Bph & Co., Inc. v. N.L.R.B.

• Decision Date: 27 June 2003
• Docket Number: No. 01-1468.,01-1468.
• Citation: 333 F.3d 213
• Parties: BPH & COMPANY, INC., as successor to HEPC Palmas, Inc., d/b/a Wyndham Palmas del Mar Resort and Villas, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

333 F.3d 213

BPH & COMPANY, INC., as successor to HEPC Palmas, Inc., d/b/a Wyndham Palmas del Mar Resort and Villas, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 01-1468.

United States Court of Appeals, District of Columbia Circuit.

Argued February 6, 2003.

Decided June 27, 2003.

COPYRIGHT MATERIAL OMITTED

On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

Howard S. Linzy argued the cause for the petitioner. Robert Lombardi was on brief for the petitioner.

Ruth E. Burdick, Attorney, National Labor Relations Board, argued the cause for the respondent. Arthur F. Rosenfeld, General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Margaret A. Gaines, Attorney, were on brief for the respondent.

Before: EDWARDS, SENTELLE and HENDERSON, Circuit Judges.

Opinion for the court filed by Circuit Judge KAREN LeCRAFT HENDERSON.

KAREN LeCRAFT HENDERSON, Circuit Judge:

BPH & Co. (Company)¹ petitions this court for review of a decision and order of the National Labor Relations Board (NLRB or Board) holding that the Company violated section 8(a)(1) and (5) of the National Labor Relations Act (NLRA or Act), 29 U.S.C. § 158(a)(1), (5), when it withdrew its recognition of the Union de Trabajadores de la Industria Gastronomica de Puerto Rico, Local 610, HEREIU, AFL-CIO (Union) as the exclusive bargaining representative of its employees. Wyndham Palmas del Mar Resort, 334 N.L.R.B. No. 70, 2001 WL 811083 (2001) [hereinafter Order] The Board has filed a cross-application for enforcement.

The Board maintains that the Company's petition should be dismissed because the Company failed to raise its objections to the Board before seeking judicial review as required by section 10(e) of the Act. See 29 U.S.C. § 160(e). We disagree and hold that it properly raised its objections before the Board. On the merits, we conclude that the Board's decision is not based on substantial evidence and, accordingly, grant the Company's petition.

I.

A.

In 1996 the Company acquired property in Humacao, Puerto Rico where it operated a resort hotel and restaurant. Shortly thereafter, in February 1997, the Company recognized the Union as the exclusive bargaining representative of its employees and commenced collective bargaining. Approximately six weeks after it recognized the Union (on March 26),² the employees filed a petition to decertify the Union as their bargaining representative pursuant to sections 7 and 9 (a) and (c) of the NLRA, 29 U.S.C. §§ 157, 159(a), (c).

The Union then filed charges against the Company, alleging that it had unlawfully refused to bargain with the Union and had unlawfully coerced the employees to sign the decertification petition. In early June, the Union withdrew its refusal to bargain charge and entered an informal settlement agreement (Agreement)³ with the Company regarding the remaining unfair labor practice charges. Under the Agreement, the Company agreed not to assist or solicit employees in the promotion, presentation or circulation of a petition to decertify the Union and not to promise employees increased wages and/or benefits in exchange for their support of a decertification petition. It further agreed to post a 60-day notice of the Agreement. The employee representative who filed the decertification petition also agreed to withdraw the petition. Significantly, the Agreement specifically includes a nonadmission clause as follows: "By entering into this settlement agreement the Employer [the Company] does not admit having violated the National Labor Relations Act." Settlement Agreement of June 5, 1997, Joint Appendix (JA) 18.

The parties recommenced bargaining until September 5, when employees filed a second decertification petition with the Board. The petition contained the signatures of the majority of employees (183 of 255) collected between July 10 and August 23. On September 15 the Company formally withdrew recognition of the Union. The Company's withdrawal spurred the Union to refile charges and this time the Regional Director issued a complaint, charging that the Company had violated section 8(a)(1) and (5) of the Act by unlawfully withdrawing recognition of the Union. Order Consolidating Cases, Consolidated Complaint and Notice of Hearing, at ¶¶ 7, 9, JA 40. The matter was submitted to the Board on briefs and stipulated facts.

B.

