ARC Bridges, Inc. v. NLRB , 861 F.3d 193 ( 2017 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 16, 2016 Decided June 30, 2017
No. 15-1113
ARC BRIDGES, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 15-1143
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Raymond C. Haley III argued the cause for petitioner.
With him on the briefs was Andrew M. Swafford.
Amy H. Ginn, Attorney, National Labor Relations Board,
argued the cause for respondent. With her on the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, and Usha Dheenan, Supervisory Attorney.
Before: TATEL and KAVANAUGH, Circuit Judges, and
GINSBURG, Senior Circuit Judge.
2
Opinion for the Court filed by Senior Circuit Judge
GINSBURG.
Dissenting opinion filed by Circuit Judge TATEL.
GINSBURG, Senior Circuit Judge: The National Labor
Relations Board held that Arc Bridges, Inc. violated §§ 8(a)(3)
and (1) of the National Labor Relations Act by failing to give
a wage increase to represented employees, with whom it was
then bargaining, when it increased the wages of its nonunion
employees. The Employer petitioned this court for review.
Because we hold that substantial evidence did not support the
Board’s findings, we grant the Employer’s petition for review,
vacate the Board’s decision and order, and deny the Board’s
cross-application for enforcement.
I. Background
The Employer is a nonprofit corporation that provides
“assisted living programs, employment counseling, and related
support services for individuals with developmental
disabilities.” Arc Bridges, Inc. v. NLRB, 662 F.3d 1235, 1236
(D.C. Cir. 2011). In November 2006 and February 2007, the
Board certified the American Federation of Professionals (the
Union) to represent Arc Bridges’ employees in two separate
bargaining units, consisting respectively of a Day Services
employee unit and Residential and Supported Living employee
unit. Arc Bridges, Inc., 355 NLRB 1222, 1222 (2010).
The Board found the sequence of relevant events thereafter
was as follows. In May 2007, supervisor Raymond Teso told
a future employee, Teresa Pendleton, during her interview that
“the Union would be gone in November.” Although he did not
say so, November was the end of the one-year period following
the Union’s certification, during which the Employer could
3
“not withdraw recognition from the union and the Board
[would] not entertain a petition contesting the union’s majority
status,” Arc Bridges, Inc., 362 NLRB No. 56, slip op. at 2 &
n.9 (Mar. 31, 2015), https://www.nlrb.gov/case/13-CA-
044627.
In June, the Employer’s board of directors authorized
management to give a three percent increase in wages to all
employees. 355 NLRB at 1228 (ALJ Op.). In July, however,
before any raise had been announced, the Union demanded
changes in health insurance and retirement benefits and a 50%
increase in wages over three years. Id. at 1227. Shortly
thereafter the Employer provided the Union with its financial
data indicating it had only $53,497 available to meet the
Union’s demands. Id. at 1227-28.
In July or August, area manager Bonnie Gronendyke told
an employee, Shirley Bullock, that Executive Director Kris
Prohl “was going to give us a raise until we voted the Union
in.” Id. at 1230. In August, Teso told Pendleton that the
$56,000 the Employer had available to increase the employees’
wages was instead being used to pay (presumably labor)
lawyers. Id. Also in August, the employees in both units
“voted to authorize the Union to call a strike.” Id. at 1228.
In September, the Employer offered the Union a one-time
bonus for all represented employees to be paid from “certain
grant money” to come from an outside source. Id. The Union
did not accept that offer and the grant eventually expired. Id.In October, the Employer gave a three percent wage increase
to its nonunion employees, retroactive to July. Id. In the course
of their bargaining at some time thereafter, the Employer
offered the Union a one and half percent and later a two percent
wage increase for represented employees. Id. at 1229.
4
In March 2008, no collective bargaining agreement having
been reached,
[t]he union filed a charge with the Board claiming that Arc
Bridges had violated § 8(a)(1), (3), and (5) of the Act by
granting the [retroactive] wage increase only to non-union
employees. The Regional Director issued a … complaint
focusing exclusively on the theory that Arc Bridges had
violated § 8(a)(3).
662 F.3d at 1237.
The Administrative Law Judge dismissed the complaint
after analyzing, under the burden-shifting framework of Wright
Line & Lamoureux, 251 NLRB 1083 (1980), the Employer’s
failure unilaterally to increase the wages of the represented
employees at the same time it gave the others a raise. 355
NLRB at 1231-32 (ALJ Op.). The ALJ first concluded “the
General Counsel has not sustained her burden of proof under
Wright Line by proving by a preponderance of the evidence that
the employees’ protected activity was a motivating factor for
[the Employer’s] withholding of the wage increase.” Id. at
1232. Second, the ALJ held that, even if the General Counsel
had carried her burden, “the [Employer] has met its Wright
Line burden of proof by demonstrating it would have taken the
identical action for legitimate, nondiscriminatory reasons.” Id.In doing so, the ALJ determined that both the General
Counsel’s and the Employer’s asserted rationales for the
discriminatory wage increase were plausible: The employer
could have “withheld the wage increase in order to punish and
retaliate against the employees for bringing in the Union,” or it
could have withheld the increase as a “legitimate bargaining
strategy.” Id. The Board reversed the ALJ’s decision on the
ground that annual wage increases, “if sufficient funds
existed,” had become “an established condition of
5
employment” for all employees, the denial of which was a
violation of the Act. 662 F.3d at 1238 (quoting 355 NLRB at
1223).
