Bannum Place of Saginaw, LLC v. Nat'l Labor Relations Bd.

• Decision Date: 14 July 2022
• Docket Number: s. 21-2664/2690
• Citation: 41 F.4th 518
• Parties: BANNUM PLACE OF SAGINAW, LLC, Petitioner/Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner.
• Court: U.S. Court of Appeals — Sixth Circuit

41 F.4th 518

BANNUM PLACE OF SAGINAW, LLC, Petitioner/Cross-Respondent,

v.NATIONAL LABOR RELATIONS BOARD, Respondent/Cross-Petitioner.

Nos. 21-2664/2690

United States Court of Appeals, Sixth Circuit.

Decided and Filed: July 14, 2022

ON BRIEF: Thomas R. Meagher, FOSTER SWIFT COLLINS & SMITH PC, Lansing, Michigan, for Petitioner/Cross-Respondent. Usha Dheenan, Joel A. Heller, Ruth E. Burdick, David Habenstreit, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for Respondent/Cross-Petitioner.

Before: MOORE, COLE, and NALBANDIAN, Circuit Judges.

KAREN NELSON MOORE, Circuit Judge.

Under the National Labor Relations Act ("Act"), the National Labor Relations Board ("Board") has jurisdiction over unfair labor practice claims brought against an "employer." 29 U.S.C. §§ 158(a), 160(a). Exempt from the definition of "employer" is the federal government. Id . § 152(2). In its petition for review of the Board's decision finding that the company had committed unfair labor practices, Bannum Place of Saginaw, LLC ("Bannum") argues that it is a joint employer with the Federal Bureau of Prisons ("BOP") and thus falls within the federal-government exemption. The Board has filed a cross-application to enforce its order remedying the unfair labor practices. We hold that the Board had jurisdiction and that its order must be enforced.¹

I. BACKGROUND

Bannum is a private company that runs a residential reentry center in Saginaw, Michigan. Administrative Record ("A.R.") at 653 (Answer ¶ 2). The center offers transitional services that help recently released inmates from federal prisons seek employment, find housing, and reintegrate into society. Id . at 813 (Decision & Direction of Election ("Election Decision") at 2). Bannum manages this center under a contract with the BOP that regulates many day-to-day operations at the facility through a detailed set of requirements called the "Statement of Work." Id . at 886–1021 (Statement of Work).

In 2017, employees at Bannum met with Local 406, International Brotherhood of Teamsters (the "Union"), leading the Union to file an election petition with the Board and the Board to schedule a representation election. Id . at 1280 (NLRB Decision & Order ("NLRB Order") at 1). Bannum challenged the Board's jurisdiction to conduct the election, arguing to the Board's Regional Director that Bannum was a joint employer with the BOP because the terms of their contract gave substantial control over the company's daily operations to the agency. Id . at 811 (Election Decision at 1). The Regional Director rejected this argument. Id . Despite being informed of its right to seek review of this decision from the Board, id . at 829 (Election Decision at 18), Bannum did not do so. The Union subsequently won the election, and the Board certified it as the employees’ exclusive representative. Id . at 1280 (NLRB Order at 1).

Bannum's efforts to prevent the Union from representing its workers were not limited to legal challenges, however. Both before and after the Union's certification, Bannum tried to dissuade its workers from supporting the Union. For example, the company interrogated employees about their views on unions, threatened reprisals if they voted for the Union, and discharged known supporters of the Union. Id . at 1280–85 (NLRB Order at 1–5).

Such conduct led the Union and an employee to file unfair labor practice charges against Bannum. Id . at 1173 (Administrative Law Judge ("ALJ") Decision at 1). The Board then filed a complaint alleging that Bannum had engaged in unfair labor practices in violation of several provisions of 29 U.S.C. § 158. Id . at 1280 (NLRB Order at 1).

During the unfair labor practice proceedings that followed in 2020, Bannum moved to dismiss the complaint, reiterating the same joint-employer argument against the Board's jurisdiction that it had made in the representation proceedings. Id . at 640–50 (Mot. to Dismiss). An ALJ held a hearing, found that Bannum had raised the same argument before the Regional Director, and ruled that the Board's rule against relitigation precluded the company from raising the issue again. Id . at 12–14 (Hearing Tr. at 12–14). That rule prevents parties "from relitigating, in any related subsequent unfair labor practice proceedings, any issue which was, or could have been, raised in the representation proceeding" if they failed to request review of the Regional Director's actions by the Board. 29 C.F.R. § 102.67(g). During the hearing, the ALJ also presented Bannum with the opportunity to present evidence concerning any changed facts or law regarding jurisdiction since the representation proceeding. A.R. at 1174 (ALJ Decision at 2). Bannum did not do so. Id .

