Hard Rock Holdings, LLC v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued February 21, 2012 Decided March 23, 2012

No. 11-1104

HARD ROCK HOLDINGS, LLC, DOING BUSINESS

AS HARD ROCK HOTEL AND CASINO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with No. 11-1133

On Petition for Review and Cross-Application

for Enforcement of an Order of the

National Labor Relations Board

James Michael Walters argued the cause for petitioner.

With him on the briefs was Brian Matthew Herman.

Barbara A. Sheehy, Attorney, National Labor Relations

Board, argued the cause for respondent. On the brief were John

H. Ferguson, Associate General Counsel, Linda Dreeben,

Deputy Associate General Counsel, Ruth E. Burdick,

Supervisory Attorney, and Richard A. Cohen, Senior Attorney.

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Before: ROGERS, Circuit Judge, and EDWARDS and

GINSBURG, Senior Circuit Judges.

Opinion for the Court by Circuit Judge ROGERS.

ROGERS, Circuit Judge: The National Labor Relations

Board seeks enforcement of its order directing Hard Rock

Holdings, LLC (“the Company”) to bargain in good faith with

Professional, Clerical and Miscellaneous Employees, Local 995,

(“the Union”) affiliated with the International Brotherhood of

Teamsters, Local 995. The Company, in its petition for review,

contests the Board’s certification of the election in which the

Union was named the bargaining representative of the

Company’s valet parking employees. In addressing the

Company’s objections, we clarify two points relating to

stipulated bargaining units and the absence of pristine laboratory

conditions during a representation election. First, the Board

established the record of its analysis under the three-prong test

of Associated Milk Producers, Inc. v. NLRB, 193 F.3d 539, 543

(D.C. Cir. 1999), necessary to support its conclusions regarding

the parties’ intent with regard to the stipulated bargaining unit.

Extrinsic evidence relied on by the Company fails to

demonstrate error. Second, the failure of the Board Agent to

provide identification badges to election observers did not result

in an unfair or invalid election in the absence of evidence that

the failure materially affected the result of the election, and the

Company offered no such evidence. The Board therefore acted

within its discretion in sustaining the Union’s challenges to the

eight ballots cast by dual-rated bell-desk employees and in

rejecting the Company’s objections alleging misconduct by the

Board’s Agent. The Board thus is entitled to enforcement of its

findings that the Company violated sections 8(a)(1) and (5) of

the National Labor Relations Act, 29 U.S.C. § 158(a)(1), (5)

(2006) (“the Act”), by refusing to bargain with the Union. See

C.J. Krehbiel Co. v. NLRB, 844 F.2d 880, 882 (D.C. Cir. 1988).

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I.

The Company owns and operates a hotel and casino in

Las Vegas, Nevada. In 2009, the Union sought to become the

bargaining representative of the Company’s parking valets. The

dispute animating this appeal relates to the scope of the

bargaining unit. Both parties agree that those employees

working in the Company’s valet-parking department are part of

the unit. Their disagreement concerns whether employees who

work primarily as bell-desk employees but who also work

occasionally as valets — so-called “dual-rated” employees —

are also members of the bargaining unit.

On September 25, 2009, the Union filed a representation

petition with the Board. As opposed to proceeding to a hearing,

the Company and the Union decided to stipulate certain issues,

including the scope of the proposed bargaining unit. The record

shows that Company and Union counsel had at least one brief

conversation prior to the signing of the final stipulation

agreement: counsel for the Company testified that he told

counsel for the Union that the Company “did not want anybody

excluded who parked cars.” Hearing Transcript, Hard Rock

Holdings LLC, Case No. 28-RC-6680, at 47 (Nov. 23, 2009).

The Board’s Agent faxed a proposed agreement to the

Company’s counsel on October 7, 2009, in which the voting unit

was described as including “[a]ll full-time and regular part-time

[v]alet [p]arking employees.” NLRB Form, Stipulated Election

Agreement, at 2. Company counsel telephoned the Agent to

advise him that the Company would not agree to inclusion of the

adjective “regular” and wanted all employees who ever parked

cars to be part of the unit. The Agent then faxed Company

counsel a revised agreement, already signed by the Union, in

which the term “regular” had been eliminated. The revised

description of the bargaining unit read: “All full-time and part-

time Valet Parking employees.” Id. Company counsel signed

the agreement and faxed it to the Agent. The agreement was

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approved the following day by the Board’s Regional Director,

and an election was scheduled for November 6, 2009.