The Employer sought review of the Board’s decision and
this court reversed, finding the Board had ignored “evidence
contradicting the practice” of yearly wage increases and
holding the sporadic history of the increases had not made them
a “condition of employment.” Id. at 1240.
On remand, applying the Wright Line burden-shifting
framework, a panel of the Board held the Employer’s decision
not to increase the wages of the represented employees was a
violation of §§ 8(a)(1) and (3) of the Act because it was
motivated by antiunion animus. 362 NLRB at 1. Member
Miscimarra dissented. Id. at 6. The Employer again petitioned
for review and the Board cross-applied for enforcement.
II. Analysis
This court “must uphold an order of the Board unless it
rests upon a finding not supported by ‘substantial evidence’”
on the record taken as a whole. S & F Mkt. St. Healthcare LLC
v. NLRB, 570 F.3d 354, 358 (D.C. Cir. 2009). We give
substantial deference to the Board’s factual inferences
from the record before it, and [w]hen the Board concludes
that a violation of the Act has occurred, [the Court] must
uphold that finding unless it has no rational basis or is
unsupported by substantial evidence. It is not necessary
that we agree that the Board reached the best outcome in
order to sustain its decisions.
6
HealthBridge Mgmt., LLC v. NLRB, 798 F.3d 1059, 1067 (D.C.
Cir. 2015) (citations and internal quotation marks omitted)
(alterations in original).
We do not defer, however, when the Board fails
adequately to explain why it has rejected the arguments for a
different understanding of the evidence. See Universal
Camera Corp. v. NLRB, 340 U.S. 474, 496-97 (1951);
Allentown Mack Sales & Service, Inc. v. NLRB, 522 U.S. 359,
378-379 (1998) (“When the Board purports to be engaged in
simple factfinding, … it 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”).
Here, the Board held the Employer’s decision to raise the
wages of the nonunion employees violated § 8(a)(3) and hence
§ 8(a)(1) of the Act. 1 362 NLRB at 1. Under § 8(a)(3), it is
“an unfair labor practice for an employer … by discrimination
in regard to hire or tenure of employment or any term or
condition of employment to encourage or discourage
membership in any labor organization.” 29 U.S.C. § 158(a)(3).
For a violation of § 8(a)(3) under the circumstances presented
here, the Board must find the Employer’s discriminatory action
was motivated by antiunion animus, an “intent[] to prejudice
the employees’ position because of their membership in the
union.” NLRB v. Brown, 380 U.S. 278, 286 (1965).
The Board has long held:
1
“[A] violation of § 8(a)(3) constitutes a derivative violation of
§ 8(a)(1),” Fort Dearborn Co. v. NLRB, 827 F.3d 1067, 1072 (D.C.
Cir. 2016) (quoting Metro. Edison Co. v. NLRB, 460 U.S. 693, 698
n.4 (1983)). Because the Board did not indicate the Employer
committed an independent violation of § 8(a)(1), we address only
§ 8(a)(3).
7
Absent an unlawful motive, an employer is privileged to
give wage increases to his unorganized employees, at a
time when his other employees are seeking to bargain
collectively through a statutory representative. Likewise,
an employer is under no obligation under the Act to make
such wage increases applicable to union members, in the
face of collective bargaining negotiations on their behalf
involving much higher stakes.
Shell Oil Co. (San Francisco, Cal.), 77 NLRB 1306, 1310
(1948). To assess whether there is an unlawful motive, the
Board applies the Wright Line framework. First, the General
Counsel of the Board “must make a prima facie showing
sufficient to support the inference that protected [i.e., union-
related] conduct was a motivating factor behind the
[discrimination].” Fort Dearborn, 827 F.3d at 1072 (first
alteration in original) (citations and internal quotation marks
omitted). If the General Counsel meets her burden, the
employer can prevail by showing “it would have taken the
same action in the absence of the unlawful motive.” Id.
Here we are called upon to determine whether substantial
evidence supports the Board’s conclusion that the Employer
was unlawfully motivated in October 2007 when, while
engaged in collective bargaining with the Union, it gave a wage
increase to its nonunion employees. The Board relied for its
conclusion upon four findings; these findings do not, however,
even in the aggregate, provide substantial evidence in support
of the Board’s conclusion.
