N.L.R.B. v. Beverly Enterprises-Massachusetts, Inc.

• Decision Date: 04 February 1999
• Docket Number: INC,ENTERPRISES-MASSACHUSETT,No. 98-1774,98-1774
• Citation: 174 F.3d 13
• Parties: 160 L.R.R.M. (BNA) 2935, 137 Lab.Cas. P 10,416 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BEVERLY, d/b/a Beverly Manor Nursing Home, Respondent. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 13

174 F.3d 13

160 L.R.R.M. (BNA) 2935, 137 Lab.Cas. P 10,416

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. BEVERLY ENTERPRISES-MASSACHUSETTS, INC., d/b/a Beverly Manor Nursing Home, Respondent.

No. 98-1774.

United States Court of Appeals First Circuit.

Heard Feb. 4, 1999.

Decided April 6, 1999.

Jonathan A. Keselenko, with whom David B. Ellis, Karen L. Vossler, and Foley, Hoag & Eliot, L.L.P., were on brief, for respondent.

Rachel I. Gartner, Senior Attorney, with whom Margaret A. Gaines, Supervisory Attorney, Frederick L. Feinstein, General Counsel, Linda Sher, Associate General Counsel, and John D. Burgoyne, Acting Deputy Associate General Counsel, National Labor Relations Board, were on brief, for petitioner.

Before SELYA, Circuit Judge, BOWNES, Senior Circuit Judge, and LIPEZ, Circuit Judge.

BOWNES, Senior Circuit Judge.

The National Labor Relations Board (NLRB or Board) petitioned this court for enforcement of its final order against Beverly Enterprises-Massachusetts, Inc. (Beverly). See 325 NLRB No. 95, 1998 WL 183042 (April 9, 1998). Beverly challenges the Board's order both procedurally and substantively.

Procedurally, the Board incorporated the Administrative Law Judge's (ALJ's) oral bench decision, which was made without affording Beverly an opportunity to submit written briefs. Beverly contends that this procedure, permitted under a recent Board regulation, 29 C.F.R. § 102.42, violates Section 10(c) of the National Labor Relations Act (NLRA or Act), 29 U.S.C. § 160(c). For this reason, Beverly argues that the regulation is unlawful, arbitrary and capricious. In any event, Beverly contends that the ALJ's procedure failed to comply with the regulation. On this question of first impression in this circuit, we reject Beverly's procedural claims and uphold the regulation.

Substantively, Beverly asserts that the record as a whole does not contain substantial evidence supporting the Board's finding that Beverly violated Sections 8(a)(1) and (5) of the Act, 29 U.S.C. §§ 158(a)(1) and (5), by unilaterally reducing the maximum 1996 wage increase from four percent to three percent, by unlawfully withdrawing recognition from the union representing its employees, and by unilaterally imposing a fee for lost timecards. We conclude that there is such substantial evidence, and enforce the Board's order.

I. Background

A. Facts

The Board found the following facts. Beverly operates a nursing home in Plymouth, Massachusetts. Historically, Beverly had given its employees annual wage increases on the anniversaries of their respective starting dates with the company. At least as early as 1990, Beverly had fixed the maximum wage increase at four percent, and it awarded that amount to approximately ninety percent of its employees.

On March 23, 1993, the NLRB certified the Hospital Workers Union, Local 767, Service Employees International Union (the union), as the exclusive bargaining representative of all full-time and part-time service and maintenance employees at Beverly's Plymouth facility.

Beginning in June 1993, the union and the company engaged in contract negotiations. The parties disagreed as to the amount of wage increases the employees would receive. In October 1994, the union told the company that it would be difficult to persuade its unit members to accept an annual increase of less than four percent. Later in 1994, the union negotiator indicated that the company would have to come up from its three percent figure if the parties were to reach agreement. At the parties' final negotiating session, on December 13, 1995, Beverly responded to the union's earlier proposal of four percent by proposing a two percent annual wage increase. The union expressed shock at the newly lowered offer and did not immediately make a counteroffer. The parties went on to discuss an unrelated dispute (whether certain employees were part of the bargaining unit) and tempers flared. The union spokesperson stated that he needed to check with his attorney on the bargaining unit issue, that he would call the company representative, but that the latter "shouldn't hold [his] breath."

While these negotiations were taking place, Beverly continued to provide its employees with wage increases on their employment anniversaries, and continued to award a maximum wage increase of four percent to the overwhelming majority of them. This practice changed in 1996, however. That year, the company gave to approximately ninety percent of the company's unit employees a maximum wage increase of three percent. Beverly did not provide notice to the union that it would lower the maximum wage increase from four percent to three percent, nor did Beverly bargain with the union over the issue. Instead, Beverly unilaterally announced the change to the union in a letter, dated March 14, 1996. The letter described the imposition of the three percent maximum wage increase as a "compromise" between the parties' negotiating positions.

