E. Brunswick European Wax Ctr., LLC v. Nat'l Labor Relations Bd.

• Decision Date: 11 January 2022
• Docket Number: Nos. 20-2120 & 20-2233,s. 20-2120 & 20-2233
• Citation: 23 F.4th 238
• Parties: EAST BRUNSWICK EUROPEAN WAX CENTER, LLC v. NATIONAL LABOR RELATIONS BOARD East Brunswick European Wax Center, LLC, Petitioner in No. 20-212 National Labor Relations Board, Petitioner in No. 20-2233
• Court: U.S. Court of Appeals — Third Circuit

23 F.4th 238

EAST BRUNSWICK EUROPEAN WAX CENTER, LLC

v. NATIONAL LABOR RELATIONS BOARDEast Brunswick European Wax Center, LLC, Petitioner in No. 20-212National Labor Relations Board, Petitioner in No. 20-2233

Nos. 20-2120 & 20-2233

United States Court of Appeals, Third Circuit.

Argued October 26, 2021

Filed: January 11, 2022

Carmen M. Finegan, Law Office of Gerard C. Vince, 1040 Amboy Avenue, Edison, NJ 08837, David Jasinski (argued), Jennifer C. Van Syckle, John C. Hegarty, Erin L. Henderson, Jasinski, P.C., 60 Park Place, 8th Floor, Newark, NJ 07102, Attorneys for Petitioner in Nos. 20-2120 and Respondent in 20-2233

Jennifer A. Abruzzo, General Counsel, Julie B. Broido, David Habenstreit, David A. Seid (argued), National Labor Relations Board, 1015 Half Street, S.E., Washington, DC 20003, Attorneys for Respondent in Nos. 20-2120 and Petitioner in 20-2233

BEFORE: GREENAWAY, JR., PHIPPS, and COWEN, Circuit Judges

OPINION OF THE COURT

COWEN, Circuit Judge.

East Brunswick European Wax Center, LLC ("EBEWC") petitioned for review of the decision and order of the National Labor Relations Board ("Board"). The Board, in turn, cross-applied for enforcement of its order. In its decision and order, the Board granted the General Counsel's motion for default judgment because EBEWC had defaulted on the terms of the settlement agreement ("Settlement Agreement") by failing to "fully comply" with the Settlement Agreement's "Electronic Notification" provision requiring EBEWC to text the requisite notice to its employees ("Notice"). Pursuant to the Settlement Agreement, the Board then found that the allegations set forth in the reissued complaint were true, made findings of fact and conclusions of law consistent with the pleading's allegations, and granted the General Counsel's request for a "full remedy" for the violations the Board found.

However, the Board took such drastic action even though EBEWC had purportedly "defaulted" on the terms of the Settlement Agreement merely by sending the requisite Notice to its employees by e-mail instead of by text message. The Settlement Agreement did explicitly provide for the Notice to be sent by text. But there is no indication that texting as opposed to some other method of electronic communication (such as e-mailing) had any real significance to EBEWC, its employees, or the Board itself—and EBEWC otherwise fully complied with its other obligations under the Settlement Agreement. Because the agency overreached and acted punitively, we will grant EBEWC's petition for review and will deny the Board's application for enforcement.

I.

This proceeding arises out of charges of unfair labor practices filed by a former EBEWC employee named Kellie Meagan Zambrano. EBEWC operates a beauty and waxing salon in East Brunswick, New Jersey. On November 30, 2016, the General Counsel issued a complaint alleging that EBEWC had violated Section 8(a)(1) and (3) of the National Labor Relations Act ("NLRA"), 29 U.S.C. § 158(a)(1) and (3), by implying that employees would be discharged if they engaged in union or protected concerted activity, soliciting employee assistance in ascertaining the union and protected activities and support of their co-workers, issuing a handbook rule subjecting employees to discipline for gossiping or complaining about EBEWC's rules or procedures, prohibiting employee discussion of ongoing internal investigations, discharging Zambrano for engaging in concerted employee activities including discussion and texting with her co-workers regarding the terms and conditions of employment, and issuing a final written warning to employee Liz Siebold.¹ The complaint sought an order requiring, among other things, EBEWC to read and post a remedial notice. In the remedy section, the pleading also stated that, "since Respondent communicates with its employees by text message, the General Counsel seeks an Order requiring that Respondent send the notice to employees to its employees by text message, such text to contain an explanation of the notice as directed by the Board." (A21.)