A. Gronendyke’s Remark to Bullock
First, the Board found Ms. Prohl “intended to give
employees a 3-percent wage increase until they voted for the
Union,” based upon a statement by area manager Gronendyke
8
that Prohl “was going to give us a raise until we voted the
Union in.” 362 NLRB at 2, 3. The Board failed, however, to
explain why this remark is anything more than an accurate
statement of the same bargaining strategy the Board held in
Shell Oil was lawful. See Orval Kent Food Co., 278 NLRB
402, 403 (1986) (declining to infer an unlawful motivation
from a manager’s remark attributing a decision not to give
wage increases to represented employees for having brought in
the union because such “remarks were merely a realistic
statement of the effects of the bargaining obligation which the
[Employer] incurred when the Union was certified to represent
the … employees”). The Board in its opinion and on appeal
attempts to distinguish Orval Kent on the ground that the
employer there also offered wage increases to the union during
negotiations. 362 NLRB at 3 n.14. This factual difference is
irrelevant, however, because the Board did not, in
characterizing the manager’s remark as “merely a realistic
statement,” rely at all upon the employer’s having offered a
wage increase to the represented employees.
B. Gronendyke’s Remark to Bullock and Teso’s Remark to
Pendleton
Second, the Board found the “[Employer]’s managers
essentially encouraged employees to blame the Union … for
Prohl’s decision to withhold the increase from them,” citing
both Gronendyke’s innocuous remark above and a statement
made in August 2007 by supervisor Teso that the $56,000
previously budgeted for a raise was instead being used to pay
the Company’s lawyers. Id. at 3. The Employer contends that
Teso’s statement merely describes the financial constraints it
faced because it had to expend resources on collective
bargaining. We agree.
9
The Board cites our opinion in Acme Die Casting, a Div.
of Lovejoy Indus., Inc. v. NLRB, 26 F.3d 162 (D.C. Cir. 1994),
to support its argument that statements blaming the union for
the lack of a raise show antiunion animus. That case, however,
does not suggest that a realistic statement of the employer’s
financial situation, such as Teso’s, shows antiunion animus. In
Acme, the employer entirely refused to bargain with the union
and, after not providing the usual semi-annual wage increase,
the president of the company told a group of prounion
employees: “I told you guys not to bother with the Union
because that was going to happen, no raise.” 26 F.3d at 163,
164. In contrast, Teso’s statement was made during ongoing
bargaining and faults not the employees’ decision to unionize
but the Employer’s increased costs, an unavoidable reality
affecting its resources. Perhaps the Board thinks employees do
not understand that collective bargaining has costs in addition
to benefits, but pointing that out is not an appeal to desert the
Union. Cf. B.F. Goodrich Co., 195 NLRB 914, 915 n.4 (1972)
(“Had the grant been accompanied by statements encouraging
the employees to abandon collective representation in order to
secure the benefit [given to nonunion employees] … we would
have clear evidence of unlawful 8(a)(3) motivation”).
The other cases the Board cites are similarly unhelpful.
See Aluminum Casting & Eng’g Co., 328 NLRB 8, 9 (1999),
aff’d in relevant part, 230 F.3d 286, 290 (7th Cir. 2000)
(affirming § 8(a)(3) violation where employer discontinued its
“established practice of granting annual across-the-board wage
increases at the time the Union began its organizing
campaign”); Structural Finishing, Inc., 284 NLRB 981, 989,
1003 (1987) (holding employer violated § 8(a)(1), which does
not require antiunion animus, by telling employees “the Union
would not allow” raises); American Girl Place, 355 NLRB
479, 479, 487 (2010) (holding § 8(a)(1) violated where
employer told employees it “suspended the process of
10
considering a wage increase” because of the union). We note,
further, that neither Gronendyke nor Teso suggested the
represented employees could capture the wage increase if they
abandoned the Union.
C. Prohl’s Stated Business Justifications
Neither does the Board’s finding that two of the
Employer’s business justifications for the discrimination were
pretextual discharge the General Counsel’s burden of
establishing antiunion animus. First, Prohl testified that
unilaterally giving the represented employees, like the
nonunion employees, a three percent wage increase in October
2007, when the Union was demanding a 20% raise immediately
and 50% over three years, would have likely provoked a strike,
which the union members had then recently authorized. 362
NLRB at 3. The Board found this justification was
“undermined” by Prohl’s having several months later offered
the Union a wage increase of less than three percent. Id.
Second, the Board discounted Prohl’s claim that she gave a
three percent wage increase to the nonunion employees in
October, retroactive to July, in order to stem the high quit rate
among unrepresented supervisors and managers. Id. at 3-4.
The Board did not credit this justification because the wage
increase was given to all nonunion employees, not just
managers and supervisors. Id.
