Laro Maintenance Corp. v. N.L.R.B.

• Decision Date: 16 August 1995
• Docket Number: I,No. 94-1064,AFL-CI,94-1064
• Citation: 56 F.3d 224
• Parties: 149 L.R.R.M. (BNA) 2530, 312 U.S.App.D.C. 260, 130 Lab.Cas. P 11,350 LARO MAINTENANCE CORPORATION, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent, Service Employees International Union,ntervenor.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 224

56 F.3d 224

149 L.R.R.M. (BNA) 2530, 312 U.S.App.D.C. 260,

130 Lab.Cas. P 11,350

LARO MAINTENANCE CORPORATION, Petitioner v. NATIONAL LABOR RELATIONS BOARD, Respondent, Service Employees International Union, AFL-CIO, Intervenor.

No. 94-1064.

United States Court of Appeals, District of Columbia Circuit.

Argued March 2, 1995.

Decided June 9, 1995.

Suggestion for Rehearing In Banc Denied Aug. 16, 1995.

Petition for Review and Cross-Petition for Enforcement of a Decision and Order of the National Labor Relations Board.

Clifford P. Chaiet, Jericho, NY, argued the cause and filed the briefs, for petitioner.

Joseph A. Oertel, Senior Litigation Atty., N.L.R.B., Washington, DC, argued the cause, for respondent. With him on the brief were Linda R. Sher, Acting Associate Gen. Counsel, Aileen A. Armstrong, Deputy Associate Gen. Counsel, and Howard E. Perlstein, Deputy Asst. Gen. Counsel, N.L.R.B., Washington, DC.

Ira A. Sturm, New York City, entered an appearance, for intervenor.

Before WALD, RANDOLPH, and ROGERS, Circuit Judges.

Dissenting opinion filed by Circuit Judge RANDOLPH.

ROGERS, Circuit Judge:

Laro Maintenance Corporation petitions for review of the decision and order of the National Labor Relations Board finding that Laro had violated Secs. (8)(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. Secs. 158(a)(1) and (3), by discriminating against certain applicants for employment based on their union membership. Laro Maintenance Corp., 312 N.L.R.B. 155, 1993 WL 371437 (1993). Specifically, Laro contends that the Board impermissibly presumed anti-union animus and lacked substantial evidence to support its finding of discriminatory intent. Because the Board applied the appropriate legal standard and substantial evidence in the record considered as a whole supports its determination that Laro's failure to hire any of the thirteen applicants was based on their union membership, we deny the petition for review and grant the Board's cross-petition for enforcement.

I.

For about six years ending on September 30, 1990, Prompt Maintenance Services, Inc. cleaned and maintained the federal government building at 225 Cadman Plaza in Brooklyn, New York under a contract with the General Services Administration ("GSA"). Prompt employees performed this work under a collective bargaining agreement between Prompt and Local 32B-32J, Service Employees International Union, AFL-CIO ("Local 32B"). In April 1990, the GSA solicited bids for a new cleaning contract at Cadman Plaza. The bid solicitation required the new contractor to pay the same wages as Prompt and to have an initial work force of which at least fifty percent comprised experienced cleaners. Laro was awarded the contract to begin October 1, 1990.

On or about September 17, 1990, Local 32B requested that Laro hire Prompt's Cadman Plaza employees. On September 18, Laro's President, Robert Bertuglia, toured the Cadman Plaza building. A GSA official mentioned the names of various employees as being "good workers," and Bertuglia observed two Prompt employees sleeping. Bertuglia did not take note of the names of either the good workers or the sleeping workers. After the inspection, the building manager (another GSA employee) informed Bertuglia that the GSA had taken deductions from Prompt's fee, presumably for deficient performance. ¹ Bertuglia told the building manager that he did not intend to hire any of Prompt's employees because of the deductions and the two employees he had seen sleeping on the job. The building manager informed Bertuglia that certain judges whose chambers were in the Cadman Plaza building wanted Laro to retain the Prompt employees who cleaned their chambers. The building manager also advised Bertuglia to interview all Prompt employees and stated that it would be advantageous for Laro to hire as many of them as possible. Several days later, the GSA official who conducted the inspection gave Bertuglia a list of ten "better cleaners from Prompt Maintenance," and urged Laro to hire them.

