N.Y. Party Shuttle, LLC v. Nat'l Labor Relations Bd., 112221 FED5, 20-61072

Docket Nº20-61072
Opinion JudgeEdith Brown Clement, Circuit Judge
Party NameNew York Party Shuttle, L.L.C., doing business as Onboard Tours; Washington DC Party Shuttle, L.L.C., doing business as Onboard Tours; OnBoard Las Vegas Tours, L.L.C., doing business as Onboard Tours; NYC Guided Tours, L.L.C.; Party Shuttle Tours, L.L.C., Petitioners/Cross-Respondents, v. National Labor Relations Board, Respondent/Cross-Petitioner.
Judge PanelBefore Clement, Southwick, and Willett, Circuit Judges.
Case DateNovember 22, 2021
CourtUnited States Courts of Appeals, United States Court of Appeals (5th Circuit)

New York Party Shuttle, L.L.C., doing business as Onboard Tours; Washington DC Party Shuttle, L.L.C., doing business as Onboard Tours; OnBoard Las Vegas Tours, L.L.C., doing business as Onboard Tours; NYC Guided Tours, L.L.C.; Party Shuttle Tours, L.L.C., Petitioners/Cross-Respondents,


National Labor Relations Board, Respondent/Cross-Petitioner.

No. 20-61072

United States Court of Appeals, Fifth Circuit

November 22, 2021

Petition for Review of an Order and Decision of the National Labor Relations Board NLRB No. 20-61072

Before Clement, Southwick, and Willett, Circuit Judges.

Edith Brown Clement, Circuit Judge

After New York Party Shuttle, LLC ("NYPS") fired Fred Pflantzer for attempting to unionize, the NLRB held an unfair labor practice proceeding. The Board concluded that NYPS committed an unfair labor practice and ordered NYPS to reinstate Pflantzer and make him whole. NYPS appealed the Board's liability finding but failed to file an opening brief;


thus, we entered a default judgment against NYPS. The Board then held a compliance proceeding to determine damages. At that proceeding, an ALJ awarded some $91, 000 in backpay to Pflantzer. Petitioners now appeal the Board's backpay award, arguing multiple grounds for reversal. We affirm in part and reverse and remand in part.


NYPS provided sightseeing bus tours in New York City. In October 2011, NYPS hired Fred Pflantzer to serve as a tour guide. As a tour guide, Pflantzer conducted three to four tours a week, with each tour lasting five to six hours. He was paid $20 an hour and approximately $35 in tips. Pflantzer also created his own tour company, New York See Tours, which he operated exclusively on Saturdays that he was not working for NYPS. In February 2012, NYPS terminated Pflantzer.

Following Pflantzer's termination, the NLRB held an unfair labor practice proceeding. According to NYPS, Pflantzer was an independent contractor who was discharged after management learned that he was operating a competing business. The NLRB rejected NYPS' version of events and instead determined that Pflantzer was an employee who was fired for talking to fellow employees about unionizing in violation of 29 U.S.C. § 158(a)(3) and (1). Based on this finding, the Board ordered NYPS to reinstate Pflantzer and make him whole. NYPS timely appealed.

On its unfair labor practices appeal, NYPS failed to file its opening brief. The court consequently entered default judgment against NYPS, thereby affirming the Board's 2013 merits order. It then denied NYPS'


subsequent motion for reconsideration. With the 2013 merits order affirmed and the mandate issued, the NLRB advanced to the compliance proceeding phase to determine damages.

During the compliance proceeding phase, the Board's regional director issued a compliance specification. The specification calculated the backpay NYPS owed Pflantzer. In the third amendment to the compliance specification, the director asserted that New York City Guided Tours, LLC ("NYCGT"), OnBoard Las Vegas Tours, LLC ("OBLV"), Party Shuttle Tours, LLC ("PST"), and Washington DC Party Shuttle, LLC ("DCPS") (collectively, "non-NYPS petitioners") were one single employer with NYPS.1 In response, petitioners filed a motion challenging, among other things: (1) the board's jurisdiction over the non-NYPS petitioners; and (2) the validity of the 2013 merits order given the holding in NLRB v. Noel Canning, 573 U.S. 513, 519 (2014). The Board rejected petitioners' challenge, dismissed petitioners' attempts to relitigate the underlying merits, and found that it lacked jurisdiction to modify the 2013 merits order. The compliance proceeding then went to a hearing before an ALJ.

At the hearing, the ALJ found that the backpay calculation was reasonable, petitioners constituted a single employer, and Pflantzer reasonably mitigated his damages. The Board affirmed the ALJ's rulings,


findings, and conclusions and adopted the recommended order. Petitioners again appealed, asserting this time, among other things, that: (1) they are not a single employer; (2) the Supreme Court's decision in Noel Canning, 573 U.S. at 519, voids the 2013 merits order; and (3) the backpay award is arbitrary, unreasonable, and without substantial evidence.