Following the signing of the stipulation agreement, the

Company submitted to the Regional Director a list of the names

of those its viewed to be voting-eligible employees — the

Excelsior1 list. The Union did not object to the list, which

included the names of the eight dual-rated employees. Just prior

to the election, both Company and Union counsel signed the

Excelsior list at a conference held by the Agent. During the

election, the Union challenged the votes of the eight dual-rated

employees.

Also, just before the start of the election, the Agent

realized that he did not have enough identification badges for

both the Union and Company observers. Rather than provide a

badge to only one observer, the Agent testified that he decided

to give none of the observers a badge. Neither the Company nor

the Union contests the fact that the observers were not wearing

identification badges during the election. The record indicates

some dispute, however, about whether the Agent himself wore

a badge identifying him as a government official.

During the election, one of the voters, a dual-rated

employee (“the Voter”), engaged in a verbal exchange with the

Agent shortly after a Union observer challenged the Voter’s

voting eligibility due to his status as a dual-rated employee. The

level of altercation and nature of the words exchanged are

disputed. The record is clear, however, that during the

conversation, the Agent told the Voter to calm down or he might

risk losing his job. The Voter testified that he had not known

the Agent was a Board official until the end of the incident.

Upon learning that the Agent was a government official, the

Voter testified that he told the agent, “[t]hat’s probably why you

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Excelsior Underwear, Inc., 156 NLRB 1236 (1966).

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and I got off to the wrong start.” Hearing Transcript at 110.

One voter was present during this incident and another was on

his way out of the polling area.

At the completion of voting, the tallied results showed

seventeen votes for and nine against Union representation with

eight additional votes against the Union that it had challenged.

The Company and the Union filed objections with the Board. A

hearing was held regarding these objections and the Union’s

challenges to the votes of the eight dual-rated employees. The

Hearing Officer recommended that the Board sustain the

Union’s ballot challenges, overrule the Company’s objections,

approve the Union’s withdrawal of its objections, and certify the

Union as the bargaining representative. Hearing Officer’s

Report on Objections & Challenged Ballots (“Hearing Report”),

Hard Rock Holdings LLC, Case No. 28-RC-6680, at 27 (Dec.

29, 2009). The Board adopted the Hearing Officer’s

recommendations. Decision & Certification of Representative

(“Certification Decision”), Hard Rock Holdings LLC, Case No.

28-RC-6680, at 1 (Sept. 28, 2010). To preserve its ability to

appeal the certification, the Company refused to bargain with the

Union. See Boire v. Greyhound Corp., 376 U.S. 473, 477–78

(1964). A complaint was issued against the Company alleging

its refusal to bargain violated the Act. On April 7, 2011, the

Board issued its decision and order, granting summary judgment

against the Company for violating section 8(a)(1) and (5) of the

Act.

II.

The Company petitions for review of the Board’s order

on two grounds: first, it objects to the Board’s sustaining of the

Union’s challenges to the eight ballots in view of the extrinsic

evidence, and second, it maintains that the Agent’s failure to

provide observer badges impermissibly disrupted the election.

In addressing these contentions, the court must determine

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whether the Board abused its discretion. See Serv. Corp. Int’l v.

NLRB, 495 F.3d 681, 684 (D.C. Cir. 2007); Schoolman Transp.

Sys., Inc. v. NLRB, 112 F.3d 519, 521 (D.C. Cir. 1997). Our

review of the Board’s determination that a stipulated election

agreement is ambiguous is de novo, see Entergy Servs., Inc. v .