In approximately January 1996, Beverly changed its system of keeping track of its employees' work time. It replaced its system of paper timecards with a system using plastic timecards that contained a magnetic strip. Included in its new system was a new policy requiring unit employees to pay a five-dollar fee for lost timecards. In making these changes, Beverly neither gave notice to nor bargained with the union. As of the date of the NLRB hearing on April 15, 1997, the company had collected the five-dollar lost-timecard fee on at least seventeen occasions.

Between January and June 1996, the union contacted Beverly on several occasions and requested that it remedy its unilateral changes and that the parties resume bargaining. In its letters, the union preconditioned further negotiations on Beverly's remedying an unrelated alleged unfair labor practice.

On June 1, 1996, the union's chief negotiator and a group of union members committed a trespass at Beverly's facility while ostensibly handbilling Beverly's employees. On June 17, 1996, the union again wrote Beverly offering to bargain if the latter rectified all outstanding conduct which the union perceived to be violative of the Act. On June 25, 1996, Beverly unilaterally withdrew recognition of the union.

B. Board Conclusions and Order

The union filed unfair labor practice charges (ULP) with the NLRB. A hearing was held before a Board ALJ, who found the foregoing facts and concluded that Beverly violated Sections 8(a)(1) and (5) of the NLRA, 29 U.S.C. § 158(a)(1) and (5) (1994), in two separate respects: by unilaterally reducing the maximum 1996 wage increase from four percent to three percent, and by unilaterally imposing a new fee for lost timecards. The ALJ also found that the company violated the same statutory provisions by unlawfully withdrawing recognition of the union as the exclusive bargaining representative of Beverly's service and maintenance employees. Based upon its findings of fact, the Board adopted both the findings and the recommended decision of its ALJ.

As recommended by the ALJ, the Board ordered Beverly to cease and desist from its unfair labor practices and from otherwise interfering with, restraining, or coercing employees in the exercise of their rights under Section 7 of the NLRA. Affirmatively, the Board ordered the company immediately to put into effect the annual four percent wage increases that were customary prior to January 1, 1996, and to continue such increases in effect until the company negotiated a collective bargaining agreement (CBA) with the union or reached an impasse after bargaining in good faith. The order also required the company to make whole unit employees for any loss of pay they had suffered due to Beverly's unilateral reduction of the maximum wage increase.

The order further required Beverly to eliminate the five-dollar fee charged to employees for lost timecards until it negotiated a CBA with the union or reached an impasse after bargaining in good faith. It required the company to make whole its unit employees for any losses caused by the imposition of the five-dollar fee. Finally, the order required Beverly to bargain with the union upon request, to embody any understanding reached in a written agreement, and to post an appropriate notice.

II. Standard of Review

The applicable standard of review for NLRB action is provided by the National Labor Relations Act, 29 U.S.C. § 160(e) (1994), and, by default, the Administrative Procedure Act (APA), 5 U.S.C. § 706 (1994). These statutes require us to apply different standards of review depending upon what type of determination we are reviewing.

A. The Board's Factual Findings

The Board's findings of fact are conclusive if supported by substantial evidence on the record considered as a whole. 29 U.S.C. § 160(e); Universal Camera Corp. v. N.L.R.B., 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Substantial evidence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera, 340 U.S. at 477, 71 S.Ct. 456 (internal quotation marks omitted), quoted in American Textile Mfrs. Inst. v. Donovan, 452 U.S. 490, 522, 101 S.Ct. 2478, 69 L.Ed.2d 185 (1981) (ATMI ); see also F.T.C. v. Indiana Fed'n of Dentists, 476 U.S. 447, 454, 106 S.Ct. 2009, 90 L.Ed.2d 445 (1986). The reviewing court must consider "the record in its entirety ..., including the body of evidence opposed to the Board's view." Universal Camera, 340 U.S. at 487-88, 71 S.Ct. 456; see Penobscot Air Servs., Ltd. v. F.A.A., 164 F.3d 713, 718 (1st Cir.1999). But "the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence." ATMI, 452 U.S. at 523, 101 S.Ct. 2478 (internal quotation marks omitted).

In Allentown Mack Sales & Serv., Inc. v. N.L.R.B., 522 U.S. 359, 118 S.Ct. 818, 823, 139 L.Ed.2d 797 (1998), the Court equated the substantial...