Sutter East Bay Hospitals v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 14, 2012 Decided July 24, 2012

No. 11-1277

SUTTER EAST BAY HOSPITALS, DOING BUSINESS AS ALTA

BATES SUMMIT MEDICAL CENTER,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with 11-1318

On Petition for Review and Cross-Application for

Enforcement of an Order of the National Labor Relations

Board

Christopher T. Scanlan argued the cause for petitioner.

With him on the briefs were David S. Durham and Gilbert J.

Tsai.

Milakshmi V. Rajapakse, Attorney, National Labor

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

the brief was John H. Ferguson, Associate General Counsel,

Linda Dreeben, Deputy Associate General Counsel, and Robert

J. Englehart, Supervisory Attorney.

2

Michelle M. Devitt, Trial Attorney, entered an appearance.

Before: SENTELLE, Chief Judge, BROWN and GRIFFITH,

Circuit Judges.

Opinion for the Court filed by Chief Judge SENTELLE.

SENTELLE, Chief Judge: Petitioner Sutter East Bay

Hospitals seeks review of a National Labor Relations Board

(“NLRB” or “Board”) order concluding that Sutter East Bay

violated sections 8(a)(1) and 8(a)(3) of the National Labor

Relations Act (“the Act”), 29 U.S.C. § 158(a)(1), (3). See Alta

Bates Summit Med. Ctr. and Nat’l Union of Healthcare

Workers, 357 NLRB No. 31, 2011 WL 3269362 (July 29, 2011)

(“Board Decision”). The Board cross-applies for enforcement

of that order. Sutter East Bay concedes that it engaged in illegal

surveillance of its employees’ union activities, and we grant the

Board’s application for enforcement of that determination. We

also grant the Board’s application for enforcement of the finding

that Sutter East Bay unlawfully changed its solicitation policy to

stifle support for a new labor union. We agree with Sutter East

Bay, however, that the administrative law judge failed to

properly apply the appropriate legal standard in determining that

the employer unlawfully disciplined its employee, Beverly

Griffith. We therefore grant Sutter East Bay’s petition for

review with regard to those disciplinary actions, vacate the

relevant factual findings and conclusions, and remand to the

Board for rehearing.

I. Background

Sutter East Bay operates four hospital facilities in

northern California, including the Summit Hospital campus in

Oakland and the Alta Bates Hospital facility in Berkeley. The

events at issue here relate to a conflict between two unions

3

present at Sutter East Bay’s hospitals. Service Employees

International Union (“SEIU”) had originally represented union

workers at the hospitals, but after the national organization

placed the local chapter in trusteeship in January 2009, the

ousted leadership and other employees worked to decertify

SEIU and certify a replacement, the National Union of

Healthcare Workers (“NUHW”). Board Decision at 5 (ALJ

Op.). Beverly Griffith, an environmental-services worker and

displaced SEIU steward, was one of the employees supporting

NUHW. She is the subject of the disciplinary actions found

unlawful by the Board in this case. Many of the facts are

disputed by the parties. Based on the findings of the Board and

the evidence in the record, we set them forth briefly and note

key areas of disagreement. See id. at 4–21 (describing the facts

of the case and conflicting testimony in detail).

A. The Water-Spilling Incident

The first incident occurred on February 17, 2009, when

two SEIU representatives, Carlos Hernandez and Erica

McDuffie, visited Alta Bates Hospital. Hernandez testified that

he and McDuffie were followed in the hospital by Griffith and

another employee, who harassed them and called them “scabs.”

Id. at 8. According to Hernandez, Griffith followed the SEIU

representatives to the cafeteria and sat close to where they were

sitting. Eventually, Hernandez testified, Griffith left and

returned with two cups of water. Id. at 8–9. Shortly after,

Hernandez looked up and noticed that Griffith had spilled her

water, which was flowing toward the SEIU employees and their

belongings. Id. McDuffie accused Griffith of spilling the water

intentionally and reported the incident to the security guard

present in the cafeteria; Griffith approached security and told the

guard that the spill was an accident. The security officers wrote

up the conflicting accounts in a report that described the incident

without placing blame. Id. at 9. In her own testimony, Griffith

4

contended that she was already sitting in the cafeteria when the

SEIU employees arrived, and that Hernandez and McDuffie sat

near her and tried to convince her to support SEIU. Id. Griffith

did not dispute that she spilled the water, but testified that she

accidentally spilled it as she stood up to leave.

Three days after the incident, McDuffie called Bruce

Hatten, Sutter East Bay’s Labor Relations Specialist, to

complain that hospital employees were placing NUHW

literature on SEIU bulletin boards. Id. During that

conversation, McDuffie complained that Griffith had been rude

during the visit and had intentionally spilled water on the SEIU

representatives. Hatten then obtained a copy of the security

report and, without interviewing Hernandez, the security officer,

or Griffith, drew up a written reprimand for “misconduct and

inappropriate behavior” and gave it to Griffith. Id. at 10.

