800 River Rd. Operating Co. v. Nat'l Labor Relations Bd.

• Decision Date: 29 April 2015
• Docket Number: 14–2036.,Nos. 14–1571,s. 14–1571
• Citation: 784 F.3d 902
• Parties: 800 RIVER ROAD OPERATING CO. LLC, dba Woodcrest Health Care Center, Petitioner in No. 14–1571 v. NATIONAL LABOR RELATIONS BOARD, Respondent. 1199 SEIU United Healthcare Workers East New Jersey Region, Intervenor. * Amended Pursuant to Clerk Order entered 04/22/14. National Labor Relations Board, Cross–Petitioner in No. 14–2036 v. 800 River Road Operating Co. LLC, d/b/a Woodcrest Health Care Center, Cross–Respondent.
• Court: U.S. Court of Appeals — Third Circuit

784 F.3d 902

800 RIVER ROAD OPERATING CO. LLC, dba Woodcrest Health Care Center, Petitioner in No. 14–1571

v.NATIONAL LABOR RELATIONS BOARD, Respondent.

1199 SEIU United Healthcare Workers East New Jersey Region, Intervenor.

* Amended Pursuant to Clerk Order entered 04/22/14.

National Labor Relations Board, Cross–Petitioner in No. 14–2036

v.800 River Road Operating Co. LLC, d/b/a Woodcrest Health Care Center, Cross–Respondent.

Nos. 14–1571

14–2036.

United States Court of Appeals, Third Circuit.

Argued Jan. 23, 2015.

Filed: April 29, 2015.

Paul D. Clement, Esq., William R. Levi, Esq., Erin Murphy, Esq. (Argued), Bancroft PLLC, Washington, DC, Rosemary Alito, Esq., George P. Barbatsuly, Esq., K & L Gates, LLP, Newark, NJ, Counsel for Petitioner/Cross–Respondent 800 River Road Operating Co, LLC.

Kira D. Vol, Esq., Julie B. Broido, Esq., Jared D. Cantor, Esq. (Argued), Linda Dreeben, Esq., Richard F. Griffin, Jr., Esq., Jennifer Abruzzo, Esq., John H. Ferguson, Esq., National Labor Relations Board, Washington, DC, Counsel for Respondent/Cross–Petitioner National Labor Relations Board.

Before: RENDELL, SMITH and KRAUSE, Circuit Judges.

OPINION

RENDELL, Circuit Judge:

Petitioner 800 River Road Operating Co. LLC, d/b/a Woodcrest Health Care Center (“Woodcrest”), seeks review of the National Labor Relations Board (“NLRB” or “Board”) decision and order (“Order”), which found that Woodcrest violated § 8(a)(1) and (a)(3) of the National Labor Relations Act, 29 U.S.C. §§ 151 –169 (“NLRA” or “Act”), by committing various unfair labor practices. Woodcrest Health Care Ctr., 360 N.L.R.B. No. 58 (Feb. 27, 2014). The NLRB cross-petitions for enforcement of the Order. The charging party in the underlying Board proceeding, 1199 SEIU United Healthcare Workers East New Jersey Region (“Union”), intervened in this appeal in support of the Order.

In January 2012, the Union petitioned for an election to unionize some of Woodcrest's employees. The election was held in early March 2012. The Union charged that certain conduct of Woodcrest before and after the election constituted unfair labor practices. This conduct included: (1) withholding of election-eligible employees' benefits, (2) coercively interrogating employees, and (3) creating an unlawful impression of surveillance. Woodcrest lost before the Board and now appeals the Board's rulings. We will vacate in part, affirm and enforce in part, and remand for further consideration in light of this opinion.

I. Background

Woodcrest is a limited liability corporation engaged in the business of operating a rehabilitation and nursing facility. On January 23, 2012, the Union filed a petition for an election to determine whether certain employees of Woodcrest would unionize. The election was held on March 9, 2012, and the employees voted to unionize. Woodcrest filed objections to the election, and the Union filed a charge against Woodcrest alleging that Woodcrest committed various unfair labor practices in violation of § 8(a)(1) and (a)(3). The NLRB issued a first amended complaint against Woodcrest, and the case was tried before an Administrative Law Judge (“ALJ”) in Newark, New Jersey.

The ALJ found that Woodcrest committed unfair labor practices by withholding benefits from election-eligible employees and by engaging in three coercive interrogations of election-eligible employees, but that Woodcrest did not create an unlawful impression of surveillance in another exchange with an employee. Woodcrest, the NLRB, and the Union each filed exceptions to the ALJ's decision. On appeal, the Board affirmed the ALJ's decision with respect to the benefit withholding and interrogation claims, but it reversed with respect to the surveillance claim. Thus, the Union emerged successful on all of the charges. Woodcrest appeals, and the NLRB cross-appeals for enforcement of the Order.

