Paulsen v. Remington Lodging & Hospitality, LLC

• Decision Date: 12 December 2014
• Docket Number: 13–3372–cv Con.,Nos. 13–2775–cv Lead,s. 13–2775–cv Lead
• Citation: 773 F.3d 462
• Parties: James G. PAULSEN, Regional Director of Region 29 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner–Appellant, v. REMINGTON LODGING & HOSPITALITY, LLC, Respondent–Appellee. Remington Lodging & Hospitality, LLC, Petitioner–Appellee, v. James G. Paulsen, Regional Director of Region 29 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Respondent–Appellant.
• Court: U.S. Court of Appeals — Second Circuit

773 F.3d 462

James G. PAULSEN, Regional Director of Region 29 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner–Appellant

v.REMINGTON LODGING & HOSPITALITY, LLC, Respondent–Appellee.

Remington Lodging & Hospitality, LLC, Petitioner–Appellee

v.James G. Paulsen, Regional Director of Region 29 of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Respondent–Appellant.¹

Nos. 13–2775–cv Lead

13–3372–cv Con.

United States Court of Appeals, Second Circuit.

Argued: April 23, 2014.

Decided: Dec. 12, 2014.

Elizabeth A. Heany, Attorney (Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, Barry J. Kearny, Associate General Counsel, Jayme L. Sophir, Deputy Associate General Counsel, Elinor L. Merberg, Assistant General Counsel, Laura T. Vazquez, Deputy Assistant General Counsel, on the brief), National Labor Relations Board, Washington, D.C., for Petitioner–Appellant.

Karl M. Terrell, Stokes Wagner Hunt Maretz & Terrell, Atlanta, GA, for Respondent–Appellee.

Before: WINTER, PARKER, and HALL, Circuit Judges.

Opinion

BARRINGTON D. PARKER, Circuit Judge:

This opinion resolves three appeals arising from a union organizing campaign at a Hyatt Hotel operated by Remington Lodging and Hospitality, LCC (“Remington”). James G. Paulsen, a Regional Director for the National Labor Relations Board (“NLRB”), appeals from a May 23, 2013 order of the United States District Court for the Eastern District of New York (Bianco, J. ) (“May order”). The order denied his petition under § 10(j) of the National Labor Relations Act (“NLRA” or “the Act”) for an injunction prohibiting Remington from engaging in unfair labor practices and ordering the immediate reinstatement of certain discharged employees. See 29 U.S.C. § 160(j). He also appeals from an August 14, 2013 order that denied his motion for an injunction ordering the immediate reinstatement of the discharged employees not withstanding the fact that the court concluded that Remington had engaged in unfair labor practices (“August order”). The district court concluded in both instances that an injunction was not “just and proper,” primarily because Remington had already offered, or would soon offer, reinstatement to the discharged employees. See Joint App'x at 91–94;² Paulsen ex rel. N.L.R.B. v. Remington Lodging & Hospitality, LLC, No. 13 Civ. 2539(JFB)(WDW), 2013 WL 4119006, at *9–13 (E.D.N.Y. Aug. 14, 2013).

Separately, Remington appeals from the district court's August order insofar as it denied Remington's motion to dismiss Paulson's petition on the ground that the NLRB had been improperly constituted under the Recess Appointments Clause, see N.L.R.B. v. Noel Canning, ––– U.S. ––––, 134 S.Ct. 2550, 2575, 189 L.Ed.2d 538 (2014), and enjoined Remington from engaging in unfair labor practices. For the reasons discussed below, we AFFIRM in part and REVERSE in part the orders of the district court.

BACKGROUND

The following facts are drawn from the findings of the administrative law judge and of the district court. We are bound by those findings of fact unless they are clearly erroneous. Hoffman ex rel. N.L.R.B. v. Inn Credible Caterers, Ltd., 247 F.3d 360, 364 (2d Cir.2001). In April 2012, Local 947, United Service Workers Union, International Union of Journeymen and Allied Trades (the “Union”) began communicating with employees at a Hyatt Hotel regarding unionization. The employees of the housekeeping department were the principal focus of the campaign. Remington's management opposed the campaign and, in response, began interrogating employees about union activity, spreading misinformation regarding the union, and threatening to dismiss employees who joined. Before Remington's operation of the hotel, housekeeping services had been subcontracted to Housekeeping Staffing Services (“HSS”). When Remington arrived, it dismissed HSS. In August 2012, Remington again subcontracted the work done by its housekeeping staff to HSS, which, in turn, hired most of Remington's housekeeping employees. At the same time as Remington's former employees were working for HSS, Remington was hiring and training a separate, new housekeeping staff. In October 2012, after the training was complete, Remington cancelled the subcontract, fired its old employees and replaced them with the newly trained workers. Remington contends that it took these actions in response to persistently low customer ratings of the hotel's housekeeping and that the actions were unrelated to the Union's organizing campaign.

