Veritas Health Services, Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 1, 2011 Decided March 13, 2012

No. 11-1107

VERITAS HEALTH SERVICES, INC., DOING BUSINESS AS CHINO

VALLEY MEDICAL CENTER,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITED NURSES ASSOCIATIONS OF CALIFORNIA/UNION OF

HEALTH CARE PROFESSIONALS, NUHHCE, AFSCME,

AFL-CIO,

INTERVENOR

Consolidated with 11-1127

On Petition for Review

and Cross-Application for Enforcement

of an Order of the National Labor Relations Board

Theodore R. Scott argued the cause for petitioner. With

him on the briefs was Edward F. Berbarie. Steven L. Rahhal

entered an appearance.

2

Barbara A. Sheehy, Attorney, National Labor Relations

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

were John H. Ferguson, Associate General Counsel, Linda

Dreeben, Deputy Associate General Counsel, and Jill A.

Griffin, Supervisory Attorney. Ruth E. Burdick, Attorney,

entered an appearance.

Lisa C. Demidovich argued the cause for intervenor

United Nurses Associations of California/Union of Health

Care Professionals, NUHHCE, AFSCME, AFL-CIO, in

support of respondent.

Before: GARLAND and KAVANAUGH, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge

KAVANAUGH.

KAVANAUGH, Circuit Judge: In an April 2010 union

election, registered nurses working for Veritas Health

Services voted to make the United Nurses Associations of

California/Union of Health Care Professionals their

bargaining representative. But Veritas would not bargain

with the Union because Veritas claimed that pro-Union

conduct by supervising charge nurses had coerced the

registered nurses’ votes and tainted the election. Rejecting

Veritas’s claims, the National Labor Relations Board certified

the Union and found that Veritas had committed an unfair

labor practice by refusing to bargain. Veritas has petitioned

for review in this Court. We conclude that precedent and

substantial evidence support the Board’s conclusions. We

therefore deny Veritas’s petition and grant the Board’s cross-

application for enforcement of its order.

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I

By early 2010, the United Nurses Associations of

California/Union of Health Care Professionals organized a

campaign to represent the nurses at the Chino Valley Medical

Center, a community hospital operated by Veritas Health

Services. In order for the Union to successfully petition the

National Labor Relations Board to hold an election, the Union

needed cards authorizing representation from 30% of

employees. See 29 C.F.R. § 101.18(a).

In seeking the necessary authorization cards, the Union

reached out to registered nurses. It also contacted charge

nurses. Charge nurses supervise registered nurses by, among

other things, directing and assigning work to registered

nurses.

The Union’s efforts to recruit charge nurses succeeded.

Several charge nurses signed authorization cards, met with

Union representatives, and attended Union meetings. Some

also expressed pro-Union sympathies.

Some of the charge nurses actively encouraged

subordinate registered nurses to support the Union. The two

charge nurses who most actively promoted the Union were

Angelica Silva and Cheryl Gilliatt. Silva talked to six

registered nurses about future Union meetings, forwarding

text-message reminders to some and approaching others in

person to ask if they planned to attend. Gilliatt did even

more. She told about 10 registered nurses to attend the

Union’s meetings, saying, for example, “You need to attend

after work today.” Hr’g Tr. 310, May 26, 2010. And she

encouraged them to sign authorization cards, asking, for

example, “Have you signed a card? When are you planning

on going? You only have until Sunday, and you need to go

and sign the card.” Id. at 328.

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On February 22, 2010, after collecting the necessary

authorization cards, the Union petitioned the National Labor

Relations Board to hold an election. The election was

scheduled for April 1 and 2, 2010.

On March 5, the parties stipulated that these charge

nurses were supervisors under the National Labor Relations

Act. As a result, the charge nurses could not vote in the

election. After the stipulation, charge nurses apparently

stopped most of their pro-Union conduct. Soon thereafter,

moreover, Veritas promoted Gilliatt and Silva to managerial

positions. Perhaps not coincidently, both Gilliatt and Silva

then actively opposed the Union. Gilliatt told 20 to 30

registered nurses that she no longer supported the Union.

Silva told four registered nurses the same thing. And during

election week, both signed letters – personalized for every

registered nurse and printed on company letterhead – that

urged the registered nurses to vote against the Union:

Thursday, April 1 and Friday, April 2, 2010 are very

important dates for you, your family and the hospital.