Congress afforded the NLRB broad discretion, with limited judicial review, when fashioning backpay awards. See Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203, 216 (1964). As such, the court should not disturb an order "unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act." Id. (quoting Va. Elec. & Power Co. v. NLRB, 319 U.S. 533, 540 (1943)). So long as the Board "was not arbitrary in the selection of [its backpay] formula, its choice may not be rejected." NLRB v. Charley Toppino & Sons, Inc., 358 F.2d 94, 97 (5th Cir. 1966).

Despite the discretion afforded to the Board, it does not receive a blank check. The court must ensure that the Board's factual findings are supported by "substantial evidence on the record considered as a whole." NLRB v. McCullough Env't Servs., Inc., 5 F.3d 923, 927 (5th Cir. 1993) (citing NLRB v. Delta Gas, Inc., 840 F.2d 309, 311 (5th Cir. 1988)). When findings of fact concern credibility determinations, however, the court defers to the Board and should only disregard a determination if it is contradictory, "based on an inadequate reason, or no reason at all." Id. at 928 (quoting NLRB v. Moore Bus. Forms, Inc., 574 F.2d 835, 843 (5th Cir. 1978)).



Because the Board's single employer finding necessarily affects our Noel Canning analysis, we review that finding first.2 We hold that substantial evidence supports the Board's single employer finding.

Several nominally separate business entities are considered "to be a single employer where they comprise an integrated enterprise." Alcoa, Inc. v. NLRB, 849 F.3d 250, 255 (5th Cir. 2017) (quoting S. Prairie Constr. Co. v. Loc. No. 627, Int'l Union of Operating Eng'rs, 425 U.S. 800, 802 n.3 (1976) (per curiam)). "To determine whether several entities are a single employer within the meaning of the Act, the Board looks to four factors: (1) common ownership; (2) interrelation of operations; (3) common management; and (4) centralized control of labor relations." Id. (citing Radio & Television Broad. Technicians Loc. Union 1264 v. Broad. Serv. of Mobile, Inc., 380 U.S. 255, 256 (1965) (per curiam)). No one factor is controlling, and all factors do not need to be present, but the last three factors are considered the most important. Id.; see also Oaktree Cap. Mgmt., L.P. v. NLRB, 452 Fed.Appx. 433, 438 (5th Cir. 2011) (per curiam) (citing Covanta Energy Corp., 356 NLRB 706, 726 (2011)) (same). Ultimately, single employer status "depends on 'all the circumstances of the case' and is characterized as an absence of an 'arm's


length relationship found among unintegrated companies.'" Alcoa, 849 F.3d at 255 (quoting NLRB v. DMR Corp., 699 F.2d 788, 791 (5th Cir. 1983)).


Substantial evidence supports the Board's finding that there is common ownership and financial control among petitioners. As the Board found and the record confirms, PST owns 100% of OBLV and NYCGT; 92.46% of NYPS; and nearly 99% of DCPS. Furthermore, Charles Thomas Schmidt-the CEO or former CEO of every involved company-owns 69.44% of Infinity Trade Capital, which respectively owns over 70% of PST. The Board also found that Schmidt exercises "almost unfettered control over the financial aspects of all five entities." Records demonstrate hundreds of banking transactions and expenditures through PST. Similarly, the Board found a significant amount of outstanding monetary loans from PST to DCPS, NYCGT, NYPS, and OBLV absent any formal loan agreements.

Government's exhibit 73 confirms the Board's finding of common financial control-although the Board itself did not rely on such evidence. In 2012, for instance, PST had a total of $866, 581.79 in outstanding loans to petitioners. In 2013, those outstanding loans rose to $1, 245, 892.44. And, by 2016, PST's outstanding loans rose to a total of $3, 189, 661.95. The Board concluded that its findings evidenced a lack of an arm's length relationship between petitioners, which, in turn, evidenced common ownership and financial control. Thus, notwithstanding petitioners' claim that "no two petitioners have common ownership, "-which Schmidt's own testimony at the compliance proceeding directly contradicted-the Board's finding of


common ownership is supported by substantial evidence. See Spurlino Materials, LLC v. NLRB, 805 F.3d 1131, 1142 (D.C. Cir. 2015) (noting that common ownership need not be absolute, just substantial, and that no particular corporate structure is required).


The Board also found an interrelation of operations between all five petitioners, which substantial evidence supports. To determine whether there is an interrelation of operations, the Board considers, among other things, "whether the subject entities hold themselves out to the public and employees as a single business and whether the [entities] actually deal with one another at arm's length." Alcoa, 849 F.3d at 256 (citations omitted).

In support of its determination that there is an interrelation of operations between petitioners, the Board found that: I. Company buses from NYPS, DCPS, and even OBLV were transferred between companies during busy seasons;

II. A PST employee established a call center in Houston to accept calls from NYPS, DCPS, and OBLV customers;

III. The same call center was used to monitor sales agents and provide training;

IV. The OnBoard website included information and promotions for NYPS, DCPS, OBLV, and NYCGT;

V. Less than arm's length loans were routinely transacted between petitioners;

VI. Policies, procedures, employee conduct guides, training, and even uniforms overlapped between...

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