According to Griffith’s testimony, she protested that Hatten had

not asked for her side of the story, and Hatten responded that the

behavior “sounds like [Griffith].” Id. Griffith wrote on the

disciplinary form that she was being harassed by Hatten and

SEIU, and that there was no investigation of the incident prior

to the discipline.

B. The March 20 Cafeteria Incident

The next incident occurred on March 20, 2009, when

Griffith and other SEIU stewards held an all-day “membership

meeting” in the Summit Hospital cafeteria to build support for

NUHW. The stewards had previously publicized the meeting by

posting and distributing leaflets, and the meeting was designed

so that the stewards would take a vacation day and sit in the

cafeteria to discuss union matters with employees whenever

those employees were on lunch or break. Id. at 11.

5

Having heard in advance about the meeting, Sutter East

Bay sent to NUHW on March 13 a cease-and-desist letter stating

that the hospital is private property and does not allow outside

groups to meet on its premises. Id. In addition, Bruce Hatten

hired Allied Barton Security Services to provide private security

guards, and he instructed those guards to report in suits instead

of uniforms. Hatten gave the guards a camera and instructed

them to watch for activity by the members of the new union and

to report any union solicitation or distribution to Hatten right

away. Id. He specifically identified Griffith as one of the

employees to watch. Id.

During the March 20 membership meeting, Hatten and

one of the security guards approached the table after Griffith and

another steward, Deborah Kirtman, finished talking to a group

of employees. There was a brief confrontation, wherein Hatten

grabbed a stack of flyers and informed Griffith and Kirtman that

they were not allowed to conduct meetings for outside unions,

to distribute literature, or to solicit funds. Kirtman responded by

stating that the employees remained stewards for SEIU and had

a right to inform their members. Hatten and Parks then left the

cafeteria. Id. at 12. Throughout the day, Sutter East Bay’s hired

security guards sat near the employees and recorded their

activities, though the security guards testified that they did not

observe any union business after the confrontation. Id. at 11–13.

C. The March 23 Cafeteria Incident

Employees held another all-day meeting the following

Monday, this time in the cafeteria of Alta Bates Hospital. Id. at

14. Griffith scheduled a vacation day and organized the event.

Griffith and DeAnn Horne, a ward clerk at Alta Bates, arrived

early in the morning, met another clerk, and placed stacks of

flyers and documents on a table in the corner of the dining area.

Across the dining room, Hatten was sitting with another

6

employee and two hired security guards, Ronnie Parks and

Mahir Said. Id. Shortly after Griffith and Horne arrived, Hatten

left the cafeteria. Id.

While Horne left the cafeteria to inform employees that

Griffith was available to talk, Griffith walked over to a table of

dietary workers and spoke with them, standing at first and then

sitting with them. After a few minutes, Griffith returned to her

table and Horne returned as well. Shortly thereafter, Hatten

returned to the cafeteria and approached the employees.

According to the employees, Hatten told them, “I need you to

cease and disperse . . . . I’m giving you a direct order to leave

the premises now.” Id. As to his motivation for expelling the

employees from the cafeteria, Hatten testified that security guard

Parks had called him to report that Griffith had addressed the

dietary employees loudly and had solicited money from them for

union dues. Id. at 15. Parks also included in a report on the

events of March 23 that Griffith had moved to two different

tables talking with employees. Griffith, in her own testimony,

denied talking in a loud voice at any time and claimed she only

moved to the dietitians’ table and back to her own.

Testimony again differed as to what happened after

Hatten ordered the employees to leave: Griffith stated that she

asked to borrow Horne’s cell phone to arrange a ride home, and,

as Griffith and Horne were gathering their belongings, Hatten

again ordered them to leave and threatened them with

suspension. Id. Griffith testified that Hatten never actually

suspended her. Id. at 14–16. Horne corroborated Griffith’s

testimony, stating that security personnel arrived as the

employees were departing and that Hatten never suspended

Griffith. Security Guard Parks, however, testified that Horne,

upon being ordered to leave, said “I’m outa here” and left, while

Griffith stayed behind and picked up her cell phone to call her

lawyer. Id. at 15. At that point, Parks testified, Hatten stated

7

that Griffith appeared unwilling to comply and that he would

consider her to be disobeying his order if she did not depart

before security arrived. Id. Parks testified that Griffith was still

slowly packing her things when security arrived to escort her

out, and Hatten placed her on suspension at that time. Id.

Hatten, in turn, gave testimony that was similar to Parks’,

although Hatten stated that he suspended Griffith before security

was even called to escort her out, and that Griffith was “defiant”

and refused to comply with his order. Id. at 15–16. Sutter East

Bay also provided testimony from another security guard who

was part of the detail that arrived to escort Griffith out of the

building; she claimed to have witnessed the suspension. Id. at

16.