The Board failed adequately to explain why these two
justifications, which are respectively a facially reasonable
bargaining strategy and a rational business decision, are
indicative of antiunion animus. First, that the Employer later
offered the Union a wage increase of one-and-a-half percent
does nothing to support the inference that its October 2007
decision not to give the represented employees a three percent
raise was motivated by antiunion animus; the Board offered
11
nothing to the contrary except its conclusory statement that the
later offer “undermined” Prohl’s assertion that at the earlier
time she feared provoking a strike. This is a non sequitur. Why
Prohl offered a raise of one-and-a-half percent in collective
bargaining several months later, with no strike having been
called, is not a matter of record. Board counsel simply failed
to ask Prohl what circumstances, if any, had changed by the
later offer. Therefore, there is no basis for the Board’s
conclusion that her later raise “undermined” her explanation
for not offering a raise several months earlier. See Universal
Camera, 340 U.S. at 488 (“The substantiality of evidence must
take into account whatever in the record fairly detracts from its
weight”); see also 355 NLRB at 1232 (ALJ Op.) (concluding
“it has not been shown that the [Employer’s] rationale for
withholding the wage increase … was advanced merely as a
pretext to mask discriminatory behavior”).
Second, the decision to extend a wage increase to all
nonunion employees as a way of addressing the high turnover
among managers and supervisors does not support the Board’s
inference that antiunion animus motivated the Employer’s not
increasing the wages of the represented employees, about
whose wages it was then bargaining with the Union. The
implication of the Board’s reasoning is that the Employer
would have been on solid ground if it had given the raise only
to managers and supervisors – who comprised about 40% of
the nonunion employees. 2 But the raise given to all nonunion
employees was consistent with the Company’s history of
raising wages, if at all, for rank and file employees, whenever
it raised wages of managers and supervisors. The Board’s
2
See 355 NLRB at 1227 (ALJ Op.) (“Approximately 121 individuals
… are not represented by the Union; of this number approximately
70 [58%] to 80 [66%] individuals are not managers or supervisors”).
12
attempt to spin these innocuous facts into an unlawful attempt
to discourage union membership is simply unreasonable.
An additional problem with the Board’s decision is its
cursory treatment of the other justifications given by Prohl. See
362 NLRB at 4-5. She testified that if the Employer had
offered a three percent wage increase in October, then it would
have had nothing further to offer the Union. Id. at 8 n.7
(Dissenting Op.). The Board entirely failed to address why
granting a three percent increase to represented employees
would not have severely impaired the Employer’s bargaining
position. See 362 NLRB at 4-5. On appeal, the Board still does
not address the substance of this justification for the
Employer’s conduct, although the Employer continues to press
it.
Prohl offered a further explanation for her decision, as
recounted by the ALJ: “Asked why she did not also grant the
wage increase to the unit employees, Prohl testified that she
was attempting to avoid a charge for ‘not good faith
bargaining.’” 355 NLRB at 1228 (ALJ Op.); see NLRB v. Katz,
369 U.S. 736, 745 (1962) (holding unilateral wage increase to
represented employees violated § 8(a)(5) duty to bargain in
good faith). The Board cannot dismiss these points without at
least some cogent discussion of their merits. Here, however,
the Board summarily dismissed Prohl’s concerns, stating that
the Employer could have permissibly discriminated if only it
had not harbored an unlawful motive or if it had sought the
Union’s approval before giving represented employees a raise.
362 NLRB at 5 & n.18. The first possibility is now beside the
point for, as we have seen, the Board’s reasons for saying the
Employer’s motive was antiunion do not withstand scrutiny.
As to the second possibility, the Board did not even address
Prohl’s concerns regarding the ex ante uncertainty of asking for
the Union’s approval. As Member Miscimarra put it: “if the
13
Union rejected the offer, she feared it would ... provoke a strike,
and if the Union accepted the offer, the [Employer] would lose
bargaining leverage.” Id. at 8 n.7 (Dissenting Op.). Therefore,
the Employer had no reason unilaterally to forgo its Shell Oil
privilege by asking for the Union’s permission. 3
3
This court’s recent opinion in Care One at Madison Ave., LLC
v. NLRB, 832 F.3d 351 (D.C. Cir. 2016), does not support a
different conclusion. In that case, we held the timing of a
discriminatory increase in health benefits three weeks before a
scheduled union election was probative of antiunion animus.
Id. at 359. The employer was not, we said, in a no-win position
when deciding whether to “make benefits changes during the
pendency of a representation election,” id. at 359, because “a
brief delay until after the election is a simple way to guard
against a finding that the employer timed the announcement of
the benefit in an effort to influence employees’ voting
behavior,” id. at 360. Here, the represented employees were in
the midst of bargaining and there is no hint in the record of
another election in the offing. Therefore, the employer did not
have the option of simply waiting “until after the election.” Id.
Care One does not apply here for an additional reason.
