Nat'l Labor Relations Bd. v. CNN Am., Inc.

• Decision Date: 04 August 2017
• Docket Number: No. 15-1112,C/w 15-1209,15-1112
• Citation: 865 F.3d 740
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioner v. CNN AMERICA, INC., Respondent National Association of Broadcast Employees and Technicians–Communications Workers of America, Local Union No. 11 and National Association of Broadcast Employees and Technicians–Communications Workers of America, Local Union No. 31, Intervenors
• Court: U.S. Court of Appeals — District of Columbia Circuit

865 F.3d 740

NATIONAL LABOR RELATIONS BOARD, Petitioner

v. CNN AMERICA, INC., RespondentNational Association of Broadcast Employees and Technicians–Communications Workers of America, Local Union No. 11 and National Association of Broadcast Employees and Technicians–Communications Workers of America, Local Union No. 31, Intervenors

No. 15-1112

C/w 15-1209

United States Court of Appeals, District of Columbia Circuit.

Argued February 23, 2017

Decided August 4, 2017

Kannon K. Shanmugam, Washington, DC, argued the cause for CNN America, Inc. With him on the briefs were Kevin T. Baine, Paul Mogin, Washington, DC, and Zachary D. Fasman, New York, NY.

Maurice Baskin, Michael J. Lotito, San Francisco, CA, and Elizabeth Parry, Walnut Creek, CA, were on the brief for amici curiae Chamber of Commerce of the United States of America, et al. in support of CNN America.

Joan E. Hoyte–Hayes, Supervisory Attorney, National Labor Relations Board, argued the cause for the National Labor Relations Board. With her on the brief were Richard F. Griffin, Jr., General Counsel, John H. Ferguson, Associate General Counsel, and Linda Dreeben, Deputy Associate General Counsel. Usha Dheenan, Attorney, Ashland, OH, entered an appearance.

Keith R. Bolek, Washington, DC, argued the cause for intervenors. With him on the brief was Patricia McConnell, New York, NY.

Before: Garland, Chief Judge, and Kavanaugh and Pillard, Circuit Judges.

Opinion concurring in Parts II and V and dissenting in part filed by Circuit Judge Kavanaugh.

Garland, Chief Judge:

For many years, Cable News Network (CNN) used outside contractors to provide technicians to operate the electronic equipment at its Washington, D.C. and New York City bureaus. In 2003, CNN changed that longstanding arrangement, terminating its latest contracts and hiring a new in-house workforce. The National Labor Relations Board found that CNN's replacement of its unionized contractor with a nonunion, in-house workforce violated the National Labor Relations Act in several respects.

The Board now applies for enforcement of its decision and order. CNN cross-petitions for review. For the reasons set forth below, we grant each request in part and deny each in part.

I

CNN is a leading television and online news provider. Its Washington, D.C. and New York City bureaus, from their inception, relied on outside contractors to operate the equipment necessary to produce and broadcast the news. Pursuant to exclusive service contracts—known as Electronic News Gathering Service Agreements—camera operators, sound technicians, studio technicians, and broadcast engineers (hereinafter, "technicians") employed by the contractors performed much of the technical work at both bureaus.

Those technicians were consistently represented by a union. In 1982, the Board certified the National Association of Broadcast Employees and Technicians (hereinafter, "the union") as the collective-bargaining representative of the technicians staffing the Washington bureau. In 1985, the Board certified the same union to represent the New York bureau's technicians. Over the following years, the union and the contracting companies employing the technicians entered into successive collective-bargaining agreements. When CNN switched contracting companies—which happened several times—the new company would hire nearly all of its predecessor's employees and continue to recognize the union.

In 1997, Asgard Entertainment Group successfully bid for the Washington contract and created Team Video Services (TVS) for the sole purpose of staffing the Service Agreement with CNN. In 2001, Asgard won the New York contract, which it also serviced through TVS. The Service Agreements at the two bureaus were materially identical. Broadly, they required TVS to furnish CNN with technicians, as well as supervisors for those technicians, in exchange for CNN covering TVS' labor expenses and paying a monthly management fee. The Service Agreements provided that TVS would supply full-time technicians for at least 40 hours per week, in addition to part-time technicians available 24/7 as needed by CNN. They also provided that CNN: could require changes in TVS staffing levels; could audit TVS' books without cause or notice; would fund a 4% increase in salary expenses per year; would provide all equipment used by TVS technicians; and had the sole option to renew the agreement and could terminate it for any reason upon four weeks' notice.

