DH Long Point Management LLC v. NLRB ( 2021 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
No. 20-1030 September Term, 2020
FILED ON: MAY 14, 2021
DH LONG POINT MANAGEMENT LLC,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
UNITE HERE LOCAL 11,
INTERVENOR
Consolidated with 20-1096
On Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board
Before: TATEL, GARLAND * and WILKINS, Circuit Judges.
JUDGMENT
This petition for review of a decision of the National Labor Relations Board was presented
to the Court, and briefed and argued by counsel. The Court has accorded the issues full
consideration and has determined that they do not warrant a published opinion. See D.C. CIR.
RULE 36(d). For the reasons stated below, it is
ORDERED and ADJUDGED that the petition be DENIED and the cross-petition for
enforcement be GRANTED.
*
Judge Garland was a member of the panel at the time this case was submitted but did not participate in the final
disposition of the case.
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I.
Petitioner DH Long Point Management LLC (“DH Long Point” or “Company”) operates
a 600-room resort named Terranea in Rancho Palos Verdes, California. The resort has several
restaurants, each of which operates its own kitchen. All of the kitchens are under the supervision
of an executive chef. One of the kitchens is the in-room dining kitchen, which prepares room-
service orders 24 hours per day and serves the lobby lounge and coffee bar. The kitchen is split
into a hot side and a cold side. The hot side prepares more “expensive protein dishes,” while the
cold side prepares pizzas, fruit dishes, and other dishes. J.A. 261. A chef de cuisine manages the
kitchen, and a sous chef works under him or her. The kitchen is also staffed by hourly workers
ranked in the following order: (1) a junior sous chef, (2) cooks (with three ranks: Cook I, Cook
II, Cook III), (3) cook-interns, and (4) temporary helpers.
Freddy Lovato began working as an hourly employee in 2009. In 2012, Lovato was
promoted to the role of junior sous chef. In this role, Lovato was assigned the dinner shift, which
spanned from 2 until 10:30 pm. Lovato was expected to prepare dishes at his assigned station, but
when the chef de cuisine and sous chef were not in the kitchen, Lovato was also responsible for
monitoring the line and correcting any mistakes he saw.
In 2017, UNITE Here Local 11 (“Union”) initiated a campaign to organize the resort’s
employees. Lovato was part of the union-organizing committee. In October 2017, the Union
began to campaign publicly, and Lovato was the most prominent advocate for union
representation, and he was named in four news articles about the campaign. In March 2018,
Lovato also participated in a delegation that sought to meet with the resort’s president about the
campaign. In May 2018, Lovato was the sole employee who joined Union representatives in
delivering signatures to city hall in support of an initiative focusing on work conditions and the
minimum wage. In response to the Union’s campaign, DH Long Point began anti-union
organizing. This included mandatory employee meetings where senior managers discussed their
opposition to the Union. At one meeting, the resort’s president warned employees that the Union
would represent the employees “over my dead body.” J.A 271.
Central to this dispute are four incidents in 2018 involving the Company’s kitchens. First,
on May 19, a guest ordered a gluten-free pizza. The events surrounding the pizza’s preparation
are disputed, but the pizza was not properly prepared and consequently the guest had to be
hospitalized after suffering an allergic reaction. No employee or supervisor faced any punishment.
Second, on May 25, a guest ordered a gluten-free mac-and-cheese. Lovato was working on the
hot side of the kitchen, and he was the most senior employee in the kitchen at the time. Jose
Flamenco, a Cook II, prepared the mac-and-cheese dishes about five to eight feet away from
Lovato. After the guest complained that her child had vomited due to an allergic reaction to the
mac-and-cheese, Mona Guerrero, the chef de cuisine, spoke with Flamenco and Lovato for less
than a minute about the incident. Lovato suggested that the cheese sauce could have caused the
allergic reaction. Guerrero subsequently emailed Bernard Ibarra, the executive chef, to notify him
of the incident. Guerrero and Ibarra then met with the head of human resources to discuss
disciplinary action, and Guerrero and Ibarra subsequently issued a written warning to Flamenco
and a final written warning to Lovato, bypassing the Company’s progressive discipline policy.
