MCPC Inc. v. Nat'l Labor Relations Bd.

• Decision Date: 12 February 2016
• Docket Number: Nos. 14–1379,14–1731.,s. 14–1379
• Citation: 813 F.3d 475
• Parties: MCPC INC., Petitioner in No. 14–1379 v. NATIONAL LABOR RELATIONS BOARD, Petitioner in No. 14–1731.
• Court: U.S. Court of Appeals — Third Circuit

813 F.3d 475

MCPC INC., Petitioner in No. 14–1379

v.NATIONAL LABOR RELATIONS BOARD, Petitioner in No. 14–1731.

Nos. 14–1379

14–1731.

United States Court of Appeals, Third Circuit.

Argued: Dec. 11, 2014.

Filed: Feb. 12, 2016.

Dean F. Falavolito, Esq. [Argued], Margolis Edelstein, Pittsburgh, PA, Counsel for MCPc, Inc.Julie B. Broido, Esq., Linda Dreeben, Esq., Gregory P. Lauro, Esq. [Argued], Washington, DC, Counsel for the National Labor Relations Board.

Before: FUENTES, FISHER, and KRAUSE, Circuit Judges.

OPINION OF THE COURT

KRAUSE, Circuit Judge.

The National Labor Relations Act prohibits employers from discharging union or non-union employees for exercising their organization and collective bargaining rights, including their right to engage in concerted activities for the purpose of mutual aid and protection. MCPc, Inc. appeals the decision and order of the National Labor Relations Board holding that MCPc violated the Act by discharging Jason Galanter for concerted activity, and the Board cross-appeals for enforcement of its order. Our resolution of these issues provides us occasion to clarify both the definition of "concerted activity" and the test for determining whether that activity formed the basis for an employee's allegedly discriminatory discharge. For the reasons set forth below, we will affirm and enforce in part, vacate in part, and remand to the Board for further consideration in light of this opinion.

I. Background

A. Factual History

MCPc provides computer consulting, technology, and organizational services from offices in several states. Among MCPc's specialties is the creation of complex telephony systems that allow companies to receive and appropriately route inbound customer calls. MCPc generally employs solution architects to design these technology solutions for client companies, and delivery engineers to implement the solutions. However, because of a company-wide shortage of engineers, Galanter, a senior solutions architect based in MCPc's Pittsburgh office, was tasked with not only designing but also implementing a call center at one of the company's locations in Buffalo.

Domenic Del Balso, MCPc's director of engineering, visited the Pittsburgh office from Cleveland once or twice a month and often took available employees out to lunch on these occasions for "team building" purposes. MCPc, Inc., 360 N.L.R.B. No. 39, 2014 WL 495815, at *1 (Feb. 6, 2014). One such lunch took place on February 24, 2011 and included Galanter; Jeremy Farmer, who was another solutions architect; and Dan Tamburino and Brian Sawyers, both of whom were engineers. At the lunch, the attendees discussed how busy everyone was because of the engineer shortage. During this discussion, Galanter told Del Balso that he was working many hours a week, urged him to hire additional engineers to alleviate the employees' unduly heavy workloads, and—most pertinent to this case—stated that MCPc could have hired several additional engineers with the $400,000 salary MCPc was paying Peter DeMarco, a recently hired executive. Tamburino and Sawyers expressed agreement with Galanter.

After the February 24th lunch, Mike Trebilcock, the company's Chief Executive Officer, was informed of Galanter's comments regarding executive compensation. Because DeMarco had indeed been recently hired by MCPc for what was at the time an unprecedented company salary of $400,000, and because not many people within the company had access to the information in the company's computer systems about executive compensation, Trebilcock became concerned about a possible breach of confidential files. He directed Beth Stec, vice president of human resources and communication, to review Galanter's access to MCPc's computer records, and he was subsequently informed that, in connection with Galanter's implementation of the Buffalo call center project, Galanter indeed had obtained global access privileges and thus had the ability to view on MCPc's computer systems confidential files normally restricted to human resources and information technology personnel.

On March 4, 2011, eight days after the Del Balso lunch, Galanter was asked to travel to the Cleveland office for what turned out to be a face-to-face meeting with Trebilcock and Stec. During the meeting, Trebilcock asked Galanter where he had obtained the salary information that he had mentioned at the February 24th lunch. Galanter provided a number of explanations in quick succession. First Galanter asserted that no one had supplied him the information and attributed his knowledge to what he had found on the Internet¹ —though at the subsequent hearing before the Administrative Law Judge (ALJ), Trebilcock testified that he "never heard that." Id.; J.A. 113a. Galanter also told Trebilcock that the salary information was a topic of "water cooler" conversation among many employees. MCPc, Inc., 360 N.L.R.B. No. 39, at *8. Galanter then switched gears and advised that he might have heard the salary information from Nancy Damin and Greg Jurkowski, two sales representatives from the Buffalo office.