In late December 2012, in opposition to the campaign, Remington distributed literature to its employees regarding their compensation. Margaret Loiacono, a Remington employee, pointed out errors in the literature to a manager. She also allegedly left her work area and criticized the content of the literature to one of her co-workers. A short while later, Loiacono was discharged, ostensibly because she “ignored her duties” by being away from her work area.

In November 2012, the Union filed an unfair labor practice charge directed against Remington's interference with the organizing campaign. On January 15, 2013, after investigating the charge, James Paulsen, the NLRB's regional director, filed an administrative complaint against Remington. He filed an amended complaint on February 13, 2013 pursuant to § 10(j) of the NLRA. The NLRB alleged that Remington violated § 8(a)(1) of the Act by interrogating and threatening employees regarding their union activity, and §§ 8(a)(1) and (3) of the Act by subcontracting and discharging forty housekeeping employees and Loiacono to discourage them from engaging in union activities.

In March 2013, Remington began making unconditional offers of reemployment to the housekeeping employees listed in the amended complaint. The offers were made on a rolling basis as positions became available, and were awarded on a “first come-first served” basis. Remington did not offer re-employment to Loiacono.

On April 26, 2013, Paulsen filed a petition in district court seeking temporary injunctive relief requiring Remington to cease and desist from engaging in unfair labor practices and to immediately reinstate the discharged employees. Although the Board, by its Acting General Counsel, putatively authorized the petition, Remington moved to dismiss it on the ground that the Board authorization was void because the improper recess appointments of two of the three NLRB members had deprived it of a quorum.³ Remington also asserted that the Board had not delegated authority over the petition to the General Counsel and that, absent such delegation, the petition was not authorized under the NLRA. On May 15, 2013, while the petition and motion remained pending, the ALJ issued a decision in the administrative proceeding. He found that Remington had violated the NLRA and recommended the relief sought in the § 10(j) petition.

On May 22, 2013, the district court denied Paulsen's petition. The court concluded that an injunction would not be “just and proper” because of the Board's delay in seeking injunctive relief, because of the harm to the replacement employees who would be displaced by reinstated employees, and because Remington's ongoing offers of re-employment to the discharged employees substantially replicated the relief sought in the petition. Having denied relief on the merits, the court declined to rule on Remington's motion to dismiss the petition.

Paulsen appealed from the denial of the petition and, at the same time, moved in district court for an injunction pending appeal. In August 2013, the district court denied the injunction insofar as it would require the immediate reinstatement of the discharged employees. However, with Remington's consent, the court entered an order requiring Remington to cease and desist from further violations of the NLRA. The district court also denied Remington's motion to dismiss. It concluded that even if Remington were correct that the Board lacked a quorum at the time it authorized the petition, a prior, validly constituted Board had delegated the authority to authorize § 10(j) petitions to the Board's General Counsel, and Lafe Solomon, the Acting General Counsel, had properly authorized the petition in this case.

Paulsen also appealed from the denial of an injunction pending appeal and Remington cross-appealed from the denial of its motion to dismiss. In its cross-appeal, Remington contended for the first time that Solomon's appointment as Acting General Counsel violated the Federal Vacancies Reform Act (“FVRA”) and, consequently, he could not have authorized Paulsen to file the § 10(j) petition. See 5 U.S.C. § 3345, et seq.

For the reasons discussed below, we affirm the district court's denial of the motion to dismiss. We conclude that because Remington's arguments concerning the FVRA were not raised below and do not implicate our subject-matter jurisdiction, they are forfeited. We also affirm the district court's denial of reinstatement to the housekeeping employees. Finally, because the district court did not directly address Loiacono's status, and because she was not offered reemployment, we reverse the district court's denial of injunctive relief with respect to her and remand to the district court with instructions to order that an offer of reinstatement be extended to her.

DISCUSSION

I.

We turn first to the jurisdictional question raised by Remington. As noted, Remington contends for the first time on its cross-appeal that Solomon was improperly appointed under the FVRA as Acting NLRB General Counsel. In proceedings below, Remington contended only that, because a majority of NLRB board members had not been properly appointed, no quorum existed, and consequently, the § 10(j) petition was invalid.See Noel Canning, 134 S.Ct. 2550. However, before the petition was filed, the Board had delegated its authority to sue under § 10(j) to its General Counsel....