The ALJ ultimately concluded that Bannum had engaged in various unfair labor practices and ordered Bannum to cease and desist from the practices and to take affirmative steps to remedy the violations. Id . at 1200–03 (ALJ Decision at 28–31). Bannum filed exceptions and a supporting brief in which it objected to the ALJ's denial of its motion to dismiss for lack of jurisdiction. Id . at 1210 (Exceptions ¶ 1); App. R. 31 (Bannum Br. in Support of Exceptions at 47–48).

The Board affirmed the ALJ's denial of Bannum's motion to dismiss, holding that the rule against relitigation precluded the company from raising its joint-employer argument again. Id . at 1280 (NLRB Order at 1 n.1). The Board also found that Bannum had engaged in unfair labor practices in violation of 29 U.S.C. § 158(a)(1), (3), and (4), and ordered that these violations be remedied. Id . at 1280–86 (NLRB Order at 1–6).

Pursuant to 29 U.S.C. § 160(f), Bannum has petitioned this court for review of the Board's final order. App. R. 1 (No. 21-2664) (Pet. for Review). The Board has cross-applied for enforcement under § 160(e). App. R. 1 (No. 21-2690) (Cross-Application).

II. ANALYSIS

"Our review of the Board's decision is quite limited." Caterpillar Logistics, Inc. v. NLRB , 835 F.3d 536, 542 (6th Cir. 2016) (quoting Torbitt & Castleman, Inc. v. NLRB , 123 F.3d 899, 905 (6th Cir. 1997) ). "We defer to the Board's factual determinations if they are supported by substantial evidence on the record as a whole." Id ; see also 29 U.S.C. § 160(e), (f). "Substantial evidence means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Caterpillar Logistics , 835 F.3d at 542 (quoting Dupont Dow Elastomers, L.L.C. v. NLRB , 296 F.3d 495, 500 (6th Cir. 2002) ). "The Board's application of law to the facts is also reviewed for substantial evidence, and its ‘[c]onclusions of law are subject to a de novo review, although [we] will uphold the Board's reasonable interpretation of the [National Labor Relations Act] where Congress has not spoken to the contrary on the same issue.’ " Id . (alterations in original) (quoting Dupont Dow Elastomers , 296 F.3d at 500 (citation omitted)).

A. Bannum's Challenge

Bannum reraises the argument that the company is a joint employer with the BOP and that this deprived the Board of jurisdiction to conduct the union-representation election. As a threshold matter, however, we must address the Board's argument that this issue is not properly before us. For this proposition, the Board points to its rule against relitigation, 29 C.F.R. § 102.67(g), arguing that Bannum's failure to comply with that rule "precludes further consideration now" of the company's previously raised joint-employer argument. Board Br. at 14. For the reasons that follow, we agree with the Board.

1. The Rule Against Relitigation

To understand what the rule against relitigation is and how it functions in this case requires some context about the Board's procedures and their history. Proceedings before the Board are normally split between two stages: a representation proceeding and then an unfair-labor-practice proceeding. At the representation stage, employees request that the Board conduct a union-representation election, as the Union did here when it filed its election petition with the Board. See 29 U.S.C. § 159. A Regional Director may then decide matters such as logistics pertaining to the election, the size of the bargaining unit, and the scope of the Board's jurisdiction. See id . § 153(b); 29 C.F.R. § 102.67(a) – (b). Again, that is akin to what occurred in the present case, this time when the Regional Director assessed and rejected Bannum's joint-employer argument.

If the employer is dissatisfied with the Regional Director's decision, then it has two options for requesting review. On the one hand, the employer may request that the Board review the Regional Director's decision. 29 C.F.R. § 102.67(c). (Here, the facts begin to diverge from the law—Bannum did not request that the Board review the Regional Director's rejection of its joint-employer argument.) The Board, however, will grant such requests "only where compelling reasons exist." Id. § 102.67(d). On the other hand, the employer can obtain judicial review of the Board's certification of the bargaining unit, but not directly from the representation proceeding. Boire v. Greyhound Corp. , 376 U.S. 473, 477, 84 S.Ct. 894, 11 L.Ed.2d 849 (1964). Instead, the Act requires that an employer "refuse to bargain with the union and then raise the issue of the unit's appropriateness in a subsequent unfair-labor-practice proceeding." Kindred Nursing Ctrs. E., LLC v. NLRB , 727 F.3d 552, 558 (6th Cir. 2013). Should the Board reject the employer's arguments at the unfair-labor-practice proceeding, the employer may then seek judicial review of the Board's decision in a federal circuit court. See 29 U.S.C. § 160(f) ; Kindred Nursing Ctrs. E. , 727 F.3d at 558 ; see also Pace Univ. v. NLRB , 514 F.3d 19, 24 (D.C. Cir. 2008) (explaining that a "court generally will review a representation issue upon the filing of a petition from an unfair labor practice proceeding as long as a party litigated the issue during the representation proceeding and presented its arguments on the issue as a...