Under well-settled precedent, an incumbent union enjoys a presumption that it represents a majority of employees. Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 37, 107 S.Ct. 2225, 2232-33, 96 L.Ed.2d 22 (1987). Unless it rebuts the presumption, an employer that refuses to bargain with the union by withdrawing recognition violates section 8(a)(1) and (5) of the Act. NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 778, 110 S.Ct. 1542, 1545, 108 L.Ed.2d 801 (1990).⁴ It can do so by showing that at the time of the withdrawal, "either (1) the union did not in fact enjoy majority support, or (2) the employer had a `good-faith' doubt, founded on a sufficient objective basis, of the union's majority support."⁵ Id. (emphasis removed) (citing Station KKHI, 284 N.L.R.B. 1339, 1987 WL 89811 (1987), enforced, 891 F.2d 230 (9th Cir. 1989)).⁶ A decertification petition signed by a majority of the bargaining unit suffices for an employer to have a good faith doubt about the union's majority support. Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 737 (D.C.Cir.2000); Sullivan Indus. v. NLRB, 957 F.2d 890, 898 (D.C.Cir. 1992); Nat'l Med. Hosp. of Orange Inc., 287 N.L.R.B. 415, 417, 1987 WL 90088 (1987). Nevertheless, the employer may not withdraw recognition based on a "good faith doubt" if unfair labor practices "significantly contribute to such a loss of majority or to the factors upon which doubt of such majority is based." St. Agnes Med. Ctr. v. NLRB, 871 F.2d 137, 146-47 (D.C.Cir.1989) (internal quotations omitted). In that case, the ULPs "taint" the petition. Thus, if "the Board determines that unremedied ULPs contributed to the erosion of support for the union, the employer may commit an unfair labor practice by withdrawing its recognition." Vincent Indus., 209 F.3d at 737 (citations omitted); see Olson Bodies, 206 N.L.R.B. 779, 780, 1973 WL 4539 (1973). To make its determination, the Board uses the four-factor test of Master Slack Corp., 271 N.L.R.B. 78, 84, 1984 WL 36573 (1984).⁷ Vincent Indus., 209 F.3d at 737; Lee Lumber & Bldg. Material Corp. v. NLRB, 117 F.3d 1454, 1458-60 (D.C.Cir.1997) (per curiam); NLRB v. Williams Enters., 50 F.3d 1280, 1288 (4th Cir.1995).

The Company argued before the Board that, consistent with this long-held precedent, it lawfully withdrew recognition of the Union based on the September 5 decertification petition signed by a majority of its employees. It emphasized that the Stipulation of Facts contained no facts supporting any ULP and that the Agreement provided no basis for any ULP finding because it contained an express nonadmission clause. See supra at 217-218. The Board, however, concluded that the Company had violated the Act. Order at 5. Without finding that any ULP in fact tainted the petition, presumably because, as it acknowledged, "there has been no finding by the Board (or admission by the Respondent) that an unfair labor practice was committed," the Board decided that an employer that enters into a settlement agreement under which it agrees to remedial notice posting cannot "lawfully challenge the Union's majority status on the basis of [an] antiunion petition that was signed during the 60-day posting period." Id. at 3, 5. Relying on its decision in DouglasRandall, 320 N.L.R.B. 431, 1995 WL 788564 (1995), and on the holding in Poole Foundry & Machine Co. v. NLRB, 192 F.2d 740 (4th Cir.1951), the Board defended its decision — despite the fact that it found no ULP that caused disaffection with the Union — on the policy ground that the Board must have the power to give effect to the remedies included in a settlement agreement. Order at 3 ("`[A] settlement agreement is not an admission or finding or unlawful conduct,' but ... `in order to give proper effect to such an agreement, the [decertification] petition should be dismissed.'" (quoting DouglasRandall, 320 N.L.R.B. at 435 n. 9)). Here, it said, the employer entered into an agreement under which it "agreed to take precisely the sort of remedial action that the Board might have ordered to redress a violation of the Act: to post a notice for 60 days stating that it would not engage in unfair labor practices that were the subject of the Union's charge." Id. at 3. If an employer could withdraw recognition based on a petition signed during the posting period, the Board reasoned, the purpose of the notice-posting remedy — to cure the "lingering effects of the settled unfair labor practice conduct" — would be defeated. Id. at 4. In addition, the Board used the charged conduct to support its conclusion that the Company caused the employees to become disaffected with the Union thereby tainting the decertification petition and making the Company's resulting withdrawal of recognition a violation of section 8(a)(1) and (5). Id. at 5. Accordingly, the Board ordered the Company to bargain with the Union. Id. at 5-6. The Company then petitioned this court for review.

II.

The Board first asserts that we lack jurisdiction to consider the Company's petition because it did not raise before the Board, as required by section 10(e) of the Act, the issues it now presses before us. Section 10(e) of the Act mandates that "No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances." 29 U.S.C. § 160(e). The Board maintains that the Company's failure to challenge the "rule"...