FERC, 568 F.3d 978, 982 (D.C. Cir. 2009), but the Board’s

factual determinations are conclusive if supported by substantial

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

§ 160(e); Universal Camera Corp. v. NLRB, 340 U.S. 474, 477,

488 (1951). And the court will not reverse the Board’s adoption

of an administrative law judge’s credibility determination unless

it is “hopelessly incredible,” “self-contradictory,” or “patently

unsupportable.” United Food & Commercial Workers Union

Local 204 v. NLRB, 447 F.3d 821, 824 (D.C. Cir. 2006) (quoting

Cadbury Beverages, Inc. v. NLRB, 160 F.3d 24, 28 (D.C. Cir.

1998)).

A.

In Associated Milk, the court clarified the analysis the

Board must apply when faced with a stipulated bargaining unit

agreement. First, the Board must determine whether or not the

agreement’s description of the bargaining unit is ambiguous.

Associated Milk, 193 F.3d at 543. If no ambiguity exists, the

Board must enforce the parties’ agreement. Id. If the stipulation

is ambiguous, however, the Board must apply ordinary

principles of contract law in an attempt to determine the parties’

intent. See id. at 543–44. At this stage, the Board may consider

extrinsic evidence. Id. at 544. If, following this review, the

Board concludes the parties’ intent is still unclear, it must apply

its traditional community-of-interests test. See id. at 543.

Here, the Board proceeded through each of these steps.

First, it found that the scope of the unit as stated in the stipulated

agreement was ambiguous: the wording was unclear as to

whether the Company and the Union intended dual-rated

employees to be included in the bargaining unit. The Board

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observed that the stipulation’s wording was “amenable to either

interpretation” advanced by the parties. Certification Decision

at 2. Second, the Board found that the extrinsic evidence failed

to resolve that ambiguity: the record showed that, prior to

entering into the stipulated agreement, Company and Union

counsel had had one brief telephone conversation about the

composition of the unit, a conversation in which they disagreed.

Third, the Board determined under its community-of-interests

standard that the dual-rated employees did not share a

community of interest with the unit employees and so did not

belong in the unit. In arriving at this conclusion, the Board

relied on the evidence that (1) only one of the four dual-rated

employees who testified had worked as a valet for more than a

handful of shifts during the three months proceeding the

election; (2) those four employee-witnesses could not recall any

of the other four dual-rated employees ever working as valets

more recently than two months prior to the election; and, (3) the

dual-rated employees worked mainly as bell-desk employees

and, as such, worked independently of valet-department

employees, were supervised separately, and did not share in the

valet tip pool (unless they worked as valets for an entire shift).

The Company does not specifically contest the Board’s

application of the first and third prongs of the Associated Milk

analysis. Instead, the Company contends that the parties’ intent

was “easily discernable from a reading of available extrinsic

evidence.” Pet’r’s Br. 11. The Company maintains that the

Board “completely ignored the import of [its counsel’s]

unrebutted testimony that he communicated [the Company’s]

intention that it did not ‘want anybody excluded who parked

cars.’” Pet’r’s Reply Br. 3. The Company next points to

evidence that the Union did not object to the inclusion of the

names of the eight dual-rated employees on the Excelsior list,

but rather examined and signed a copy of the list prior to the

election. In the Company’s view, this failure to object to the

Excelsior list was evidence of the Union’s approval of the

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named inclusions, for “[o]nly later did it become apparent that

[the Union representative] had surreptitiously instructed [its]

employee-observer to challenge any part-time valets who

appeared at the NLRB polls to vote.” Pet’r’s Br. 14. Invoking

sections 11084.2, 11095, and 11312.4 of the Board’s

Casehandling Manual, Part Two, Representation Proceedings

(“the Manual”), the Company suggests that the Board’s

Regional Director would or should have revoked his approval of

the stipulation agreement had he been aware that a substantial

number of listed voters would be challenged. In any event, the

Company concludes, the Union “should have been foreclosed

from raising such tardy challenges to such a large portion of the

electorate.” Pet’r’s Br. 15.

The Company fails to meet its burden to show that the

Board abused its discretion in applying the second prong of

Associated Milk. There was substantial evidence to support the

Board’s finding that the disagreement in the discussion of the

stipulated unit by Company and Union counsel did not remove

the ambiguity as to their intent regarding dual-rated employees.

