Boch Imports, Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 17 June 2016
• Docket Number: 15-1721,Nos. 15-1653,s. 15-1653
• Citation: 826 F.3d 558
• Parties: Boch Imports, Inc., d/b/a Boch Honda, Petitioner, Cross–Respondent, v. National Labor Relations Board, Respondent, Cross–Petitioner.
• Court: U.S. Court of Appeals — First Circuit

826 F.3d 558

Boch Imports, Inc., d/b/a Boch Honda, Petitioner, Cross–Respondent

v.National Labor Relations Board, Respondent, Cross–Petitioner.

Nos. 15-1653

15-1721

United States Court of Appeals, First Circuit.

June 17, 2016

Anthony D. Rizzotti, with whom Gregory A. Brown and Littler Mendelson, P.C., Boston, MA, were on brief, for petitioner.

Jared Cantor, with whom Kira Dellinger Vol, Supervisory Attorney, Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, and Linda Dreeben, Deputy Associate General Counsel, were on brief, for respondent.

Before Barron and Stahl, Circuit Judges, and Sorokin,^* District Judge.

BARRON

, Circuit Judge.

This case concerns cross-petitions from an order that the National Labor Relations Board (“Board”) issued in 2015. The Board ruled that a Massachusetts car dealership was liable for unfair labor practices in two respects. The Board concluded that the dealership was liable for certain unlawful workplace policies because the dealership failed to take the steps necessary to “repudiate” them, even though the dealership had revised the policies to make them compliant with federal labor law. The Board also concluded that the dealership's ban on employees' wearing pins, insignia, and “message clothing” in the workplace constituted an unfair labor practice even in the ban's revised form.

In petitioning for review, the dealership principally argues that the Board's findings are not supported by substantial evidence and that the Board applied its precedents arbitrarily and capriciously. The Board responds that it reasonably applied its precedents to the facts that it supportably found, both with respect to the steps that an employer must take to repudiate a formerly unlawful workplace policy and with respect to the circumstances that may justify the imposition of a dress ban as sweeping as the one at issue here. The Board therefore requests that we grant its petition for enforcement of its order.

We conclude that the Board's rulings are supported by substantial evidence and by reasoning that is not arbitrary and capricious. We thus deny the dealership's petition for review and grant the Board's petition for enforcement.

I.

This dispute concerns a Honda dealership located in Norwood, Massachusetts. That dealership is operated by Boch Imports, Inc., which does business as Boch Honda. For ease of reference, we will refer to the petitioner simply as “Boch.”

We start our review of the lengthy history of this case with the response provoked by Boch's issuance of an employee handbook in July 2010. Less than a year after the handbook's publication, in 2011, the Boch employees' collective bargaining representative—the International Association of Machinists & Aerospace Workers, District Lodge 15, Local Lodge 447 (the “Union”)—asserted that some of the workplace policies contained in that handbook infringed upon employees' right to organize in violation of the National Labor Relations Act (“NLRA”). 29 U.S.C. § 151, et seq.

[J.A. 1, 77-81]

Discussions between Boch and the Union over the possible revision of those policies ensued. While those discussions continued, the Union filed a formal charge against Boch with the Board. That charge alleged that Boch maintained workplace rules in its 2010 employee handbook that “interfere[d] with, restrain [ed] or coerce[d] employees in the exercise of” their rights to organize under Section 7 of the NLRA, in violation of Section 8(a)(1) of the NLRA.¹ 29 U.S.C. § 158(a)(1)

.

In September 2011, however, Boch's collective bargaining unit decertified the Union. The discussions between Boch and the Union thus came to an end. But Boch then began to discuss the possible revision of the policies contained in the 2010 handbook with the Board's regional office.

Prior to Boch's making any revisions, the Board, on December 31, 2012, issued a formal complaint against Boch that stemmed from the Union's charge. See id. § 160(b); 29 C.F.R. § 102.15

. The Board's complaint alleged that certain portions of the policies in Boch's 2010 employee handbook violated Section 8(a)(1) of the NLRA. For example, the complaint alleged that Boch's 2010 social media policy impermissibly threatened employees with disciplinary action if they engaged in conduct—even when off Boch's property and off the clock—that could potentially have a “negative effect on the Company.” [J.A. 16, 209]

The Board's complaint identified the following policies in the 2010 handbook as containing unlawful provisions: social media, confidential and proprietary information, discourtesy, inquiries concerning employees, solicitation and distribution, and dress code and personal hygiene (the “2010 Policies”). [J.A. 2-5] We note that the portion of the dress code and personal hygiene policy that restricts the wearing of pins, insignias, and message clothing figures particularly prominently in these cross-petitions. We refer to that portion of the policy throughout as, simply, the “dress ban.”