The Employer’s discrimination occurred during the course of
negotiations over wages. This difference is significant because
the legal standards that apply to discrimination before and after
an election are different. The Shell Oil privilege to grant
benefits to nonunion employees absent antiunion animus does
not apply pre-election; on the contrary, the Board “presumes”
“the granting of benefits during an organizational campaign to
be … objectionable ‘unless the Employer establishes that the
timing of the action was governed by factors other than the
pendency of the election.’” Noah’s N.Y. Bagels, Inc., 324
NLRB 266, 272 (1997).
14
D. Second Statement by Teso to Pendleton
Fourth, the Board found that, because the Employer
generally gave wage increases, if at all, in July, its decision to
give a raise to the nonunion employees in October, one month
before the end of the certification year for the Union, indicated
an unlawful motive for the delay. 362 NLRB at 4. For this,
the Board relied upon Teso’s statement, when interviewing a
prospective employee the previous May, that “the Union would
be gone in November.” Id. Teso’s May statement, however,
was made before the Employer’s board of directors authorized
a three percent wage increase (June) and before the Union
presented its wage demands (July). The Board’s proffered
connection between Teso’s May expectation that the Union
would be gone after its first year and a finding of antiunion
animus when the Employer five months later exercised its Shell
Oil right is untenable, particularly in light of the ALJ’s finding
that Teso’s statement “simply indicates that he believed no
contract would be negotiated.” 355 NLRB at 1232 n.14 (ALJ
Op.).
Of course “[t]he Board is free to disagree with the ALJ,”
but under our case law it must “explain the basis of its
disagreement.” Fort Dearborn, 827 F.3d at 1073. Here the
Board did not give a rational explanation for rejecting the
ALJ’s conclusion. As Member Miscimarra pointed out and the
Employer here emphasizes, for Teso’s statement to reflect the
Company’s antiunion animus when it later withheld the wage
increase from represented employees, the Board would have to
find that Teso knew or foresaw in May that the Employer
would refuse to increase the wages of represented employees
in October. See 362 NLRB at 11 (Dissenting Op.). The Board
did not so find and the record would not support it.
15
III. Conclusion
Viewing the Board’s four findings against the background
of ongoing bargaining between the Employer and the Union,
we hold substantial evidence does not support the Board’s
inference that antiunion animus motivated the Employer’s
decision not to give a unilateral wage increase to the
represented employees in October 2007. Therefore, we grant
the Employer’s petition for review, vacate the Board’s decision
and order, and deny the Board’s cross-application for
enforcement.
So ordered.
TATEL, Circuit Judge, dissenting: Over eighty years ago,
Congress passed the National Labor Relations Act (NLRA), 29
U.S.C. §§ 151–69, to level an uneven playing field for
American workers by “allowing [them] to band together in
confronting an employer regarding the terms and conditions of
their employment,” NLRB v. City Disposal Systems Inc., 465
U.S. 822, 835 (1984). Intending to “do more than simply . . .
alter the then-prevailing substantive law,” Congress
“restructure[d] fundamentally the processes for effectuating
[labor] policy, deliberately placing the responsibility for
applying and developing this comprehensive legal system in
the hands of an expert administrative body rather than the
federalized judicial system.” Amalgamated Association of
Street, Electric Railway & Motor Coach Employees of America
v. Lockridge, 403 U.S. 274, 288 (1971). Thus, the National
Labor Relations Board was born.
Now, as at the Board’s inception, its members are
nominated by the President and confirmed by the Senate
because of their expertise in labor policy. And now, as then,
these members possess accumulated wisdom about the nuances
of labor disputes due to their workaday experience enforcing
the Act. Cf. Humphrey’s Executor v. United States, 295 U.S.
602, 625 (1935) (characterizing independent agencies as
“bod[ies] of experts who shall gain experience by length of
service”). In short, Congress continues to “entrust[] the
administration of the labor policy for the Nation to a centralized
administrative agency, armed with its own procedures, and
equipped with its specialized knowledge and cumulative
experience.” San Diego Building Trades Council, Millmen’s
Union, Local 2020 v. Garmon, 359 U.S. 236, 242 (1959).
In stark contrast to the Board, the federal courts, composed
of generalist judges, have no comparable expertise, experience,
or accountability when it comes to labor matters. For this
reason, once a reviewing court concludes that the Board is
operating within its delegated authority, it affords the Board
2
great leeway. Waterbury Hotel Management, LLC v. NLRB,
314 F.3d 645, 650 (D.C. Cir. 2003) (“As we often observe, our
role in reviewing decisions of the [Board] is limited.”). Courts
may set aside Board findings “only when the record is so
compelling that no reasonable factfinder could fail to find to
the contrary,” Ozburn-Hessey Logistics, LLC v. NLRB, 833
F.3d 210, 217 (D.C. Cir. 2016) (quoting Bally’s Park Place,
Inc. v. NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011)), and “owe
‘substantial deference’ to inferences drawn by the Board from
the factual record,” Tenneco Automotive, Inc. v. NLRB, 716
F.3d 640, 647 (D.C. Cir. 2013) (quoting Halle Enterprises, Inc.
v. NLRB, 247 F.3d 268, 271 (D.C. Cir. 2001)). Further—and
central to this case—“[o]ur review of the Board’s conclusions
as to discriminatory motive is even more deferential, ‘because
most evidence of motive is circumstantial.’” Fort Dearborn
Co. v. NLRB, 827 F.3d 1067, 1072 (D.C. Cir. 2016) (quoting
Inova Health System v. NLRB, 795 F.3d 68, 80 (D.C. Cir.