Despite Bertuglia's stated desire not to hire any Prompt employees, Laro agreed to hire the ten Prompt employees on the GSA's list. Laro accepted applications from other Prompt employees but had already decided that it would not hire any of them; consequently Laro asked the Prompt employees who were not on the GSA's list virtually no questions about their background or experience and did not seek information about individual Prompt employees who had good work records and had worked at Cadman Plaza for a number of years for Prompt and its predecessor. Instead, to complete its Cadman Plaza work force, Laro hired eight workers who had not previously worked for Prompt. Laro had previously employed four of these workers. Two had good work records and requested transfers to Cadman Plaza. Laro transferred the other two to Cadman Plaza at least in part because of their poor performance at Laro's Jamaica, New York site: Laro had discharged one for poor attendance and insubordination three weeks before it hired her to work at Cadman Plaza, and transferred the other because he required constant supervision, did not get his work done, made frivolous excuses for his failure to complete tasks, and constantly complained. Laro also hired four workers who had not previously been employed by either Prompt or Laro. Laro admitted that three of them had no relevant work experience, and although the fourth worker listed factory and office cleaning as relevant experience on his application, he did not list any positions at which he would have gained such experience. On September 28, 1990, just before commencing work at Cadman Plaza under its contract with GSA, Laro entered into a supplemental agreement with Amalgamated Local Union 355 ("Local 355")--with which Laro had a collective bargaining agreement (August 1, 1990, through July 1, 1993) for its employees in Jamaica, New York--covering its employees at Cadman Plaza.

Thereafter, Local 32B filed an unfair labor practice charge against Laro. The Board's General Counsel filed a complaint, alleging violations of Secs. 8(a)(1), (2), (3), and (5) of the Act on the ground that Laro had bargained with Local 355 knowing that it represented a minority of the workers at Cadman Plaza and that it had refused to consider employing Prompt employees, other than those on the GSA's list, because of their union membership. When these charges came before an Administrative Law Judge ("ALJ") for a hearing, Laro admitted that it had recognized Local 355 although Local 32B represented a majority of the employees at Cadman Plaza; the Board entered into an informal settlement agreement with Laro whereby Laro agreed to recognize Local 32B for its Cadman Plaza employees, thus disposing of the alleged violations of Secs. 8(a)(2) and (5). Following a hearing on the remaining complaint allegations, the ALJ concluded that Laro violated Secs. 8(a)(1) and (3) upon finding that Laro had declined to consider any Prompt employees who were not on the "better cleaners" list in order to recognize and bargain with Local 355 rather than Local 32B. The Board adopted the ALJ's findings and conclusions with minor modifications and ordered Laro to offer employment and back pay to the Prompt employees it had refused to consider. ² Laro petitioned for review under 29 U.S.C. Sec. 160(f), and the Board cross-petitioned for enforcement under 29 U.S.C. Sec. 160(e).

II.

Section 8(a)(3) of the Act makes it an unfair labor practice for an employer "to encourage or discourage membership in any labor organization," "by discrimination in regard to hire or tenure of employment or any term or condition of employment...." 29 U.S.C. Sec. 158(a)(3). ³ Under this section, a successor employer not the alter ego of its predecessor is not obligated to hire its predecessor's employees. Howard Johnson Co. v. Hotel & Restaurant Employees Int'l Union, 417 U.S. 249, 259 n. 5, 261, 94 S.Ct. 2236, 2242 n. 5, 2243, 41 L.Ed.2d 46 (1974) (quoting NLRB v. Burns Int'l Sec. Servs., 406 U.S. 272, 280 n. 5, 92 S.Ct. 1571, 1579 n. 5, 32 L.Ed.2d 61 (1972)). However, "a new owner [can]not refuse to hire the employees of [its] predecessor solely because they were union members or to avoid having to recognize the union." Id. at 262 n. 8, 94 S.Ct. at 2243 n. 8; see Great Lakes Chem. Corp. v. NLRB, 967 F.2d 624, 627 (D.C.Cir.1992).

When a violation of Sec. 8(a)(3) is alleged, the Board applies the two-stage causation test established in Wright Line, 251 N.L.R.B. 1083, 1980 WL 12312 (1980), enf'd, 662 F.2d 899 (1st Cir.1981), cert. denied, 455 U.S. 989, 102 S.Ct. 1612, 71 L.Ed.2d 848 (1982), and approved by the Supreme Court in NLRB v. Transportation Mgt. Corp., 462 U.S. 393, 103 S.Ct. 2469, 76 L.Ed.2d 667 (1983). ⁴ Under Wright Line, the Board's General Counsel bears the initial burden to "make a prima facie showing sufficient to support the inference that protected [i.e., legitimate, union-related] conduct was a 'motivating factor' in the employer's decision" to take adverse employment action. Wright Line, 251 N.L.R.B. at 1089. The employer may then rebut the inference by showing by a preponderance of the evidence that "the same action would have taken place even in the absence of the protected conduct." Id.; see Transportation Mgt., 462 U.S. at 399, 103 S.Ct. at 2473; Power Inc. v. NLRB, 40 F.3d 409, 417 (D.C.Cir.1994). ⁵

Laro contends that the Board violated the legal standard articulated in Howard Johnson Co. by presuming anti-union animus from the fact that Laro decided not to consider any Prompt employee who was not on the "better cleaners" list. If applied, such a presumption would be contrary to the Howard Johnson Co. rule allowing a subsequent employer to refuse to hire its predecessor's employees, and involve a misapplication of Sec. 8(a)(3). However, no fair reading of the Board's decision indicates that the Board applied such a presumption. To the contrary, the Board concluded...