D. The March 24 Profane Tirade and Griffith’s

Termination

The next day, Griffith arrived in uniform five minutes

before her scheduled 7:00 am shift. Id. at 17. Griffith had

arrived early to hand out flyers regarding the cafeteria

confrontation the previous day. She was in the environmental-

services lounge when a supervisor, Tito Aquino, asked her to

step outside and speak with him. Id. Griffith initially refused

but eventually complied and brought a coworker, Lawana

Williams, with her. After walking Griffith down the hall

roughly fifteen feet, Aquino informed Griffith that she had been

suspended but that he did not know the reason for the

suspension. Id. at 17–18. Griffith demanded written notice of

her suspension and its reasoning; Aquino refused, told her to

leave, and called security to escort her. Id.

Yet another series of disputed events followed. Sutter

East Bay claims that Griffith returned to the break room and

began a tirade of profanity, including statements such as: “Did

you all hear that? I’m being f***ing suspended. I can’t even

8

speak to you in a f***ing public place.” Id. at 18. Sutter East

Bay offered Aquino’s testimony, as well as that of Carla Biddle,

another supervisor who claimed to have witnessed much of the

tirade while standing in the doorway of the break room. Biddle

and Aquino submitted reports of the incident on the day it

occurred. Id. at 19.

Griffith’s version of events, which was corroborated by

Lawana Williams, differed greatly from that of Biddle and

Aquino. Griffith testified that after being informed of the

suspension she asked Aquino if she could collect her belongings

from the break room, and Aquino consented. Id. at 18. While

doing so, Griffith testified, she told the other employees that she

had been suspended, and in conversation with them said that the

suspension was “bulls***” (or, according to Williams, merely

“bull”). According to Griffith and Williams, there was no tirade

and Griffith left within a few minutes.

Bruce Hatten interviewed Griffith two days later

concerning the events of March 23–24. Among other things,

Hatten asked if Griffith had gone to the hospital on March 24

with the intention of working and being paid. Griffith

responded affirmatively, stating that she was unaware of her

suspension. Id. at 20. Hatten also asked if she stood up and

spoke to a group in the cafeteria on March 23, and Griffith said

that she could not recall doing so. Id. Finally, Hatten asked if

Griffith had used the word “f***ing” after being informed of her

suspension. Griffith stated that she was not sure but that she

might have done so. Id. On April 7, 2009, Sutter East Bay

discharged Griffith based on her failure to obey Hatten’s orders

on March 23, for attempting to work while suspended, and for

the tirade on March 24. Id. at 21.

9

E. Proceedings Before the ALJ and Board

The National Union of Healthcare Workers filed unfair

labor practice charges against Sutter East Bay in April 2009,

alleging that Sutter East Bay violated the Act by 1) interfering

with employees’ rights under the Act by enforcing solicitation

and distribution rules in a discriminatory manner and by

retaliating against Griffith for supporting NUHW, 2) showing a

preference for a rival union by threatening and disciplining

Griffith for her support for NUHW, and 3) discriminating

directly against Griffith for her support of NUHW by unjustly

disciplining and suspending her. The Board, through its

Regional Director, investigated the charges and issued a

complaint against Sutter East Bay. The consolidated hearing on

all charges took place before an ALJ from November 30 to

December 3, 2009.

The ALJ largely agreed with NUHW’s version of events,

finding Hatten and Biddle to be “particularly disingenuous,

deceitful, and not worthy of belief as to any aspect of his or her

testimony.” Id. at 21. The ALJ declared Hatten to be a

“duplicitous witness, one whose primary intent, I believe, was

to buttress [Sutter East Bay’s] defense rather than to testify

truthfully.” Id. at 21–22. The ALJ found Biddle to be

“internally inconsistent regarding seemingly innocuous,

irrelevant points” regarding the March 24 incident. Id. at 22.

Overall, the ALJ rejected much of the testimony of Sutter East

Bay’s witnesses as internally or externally inconsistent. The

ALJ also disregarded as “fabrication[s]” both Biddle’s and

Aquino’s contemporaneous written reports of the March 24

incident. Id. at 30 n.101. The ALJ rejected Aquino’s report

because it was a second draft and Aquino had not produced the

first draft, and he rejected Biddle’s report because it was drafted

at Hatten’s behest and was not identical to her testimony

regarding the incident. Id.

