New Concepts for Living, Inc. v. Nat'l Labor Relations Bd.

• Docket Number: 22-3301,22-3426
• Decision Date: 04 March 2024
• Citation: New Concepts for Living, Inc. v. Nat'l Labor Relations Bd., 94 F.4th 272 (3rd Cir. 2024)
• Parties: NEW CONCEPTS FOR LIVING, INC., v. NATIONAL LABOR RELATIONS BOARD. New Concepts for Living, Inc., Petitioner in No. 22-3301 National Labor Relations Board Petitioner in No. 22-3426.
• Court: U.S. Court of Appeals — Third Circuit

94 F.4th 272

NEW CONCEPTS FOR LIVING, INC., v. NATIONAL LABOR RELATIONS BOARD

New Concepts for Living, Inc., Petitioner in No. 22-3301

National Labor Relations Board Petitioner in No. 22-3426

Nos. 22-3301 and 22-3426

United States Court of Appeals, Third Circuit

Argued September 28, 2023

Filed: March 4, 2024

On Petition for Review from a decision of the National Labor Relations Board Nlrb Nos: 1:22-CA-187407; 1:22-CA-195819; 1:22-CA-197088; 1:22-CA-205843; 1:22-CA-208390.

Maurice Baskin [ARGUED], Emily Carapella, Littler Mendelson, 815 Connecticut Avenue NW, Suite 400, Washington, DC 20006, Counsel for New Concepts for Living, Inc.

Ruth E. Burdick, Elizabeth A. Heaney, Joel Heller [ARGUED], National Labor Relations Board, Appellate and Supreme Court Litigation Branch, 1015 Half Street SE, Washington, DC 20570, Counsel for the National Labor Relations Board.

Before: KRAUSE, AMBRO, and SMITH, Circuit Judges

OPINION OF THE COURT

SMITH, Circuit Judge.

New Concepts for Living, Inc. ("New Concepts") seeks review of an order of the National Labor Relations Board ("NLRB" or the "Board") determining that New Concepts engaged in unfair labor practices by pushing to decertify its employees' union. An administrative law judge ("ALJ") dismissed all eight charges against New Concepts. Although the Board affirmed the ALJ's dismissal of three of those charges, the Board reversed his dismissal of five others by a two-to-one vote. New Concepts petitioned for review, and the NLRB cross-petitioned for enforcement. After a thorough review of the record, we hold that the Board majority's five reversals are not supported by substantial evidence. We will therefore grant New Concepts' petition for review and deny the NLRB's cross-application for enforcement.

I. Factual Background

New Concepts is a nonprofit corporation that provides services for people with disabilities at several facilities located in northern New Jersey. In 2007, the Communications Workers of America, Local 1040 (the "Union"), began representing a bargaining unit of approximately 90 New Concepts employees. The most recent collective bargaining agreement ("CBA") between New Concepts and the Union ("the parties") expired on June 30, 2014. Thereafter, for nearly two years, a series of Union representatives failed to request that New Concepts commence negotiations aimed at reaching a successor agreement. The result of that inactivity was that members were, understandably, dissatisfied with their Union.

In August 2016, the parties began negotiations to reach a successor agreement. Around the same time, momentum was building to decertify the Union. Specifically, New Concepts employee Andre Marshall and several other employees gathered signatures from coworkers on a petition in support of decertification. Although the negotiations that had begun in August did not result in a new CBA, the parties did agree to meet again in late October 2016.

Meanwhile, New Concepts CEO Steve Setteducati spoke at a series of staff meetings in October and answered questions posed by employees. In the wake of those meetings, Marshall filed a decertification petition with the NLRB. New Concepts then informed the Union that it would suspend bargaining, reasoning that the petition gave rise to a good faith doubt that the Union was actually supported by a majority of the unit. The NLRB scheduled a decertification vote which, in turn, led the Union to file an unfair labor practice charge. Filing of the charge blocked further processing of the petition and resulted in an indefinite postponement of the vote. Marshall then chose to withdraw the decertification petition.

