windsor Redding Care Center, LLC,

366 NLRB No. 127, at 9 (July 17, 2018) (“Dec.”) (Emanuel,

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M., dissenting in part). He responded to each of the grounds

on which the Board relied for its determination that the

Company would not have fired Rowland absent her Union

activities. First, Antonson was not, in his opinion, an

appropriate comparator because in Rowland’s case, unlike in

Antonson’s, there were multiple neutral witnesses to the

incident. Second, the Company’s post-discharge investigation

was, he concluded, “unremarkable” given that Rowland was a

good and well-liked employee and that the Company would

therefore have naturally “continue[d] to investigate in hopes of

uncovering information that would exonerate her.” Id. at 10.

The post-discharge investigation was appropriate, in his view,

in light of “reasonably anticipated litigation over the discharge”

about which Cess had testified. Id.

The Company petitions for review, and the Board cross-

applies for enforcement of the Order accompanying its

decision.

III.

The legal principles that the court must apply are well-

settled. The court reviews the Board’s decision deferentially

and will overturn it “only if the Board’s factual findings are not

supported by substantial evidence, or the Board acted

arbitrarily or otherwise erred in applying established law to the

facts of the case.” Fred Meyer Stores, Inc. v. NLRB, 865 F.3d

630, 638 (D.C. Cir. 2017) (quoting Pirlott v. NLRB, 522 F.3d

423, 432 (D.C. Cir. 2008)). A Board decision is arbitrary and

capricious if it “entirely fail[s] to consider an important aspect

of the problem” or “offer[s] an explanation for its decision that

runs counter to the evidence before [it].” Motor Vehicle Mfrs.

Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,

43 (1983). Likewise, this court has made clear that the Board

may not “totally ignore[] facts in the record,” Fred Meyer

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Stores, 865 F.3d at 638, and must “take into account whatever

in the record fairly detracts from its [conclusion’s] weight,”

David Saxe Productions, LLC v. NLRB, 888 F.3d 1305, 1312

(D.C. Cir. 2018) (alteration in original) (quoting Universal

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

“The findings and decision of the [ALJ] form an important

part of the ‘record.’” Int’l Bhd. of Teamsters, Local No. 310 v.

NLRB, 587 F.2d 1176, 1180 (D.C. Cir. 1978). Just as the board

may not “totally ignore[] facts in the record,” Fred Meyer

Stores, 865 F.3d at 638, the Board is obligated to give

“attentive consideration” to the ALJ’s decision, Greater

Boston Television Corp. v. FCC, 444 F.2d 841, 853 (D.C. Cir.

1970). Although the Board is “free to substitute its judgment

for the [ALJ]’s,” “when it disagrees with the ALJ, [it] must

make clear the basis of its disagreement.” Bally’s Park Place,

646 F.3d at 935 n.4 (first alteration in original) (quoting Local

702, Int’l Bhd. of Elec. Workers v. NLRB, 215 F.3d 11, 15 (D.C.

Cir. 2000)).

The Board’s obligation to engage with record evidence,

including the ALJ’s decision, is particularly acute when the

opinion of a dissenting Member draws attention to such

evidence. To ensure that the Board’s action “was the product

of reasoned decisionmaking,” the court will inquire whether it

“‘engage[d] the arguments before it,’ including those of a

dissenting Member,” Hawaiian Dredging Constr. Co. v.

NLRB, 857 F.3d 877, 881–82 (D.C. Cir. 2017) (alteration in

original) (first quoting State Farm, 463 U.S. at 52; then quoting

Del. Dep’t of Nat. Res. & Envtl. Control v. EPA, 785 F.3d 1,

11 (D.C. Cir. 2015)), so long as those arguments are not so

frivolous as to be “unworthy of consideration,” Chamber of

Commerce of the U.S. v. SEC, 412 F.3d 133, 144 (D.C. Cir.

2005).

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The Company contends that the Board failed to engage

with record evidence that was favorable to the Company and

that undercut the Board’s decision, rendering that decision

unsupported by substantial evidence. We agree, as follows.

First, the Board failed to engage with or even acknowledge the

evidence of the Company’s zero-tolerance elder-abuse policy,

which compelled it to fire any employee found to have

committed “willful abuse” of a resident. The ALJ alluded to

this policy and the seriousness with which the Company treated

allegations of elder abuse, and specifically found that the

Company “has successfully demonstrated that it is very serious

about preventing elder abuse and reporting any suspected

abuse.” ALJ Dec. at 19. As the ALJ found, the Company was

confronted with significant evidence from three “impartial”

witnesses with “no reason to be biased or prejudiced,” id., “that

Rowland had screamed a threat of physical violence towards

Resident B,” id. at 21. Rowland’s conduct “constituted

obvious elder abuse” and as such, and in light of the zero-

tolerance policy, “it was incumbent upon the [Company] to

take some disciplinary action against the employee who had

committed the offense.” Id. The ALJ’s analysis demonstrated

that the existence of the zero-tolerance policy was evidence

that Rowland’s willful misconduct was sufficient grounds for

her discharge, as she herself acknowledged, which, in turn,

supported the conclusion that the Company would have

discharged Rowland absent her Union activities. The Board

nevertheless failed to discuss the zero-tolerance abuse policy,

the seriousness with which the Company treated allegations of

willful abuse of residents, and the ALJ’s analysis. Yet the

Board was obligated to engage with evidence that showed that

the Company’s conduct was lawful, see David Saxe

Productions, 888 F.3d at 1312, particularly given that the

dissenting Member highlighted the significance of the zero-

tolerance policy to the Wright Line inquiry, see Hawaiian

Dredging, 857 F.3d at 881–82.