10

Based on his findings, the ALJ concluded that several of

Sutter East Bay’s actions violated the Act. First, Sutter East Bay

conducted unlawful surveillance of union activities taking place

on hospital property. Second, Sutter East Bay unlawfully

changed its solicitation policies to prevent employees from

engaging in activities supporting NUHW. Third, Sutter East

Bay unlawfully disciplined union-supporter Beverly Griffith for

the water-spilling incident. Fourth, Sutter East Bay unlawfully

evicted Griffith from the Alta Bates Hospital cafeteria,

threatened to suspend her, and ultimately suspended her on

March 23 because of her union-supporting activities. Fifth,

Sutter East Bay unlawfully discharged Griffith in April 2009,

again because of her support for NUHW. Id. at 30. The Board

affirmed the ALJ’s conclusions and reasoning with only minor

modifications. See id. at 1–4 (Board Op.). The Board also

rejected a motion by Sutter East Bay to reopen the record and

allow Erica McDuffie to testify. Id. at 2.

Sutter East Bay petitions this court for review, arguing

that the ALJ’s conclusion that Sutter East Bay unlawfully

changed its solicitation policy to hamper NUHW was not

supported by substantial evidence and that the ALJ failed to

correctly apply the appropriate test for determining whether the

disciplinary actions against Griffith were lawful. Sutter East

Bay does not, however, challenge the conclusion that it engaged

in unlawful surveillance of union activities, see Pet’r’s Br. at

2–3 n.2, and we therefore grant the Board’s application for

enforcement as to that issue. We discuss the remaining issues

below.

II. Changes to the Solicitation Policy

We first examine the Board’s conclusion that Sutter East

Bay violated Sections 8(a)(1) and 8(a)(3) of the Act by

discriminatorily enforcing its solicitation and distribution rules

11

on March 20 and 23, 2009. The ALJ determined that prior to the

events of March 2009, “employees had utilized the cafeterias for

solicitations, including collecting union dues, and for

distributing union-related literature without restriction.” Board

Decision at 27 (ALJ Op.). With regard to NUHW, however, the

ALJ concluded that Sutter East Bay “redefined its

solicitation/distribution rules” when it told Griffith and her

fellow employees that they could not conduct a meeting for an

“outside union,” distribute literature, or solicit funds. Id. The

ALJ noted that the cafeterias at Sutter East Bay’s hospitals are

not patient-care areas, which may by law be more stringently

controlled by management. See, e.g., St. Johns Hosp. & Sch. of

Nursing, 222 N.L.R.B. 1150, 1150–51 (1976) (holding that a

hospital may lawfully ban solicitations in patient-care areas).

Finally, the ALJ specifically noted that Sutter East Bay placed

no limitations on SEIU agents meeting with employees in the

cafeterias and even allowed non-union, employee-to-employee

solicitations, demonstrating the discriminatory nature of Sutter

East Bay’s rules. Board Decision at 6, 27 (ALJ Op.). The

Board adopted the ALJ’s findings and analysis. Id. at 1 (Board

Op.).

A.

Sutter East Bay contends that it did not allow other

unions to conduct meetings while preventing NUHW from

doing the same, and that the ALJ’s conclusion is not supported

by substantial evidence. First, Sutter East Bay argues that the

ALJ ignored evidence that it acted to prevent meetings in the

past, pointing to evidence in the record that Sutter East Bay sent

warnings to SEIU in 2004 concerning non-employee meetings

on its premises. Second, Sutter East Bay contends that

discriminatory intent is absent if the employer was unaware of

the other meetings, and there was no evidence that Sutter East

Bay was aware that SEIU or any other union conducted

12

meetings in its cafeteria. See St. Luke’s Mem. Hosp., Inc., 342

N.L.R.B. 1040, 1042 (2004) (finding an isolated instance of

solicitation for personal business to be insufficient to

demonstrate discriminatory enforcement because the employer

was unaware of it); Seton Co., 332 N.L.R.B. 979, 980 (2000)

(declining to rely on incidents of solicitation and distribution not

known to employer). Third, Sutter East Bay argues that to the

extent that SEIU or any other union bargained for access to

Medical Center property, it does not follow that NUHW would

have the same access. Cf. Seaboard Terminal & Refrigeration

Co., 114 N.L.R.B. 754, 755 (1955). Finally, Sutter East Bay

argues more broadly that no person or group may use an

employer’s property in a manner inconsistent with its intended

purpose, see S. Md. Hosp. Ctr., 293 N.L.R.B. 1209, 1216

(1989), and employees may not, as Griffith did, “commandeer”

the dining area as a meeting space. Sutter East Bay contends

that it was within its rights to adopt policies that protect patient

care and foster a respectful workplace environment.