On December 28, 2016, New Concepts distributed to its employees a memorandum (the "December Memo") which informed them of their right to resign from the Union. The December Memo began by stating that New Concepts had "received numerous questions" from employees concerning the deduction of union dues from their paychecks. R. 1434. The Memo went on to state that more than two years had passed since the CBA had expired and that the employees' payment of dues remained voluntary. Id. The Memo also cautioned that "[employees] have the right to resign from membership in the Union and [from] paying dues at any time, BUT the Union may take the position that [they] can only revoke ... [dues] deduction authorizations twice a year." That meant, the Memo explained, that if employees chose not to revoke authorization by December 30, "[they] may be forced to pay Union Dues for another 6 months." Id. The Memo assured employees that there would be "no reward for stopping Union Dues or punishment for continuing to pay Union Dues." Id. Attached to the December Memo was a form letter titled "Resignation/Dues Revocation Letter." R. 1432. Addressed to both the Union and New Concepts, the form letter provided a means for those who signed it to "resign from membership in CWA Local 1040[,]" reiterated that the employee understood that resignation would "have no effect on [his/her] employment[,]" stated that resignation required that "both the union and the company ... immediately cease enforcing the dues check-off authorization[,]" and noted that "payment of union dues" was a requirement of membership. Id.

Approximately 90% of the employees (80 individuals) signed and returned the form letter to New Concepts, which, in turn, forwarded the letters to the Union. Though the Union regarded the form letter as not binding, it nonetheless suspended the collection of dues from all employees, whether or not they had signed the form letter.

The parties resumed bargaining in January 2017 and continued those efforts through much of that year. It "is undisputed" that, throughout this time, New Concepts "push[ed] for negotiations to move faster" and for bargaining sessions to take place more frequently. J.A. 41. Still, no final agreement was reached.

For its part, the Union attempted — unsuccessfully — to revive support among unit members. Union employee Donna Ingram led those efforts. She candidly acknowledged that members "were dissatisfied" with prior enforcement of the contract and with the "complete lack of communication" from those who had served previously as union representatives. R. 3187. And despite efforts by the Union to revive support after the decertification petition was withdrawn, Ingram conceded that the "reception by employees was not positive." R. 3188. For example, the "Union was turned away by employees on multiple occasions both at employee facilities and from the employees' individual residences." R. 3188-89. Ingram also attempted to gather new authorization forms throughout 2017. And although she claimed to have received a few dozen authorization cards in response to her efforts, she "acknowledged she was only speculating" as to that estimate and admitted "that some of those were likely duplicates." R. 3189. By August 2017, "only a handful of employees" remained who had "actually authorized dues to be deducted, with nearly every employee having already requested in writing" that their deductions cease. Id.

On August 15, 2017, Setteducati distributed to employees a memorandum (the "August Memo" and, together with the December Memo, the "Memos") instructing them on how they could resume or start paying dues. R. 1435. The August Memo began by reminding employees that New Concepts had, in 2016, received "numerous questions" from employees about dues deductions, and that since then, "over 95%" of New Concepts employees, including both "new" and "long term staff," had chosen not to pay dues. Id. The August Memo went on to explain the impetus behind its having been sent: to rebut the Union's allegation that New Concepts, through the distribution of the December Memo, had "'coerced' employees into not paying Union Dues." Id. Setteducati wrote: "As you know, that's just not true. BUT, to prove that, [New Concepts is] attaching to this memo [an authorization form] that you can sign and return if you want to start paying Union Dues." Id. (emphasis in original). The August memo re-emphasized that the payment of dues was voluntary and that there would be "no reward for NOT paying Union Dues" nor "punishment for resuming or starting to pay" dues. Id. (emphasis in original). Despite the information and assurances provided to employees in the August Memo, New Concepts did not receive any completed cards authorizing the payment of union dues.

In September 2017, New Concepts announced its intention to poll employees as to their support for the Union. By letter, New Concepts informed the Union that it had a good faith doubt of the Union's majority status. Specifically, New Concepts pointed to: (1) unit employees' lack of participation at bargaining sessions; (2) the fact that nearly every employee had elected to stop paying dues; (3) the fact that no employees opted to resume dues deduction after New Concepts circulated the August Memo; and (4) the claim that roughly 50% of unit employees had backed Marshall's decertification petition. The poll was conducted on September 21 and mimicked the process used in an NLRB election. Voting was by secret ballot and included oversight by a retired judge. The Union declined an invitation to participate in any way or to even have an observer present. With approximately 85 employees remaining eligible to participate in the election, the Union lost the vote by 61 to 9. New Concepts then withdrew its recognition of the Union based on what it described as the "overwhelming" results of the poll. R. 2531.

II. Procedural History

The NLRB's General Counsel filed a complaint against New Concepts alleging, in eight respects, that New Concepts violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (the "Act"). 29 U.S.C. § 158(a)(1), (5). The General Counsel alleged that: (1) Setteducati's October 2016 employee meetings unlawfully encouraged support for the decertification petition; (2) Setteducati unlawfully led...