Third, on June 29, an intern prepared a fruit dish with pineapple despite the order sheet requesting
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no pineapple due to an allergy. The intern received a verbal warning. Finally, on August 8, Lovato
was preparing chicken wings for an order. After he was told to change the sauce, Lovato rinsed
the wings in water but was told by Guerrero to use new wings. Lovato placed the wings in a
container in the walk-in cooler. Guerrero then saw the wings in the cooler and discarded them.
Guerrero subsequently reported the wings incident to Ibarra and the head of human resources, who
all agreed to discharge Lovato as an escalation from the final written warning he received after the
mac-and-cheese incident. Lovato was then discharged five days later.
The Union then filed a charge with the National Labor Relations Board (“NLRB” or
“Board”), alleging that Lovato was discharged due to his pro-union advocacy. The Company
responded that Lovato was not subject to the protections of the National Labor Relations Act
(“Act”) because he was a statutorily exempt supervisor. The Company also claimed that Lovato’s
discharge was unrelated to his pro-union activities. An Administrative Law Judge (“ALJ”) held a
four-day hearing before finding that Lovato was not a statutorily exempt supervisor and that the
Company was motivated by anti-union animus when it discharged Lovato. The Board then
rejected the Company’s exceptions and almost entirely adopted the ALJ’s findings, declining only
to rely on the ALJ’s finding that the human resources manager implicitly admitted that she knew
about Lovato’s pro-union activities and Petitioner’s president’s correspondence with city officials.
The Company petitioned for review and the Board cross-petitioned for enforcement.
On petitions for review of an NLRB order, we “must uphold the judgment of the Board
unless its findings are unsupported by substantial evidence, or it acted arbitrarily or otherwise erred
in applying established law to the facts of the case.” Novato Healthcare Ctr. v. NLRB, 916 F.3d
1095, 1100 (D.C. Cir. 2019) (citing Spurlino Materials, LLC v. NLRB, 805 F.3d 1131, 1136 (D.C.
Cir. 2015); Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011)). Substantial
evidence is defined as “such relevant evidence as a reasonable mind might accept as adequate to
support a conclusion.” NLRB. v. Ingredion Inc., 930 F.3d 509, 514 (D.C. Cir. 2019) (quoting
Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951)). We must therefore “affirm the
Board’s findings unless ‘no reasonable factfinder’ could find as it did.” Id. (quoting Alden Leeds,
Inc. v. NLRB, 812 F.3d 159, 165 (D.C. Cir. 2016)). Under this deferential standard of review, we
deny the petition for review and grant the cross-petition for enforcement.
II.
The NLRA does not apply to “any individual employed as a supervisor.” 29 U.S.C. § 152(3).
The Act sets out the conditions that establish whether an individual is a supervisor. In pertinent
part, the Act defines a supervisor as “any individual having authority . . . to direct” other employees
as long as “the exercise of such authority is not of a merely routine or clerical nature, but requires
the use of independent judgment.” Id. § 152(11). Employees are supervisors as understood by the
Act “if (1) they hold the authority to engage in any 1 of the 12 listed supervisory functions, (2)
their ‘exercise of such authority is not of a merely routine or clerical nature, but requires the use
of independent judgment,’ and (3) their authority is held in the interest of the employer.’” NLRB
v. Kentucky River Cmty. Care, Inc., 532 U.S. 706, 713 (2001) (quoting NLRB v. Health Care &
Retirement Corp. of America, 511 U.S. 571, 573–74 (1994)). “The burden of proving the
applicability of the supervisory exception . . . fall[s] on the party asserting it.” Id. at 711. The
parties’ dispute is over (1) whether Lovato exercised the independent judgment necessary to
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qualify as a supervisor and (2) whether Lovato was responsible for the failings of the kitchen staff.
Because there was substantial evidence for the Board to conclude that Lovato did not exercise
independent judgment and is thus not exempted from the Act, we do not reach the question of
whether he was held responsible for the errors of his subordinates.