The Board responds that Sutter East Bay has no written

policy prohibiting meetings in its cafeterias, and employees have

held such meetings in the cafeterias for years. Indeed, the Board

argues, Sutter East Bay’s policies explicitly allow employee-to-

employee solicitation and distribution in the cafeterias, so long

as all employees involved are not on duty. In addition, at least

one outside group, the California Nurses Association, meets

there as well. Sutter East Bay cites to two isolated instances

where it has prohibited non-employee SEIU representatives

from holding meetings in the cafeteria, but, the Board argues,

Sutter East Bay cannot show any time in past years when it

prohibited any of the openly advertised employee meetings

regularly held in the cafeterias. Under Board precedent, a

hospital cannot prohibit employees from engaging in union

solicitation and distribution in its cafeterias without showing

that such activities would disrupt patient care. See St. John’s

13

Hosp., 222 N.L.R.B. at 1150–51; Beth Israel Hosp. v. NLRB,

437 U.S. 483, 495, 502 (1978). Here, the Board argues, Sutter

East Bay made no attempt to show that solicitation in the

cafeterias—which are used almost entirely by

employees—would hinder patient care. Instead, as the ALJ

found, Sutter East Bay changed its solicitation and distribution

policy to hinder employees’ support for NUHW. Sutter East

Bay claims that it was concerned about disruptive meetings and

table-hopping, but it could have proscribed that behavior

directly instead of targeting solicitation and distribution

generally.

B.

We deny Sutter East Bay’s petition on this issue and

grant the Board’s cross-application for enforcement. Sutter East

Bay makes essentially two arguments: First, it was unaware of

past employee meetings and solicitations, and it attempted to

stop events it was aware of in the past. Second, as the owner of

the property and operator of the business, Sutter East Bay must

be allowed to control what goes on in its facilities. The former

argument is contradicted by the record and, in any event, is not

essential to the Board’s conclusion. The latter argument is a

complaint against well-established case law preventing hospitals

from banning solicitation in employee-focused cafeterias.

The Board properly found a violation of the Act without

regard to whether Sutter East Bay knew of past group meetings

in the cafeteria. As always, restrictions on employee solicitation

during nonworking time in nonworking areas are presumptively

invalid absent a showing of special circumstances. Beth Israel

Hosp., 437 U.S. at 492–93. In particular, while hospitals have

the leeway to enact more stringent prohibitions in patient-care

areas, that leeway requires that the “balance should be struck

against the prohibition in areas other than immediate patient care

14

areas such as lounges and cafeterias.” Id. at 495, 506–07. In

NLRB v. Baptist Hospital, Inc., 442 U.S. 773 (1979), for

example, the Supreme Court held that the hospital properly

justified its ban on solicitation in the corridors and sitting rooms

on patient floors as necessary to prevent disruption of patient

care, but also concluded that the hospital had not justified such

a ban in the cafeteria because the facts showed that patients

rarely visited the cafeteria. Id. at 786–87.

Here, the cafeteria was shown to be used almost

exclusively by employees. Sutter East Bay did not even attempt

to demonstrate any kind of special circumstances that would

justify a ban on union solicitation there. Sutter East Bay argues

that it was only trying to prevent a takeover of its cafeterias, but

Bruce Hatten’s admission that he ordered employees not to

solicit or distribute goes further than just preventing disruption.

Sutter East Bay complains in its brief that casinos and

department stores have more power to prohibit employee

solicitation in their cafeterias, but the Supreme Court already

addressed and rejected such an argument in Beth Israel Hospital,

citing the balance discussed above and the customer-facing

function of cafeterias in other businesses. 437 U.S. at 505–07.

The Board’s conclusion that Sutter East Bay changed its

solicitation rules to squelch union activity in March 2009 is

supported by substantial evidence. Hatten’s instructions to the

security guards display animus toward the “outside union,” but

more to the point is the fact that SEIU employees had been

meeting in the cafeteria regularly. Hatten, in fact, admitted that

he was “sure that SEIU stewards came into the cafeteria prior to

the trusteeship, handed out flyers, and did other things to

encourage support for SEIU.” Board Decision at 6 n.8 (ALJ

Op.). But when employees attempted to do the same for

NUHW, Hatten took aggressive action to prevent it. That makes

this case different than, for example, St. Luke’s Memorial

15

Hospital, Inc., where the Board refused to hold against the

employer its lack of knowledge about an isolated incident of

solicitation that had occurred contrary to its established policy.

See 342 N.L.R.B. at 1042. As Hatten admitted, he knew of the

SEIU solicitation and distribution, and Sutter East Bay had a

policy generally allowing solicitation and distribution in its

cafeterias, so long as employees were not on the clock.

Sutter East Bay claims that changing the solicitation

policy was necessary to prevent disruptive meetings, but the

record supports the ALJ’s conclusion that such a concern only

arose when the employees began meeting about the new union.

Given Sutter East Bay’s lack of any written policy prohibiting

meetings in the cafeteria, its practice of allowing such

employee-to-employee solicitation by SEIU stewards and others

in the past, and its sudden about face in light of the effort to

certify NUHW, the Board had substantial evidence on the record

that Sutter East Bay unlawfully redefined its solicitation policy.

We defer to that determination and grant the Board’s cross-

application for enforcement.