It’s very important that you vote and please remember

your vote is secret.

We’ve already seen the union’s misrepresentation,

bullying tactics and the divisiveness that has resulted. In

contrast, we have been open and honest with you and

provided only factual information to help you make an

informed decision.

We the Chino Family enjoy our relationship and hope to

maintain a union free environment. Please vote no on

Thursday, April 1 and Friday, April 2, 2010.

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Letter from Chino Valley Medical Center, Joint Appendix

653. The letters were distributed to most of the registered

nurses.

The Union won the election, with 72 votes in favor of the

Union and 39 votes against (plus four contested ballots).

Veritas filed objections with the Board, claiming that the

charge nurses’ pro-Union conduct had tainted the election by

coercing and interfering with the free choice of the registered

nurses they supervised. After a multi-day hearing, the

Administrative Law Judge ruled against Veritas. The Board

adopted the ALJ’s opinion and certified the Union. The next

day, the Union sent Veritas a letter asking Veritas to bargain

collectively. Veritas refused, saying the certification was

illegitimate because the election was invalid. The day after

that, the Union filed an unfair labor practice charge for

refusing to bargain. Because the Board had already upheld

the election, it rejected Veritas’s claims and found that Veritas

committed an unfair labor practice by refusing to bargain with

the Union. Veritas has petitioned this Court for review, and

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

II

An employer must bargain collectively with a union that

is duly certified as the employees’ bargaining representative.

If the employer refuses to do so, it commits an unfair labor

practice under Section 8(a)(5) of the National Labor Relations

Act. 29 U.S.C. § 158(a)(5). “An employer who violates

section 8(a)(5) also derivatively violates section 8(a)(1),

which makes it unlawful for an employer ‘to interfere with,

restrain, or coerce employees in the exercise of’ their statutory

labor rights.” Regal Cinemas, Inc. v. NLRB, 317 F.3d 300,

309 n.5 (D.C. Cir. 2003) (quoting 29 U.S.C. § 158(a)(1)).

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Here, Veritas admits that it refused to bargain collectively

with the Union. But it defends its refusal to bargain on the

ground that the Union should not have been certified.

Specifically, Veritas argues that the charge nurses’ pro-Union

conduct made the union election invalid.

A

Our review of this kind of NLRB decision is narrow.

“We must uphold the judgment of the Board unless, upon

reviewing the record as a whole, we conclude that the Board’s

findings are not supported by substantial evidence, or that the

Board acted arbitrarily or otherwise erred in applying

established law to the facts of the case.” Wayneview Care

Center v. NLRB, 664 F.3d 341, 348 (D.C. Cir. 2011) (citation

omitted). In the specific context of a representation election,

we “will set aside a representation election only if the

petitioning party demonstrates that the conduct complained of

interfered with the employees’ exercise of free choice to such

an extent that it materially affected the election.” U-Haul Co.

of Nevada v. NLRB, 490 F.3d 957, 961 (D.C. Cir. 2007)

(citation, internal quotation marks, and brackets omitted).

Under that standard, the question here is whether the pro-

Union conduct of the charge nurses rose to the level of

interference with the registered nurses’ exercise of free

choice.

In analyzing that question, we begin by noting that this

case presents the unusual situation of a supervisor alleged to

have engaged in improper interference in support of a union.

The National Labor Relations Act excludes supervisors from

its definition of “employee.” See 29 U.S.C. § 152(3). An

employer thus has “the right to discharge such supervisors

because of their involvement in union activities or union

membership.” Florida Power & Light Co. v. Int’l

7

Brotherhood of Electrical Workers, Local 641, 417 U.S. 790,

808 (1974). Given that reality, supervisors do not usually

engage in pro-union activities against the wishes of

management. But the issue of pro-union conduct by a

supervisor sometimes arises when it was unclear or disputed

at the time of the pro-union activity whether the employee

was a statutory supervisor. See, e.g., Northeast Iowa

Telephone Co., 346 N.L.R.B. 465, 466 (2006); Terry Machine

Co., 332 N.L.R.B. 855, 855-56 (2000).

When faced with pro-union conduct by supervisors, the

Board uses a two-pronged test – known as the Harborside test

– to decide whether the conduct requires setting aside the

election:

(1) Whether the supervisor’s prounion conduct

reasonably tended to coerce or interfere with the

employees’ exercise of free choice in the election.