The hearing transcript showed that Company counsel’s view of

the unit was not the same as Union counsel’s, and that during

their brief conversation, the issue was not resolved. The

Company also suggests that by agreeing to a revision of the

stipulated agreement with the word “regular” removed, the

Union assented to a definition of the bargaining unit that

included the eight dual-rated employees. As with the

conversations between the negotiators, however, this bargaining

history is ambiguous. For instance, it may be that the Union

interpreted the revised text as expanding the bargaining unit

merely to include the on-call attendants, whereas the Company’s

interpretation of the draft agreement already included the on-call

attendants and therefore removing the word “regular” from the

agreement had the effect of adding the dual-rated employees to

the unit. See Hearing Report at 13.

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Gala Food Processing, Inc., 310 NLRB 1193 (1993), on

which the Company relies, is distinguishable. In that case, the

employer claimed that the parties had intended to include some,

but not all, of the call-in employees in the stipulated bargaining

unit. Id. at 1193. The extrinsic evidence revealed just the

opposite, however: during the stipulation negotiations, the

employer proposed inclusion of the call-in employees in the unit

and, prior to signing the stipulation, provided the names of all

— not just some — of the call-in employees to the union. Id.

Thus, the extrinsic evidence of the employer’s own actions in

negotiations contradicted the position it later took when

challenging the election results. See id. The Board found this

evidence “resolve[d] the ambiguity in the stipulation” and

therefore rejected the employer’s claim that the parties had

intended anything else. Id. at 1193–94. No such extrinsic

evidence exists to resolve the ambiguity here. The record does

not suggest that either the Company or the Union switched its

position from that taken prior to the signing of the stipulation

agreement and the election; rather, the record shows

disagreement, and hence ambiguity, regarding the scope of the

bargaining unit throughout the negotiations and election. Desert

Palace, Inc., 337 NLRB 1096 (2002), on which the Company

also relies, provides no support for its contention. See id. at

1097–1101.

Nor did the Board err in its consideration of the evidence

regarding the Excelsior list. The Company’s suggestion that the

Union forfeited its right to challenge the ballots of the eight

dual-rated employees by not protesting their inclusion on the

Excelsior list is contrary to well-settled precedent: an

employer’s placing of a name on such a list does not establish

that the parties intended the employee to be included in a

stipulated unit. NLRB v. Speedway Petroleum, 768 F.2d 151,

157 (7th Cir. 1985); Groendyke Transport, Inc., 204 NLRB 96,

98 (1973), enforced 493 F.2d 17 (5th Cir. 1974), and overruled

on other grounds by Monte Vista Disposal Co., 307 NLRB 531

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(1992). Rather, an Excelsior list serves to advance the fair

choice of bargaining representatives through “encouraging an

informed employee electorate . . . by allowing unions the right

of access to employees that management already possesses.”

NLRB v. Wyman-Gordon Co., 394 U.S. 759, 767 (1969). As

such, the Union’s acknowledgment of the list was not

tantamount to approval of the bargaining unit as constituting the

employees whose names were on the list.

The Company’s related argument that the Manual

required the Union to object to the list or required the Regional

Director to have processed the parties’ stipulation differently

fails to overcome that, as the Company conceded during oral

argument, the Manual is staff guidance, not binding procedure,

Kwik Care Ltd. v. NLRB, 82 F.3d 1122, 1126 (D.C. Cir. 1996);

Oral Argument Tape at 8:12, and that the Manual itself states “it

is the Board’s decisional law, not the Manual, that is

controlling,” MANUAL, Purpose of the Manual. As noted, the

Board has explained that a union’s failure to object to an

Excelsior list until the election does not result in a forfeiture of

its right to challenge names appearing on the list. Groendyke

Transport, 204 NLRB at 98; see also Speedway Petroleum, 768

F.2d at 157.