III. Disciplinary Actions Against Beverly Griffith

We next consider the Board’s determination that Sutter

East Bay unlawfully discriminated against Beverly Griffith by

disciplining her for the water-spilling incident, evicting her from

the cafeteria on March 20 and 23, threatening to suspend her and

suspending her on March 23, and terminating her after the

March 24 confrontation. The Board adopted the ALJ’s

reasoning and conclusion that Sutter East Bay had unlawfully

disciplined Griffith due to her support for the new union. Board

Decision at 1 (Board Op.).

The ALJ purported to apply the test from Wright Line,

Inc., 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st Cir.

16

1981), which is followed when an employee is disciplined for a

reason purportedly unrelated to any protected activity, such as

a discharge for theft or poor performance. Under Wright Line,

the Board’s General Counsel must first show that the adverse

employment action was motivated by the employee’s

participation in protected activities. If the General Counsel

makes such a showing, the burden shifts to the employer to

show that it would have taken the same action even without the

unlawful motive. See, e.g., Jackson Hosp. Corp. v. NLRB, 647

F.3d 1137, 1141 (D.C. Cir. 2011); Shamrock Foods Co. v.

NLRB, 346 F.3d 1130, 1135 (D.C. Cir. 2003).

The ALJ rejected the General Counsel’s suggestion that

the test from NLRB v. Burnup & Sims, Inc., 379 U.S. 21, 23

(1964), would be appropriate as an alternative to Wright Line.

Burnup & Sims analysis is employed when disciplinary action

was taken based on conduct that occurred in the course of a

protected activity. Id. at 23. Here, the ALJ specifically declined

to apply Burnup & Sims to the water-spilling incident because

spilling water is not a protected activity, Board Decision at 23

n.93 (ALJ Op.), and made no further findings or application of

Burnup & Sims to any other issues. Two members of the Board,

however, briefly noted that they would have upheld the ALJ’s

conclusion under Burnup & Sims as well as Wright Line. Id. at

2 (Board Op.).

A.

Sutter East Bay argues that the ALJ improperly applied

the Wright Line test by failing to examine or even mention

whether Bruce Hatten had a reasonable belief that Griffith had

engaged in the misconduct. An employer who holds a good-

faith belief that an employee engaged in the misconduct in

question has met its burden under Wright Line. See DTR Indus.,

Inc., 350 N.L.R.B. 1132, 1137 (2007). This is true even if the

17

employer is ultimately mistaken about whether the employee

engaged in the misconduct. The good-faith belief demonstrates

that the employer would have acted the same even absent the

unlawful motive. See id.

Here, Sutter East Bay argues, the ALJ improperly

focused on what actually happened rather than what Hatten

reasonably believed. In doing so, the ALJ placed too high a

burden on Sutter East Bay, requiring the hospital to show, for

example, that Griffith spilled the water intentionally. Instead,

Board and circuit precedents reject the notion that Hatten was

obligated to investigate the water incident in any particular way,

Sutter East Bay argues, and based on the report from McDuffie,

the security report, and Griffith’s past behavior, Hatten

reasonably believed Griffith intentionally spilled the water.

Likewise, Hatten had a reasonable belief, based on the

information given to him by the security guards, that Griffith

disrupted the cafeteria on March 23. Yet, Sutter East Bay

argues, the ALJ did not even mention or evaluate Hatten’s

reasonable belief regarding the cafeteria disruption or Hatten’s

judgment that Griffith was being insubordinate in failing to

vacate the cafeteria when ordered to do so. So too with the

profane tirade on March 24: Hatten based his decision on reports

from two supervisors that Griffith engaged in the profane tirade,

and on Griffith’s own admission that she might have used the

profane language. With each of these incidents, Sutter East Bay

contends, Hatten had reason to believe that Griffith engaged in

the misconduct, and with each incident the ALJ failed to address

that crucial point.

The Board provides only a brief response to Sutter East

Bay’s Wright Line argument. The Board asserts that a

reasonable belief is not sufficient for an employer to meet its

Wright Line burden, arguing that the employer must show not

only that it had a reasonable belief but also that it acted based on

18

that belief instead of the improper motivation. See Midnight

Rose Hotel & Casino, Inc., 343 N.L.R.B. 1003, 1005 (2004).

The Board contends that Sutter East Bay’s failure to engage in

even a cursory investigation of the water-spilling incident

defeats any claim that Sutter East Bay actually believed the

misconduct occurred or that it acted on that belief. With regard

to the March 23 incident, the Board essentially argues that Sutter

East Bay could not demonstrate a reasonable belief that Griffith

engaged in the tablehopping, and indeed it did not happen.

Hatten claims to have relied on Parks’ report of the

tablehopping, but, the Board contends, Parks testified only that

he told Hatten that Griffith moved to one other table and then

back to her own. See Board Decision at 15 (ALJ Op.). So too

with regard to whether Griffith defied Hatten’s orders on March

23. The Board argues that Griffith was not in fact defiant, and

therefore Hatten would have no reasonable belief that she

refused to follow his order to leave.