On September 29, 2003, CNN announced that it was terminating its contracts with TVS and would begin directly hiring employees to perform the camera, studio, and engineering work at the Washington and New York bureaus. CNN expressed appreciation for TVS' performance and service. It said, however, that it wanted a new workforce to allow it to take advantage of technological developments in the industry, particularly computer-related technology. When the union requested recognition and bargaining, and asked to discuss future employment prospects for bargaining-unit employees, CNN denied the requests.

CNN named the process by which it would directly hire its new workforce the "Bureau Staffing Project." According to CNN executives, the company planned to use a multistep "behavioral interviewing process" to hire over 200 skilled technicians for the two bureaus. Former TVS employees could apply for the new jobs, but they would have to go through the Staffing Project's interviewing process. In the end, more than 100 TVS bargaining-unit employees were not hired and lost their jobs.

Three months after CNN officially terminated the Service Agreements, the union filed unfair-labor-practice charges with the National Labor Relations Board (NLRB). Three years later, in 2007, the Board's General Counsel filed his own complaint against CNN. In November 2008, after an 82–day trial, an administrative law judge (ALJ) ruled against CNN in an 83–page opinion.

The ALJ first determined that CNN had been a joint employer of TVS' employees before the termination of the Service Agreements and was thus bound by TVS' collective-bargaining agreements with the union. He further determined that CNN became a successor employer after it terminated TVS and hired a new workforce. The ALJ found that "the reasons given by CNN for its termination of its contracts with [TVS] and its implementation of the Bureau Staffing Project [were] pretextual. A major motive in these decisions was CNN's desire to operate its Washington and New York bureaus without a union." CNN America, Inc. , 361 NLRB No. 47, at 51 (2008) (ALJ Op.). The ALJ also found that "the Bureau Staffing Project was a sham process," during which "CNN engaged in widespread and blatant discrimination against [TVS] bargaining unit members." Id. at 50. "CNN did so," the ALJ found, "with the objective of depriving employees of [union] representation." Id. On the basis of these findings, and others discussed below, the ALJ determined that CNN committed multiple violations of the National Labor Relations Act (NLRA).

CNN appealed to the Board, which finally issued its decision in 2014, affirming the ALJ in all relevant respects. CNN America, Inc. , 361 NLRB No. 47, at 1 & n.1 (2014) (Board Op.). The Board found that, as a joint employer, CNN: violated NLRA § 8(a)(3) and (1), 29 U.S.C. § 158(a)(3), (1), by terminating the Service Agreements out of anti-union animus; and violated § 8(a)(5) and (1), id. § 158(a)(5), (1), by failing to bargain with the union about its decision to terminate those agreements. The Board further found that, as a successor employer, CNN violated § 8(a)(5) and (1) by failing to recognize and bargain with the union and unilaterally changing the employees' terms and conditions of employment. The Board also found that CNN: violated § 8(a)(3) and (1) by discriminating against union members in its hiring process; and violated § 8(a)(1) on four occasions by making coercive statements through its supervisors.

As a remedy for those violations, the Board ordered that, among other things, CNN: (1) provide backpay and benefits to all TVS technicians who either lost their jobs or received reduced wages as a result of CNN's violations; (2) reinstate and provide necessary training to all TVS technicians who were discharged and not hired by CNN; and (3) recognize and bargain with the union.¹

CNN filed a motion for reconsideration, which the Board denied. CNN America, Inc. , 362 NLRB No. 38 (2015). The Board now applies for enforcement of its decision and order, and CNN cross-petitions for review. The union has intervened in support of the Board.

II

The Board first had to decide whether CNN was a joint employer of TVS' employees. The Board's affirmative answer to that question led it to find that CNN committed two unfair labor practices: terminating the Service Agreements due to antiunion animus, in violation of § 8(a)(3) and (1); and failing to bargain with the union before terminating the Service Agreements, in violation of § 8(a)(5) and (1). If, as CNN argues, the Board wrongly concluded that CNN was a joint employer, then those two unfair-labor-practice findings must fall away. This is so because, if CNN was not a joint employer of TVS' employees, it would not have been bound by the collective-bargaining agreement between TVS and the union, and its termination of the Service Agreements would thus have been lawful. See Computer Assocs. Int'l, Inc. v. NLRB , 282 F.3d 849, 852–53 (D.C. Cir. 2002) ; see also Computer Assocs. Int'l, Inc. , 324 NLRB 285, 286 (1997) ("[A]n employer does not violate Section 8(a)(3) by ceasing to do business with another employer because of the union or nonunion activity of the latter's employees."), enforcement denied on other grounds , 282 F.3d 849 (D.C. Cir. 2002).

We conclude that the Board's determination that CNN and TVS were joint employers cannot stand. This is not because we find that the two companies lacked a joint-employer relationship. Rather, it is because the Board applied a standard for...