2015)). Together, these principles ensure that reviewing courts
do not substitute their views of labor policy for those of the
Board. Because the NLRB “has the primary responsibility for
developing and applying national labor policy,” we and the
Supreme Court have “accorded [the] Board . . . considerable
deference.” NLRB v. Curtin Matheson Scientific, Inc., 494 U.S.
775, 786 (1990).
In the case before us, the Board had the difficult task of
“applying the Act’s general prohibitory language” to a unique
“combination[] of events” that allegedly violated the Act. Id.(quoting Beth Israel Hospital v. NLRB, 437 U.S. 483, 500–01
(1978)). By contrast, this court has a far simpler assignment:
determining whether the Board’s conclusions are supported by
“substantial evidence.” See 29 U.S.C. § 160(e). In concluding
that they were not, the court micromanages the Board, second
guessing its factual findings and evidentiary inferences.
Although the court sets forth one plausible interpretation of the
3
record, the Board adopted another. I respectfully dissent, not
because this decade-old labor dispute involving a small
nonprofit in Indiana is especially important, but rather because
it is important that reviewing courts refrain from resolving
labor issues that Congress reserved for the Board.
I.
Under the Shell Oil rule, an employer collectively
bargaining with a union may give unrepresented employees a
benefit while withholding that benefit from represented
employees. Shell Oil Co., 77 NLRB 1306, 1310 (1948). The
court accuses the Board of ignoring this rule in finding that Arc
Bridges violated the Act by refusing to give represented
employees a 3% raise. See Maj. Op. at 8. Quite to the contrary,
the Board readily acknowledged the Shell Oil rule, Arc
Bridges, Inc. & American Federation of Professionals, 362
NLRB No. 56, at 3 (2015) (citing Shell Oil, 77 NLRB at 1310),
but simply pointed out—in accordance with its and our
caselaw—that the rule comes with an exception: under NLRA
section 8(a)(3), an employer engaging in collective bargaining
may not treat represented and unrepresented employees
differently on the basis of antiunion animus. See id.; see also
Acme Die Casting v. NLRB, 26 F.3d 162, 166 (D.C. Cir. 1994)
(“[T]he failure to increase [represented employees’] wages . . .
constituted a § 8(a)(3) violation if [the employer’s] decision
was motivated by anti-union animus . . . .” (emphasis omitted)).
The question in this case, then, is whether Arc Bridges
withheld a 3% raise from represented employees due to
antiunion animus. To answer that question, the Board applied
the two-part Wright Line test, and because that test boils down
to finding facts and drawing inferences of animus, our
deference to the Board is at its apex. See Vincent Industrial
Plastics, Inc. v. NLRB, 209 F.3d 727, 734 (D.C. Cir. 2000)
(“We are even more deferential when reviewing the Board’s
4
conclusions regarding discriminatory motive, because most
evidence of motive is circumstantial.”). Arc Bridges challenges
neither Wright Line’s applicability nor our highly deferential
standard of review. Rather, it simply disputes the Board’s
interpretation of record evidence.
In finding that the General Counsel had satisfied its Wright
Line burden of showing animus, the Board relied on three
pieces of evidence.
First, the ALJ and Board both found that Area Manager
Gronendyke told employee Bullock that “Prohl was going to
give [represented employees] a raise until [they] voted the
Union in,” and that Supervisor Teso told employee Pendleton
“that $56,000 that had been budgeted for the represented
employees now had to go pay for the lawyers.” Arc Bridges,
362 NLRB No. 56, at 4 (internal quotation marks omitted).
These statements, the Board determined, “essentially
encouraged employees to blame the Union . . . for Prohl’s
decision to withhold the increase from them.” Id. This
conclusion is consistent with the Board’s longstanding view
that where a grant of benefits to unrepresented employees is
“accompanied by statements encouraging the [represented]
employees to abandon collective representation in order to
secure the benefit, . . . [there is] clear evidence of unlawful [§]
8(a)(3) motivation.” The B.F. Goodrich Co., 195 NLRB 914,
915 n.4 (1972). Common sense underlies this expert judgment:
if your supervisor told you that you would be getting a raise but
for your union involvement, might you feel that your
supervisor was tacitly encouraging you to abandon the union?