To prove that an employee exercised independent judgment, the employer must establish
that the “individual must at minimum act, or effectively recommend action, free of the control of
others and form an opinion or evaluation by discerning and comparing data.” In re Oakwood
Healthcare, Inc., 348 NLRB 686, 693 (2006). 1 Employees are not supervisors when their
judgment “is dictated or controlled by detailed instructions” that are “set forth in company policies
or rules” or in “the verbal instructions of a higher authority.” Id. But “the mere existence of
company policies does not eliminate independent judgment from decision-making if the policies
allow for discretionary choices.” Id. The statute thus sets a baseline: the act that renders an
individual a supervisor “must involve a degree of discretion that rises above the ‘routine or
clerical.’” Id.The Board had substantial evidence to conclude that Petitioner failed to satisfy its burden
to prove that Lovato exercised independent judgment. Here, the Board found that junior sous chefs
had to strictly adhere to the procedures set by the higher-ups in preparing the dishes. Rather than
exercise independent judgment, Lovato and the other junior sous chefs were only expected to
ensure that the dishes did not deviate from the recipes and procedures established by their
superiors. And although Petitioner can point to testimony that Lovato oversaw the cooking line,
was responsible for checking the dishes, and sometimes monitored the kitchen alone, this
testimony does not contradict the fact that he did so while following detailed instructions that
stripped him of independent judgment. We therefore reject the challenge to the finding that
Petitioner failed to satisfy its burden showing that Lovato exercised independent judgment and is
not exempt from the NLRA.
III.
Petitioner also contends that the Board erred in concluding that substantial evidence
supported the Board’s finding that Petitioner punished Lovato because of his pro-union activities.
In evaluating claims of union animus, the Board applies the Wright Line test. See Tasty Baking v.
NLRB, 254 F.3d 114, 125 (D.C. Cir. 2001) (citing Wright Line, 251 N.L.R.B. 1083, 1089 (1980)).
Under the Wright Line test, the Board “determine[s] whether an unlawful motive underlay an
adverse action taken by an employer.” Napleton 1050, Inc. v. NLRB, 976 F.3d 30, 40 (D.C. Cir.
2020). First, the “[t]he General Counsel must make a prima facie showing sufficient to support
the inference that protected . . . conduct was a motivating factor behind” the termination. Fort
Dearborn Co. v. NLRB, 827 F.3d 1067, 1072 (D.C. Cir. 2016) (internal citations and quotation
marks omitted). “Relevant factors in determining an employer’s motive ‘include the employer’s
knowledge of the employee’s union activities, the employer’s hostility toward the union, and the
timing of the employer’s action.’” Ozburn-Hessey Logistics, LLC v. NLRB, 833 F.3d 210, 218
1
Petitioner cites pre-Oakwood decisions to argue that the Board failed to explain its divergence from its binding
precedent. However, the decisions Petitioner cites either applied a different analysis than Oakwood or are
distinguishable from this case. The Board thus did not have an obligation to explicitly abrogate these decisions in
deciding this case.
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(D.C. Cir. 2016) (quoting Fort Dearborn Co., 827 F.3d at 1072) (internal quotation marks
omitted). Once the Board has made a prima facie showing of animus as a motivating factor, “the
burden shifts to the [employer] to show that it would have taken the same action in the absence of
the unlawful motive.” Tasty Baking Co., 254 F.3d at 126. The employer “avoid[s] an unfair labor
practice finding by showing by a preponderance of evidence that the worker would have been fired
even if he had not been involved with the union.” Davis Supermarkets Inc v. NLRB, 2 F.3d 1162,
1167 (D.C. Cir. 1993) (internal quotation marks omitted).
It is undisputed that Lovato engaged in protected activity and that his supervisors who
punished him were aware of this activity. Instead, Petitioner argues that the record does not
support the Board’s finding that it had the requisite anti-union motive when it punished Lovato for
the mac-and-cheese incident, and that, in any event, the Board did not have substantial evidence
that this animus was the motivating factor for the adverse actions taken against Lovato. 2
In making its findings, the Board had ample evidence to support that the General Counsel
made a prima facie showing that union animus was a motivating factor in Lovato’s punishment.