In March 2013, before the Board had made any ruling on the complaint, Boch issued a revised employee handbook that altered the workplace policies that were the subject of the Board's complaint. The 2013 handbook was certified as received by all of the employees affected by the 2010 Policies. [J.A. 82-83]

Notwithstanding the publication of the revised handbook, the Board issued an amended complaint against Boch on June 17, 2013. The amended complaint stated that Boch was liable for violating Section 8(a)(1) of the NLRA by having “maintained,” from December 21, 2011 to about May 2013, specified portions of the 2010 Policies (the “2010 Policy Provisions”), and by maintaining, from about May 2013 to present, a revised version of the 2010 dress ban. [J.A. 15-16] The 2013 version of the dress ban provided: “Employees who have contact with the public may not wear pins, insignias, or other message clothing.” [J.A. 251]

The Administrative Law Judge (“ALJ”) held a telephone conference call with the parties regarding the amended complaint. [Blue Br. 9] Boch argued on that call that the allegations in the complaint concerning the 2010 Policy Provisions were moot in light of the revisions Boch made to those provisions and Boch's publication of the revised handbook in 2013. The ALJ agreed with Boch that “it would not effectuate the policies of the [NLRA] to spend time on” those no longer operative policy provisions. See Boch Imports, Inc. v. NLRB (“Boch ”), 362 NLRB No. 83, 2015 WL 1956199, at *8 (2015)

(ALJ opinion appended to Board opinion). The ALJ thus indicated that the parties should focus on the lawfulness of the 2013 version of the dress ban.

At the hearing on the complaint, the General Counsel for the Board stipulated that, with the exception of the 2013 dress ban, the policies contained in Boch's 2013 employee handbook did not violate Section 8(a)(1) of the NLRA. That is, the General Counsel stipulated that, save for the dress ban, each of the 2010 Policy Provisions had been revised in a manner that made them compliant with the NLRA.

Following the hearing, and after receipt of the parties' briefs, in which the Board in its brief argued that Boch's revision of the 2010 Policy Provisions did not render moot the issue of Boch's liability for those provisions, the ALJ issued its ruling on January 13, 2014. The ALJ explained that a “careful examination” of Board precedent “convince[d] [the ALJ] that [his] initial impression [of the mootness of the 2010 Policy Provisions] was incorrect.” Id. The ALJ held that certain of the 2010 Policy Provisions violated Section 8(a)(1) of the NLRA at the time they were set forth in the 2010 handbook, insofar as employees would “reasonably construe the language [in those provisions] to prohibit Section 7 activity.” Id.

The ALJ further held, on the basis of the Board's decision in Passavant Memorial Area Hospital (“Passavant ”), 237 NLRB No. 21, 1978 WL 7798, (1978)

, that the publication of the revised handbook in 2013 did not suffice to relieve Boch of liability under the NLRA for the 2010 Policy Provisions because, although Boch had revised them, Boch had failed to “repudiate” them. Boch , 2015 WL 1956199, at *8. In particular, the ALJ found that “[w]hile there has been an adequate publication [of the revised provisions] to the affected employees, the dress code provision remains as is in the handbook, and there have been no assurances by [Boch] that, in the future, it will not interfere with employees' Section 7 rights.” Id.

The ALJ then addressed the 2013 dress ban. The ALJ held that Boch's interest in maintaining its public image did not justify the imposition of a “blanket” ban on the wearing of pins, insignias, and message clothing without regard to such factors as size and message. Id. The ALJ held, however, that Boch's interests in promoting workplace safety and preventing damage to vehicles did justify the imposition of a comprehensive ban on pins. Id. Thus, the ALJ held that Boch violated Section 8(a)(1) of the NLRA by maintaining, from about May 2013 onward, a ban on insignias and message clothing. Id.

The ALJ ordered Boch to rescind the non-compliant parts of its 2013 dress ban. Id. The ALJ also ordered Boch to post a notice at every Boch dealership and related retail business. Id. Such notice was to advise employees that they had certain rights under Section 7 of the NLRA; that some of the policies in Boch's 2010 employee handbook interfered with those rights; that Boch had since rescinded the unlawful policy provisions; that Boch would rescind the portion of the 2013 dress code ban prohibiting the wearing of insignias and message clothing; and that Boch would not impinge on employees' Section 7 rights in any related manner in the future. Id.

Boch appealed to the Board, challenging its rulings as to both repudiation and the 2013 dress ban. On April 30, 2015, the Board issued its decision. The Board held that the language of the 2010 Policy...