Unlike the Board, the court views Gronendyke’s and
Teso’s statements as mere descriptions of Arc Bridges’
“bargaining strategy” and “financial constraints.” Maj. Op. at
8. And without explanation, it asserts that Teso’s statement
5
cannot be read as “an appeal to desert the Union.” Id. at 9; see
also id. at 10 (claiming, without explanation, that neither
Gronendyke’s nor Teso’s statement even “suggest[s]” that
“represented employees could capture the wage increase if they
abandoned the Union”). Although the court’s interpretation of
the record is plausible, our job under the NLRA is not to
determine, in the first instance, the most likely import of
employer statements. Instead, and contrary to the court’s
approach, we must determine only whether the record is “so
compelling that no reasonable factfinder” could agree with the
Board. Ozburn-Hessey, 833 F.3d at 217 (quoting Bally’s Park
Place, 645 F.3d at 935). As discussed, Congress chose this
allocation of authority because of the Board’s “specialized
knowledge and cumulative experience” in discerning the
subtext of employer statements, Garmon, 359 U.S. at 242—
attributes we judges lack.
Next, the Board gleaned animus from two justifications
that Prohl proffered for providing the 3% raise only to
unrepresented employees, both of which the Board found
pretextual. We have long held that “[a] finding of pretext may
support an inference of unlawful motive,” Fort Dearborn, 827
F.3d at 1075, and here both of the Board’s pretext findings
were well founded.
To begin with, the Board deemed pretextual Prohl’s
testimony that “she believed that granting the represented
employees a 3-percent increase would have made the
employees very unhappy and more likely to strike.” Arc
Bridges, 362 NLRB No. 56, at 4 (internal quotation marks
omitted). This pretext finding was reasonable given that, as the
Board explained, Prohl later offered represented employees a
1.5% raise—a raise even lower than the one she claimed was
so low that it would have upset those same employees. Id.6
Quibbling with the Board’s analysis, the court suggests
that Prohl may have deemed a strike more likely in October,
when she withheld the 3% raise, than in March, when she
offered the 1.5% raise. See Maj. Op. at 11. This hypothesis is
belied by the record. For one thing, the ALJ found that “in
October, at the time the wage increase was granted to the
nonunit individuals, Prohl was no longer concerned that the
granting of the wage increase to the unit employees would
precipitate a strike.” Arc Bridges & American Federation of
Professionals, No. 13-CA-44627, 2008 WL 5521196 (2008).
For another, no record evidence suggests that a strike risk—if
one ever existed—was any different in March than in October.
Indeed, in explaining why she later offered the 1.5% raise,
Prohl never even mentioned a diminished strike risk. This court
is obligated to respect the Board’s reasonable pretext finding,
rather than adopt an employer’s justification that the ALJ
rejected or one altogether missing from the record.
The Board also found pretextual “Prohl’s additional claim
that she provided the wage increase to unrepresented personnel
in order to address the high turnover rate among managers and
supervisors.” Arc Bridges, 362 NLRB No. 56, at 4. Substantial
evidence supports this pretext determination because if one
takes Prohl’s “high turnover” justification at face value, the
scope of the raise would be both overinclusive and
underinclusive. It would be overinclusive because Prohl
granted the raise to all unrepresented personnel, even though
the high turnover rate afflicted only managers and supervisors;
it would be underinclusive because turnover among
represented employees rivaled that of managers and
supervisors (34% vs. 40%), and yet Arc Bridges gave
represented employees no raise.
The court dismisses this analysis as “simply
unreasonable.” Maj. Op. at 12. According to the court, giving
7
a raise to all unrepresented employees, rather than just to
managers and supervisors, tracked Arc Bridges’ “history of
raising wages, if at all, for rank and file employees, whenever
it raised wages of managers and supervisors.” Id. at 11. But that
is not the explanation Prohl actually gave. Without mentioning
past practice, Prohl pointed to “high turnover” among
managers and supervisors. And given that this “high turnover”
justification is riddled with holes, the Board reasonably
inferred that it smacks of pretext. See, e.g., Pioneer Hotel, Inc.
v. NLRB, 182 F.3d 939, 947 (D.C. Cir. 1999) (employer’s
faulty justification was “pretextual and intended to conceal [its]
true motive”).
Finally, the Board found that the suspicious timing of the
raise to unrepresented employees evinced antiunion animus.
Specifically, the Board reasoned, Prohl waited until October to
give the raise, even though she got the green light from the
Board of Directors in June and customarily granted raises in
July. October falls just before November, which is when the
day-services unit’s certification year was set to end. And once
a union’s certification year ends, “an employer may withdraw
recognition [from the union] based upon actual evidence [e.g.,
a petition] that a majority of [unit] employees no longer
support[s] the union.” Chelsea Industries v. NLRB, 285 F.3d
1073, 1075 (D.C. Cir. 2002). All of this allowed the Board to
make a fairly obvious inference: by dangling a carrot in front
of day-services unit employees just a month before a potential
decertification petition, Arc Bridges sought to sway those
employees to vote against the union when the time came. In
essence, Prohl was saying to day-services unit employees,
“look what you can have if you vote against the union.”
