Waterbury Hotel Management, LLC v. N.L.R.B.

• Decision Date: 14 January 2003
• Docket Number: No. 01-1403.,01-1403.
• Parties: WATERBURY HOTEL MANAGEMENT, LLC and Waterbury Hotel Equity, LLC, Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — District of Columbia Circuit

314 F.3d 645

WATERBURY HOTEL MANAGEMENT, LLC and Waterbury Hotel Equity, LLC, Petitioners, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 01-1403.

United States Court of Appeals, District of Columbia Circuit.

Argued November 18, 2002.

Decided January 14, 2003.

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On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board.

Scott V. Kamins argued the cause for petitioner. With him on the briefs were Jay P. Krupin and D. Jay Sumner. Alison N. Davis entered an appearance.

David A. Fleischer, Senior Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Arthur F. Rosenfeld, General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Fred L. Cornnell Jr., Supervisory Attorney.

Before: SENTELLE, HENDERSON and TATEL, Circuit Judges.

Opinion for the Court filed by Circuit Judge TATEL.

TATEL, Circuit Judge:

The purchaser of a unionized hotel petitions for review of the National Labor Relations Board's finding that it committed unfair labor practices in an effort to prevent further union activity at the hotel. Finding the Board's determinations consistent with the National Labor Relations Act and supported by substantial evidence, we deny the petition for review and grant the Board's cross-application for enforcement.

I.

The Waterbury Sheraton Hotel was first opened in the mid-1980s by owners Joseph and Loretta Calabrese. The Calabreses also owned a hotel management company, JLM, Inc., which ran the hotel under a lease with the Calabreses. In 1995, Local 217, Hotel and Restaurant Employees and Bartenders Union, AFL-CIO, was certified as the bargaining representative of the hotel's service, front desk, restaurant, and maintenance employees.

When the Calabreses declared personal bankruptcy in 1994, Prudential Insurance Company, which held a mortgage on the hotel property, began foreclosure proceedings. JLM continued to operate the hotel for a short period, but it too filed for bankruptcy, and the bankruptcy court appointed a trustee who took over day-to-day operations of the hotel. In the meantime, Prudential solicited and ultimately secured a purchase offer from New Castle, LLC, a company that owns, operates, and develops hotels and resorts throughout the United States and Canada. New Castle acquired the facility, then operating as a mid-market Sheraton Four Points hotel, with the intention of converting it to a more upscale, four-star operation. To run the hotel, New Castle set up two subsidiaries, Respondents Waterbury Hotel Equity and Waterbury Hotel Management, to which we shall refer as "Waterbury."

Although the purchase and sale agreement, signed in November 1996, providedthat Waterbury would "have no obligation to hire any of the employees currently employed at the Hotel property," New Castle President David Buffam and other company representatives repeatedly assured the trustee that Waterbury would interview current hotel employees. When the trustee organized an on-site job fair at which potential employers could interview the hotel's employees, however, Waterbury refused to participate.

As it turned out, Waterbury had plans for its own job fair, which it conducted over three days in late January. At the fair, applicants were first interviewed by "screeners," who would either reject them or pass them on for first, and perhaps second, substantive interviews. In the end, Waterbury hired 65 employees for positions within the bargaining unit, 20 of whom had worked for the old hotel. The company interviewed and rejected 62 other incumbent employees, including all members of the Union's negotiating committee. Among those hired were three Yale undergraduates and one recent graduate whom, unbeknownst to Waterbury, the Union had asked to apply for jobs. Waterbury later fired two of the undergraduates for wearing union buttons in violation of the hotel's dress code. One week later, it fired the recent graduate for job abandonment.

The Union filed unfair labor practice charges, alleging that Waterbury violated sections 8(a)(1), (a)(3), and (a)(5) of the National Labor Relations Act by discriminatorily refusing to hire incumbent hotel employees, unilaterally setting initial terms and conditions of employment without bargaining with the Union, and discharging the three Yale students because they supported the Union. See 29 U.S.C. § 158(a)(1), (a)(3), (a)(5). After a hearing, the Administrative Law Judge found in favor of the Union. The Board adopted the ALJ's findings and conclusions, as well as his recommended order. Waterbury Hotel Mgmt. LLC, 333 N.L.R.B. No. 60, 2001 WL 252753, 2001 NLRB LEXIS 136 (Mar. 9, 2001). Waterbury petitions for review, and the Board cross-applies for enforcement.

II.

As we often observe, our role in reviewing decisions of the National Labor Relations Board is limited. We will set aside the Board's decision only if the Board "acted arbitrarily or otherwise erred in applying established law to the facts at issue, or if its findings are not supported by substantial evidence." Plumbers & Pipe Fitters Local Union No. 32 v. NLRB, 50 F.3d 29, 32 (D.C.Cir.1995) (internal quotation marks and citations omitted). With this highly deferential standard of review in mind, we consider each of Waterbury's challenges to the Board's decision.