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Second, the Board’s conclusion regarding the significance

of Gilles’s and Cess’s post-discharge investigations is

unsupported by substantial evidence. At the hearing, Gilles

testified that she continued the investigation after Rowland’s

discharge to double check that she had properly heard and

understood Johnson’s version of events. Cess explained in his

testimony that the motivation for his investigation was to avoid

an unfair labor practice charge for discharging Rowland after

an inadequate investigation, given her high profile in the

Union. The dissenting Member drew the Board majority’s

attention to this evidence, stating that he would have found that

Cess and Gilles continued their investigations after Rowland’s

discharge “[o]ut of an abundance of caution.” Dec. at 9

(Emanuel, M., dissenting in part). The Board, in contrast,

decided that “it seems only logical that the [Company] would

have waited to terminate Rowland until it completed this

important investigation,” and that its failure to do so “suggests

that the [Company] would not have taken the same action based

on her purported comments alone.” Id. at 3. Inferring from a

post-discharge investigation that the employer did not believe

its stated reason for the discharge may well be reasonable when

that inference is supported by other record evidence or when

there is no other explanation for the post-discharge

investigations, but that is not the case here. To the contrary,

Gilles, Cess, and the dissenting Member all offered innocuous,

lawful explanations: the investigation was continued to ensure

its accuracy, to avoid later charges of an insufficient

investigation, or out of an abundance of caution. In light of

those explanations, the Company’s thorough investigation, and

the report of the three doctor’s office employees, the Board’s

conclusion that the post-discharge investigations indicated that

the Company did not believe the accusations against Rowland

was unreasonable.

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Finally, the Board concluded that the Company engaged

in disparate treatment in terminating Rowland because Nancy

Antonson was similarly situated to Rowland and had not been

disciplined following an allegation of elder abuse. This

conclusion is not supported by substantial evidence in the

record. The ALJ concluded that the General Counsel’s claim

that the Company was guilty of disparate treatment was

meritless. The ALJ found that “[t]here were other employees

accused of similar conduct, but the [Company’s] investigations

disclosed that no such conduct had occurred . . . [and] where

employees had actually been found to have engaged in

improper conduct, that conduct was not analogous to

Rowland’s conduct.” ALJ Dec. at 21. The Board implicitly

rejected the ALJ’s findings, at least as they applied to Antonson

and Rowland, stating that “the Company failed to explain why

it reacted differently to an arguable act of physical abuse than

it did to an arguable act of verbal abuse.” Dec. at 3.

To the extent the Board’s disparate treatment finding rests

on its view that Antonson and Rowland were accused of

“similar conduct,” its finding is contradicted by the record. The

Company records indicate that Antonson was not as gentle with

a resident as the resident preferred, and that Antonson

apparently rolled her eyes at the resident in response to

something that she said. The record supports the conclusion

that Antonson was guilty not of “willful abuse” of a resident

but only of misconduct. She was disciplined but not

terminated. Rowland, on the other hand, was found guilty of

willful abuse and terminated pursuant to the Company’s zero-

tolerance policy. So, Antonson’s case was not comparable to

Rowland’s.

The Board’s disparate treatment finding also appears to

rest on the view that Rowland and Antonson were similarly

situated because the Company did not believe either had

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committed “willful abuse” yet responded to these doubts

differently. This conclusion is undermined by the Board’s

unreasonable interpretation of the Company’s post-discharge

investigation. The Board’s characterization of Rowland’s

conduct as “an arguable act of verbal abuse” suggests that it

disagreed with the ALJ’s finding that the Company believed

that Rowland engaged in the misconduct of which she was

accused. The Board further stated that “[w]e additionally

disagree with our dissenting colleague’s suggestion that the

[Company] found the accusations against Antonson less

credible than those against Rowland,” citing the post-discharge

investigation as a reason. Id. at 3 n.10. Yet, as explained, the

Board majority’s conclusion, based on the post-discharge

investigation, that the Company disbelieved the accusations

against Rowland is not reasonable on this record. The Board,

consequently, could not rely on this reasoning to justify a

finding that Antonson and Rowland were similarly situated.

The Board therefore failed to adequately explain the basis

of its disagreement with the ALJ, see Bally’s Park Place, 646

F.3d at 935 n.4, and took action against the Company without

the support of substantial evidence in the record. See State

Farm, 463 U.S. at 43.

Accordingly, we grant the Company’s petition for review

and deny the Board’s cross-application for enforcement of the

portion of its Order related to the unfair labor practice finding

against the Company for its suspension and discharge of

Rowland. The Board’s cross-application for enforcement of

the remainder of its Order is granted.