On December 19, 2016, EBEWC signed an informal settlement agreement, which Zambrano had signed on November 30, 2016 and the Regional Director then approved on January 3, 2017. As the Board observed in its decision, EBEWC agreed to:

(1) post at its facility the appropriate Board notice for 60 days; (2) send the notice by text message to all employees who work at the facility; (3) read, or have a Board Agent read, the notice; (4) comply with all the terms and provisions of the notice, including rescinding handbook rules prohibiting talking or complaining about wages, hours, and working conditions or the Respondent's rules, policies, and/or procedures and rescinding the final warning issued to Liz Siebold; (5) make Kellie Zambrano whole by paying her $20,000 in backpay and interest; (6) remove from its files all references to Zambrano's discharge, and inform Zambrano in writing that it had been done; and (7) notify the Regional Director in writing what steps the Respondent had taken to comply with the settlement.

E. Brunswick European Wax Ctr., 369 NLRB No. 77, 2020 WL 2476669, at *1 (May 13, 2020). The Settlement Agreement also included a "Non-Admission Clause ." (A24 ("By entering into this Settlement Agreement, the Charged Party does not admit that it has violated the National Labor Relations Act.").) But it was also agreed as to the "SCOPE OF THE AGREEMENT " that the Settlement Agreement "settles only the allegations in the above-captioned case(s)" (including all the allegations covered by the attached Notice made part of the Settlement Agreement) "and does not settle any other case(s) or matters." (A24-A25 ("It does not prevent persons from filing charges, the General Counsel from prosecuting complaints, or the Board and the courts from finding violations with respect to matters that happened before this Agreement was approved regardless of whether General Counsel knew of those matters or could have easily found them out. The General Counsel reserves the right to use the evidence obtained in the investigation and prosecution of the above-captioned case(s) for any relevant purpose in the litigation of this or any other case(s), and a judge, the Board and the courts may make findings of fact and/or conclusions of law with respect to said evidence.").)

The Settlement Agreement set forth the following requirement governing electronic notification:

ELECTRONIC NOTICE. —The Charged Party will send a copy of the signed Notice in English and in additional languages if the Regional Director decides that it is appropriate to do so, by text to all employees who work at the facility located at [address]. The message of the text transmitted with the Notice will state: "We are distributing the Attached Notice to Employees to you pursuant to a Settlement Agreement approved by the Regional Director of Region 22 of the National Labor Relations Board in Case(s) 22-CA-178646." The Charged Party will forward a copy of that text, with all of the recipients' phone numbers, to the Region's Compliance Officer at [e-mail address].

(A24.) Under the heading "PAYMENT OF WAGES AND BENEFITS ," it was agreed that: "Within 14 days from approval of this agreement, the Charged Party will make whole the employee(s) named below by payment to each of them of the amount opposite each name. The Charged Party will make appropriate withholdings for each named employee. No withholdings should be made from the interest portion of the backpay. Kellie Zambrano $20,000.00" (Id. ) In the "NOTIFICATION OF COMPLIANCE" provision, the parties to the Settlement Agreement agreed that they "will notify the Regional Director in writing what steps the Charged Party has taken to comply with the Agreement." (A25.) "This notification shall be given within 5 days, and again after 60 days, from the date of the approval of this Agreement," and "[n]o further action shall be taken in the above captioned case(s) provided that the Charged Party complies with the terms and conditions of this Settlement Agreement and Notice." (Id. )

Furthermore, the Settlement Agreement included a specific provision addressing "PERFORMANCE ":

Performance by the Charged Party with the terms and provisions of this Agreement shall commence immediately after the Agreement is approved by the Regional Director, or if the Charging Party does not enter into this Agreement, performance shall commence immediately upon receipt by the Charged Party of notice that no review has been requested or that the General Counsel has sustained the Regional Director.

The Charged Party agrees that in case of non-compliance with any of the terms of this Settlement Agreement by the Charged Party, and after 14 days' notice from the Regional Director of the National Labor Relations Board of such non-compliance without remedy by the Charged Party, the Regional Director will issue a Complaint that includes the allegations covered by the Notice to Employees, as identified above in the Scope of Agreement section, as well as filing and service of the charge(s), commerce facts necessary to establish Board jurisdiction, labor organization status, appropriate bargaining unit (if applicable), and any other allegations the General Counsel would ordinarily plead to establish the unfair labor practices. Thereafter, the General Counsel may file a Motion for Default Judgment with the Board on the allegations of the Complaint. The Charged Party understands and agrees that all of the allegations of the Complaint will be deemed admitted and that it will have waived its right to file an Answer to such Complaint. The only issue that the Charged Party may raise before the Board will be whether it defaulted on the terms of this Settlement Agreement. The General Counsel may seek, and the Board may impose, a full remedy for each unfair labor practice identified in the Notice to Employees. The Board may then, without necessity of trial or any other proceeding, find

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