ALJ Bias

We begin with the company's claim that the ALJ deprived it of a fair hearing. According to Waterbury, the ALJ, who had presided over a previous hearing concerning the hotel, at which he found that the Calabreses' management company had committed unfair labor practices, J.L.M., Inc., 312 N.L.R.B. 304, 1993 WL 379853 (1993), enforced in part, 31 F.3d 79 (2d Cir.1994), erred by not disclosing this source of potential bias. But if, as the Supreme Court has held, an ALJ is not disqualified from presiding over the remand of a case in which he previously ruled against the same employer, NLRB v. Donnelly Garment Co., 330 U.S. 219, 236-37, 67 S.Ct. 756, 765-66, 91 L.Ed. 854 (1947), then New Castle could not have obtained the ALJ's disqualification simply because he had ruled against a different employer, Waterbury's predecessor, in an unrelated case.

Waterbury next claims that the ALJ's bias is evident in his decision to adopt the Board's post-hearing brief more or less verbatim. Although we have held that wholesale cutting and pasting from proposed findings and conclusions warrants particularly close scrutiny, Berger v. Iron Workers Reinforced Rodmen Local 201, 843 F.2d 1395, 1407-08 & n. 3 (D.C.Cir.1988) (per curiam), we have never held, as Waterbury insists, that this practice alone demonstrates impermissible bias, id.; see also Anderson v. Bessemer City, 470 U.S. 564, 572, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985) ("[E]ven when the trial judge adopts proposed findings verbatim, the findings are those of the court and may be reversed only if clearly erroneous."). In this case, we are satisfied that the Board, recognizing that the ALJ had made extensive use of the General Counsel's brief, gave the ALJ's findings the appropriate scrutiny: It "independently reviewed the entire record, including the judge's decision, in consideration of the exceptions and briefs." Waterbury Hotel Mgmt., 333 N.L.R.B. No. 60, 2001 WL 252753, at *1, 2001 NLRB LEXIS 136, at *6.

Finally, Waterbury detects bias in the ALJ's decisions to disallow or ignore evidence tending to rebut the Board's case. In each instance Waterbury cites, however, the ALJ actually admitted the evidence, but determined — reasonably, we believe — either to discredit the evidence or that it was entitled to little weight. Such adverse rulings alone hardly demonstrate "that the ALJ had a fixed opinion — a closed mind on the merits of the case." Pharaon v. Bd. of Governors of the Fed. Reserve Sys., 135 F.3d 148, 155 (D.C.Cir.1998) (internal quotation marks and citations omitted).

Unlawful Hiring Practices

NLRA section 8(a)(3) makes it an unfair labor practice for an employer to discriminate in hiring or in other employment decisions in order to encourage or discourage membership in a labor union. 29 U.S.C. § 158(a)(3). This prohibition of discriminatory hiring extends to employers that take over another business. Although under no obligation to hire predecessor employees, such employers may not lawfully refuse to hire them because of their union affiliation. Howard Johnson Co. v. Detroit Local Joint Executive Bd., Hotel & Restaurant Employees, 417 U.S. 249, 262 & n. 8, 94 S.Ct. 2236, 2243 & n. 8, 41 L.Ed.2d 46 (1974); accord Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1005 (D.C.Cir.1998).

To establish a section 8(a)(3) violation, the Board must first determine "whether the employer's actions are motivated by anti-union considerations." Teamsters Local Union No. 171 v. NLRB, 863 F.2d 946, 955 (D.C.Cir.1988) (internal quotation marks and citation omitted). The Board may rely on both direct and circumstantial evidence in resolving this question of fact. Id.; Elastic Stop Nut Div. of Harvard Indus. v. NLRB, 921 F.2d 1275, 1280 (D.C.Cir.1990). Once the General Counsel has established that the employer was in fact motivated by anti-union animus, the Board must find a violation of the Act unless the employer can show that "it would have taken the [same] action regardless of the existence of such animus." Elastic Stop Nut, 921 F.2d at 1280; see also NLRB v. Transp. Mgmt. Corp., 462 U.S. 393, 403-04, 103 S.Ct. 2469, 2475-76, 76 L.Ed.2d 667 (1983), aff'g Wright Line, 251 N.L.R.B. 1083, 1980 WL 12312 (1980), enforced, 662 F.2d 899 (1st Cir.1981).

The record in this case contains substantial, unrebutted evidence that Waterbury's hiring decisions were motivated by anti-union animus. The trustee, whom the ALJ credited, testified that New Castle President David...