Given the logical force behind Board inferences of animus
based on suspiciously timed, targeted grants of benefits, we
regularly decline to second guess them. For example, in Care
8
One at Madison Avenue, LLC v. NLRB, 832 F.3d 351 (D.C. Cir.
2016), we held that “[w]hen [an employer] timed the
announcement of its discretionary, one-time, system-wide . . .
benefit just three weeks before a scheduled representation
election, withheld that benefit from only its union-eligible
employees, and offered ‘the pendency of the representation
election’ as its sole reason, it violated [§ 8(a)(3)].” Id. at 357.
True, in that case a union election had already been scheduled
when the employer granted the benefit to unrepresented
employees. Maj. Op. at 13 n.3. But the Care One rule sweeps
broadly, applying whether or not an election has been officially
marked on the calendar. Without caveat, we said there that
“[a]n employer must refrain from interfering with or
discouraging the exercise of protected labor rights by either
granting or withholding a benefit.” Care One at Madison
Avenue, 832 F.3d at 357.
In sum, the Board reasonably found that the General
Counsel carried its threshold burden of establishing that
antiunion bias motivated Arc Bridges’ refusal to extend a 3%
raise to represented employees. Two antiunion statements by
supervisors, two pretextual justifications by the Executive
Director, and a suspiciously timed raise to unrepresented
employees amount to more than enough evidence under Wright
Line. Given the deference we owe the Board, this court has no
basis for reaching the opposite conclusion.
II.
Under Wright Line, once the General Counsel has
established its prima facie case, the burden, as Arc Bridges
acknowledges, shifts to the employer to show that it would
have taken the same action absent antiunion animus. Fort
Dearborn, 827 F.3d at 1072. Here, the Board concluded that
Arc Bridges failed to meet its rebuttal burden because two of
9
the reasons Prohl offered for her decision were pretextual and
the other two not credible.
As detailed above, the Board reasonably found pretextual
Prohl’s testimony that she sought to avoid making represented
employees “very unhappy” and aimed to quell a “high turnover
rate” among managers and supervisors. As for Prohl’s
additional justifications, she allegedly refrained from granting
represented employees a 3% raise in order to prevent a loss of
bargaining leverage and avoid a section 8(a)(5) violation. But
as the Board noted, the ALJ never credited this portion of
Prohl’s testimony and “at no point . . . [found] those facts to be
true.” Arc Bridges, 362 NLRB No. 56, at 6. Given the absence
of an ALJ credibility finding, the Board quite properly lent no
credence to these justifications and thus found that Arc Bridges
failed to demonstrate a nondiscriminatory reason for its action.
Id. Because “[c]redibility of witnesses is a matter for Board
determination, and not for this court,” Vico Products Co. v.
NLRB, 333 F.3d 198, 209 (D.C. Cir. 2003) (quoting Joy Silk
Mills v. NLRB, 185 F.2d 732, 741 (D.C. Cir. 1950)), the court
was obligated to defer to the Board on this score.
My colleagues are troubled by the Board’s “fail[ure] to
address why granting a three percent increase to represented
employees would not have severely impaired the Employer’s
bargaining position.” Maj. Op. at 12. Yet after finding—in line
with the ALJ’s decision—that this justification lacked
credibility, the Board had no reason to consider it.
Echoing the dissenting Board member, the court believes
that Prohl legitimately withheld the raise to avoid a section
8(a)(5) violation. Id. at 12–13. This contention implies that Arc
Bridges faced a no-win situation: violate section 8(a)(3) by
withholding the raise or section 8(a)(5) by granting it. The
Board considered and properly rejected this argument. Arc
10
Bridges ran afoul of section 8(a)(3) not merely because it
withheld the raise from represented employees, but because it
did so due to antiunion animus. What is more, as the Board
noted, Arc Bridges had a simple way to give represented
employees a raise without flouting section 8(a)(5): seek the
Union’s permission to do so. See Arc Bridges, 362 NLRB No.
56, at 6 n.18; see also NLRB v. Katz, 369 U.S. 736, 743 (1962)
(confining holding to “unilateral change[s] in conditions of
employment under negotiation”); accord Honeywell
International, Inc. v. NLRB, 253 F.3d 125, 131 (D.C. Cir.
2001). The court says that asking for such permission may have
provoked a strike, Maj. Op. at 13, but as the ALJ expressly
found, there was no risk of a strike in October, see supra p. 6.
The catch-22 the court envisions is thus illusory. Cf. Care One
at Madison Avenue, 832 F.3d at 359–60 (rejecting similar
purported catch-22).