II. Jurisdiction

We have jurisdiction over Woodcrest's petition for review pursuant to § 10(f) of the NLRA and over the NLRB's cross-petition for enforcement pursuant to § 10(e). See 29 U.S.C. § 160(e) -(f).¹

III. Standard of Review

“We afford considerable deference to the Board.” Grane Health Care v. NLRB, 712 F.3d 145, 149 (3d Cir.2013). The Supreme Court “has emphasized often that the NLRB has the primary responsibility for developing and applying national labor policy.” NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786, 110 S.Ct. 1542, 108 L.Ed.2d 801 (1990). Courts will uphold the Board's interpretation of the NLRA “as long as it is rational and consistent with the Act.” Id. at 787, 110 S.Ct. 1542. Thus, in addressing the benefit withholding issue, we ask whether the Board's rules are rational and consistent with the NRLA.

The Supreme Court has also explained that, “if the Board's application of such a rational rule is supported by substantial evidence on the record, courts should enforce the Board's order.” Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987) ; see also 29 U.S.C. § 160(e). “ ‘Substantial evidence’ has been defined by the Supreme Court as simply ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’ ”

Hedstrom Co. v. NLRB, 629 F.2d 305, 313 (3d Cir.1980) (en banc) (quoting Consolo v. Fed. Maritime Comm'n, 383 U.S. 607, 620, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966) ). We will not “displace the Board's choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo. ” Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951). In sum, our standard of review is “highly deferential.” United Food & Commercial Workers Union Local 204 v. NLRB, 506 F.3d 1078, 1083 (D.C.Cir.2007). Thus, our question regarding the claims of coercive interrogation and unlawful impression of surveillance is whether, under this highly deferential standard, substantial evidence supports the Board's conclusions.

IV. Discussion

A. Benefit Withholding

Woodcrest was found to have violated § 8(a)(1) and (a)(3) of the NLRA by withholding benefits from employees eligible to vote in the Union election. Section 8(a)(1) establishes that it is “an unfair labor practice for an employer ... to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title.” 29 U.S.C. § 158(a)(1). Section 8(a)(3) establishes that 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.” Id. § 158(a)(3).

1. Background

The parties stipulated before the ALJ as to the evidence relevant to the benefit withholding issue. HealthBridge Management, LLC (“HealthBridge”) manages Woodcrest, along with three other health care centers. The four health care centers provide a common health insurance plan for their employees. Effective January 1, 2012, that plan underwent changes resulting in reduced benefits and increased costs for employees. HealthBridge received numerous complaints about these changes and decided to adopt certain improvements to the health insurance plan, as well as to reduce employee premiums.

Four days before the Union election, on March 5, 2012, Woodcrest's administrator directed the distribution of a memorandum to all Woodcrest employees, except those eligible to vote in the March 9 election. The memorandum announced that improvements would be made to the health insurance plan for employees not eligible to vote in the upcoming election and that the changes would be retroactive to January 1, 2012.

Election-eligible employees discovered that their coworkers were receiving these improvements, and they inquired, shortly after the election, as to their eligibility for these benefits. Woodcrest told the election-eligible employees that “we cannot negotiate your contract, your benefits, your insurance because right now you are in the critical period with the Union” and “we cannot discuss this matter at this time.” (J.A. 384–85.)

The ALJ found that “[t]he evidence establishes [Woodcrest] took the action it did, toward certain employees, because they were not involved in a representation campaign and failed to take action toward other of its employees specifically because they were involved in such a campaign.” (J.A. 386.) Because Woodcrest would have granted the improvements to the election-eligible employees but for the election, the ALJ found that Woodcrest's conduct violated § 8(a)(1) and (a)(3) of the NLRA. However, the ALJ did not make any finding as to Woodcrest's motivation or its justification for its actions.

The ALJ explained that, “[a]s a general rule, an employer, in deciding whether to grant benefits while a representation election is pending, should decide that question as it would if a union was not in the picture.” (Id. ) He noted that the Board's jurisprudence had created a safe harbor in these situations whereby an employer may “postpone such a wage or benefit adjustment so long as it [makes] clear to employees that the adjustment would occur whether or not they select a union, and that the sole purpose of the adjustment's postponement is to avoid the appearance of influencing the election['s] outcome.” (Id. (first alteration in original) (quoting Retlaw Broad. Co., 302 N.L.R.B. 381, 382 (1991) ) (internal quotation marks omitted).) Woodcrest did not follow the course set forth in the safe harbor, which, the ALJ reasoned, left “its unit employees with a clear impression they were deprived of these system wide benefits because of their section 7 rights.”² (Id. ) In effect, the safe harbor was treated as a sword: Woodcrest violated the NLRA because it did not comply with the safe harbor.

The Board, on appeal, “affirm[ed] the [ALJ's] findings, for the reasons set forth in his decision, that [Woodcrest] violated Section 8(a)(1) and (3) of the Act by announcing and...