This inquiry includes: (a) consideration of the nature and

degree of supervisory authority possessed by those who

engage in the prounion conduct; and (b) an examination

of the nature, extent, and context of the conduct in

question.

(2) Whether the conduct interfered with freedom of

choice to the extent that it materially affected the

outcome of the election, based on factors such as (a) the

margin of victory in the election; (b) whether the conduct

at issue was widespread or isolated; (c) the timing of the

conduct; (d) the extent to which the conduct became

known; and (e) the lingering effect of the conduct.

Harborside Healthcare, Inc., 343 N.L.R.B. 906, 909 (2004).

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Pro-union speech by a supervisor, standing alone, falls

short of coercion or interference under Harborside’s first

prong. In Northeast Iowa Telephone Company, for example,

the Board found no coercion or interference even though

managers attended union meetings, participated in those

meetings, told employees that the union could help prevent

layoffs, and signed authorization cards in front of employees.

See 346 N.L.R.B. at 466-67.

On the other side of the line, supervisory solicitation of

authorization cards is considered coercive. See Chinese Daily

News, 344 N.L.R.B. 1071, 1072 (2005). The solicitation of

an authorization card by a supervisor “has an inherent

tendency to interfere with the employee’s freedom to choose

to sign a card or not.” Harborside Healthcare, Inc., 343

N.L.R.B. at 911. The employee “will reasonably be

concerned that the ‘right’ response will be viewed with favor,

and a ‘wrong’ response with disfavor.” Id. The Board has

found solicitation not only in cases of direct solicitation but

also in cases where “employees had reason to believe that

whether they signed a card would become known” to their

pro-union supervisor. Madison Square Garden CT, LLC, 350

N.L.R.B. 117, 122 (2007).

Importantly, even if a supervisor’s initial pro-union

conduct would be considered coercion or interference, the

Board will uphold the election if “mitigating circumstances

sufficiently negated the inherently coercive effect” of the

conduct – or, put another way, if in light of the mitigating

circumstances, the conduct did not materially affect the

outcome of the election. SNE Enterprises, Inc., 348 N.L.R.B.

1041, 1042 (2006); see also Madison Square Garden CT,

LLC, 350 N.L.R.B. at 122; Harborside Healthcare, Inc., 343

N.L.R.B. at 910 n.12, 914.

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B

Veritas complains here that several charge nurses spoke

in favor of the Union, attended Union meetings, and signed

authorization cards in front of registered nurses. According to

Veritas, those activities amount to supervisory solicitation of

authorization cards – conduct constituting impermissible

coercion. But in Northeast Iowa Telephone Company, the

Board found almost identical conduct not coercive. See 346

N.L.R.B. at 466-67. Veritas also complains that the charge

nurses were in close contact with the Union, regularly

meeting with Union officials and referring questions about

unionization to the Union’s organizing director. Those facts,

however, do not defeat the Board’s finding that the charge

nurses’ conduct fell short of coercion under the Harborside

test. Harborside permits a supervisor to support a union. A

supervisor’s conduct presents a problem when it reasonably

tends to coerce or interfere with the employees’ free choice in

the election. Many charge nurses here clearly supported the

Union. But without any indication in the record that the

support tended to coerce or interfere with the registered

nurses’ free choice, we will not disturb the Board’s reasonable

conclusion with respect to those charge nurses.

The conduct of charge nurses Gilliatt and Silva presents a

closer question. Silva approached or sent text messages to six

registered nurses to notify them about Union meetings.

Gilliatt instructed about 10 registered nurses to attend the

meetings. And she actually told some registered nurses to

sign authorization cards.

But even assuming that the initial conduct of Gilliatt and

Silva tended to coerce or interfere with the registered nurses’

free choice, their conduct was mitigated by their subsequent

actions. After Gilliatt and Silva were promoted, they actively

10

campaigned against the Union in the run-up to the election.

Gilliatt told 20 to 30 registered nurses that she no longer

supported the Union; Silva told four. And Gilliatt and Silva

both signed personalized company letters that urged

registered nurses to vote against the Union. The letters

reached most registered nurses.

By the time of the election, therefore, registered nurses

would have had no reason to feel pro-Union coercion or

interference from Gilliatt’s or Silva’s earlier conduct. Indeed,

any registered nurses who felt pressured by Gilliatt or Silva

would have felt coerced to vote against the Union.