To verify this last explanation, Trebilcock left the room and called Damin and Jurkowski, both of whom were longtime, trusted MCPc employees. Trebilcock was able to reach Damin, who had no knowledge of the salary at issue and denied giving Galanter any such information.² In light of Damin's disavowal, Galanter's shifting explanations, and Galanter's access to MCPc's confidential human resources files, Trebilcock concluded that Galanter was lying about how he had obtained the salary information and accused him of disclosing Peter DeMarco's confidential compensation. Galanter admitted to mentioning a compensation amount of $400,000 at the lunch but contended that he had been referring to a different executive, Andy Jones,³ and that his access to the company's computer system was appropriate to his assigned project. Trebilcock stated that MCPc and Galanter needed to "divorce" and left the room. MCPc, Inc., 360 N.L.R.B. No. 39, at *8. Jeff Kaiser, MCPc's information technology manager, conducted an audit of Galanter's personal computer "to make sure that he wasn't taking with him any MCPc proprietary information or files," and Galanter was escorted from the building.⁴ J.A. 116a.

B. Procedural History

On December 30, 2011, the Board's General Counsel issued a complaint alleging that MCPc had violated § 8(a)(1) of the National Labor Relations Act, 29 U.S.C. § 158(a)(1), by discharging Galanter for complaining about working conditions, which the General Counsel described as protected concerted activity under § 7 of the Act, id. § 157, as well as for maintaining an overbroad confidentiality policy.⁵ Following a hearing, the ALJ applied the test approved by NLRB v. Burnup & Sims, Inc., 379 U.S. 21, 85 S.Ct. 171, 13 L.Ed.2d 1 (1964), which provides that " § 8(a)(1) is violated if an employee is discharged for misconduct arising out of a protected activity, despite the employer's good faith, when it is shown that the misconduct never occurred." MCPc, Inc., 360 N.L.R.B. No. 39, at *16 (quoting Burnup & Sims, Inc., 379 U.S. at 23, 85 S.Ct. 171 ). Because the ALJ determined that Galanter was discharged for accessing MCPc's confidential files after engaging in protected activity at the February 24th lunch and found that Galanter did not in fact access the files, the ALJ concluded that his discharge constituted an unfair labor practice and recommended that MCPc be ordered to cease and desist and to take affirmative remedial action, including offering Galanter full reinstatement and back pay.

MCPc filed exceptions to the ALJ's findings and a supporting brief, in which MCPc emphasized that Galanter was discharged not only for improperly accessing confidential salary information and sharing that information with other employees but also for his dishonesty to Trebilcock. The General Counsel filed an answering brief defending the ALJ's findings and recommendations.

In a decision issued on February 6, 2014, the Board concluded that MCPc's policy barring discussion of confidential information was overbroad in violation of the Act and could not constitute a valid ground for termination. As to whether MCPc had in fact lawfully discharged Galanter for improperly obtaining confidential company information, the Board held that the Burnup & Sims test was inapplicable because Galanter had allegedly accessed the files prior to, rather than in the course of, his protected activity, and thus was not terminated for committing misconduct "arising out of" a protected activity. The Board concluded, however, that even assuming the Burnup & Sims test applied, and further assuming that MCPc discharged Galanter because it honestly believed he had accessed confidential files, MCPc had violated the statute because, as the ALJ found, Galanter had not committed this misconduct. On this basis, and without reaching MCPc's purported primary rationale for terminating Galanter—his alleged dishonesty about where he had obtained the salary information—the Board affirmed the ALJ's holding that MCPc had discharged Galanter for his protected concerted activity in violation of § 8(a)(1) and ordered, among other things, that MCPc reinstate Galanter and award back pay. MCPc timely filed a petition for review and the Board cross-applied for enforcement of its order.

II. Jurisdiction and Standard of Review

The Board had jurisdiction to hear and issue a final order in this matter under 29 U.S.C. § 160(a) -(c). We have jurisdiction over MCPc's petition for review and the Board's cross-petition for enforcement pursuant to 29 U.S.C. § 160(e) and (f).

We must accept the Board's factual findings and the reasonable inferences derived from those findings if they are "supported by substantial evidence on the record considered as a whole." 29 U.S.C. § 160(f) ; see Stardyne, Inc. v. NLRB, 41 F.3d 141, 151 (3d Cir.1994). "Substantial evidence is more than a scintilla. It means such relevant evidence as a reasonable...