The General Counsel based its showing on a number of factors. First, Petitioner’s president stated
that she would allow unionization “over [her] dead body.” J.A. 271; see, e.g., Parsippany Hotel
Mgmt. Co. v. NLRB, 99 F.3d 413, 423 (D.C. Cir. 1996) (finding animus when a high-level manager
made anti-union comments that were never repudiated despite not being involved in the
disciplining of the employee). Second, Petitioner conducted a cursory investigation into the mac-
and-cheese incident that led to the issuance of the final written warning to Lovato. Third, Petitioner
bypassed its progressive discipline policy in issuing the final written warning to Lovato. See, e.g.,
United Food & Commercial Workers Union Local 204 v. NLRB, 447 F.3d 821, 826 (D.C. Cir.
2006) (per curiam) (finding that the company “failed to follow its progressive discipline policy,
instead firing [the employee] before she had accrued enough warnings,” which permitted the Board
to infer, independent of other testimony, “that her union support . . . was the real reason for her
discharge”). Fourth, Petitioner punished Lovato more severely than Flamenco even though the
human resources manager thought they were being punished for the same conduct. See, e.g.,
Ozburn-Hessey Logistics, LLC, 833 F.3d at 223 (concluding that disparate treatment can help
establish animus when the punishment of one employee is “more severe than the discipline the
Company imposed on other, similar offenders”). Finally, Lovato’s supervisors made false and
misleading testimony during the hearing. See, e.g., DHSC, LLC v. NLRB, 944 F.3d 934, 938 (D.C.
Cir. 2019). These factors, when taken together, are sufficient for the Board to conclude that the
General Counsel met its obligation to make a prima facie showing that anti-union animus was a
motivating factor in punishing Lovato.
Nor has Petitioner shown that the Board did not have substantial evidence to support its
finding that Petitioner would not have taken the same action in the absence of the unlawful motive.
First, Petitioner unpersuasively argues that its failure to punish other union supporters shows that
it would have punished Lovato anyway. But as we have repeatedly made clear, “an employer’s
2
Petitioner also raised a challenge to the Board’s finding that Lovato was unlawfully discharged for the wings incident
in its reply brief. But “[i]ssues may not be raised for the first time in a reply brief.” Am. Wildlands v. Kempthorne,
530 F.3d 991, 1001 (D.C. Cir. 2008) (quoting Rollins Envt’l Servs. v. EPA, 937 F.2d 649, 652 n.2 (D.C. Cir. 1991)).
Petitioner has thus forfeited its challenge to the Board’s findings with regards to the wings incident.
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discriminatory motive is not disproved by evidence showing that it did not weed out all union
adherents.’” Clark & Wilkins Indus., Inc. v. NLRB, 887 F.2d 308, 316 n.19 (D.C. Cir. 1989)
(quoting Nachman Corp. v. NLRB, 337 F.2d 421, 424 (7th Cir. 1964)). Second, Petitioner fails to
gain traction by pointing to the extended period of time during which it did not punish Lovato even
though he was engaged in pro-union advocacy. Lovato’s pro-union activities continued until
shortly before the mac-and-cheese incident, which was the first instance where Petitioner could
have conceivably punished Lovato. Third, while Petitioner contends that it had a good-faith belief
that Lovato engaged in the misconduct in question, it can point to no other instance where a sous
chef was given a warning of any kind for the errors of a cook. See Fort Dearborn Co., 827 F.3d
at 1076 (holding that the honest-belief exception only applied when the actions at issue “were
consistent with” the employer’s “policies and past practices” (emphasis removed)). Thus, the
Board had substantial evidence to determine that Petitioner has failed to meet its burden of showing
that it would have taken the same adverse actions against Lovato for the mac-and-cheese incident
even absent the unlawful motive.
IV.
Consistent with the foregoing, we deny the petition for review and grant the cross-petition
for enforcement. Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The
Clerk is directed to withhold issuance of the mandate herein until seven days after resolution of
any timely petition for rehearing or petition for rehearing en banc. See FED. R. APP. P. 41(B); D.C.
CIR. RULE 41.
Per Curiam
FOR THE COURT:
Mark J. Langer, Clerk
BY: /s/
Daniel J. Reidy
Deputy Clerk
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