B.

1.

The ALJ misapplied the Wright Line test. Unlike the

ALJ’s analysis, the Wright Line test does not concern itself with

whether the employee actually engaged in the misconduct.

Instead, proper application of Wright Line requires that the judge

determine 1) whether the General Counsel has shown an

improper motivation for the disciplinary action, and, if so, 2)

whether the employer can demonstrate that it would have taken

the same action even without the improper motivation. See, e.g.,

Shamrock Foods Co., 346 F.3d at 1135–36. In any case in

which the evidence is disputed concerning the disciplined

employee’s underlying misconduct, it would seem essential that

the trier of fact must determine whether the employer had a

good faith belief in order to even begin an analysis of whether

19

the employer would have imposed the same consequence in the

absence of the anti-union animus. Certainly that is true here.

For all we can tell from the record and the ALJ’s analysis, Sutter

East Bay with no animus at all would have disciplined Griffith

in precisely the same fashion if it believed she committed the

misconduct. If Hatten reasonably believed that Griffith had

spilled the water intentionally, for example, he presumably had

the right to discipline her. So too if he reasonably believed that

she refused to leave the premises on March 23 or that she

engaged in the verbal tirade on March 24. If Sutter East Bay’s

management reasonably believed those actions occurred, and the

disciplinary actions taken were consistent with the company’s

policies and practice, then Sutter East Bay could meet its burden

under Wright Line regardless of what actually happened.

Unfortunately, Sutter East Bay never had the chance to meet its

Wright Line burden here because the ALJ declined to even

examine what Hatten believed, whether his beliefs were

reasonable, and whether his actions based on those beliefs were

consistent with Sutter East Bay’s policies and past practice.

On the water-spilling incident, the ALJ expressly

invoked Wright Line as the proper standard and rejected Burnup

& Sims. Board Decision at 23 & n.93 (ALJ Op.). The ALJ

seemingly applied the first step of Wright Line, finding that

Bruce Hatten had become aware of Griffith’s activities in

support of NUHW prior to the water-spilling incident and

finding that Hatten favored SEIU and sought to quell support for

NUHW. Id. at 23. But the ALJ’s analysis of the second step of

the Wright Line analysis is absent: the ALJ stated that he “[did]

not believe Hatten ever conducted an investigation of the

incident” and instead relied solely on the security report of the

incident and McDuffie’s statement to him on the phone. Id. at

24. For that reason, and seemingly based on the ALJ’s general

discrediting of Hatten’s testimony, the ALJ concluded that

Hatten issued the warning to Griffith in violation of the Act.

20

Nowhere in that analysis is there an examination of

whether Hatten had a reasonable belief that Griffith intentionally

spilled the water. Hatten’s failure to investigate the matter in a

specific way seems to be the foundation for the ALJ’s

conclusion, but an employer is not required to investigate in any

particular manner, Detroit Newspaper Agency v. NLRB, 435

F.3d 302, 310 (D.C. Cir. 2006), especially when the Board can

point to no evidence that would have been uncovered after a

deeper investigation. Of course, none of this is to say whether

Hatten reasonably believed that Griffith spilled the water—such

a determination is to be made by the finder of fact, not by us.

But the finder of fact must actually undertake to make that

finding before pronouncing judgment under Wright Line.

The ALJ’s analyses of the March 23 and 24 incidents are

similarly deficient. Rather than applying the Wright Line test by

examining Hatten’s reasonable beliefs and how those beliefs

might have informed his disciplinary decisions, the ALJ simply

reached factual conclusions as to what actually happened. He

found, for example, that Griffith did not use the word “f***” in

the break room after being informed of her suspension on March

24. Board Decision at 30 (ALJ Op.). But Hatten, who was not

present during the tirade, relied on reports from managers stating

that Griffith did engage in the tirade, and on Griffith’s own

admission that she “might have” used that language. Whether

the ALJ believes the reports are accurate or whether Griffith

actually engaged in the tirade is largely immaterial to whether

Hatten reasonably believed she did. The ALJ relied on his

conclusion that the contemporaneous written reports were self-

serving fabrications. See Board Decision at 30 n.101 (ALJ Op.).

Of course, if Hatten were properly found to be part of such a

fabrication or to have knowledge of it, that would relate directly

to his reasonable belief. But the ALJ made no analysis or

finding that Hatten had any reason to doubt the veracity of the

21

reports. Therefore, the proper question was whether Hatten,

relying on those reports and Griffith’s own admission,

reasonably believed the tirade occurred.