In short, Veritas has not shown that we should overturn

the Board’s decision upholding the election. See SNE

Enterprises, Inc., 348 N.L.R.B. at 1042-44; Northeast Iowa

Telephone Co., 346 N.L.R.B. at 466-67; Harborside

Healthcare, Inc., 343 N.L.R.B. at 909-13.

III

Veritas also challenges some of the evidentiary rulings

that were made by the ALJ at the hearing and that were

approved by the Board. We review the ALJ’s rulings for

abuse of discretion. See Perdue Farms, Inc. v. NLRB, 144

F.3d 830, 834 (D.C. Cir. 1998). 1

1

As a technical matter, it might be argued that the Board

reviews the ALJ’s ruling for abuse of discretion, see Aladdin

Gaming, LLC, 345 N.L.R.B. 585, 587 (2005), and we review the

Board’s decision under the arbitrary and capricious standard. But

little if anything turns on the wording. The key point is this: When

an ALJ’s evidentiary ruling has been upheld by the Board, our

review is deferential.

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Veritas complains about two of the ALJ’s evidentiary

rulings.

First, the ALJ redacted some documents and limited

certain testimony so as to prevent disclosure of the names of

registered nurses who had been in contact with the Union.

Veritas claims it would have used the names and the

communications to more fully develop the record and to test

witness credibility. The Board concluded that the ALJ’s

evidentiary rulings were not an abuse of discretion.

“It is well settled that Section 7 of the Act gives

employees the right to keep confidential their union activities,

including their attendance at union meetings.” Guess?, Inc.,

339 N.L.R.B. 432, 434 (2003) (citing 29 U.S.C. § 157). For

an employer to obtain information about confidential union

activities, “the employer’s interest in obtaining this

information must outweigh the employees’ confidentiality

interests under Section 7 of the Act.” Id. In National

Telephone Directory Corporation, for example, the Board

ruled that an employer could not seek the names of employees

who signed authorization cards or attended union meetings

because of “the potential chilling effect on union activity that

could result from employer knowledge of the information.”

319 N.L.R.B. 420, 421 (1995). That potential chilling effect

outweighed the employer’s “right to test the credibility of the

General Counsel’s witnesses” during cross-examination. Id.

Here, the ALJ protected names of nurses who attended

Union meetings or expressed views about the Union during

the Union’s organizing campaign. In light of the settled

principles protecting the confidentiality of employees’ union

activities, the Board reasonably determined that the ALJ did

not abuse her discretion in protecting the names of the

registered nurses.

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Second, the ALJ excluded testimony about

communications between the Union and the charge nurses.

See 29 C.F.R. § 102.35(a)(4); Hovey Electric, Inc., 328

N.L.R.B. 273, 273 n.1 (1999). The ALJ “declined to receive

evidence of interactions solely between union representatives

and supervisory charge/relief charge nurses” because “such

interactions, unknown to eligible voters, could not reasonably

tend to interfere with employees’ free and uncoerced election

choice in any material way.” Veritas Health Services, Inc.,

No. 31-RC-8795, slip op. at 5 n.7 (N.L.R.B. July 7, 2010).

The ALJ’s explanation is reasonable, and the Board therefore

reasonably determined that the ALJ did not abuse her

discretion in excluding this testimony.

IV

Veritas raises one final argument: that the unfair labor

practice charge against it was untimely. A union ordinarily

must file an unfair labor practice charge within six months of

the alleged unfair labor practice. See 29 U.S.C. § 160(b).

Veritas claims that it refused to bargain with the Union on

April 14, 2010, but that the Union did not file a charge until

February 3, 2011. Veritas ignores, however, that a new

refusal to bargain constitutes a new violation of the Act. See

Bentson Contracting Co. v. NLRB, 941 F.2d 1262, 1264 n.2

(D.C. Cir. 1991). As the Board explained below, the Union

sent Veritas a letter on January 26, 2011, asking Veritas to

bargain collectively with the Union. On February 2, 2011,

Veritas refused to do so. The charge was filed the next day.

Therefore, the unfair labor practice charge was timely. See

Veritas Health Services, Inc., 356 N.L.R.B. No. 137, slip op.

at 1 n.1, 2 (Apr. 12, 2011).

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***

We deny Veritas’s petition for review and grant the

Board’s cross-application for enforcement.

So ordered.