The Company’s protest that had it known it would face

a community-of-interest analysis, it might not have waived its

right to a pre-election hearing, fails to show prejudice inasmuch

as it acknowledges it had an opportunity to preserve its rights to

a hearing and decided instead to forego that hearing as

(presumably, so far as the record shows) a matter of litigation

strategy. To the extent the Company suggests that it unfairly

lost the benefit of its invocation of the Board-approved practice

of stipulated bargaining unit agreements, it neglects to recognize

that successful application of such practice rests on the existence

of an unambiguous stipulation, an element found absent here.

See, e.g., Kim/Lou, Inc., 337 NLRB 191, 191 (2001).

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B.

The Company also contends that the Board erred in

refusing to rule that the Agent’s alleged misconduct — his

failure to provide election observers with identification badges

— tended to destroy the laboratory conditions necessary for a

Board-conducted election. Indeed, the Manual states that “[i]t

is required that all observers wear the official observer badge.”

MANUAL, § 11326.1. Deviations in election procedures

involving observer badges, however, do not necessarily affect,

much less undermine, the fairness of an election. See NLRB v.

First Union Mgmt., Inc., 777 F.2d 330, 335–36 (6th Cir. 1985);

L.C. Cassidy & Son, Inc. v. NLRB, 745 F.2d 1059, 1063 (7th Cir.

1984). A deviation such as occurred here is not a per se ground

for invalidation of an election. Nabisco, Inc. v. NLRB, 738 F.2d

955, 958 (8th Cir. 1984). Rather, the objecting party must show

that such a deviation had a material effect on the election such

as an impact on an individual vote. See Serv. Corp. Int’l, 495

F.3d at 684–85; C.J. Krehbiel, 844 F.2d at 882; Nabisco, 738

F.2d at 958. The Company offered no such evidence.

As an initial matter, the Board did not abuse its

discretion in adopting the Hearing Officer’s finding that the

Agent reasonably exercised his professional judgment in

deciding that neither the Company nor the Union observer

should wear a badge when only one badge was immediately

available. The Board could reasonably conclude that there was

no evidence the absence of observer badges had any effect on

the fairness and validity of the election. As to any confusion

regarding the Agent’s identity, the Board reasonably deferred to

the Hearing Officer’s conclusion that “[e]ven the witnesses who

testified that they initially believed that the Board Agent

represented the [Union] acknowledged that their doubts were

erased after the Board Agent identified himself to them,”

Hearing Report at 24. Certification Decision at 1 n.1; see also

Nabisco, 738 F.2d at 958. The Hearing Officer further found

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that the Board Agent wore a badge identifying him as a

“Government Official” during the entire election, a finding that

is supported by substantial evidence.

The Company’s challenge to the Board’s overruling of

its observer-badge objections is thus to no avail. The Company

suggests that the Board mis-characterized or never addressed

this argument, but the record is to the contrary. The Board

reviewed the Company’s challenges and the record and

concluded that there was no basis for reversing the Hearing

Officer’s credibility findings regarding the observer badges.

Certification Decision at 1 n.1. The Hearing Officer explained

his findings were “compiled based on a synthesis of the credited

testimony,” and that “[t]o the extent that the facts differ[ed]

from the testimony of a particular witness,” he “discredited

[that] testimony either because it was inherently inconsistent

with credited facts or explicitly contradicted by the testimony of

a credited witness or witnesses.” Hearing Report at 21. The

Company fails to show that the credibility determinations

adopted by the Board were “hopelessly incredible,” “self-

contradictory,” or “patently unsupportable,” as would be

required to overcome the deference otherwise owed to the

Board. See United Food & Commercial Workers Union, 447

F.3d at 824.

The Board also reasonably determined that the Agent’s

actions in responding to the Voter did not amount to agent

misconduct that tainted the election, as the Company contends.

The credited evidence failed to establish that the Agent was

responsible for the incident; rather, the Agent, upon identifying

himself verbally as a government official present to conduct the

election, “persuaded [the Voter] to calm down long enough to

vote.” Hearing Report at 24. After tensions eased, the Voter

remained seated until he voted and then apologized to the Agent

for his conduct as he was ushered out of the polling place. No

evidence was presented that this incident impacted any

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employee’s ability to vote or otherwise compromised election

results.

Accordingly, we deny the Company’s petition for review

and grant the Board’s cross-application for enforcement of its

order.