Reviewing the ALJ’s analysis, it is difficult to even

surmise what legal standard he applied with regard to the March

23 and 24 events, given the total absence of any mooring to the

Wright Line test or any other test. The ALJ’s findings amount

to this: the ALJ did not believe that Griffith engaged in the

misconduct, and therefore he concluded that Sutter East Bay

violated the Act by disciplining Griffith for it. The ALJ’s

conclusions leave that crucial second step of the Wright Line test

unexamined and unanswered, and therefore we must vacate the

factual record regarding the disciplinary measures in order to

allow for the evidence to be reheard and subjected to the proper

standard.

Perhaps out of concern that the ALJ’s Wright Line

analysis was defective, the Board made a terse statement that

Burnup & Sims analysis would also support the ALJ’s

conclusion. Board Decision at 2 (Board Op.). Such a bare

statement simply cannot survive judicial scrutiny. To receive

our deference, an agency’s decision must be supported by

substantial evidence on the record and the agency must not act

arbitrarily in applying established law to the factual evidence.

See, e.g., W & M Props. of Conn., Inc. v. NLRB, 514 F.3d 1341,

1346 (D.C. Cir. 2008). Here, the Board did not explain its

reasoning when it noted—almost in passing—that Burnup &

Sims analysis would sustain the ALJ’s conclusions. The ALJ

explicitly refused to apply Burnup & Sims to the water incident

and did not mention it with regard to the other incidents. Board

Decision at 23 n.93 (ALJ Op.). The Board does not meet its

analytical burden by simply stating that application of Burnup

& Sims would reach the same conclusion without providing any

analysis or explanation. In so holding, we do not decide which

22

test, Wright Line or Burnup & Sims, is the correct test for

analyzing each of these events. Griffith may or may not have

been engaging in protected activities during the different

incidents. Regardless, the Board did not properly apply any test

at all.

2.

We cannot conclude without discussing another

troubling aspect of this case. As the Supreme Court has

explained, the Board “is not free to prescribe what inferences

from the evidence it will accept and reject, but must draw all

those inferences that the evidence fairly demands.” Allentown

Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359, 378 (1998).

Yet the ALJ treated conflicting evidence here with an almost

breathtaking lack of evenhandedness. The employer’s witnesses

saw their testimony completely disregarded for the slightest of

immaterial inconsistencies, while the union’s witnesses survived

even material contradictions.

One illustrative example is the ALJ’s weighing of the

testimony regarding the profane tirade on March 24. During

Aquino’s testimony about the tirade, Aquino originally quoted

Griffith and included the profanity she purportedly used; later in

his testimony, while discussing matters related to the sequence

of events and not the language, he quoted Griffith in almost the

same terms, but without the profanity. Upon inquiry from the

ALJ, Aquino made clear that Griffith did, in fact, use the

profane words. See Board Decision at 18–19 n.76 (ALJ Op.).

Despite crediting Aquino as appearing to testify honestly, the

ALJ rejected Aquino’s account of the incident largely based on

this inconsistency. Id. at 21. As should be obvious, however, a

witness might feel reluctant to use obscene language

unnecessarily on the witness stand. Dismissing as contradictory

such clearly consistent testimony tries both our deference and

23

our patience, especially given the ALJ’s willingness to

countenance Griffith’s significant reversal as to whether she

used the word “f***” during the tirade. Griffith admitted to

Hatten on March 26 that she might have used the word “f***.”

Id. at 20. She fully denied during the hearing that she used that

word at all. Id. at 18. The treatment of Aquino’s testimony

compared to Griffith’s is but one example of the problem that

troubles us.

Although an ALJ’s credibility determinations are entitled

to significant deference, e.g., Capital Cleaning Contractors, Inc.

v. NLRB, 147 F.3d 999, 1004 (D.C. Cir. 1998), they are not

immune to judicial scrutiny. Because we are already vacating

the factual record due to the misapplication of Wright Line test,

we lack the occasion here to resolve whether the ALJ achieved

the rare result of exceeding our deference. We note with great

concern, however, the apparent application of different

standards to union and company witnesses. We hope that

concern will be alleviated on remand.

IV. Conclusion

We grant the Board’s cross-application for enforcement

of its order only to the extent that it concludes that Sutter East

Bay violated the Act with its unlawful surveillance of union

activities and redefinition of its solicitation and distribution

policies. We cannot do so, however, regarding the disciplinary

actions taken against employee Beverly Griffith. The Board

adopted the ALJ’s fatally deficient application of the Wright

Line standard, and we therefore grant Sutter East Bay’s petition

for review and vacate the Board’s factual record and conclusions

as to that issue. On remand, the Board must rehear the evidence

and correctly apply the appropriate legal standards. In doing so,

the Board and the ALJ must take care to “draw all those

inferences that the evidence fairly demands”—no more and no

24

less. Allentown Mack Sales & Serv., Inc., 522 U.S. at 378. That

requirement is the “foundation of all honest and legitimate

adjudication.” Id. at 379.

So ordered.