Lead Opinion
with whom SMITH, Chief Judge, WOLLMAN, RILEY, GRUENDER, and SHEPHERD, Circuit Judges, join.
MikLin Enterprises, Inc. (“MikLin”) petitions for review of a National Labor Relations Board (“Board”) Order holding that MikLin violated Sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act (“NLRA” or “the Act”), 29 U.S.C. §§ 158(a)(1) and (3), when it (i) discharged and disciplined employees who publicly distributed posters suggesting that Mik-Lin’s “Jimmy John’s” sandwiches posed a health risk to consumers; (ii) solicited employees to aid in removing the posters; (in) encouraged employees to disparage a union supporter; and (iv) removed union literature from in-store bulletin boards. MikLin argues that the Board misapplied governing law and its decision is not supported by substantial evidence. The Board cross-petitions for enforcement of its Order. A divided panel enforced the Order in its entirety. We granted rehearing en banc and vacated the panel decision. We now conclude that the means the disciplined employees used in their poster attack were so disloyal as to exceed their right to engage in concerted activities protected by the NLRA, as construed in a controlling Supreme Court precedent, NLRB v. Local Union No. 1229, IBEW,
I. Background.
A. The “Sick Day Posters” Campaign. MikLin is a family enterprise that owns and operates ten Jimmy John’s sandwich-shop franchises in the Minneapolis-St. Paul area. Michael Mulligan is president and co-owner; Robert Mulligan, his son, is vice-president. In 2007, several MikLin workers began an organizing campaign seeking representation by the Industrial Workers of the World (“IWW”) union. The IWW lost a Board-conducted election in October 2010, filed unfair labor practice charges and objections to the election with the Board, and continued its organizing campaign by urging MikLin to provide employees holiday pay in late 2010. On January 10, 2011, MikLin and the IWW settled the IWW’s objections. MikLin admitted no wrongdoing but agreed to a Board-conducted rerun election if the IWW filed for'the election after sixty days but not later than after eighteen months.
With the holiday season passed,, the IWW decided its next “march on the boss” group action would be to demand paid sick leave. The IWW concluded that the approach of flu season was a good time to raise the issue. At this time, MikLin’s handbook required any employee who would be absent from a shift to find a replacement and notify the store manager. Rule 11 of Jimmy John’s Rules for Employment, which employees received when hired, stated: “Find your own replacement if you are not going to be at work. We do not allow people to simply call in sick! We require our employees and [managers] to find their own replacement! NO EXCEPTIONS!” Failure to follow this procedure resulted in termination. MikLin did not offer paid leave for sick employees, though an employee with sufficient tenure was entitled to paid leave to care for a sick child.
Organizers of the IWW sick leave campaign began their attack in late January
MikLin managers quickly removed the posters from store bulletin boards. On the morning of March 10 — the day before the IWW could request a rerun election— IWW supporters distributed a press release, letter, and the sandwich poster to more than one hundred media contacts, including local newspapers and major news outlets such as the Associated Press, Reuters, Bloomberg, and NBC News. The press release highlighted “unhealthy company behavior.” Its second sentence framed the message: “As flu season continues, the sandwich makers at this 10-store franchise are sick and tired of putting their health and the health of their customers at risk.” The release declared: “According to findings of a union survey, Jimmy John’s workers have reported having to work with strep throat, colds and even the flu.” The release ended with a threat: if Robert and Michael Mulligan would not talk with IWW supporters about their demands for paid sick leave, the supporters would proceed with “dramatic action” by “plastering the city with thousands of Sick Day posters.”
Employees attached to the press release a “sick leave letter” to the Mulligans which asserted that health code violations occur at MikLin stores nearly every day. The employees complained: “By working sick, we are jeopardizing the entirety of [the company’s] image and risking public safety.” The letter accused MikLin of refusing to put customers first, risking customers’ health, and “shoving [customers] to the bottom of the well of importance.” Like the press release, the letter concluded with a threat: if the Mulligans would not meet the employees’ demands, the campaign would “move forward with [its] Sick Day posters by posting them not only in stores, but on the University’s Campus, in hospitals, on street corners, and any other place where postings are common, eitywide.”
Also on March 10, four organizers met with Robert Mulligan. They told Mulligan that MikLin’s attendance policy and low wages pressured employees to work while sick. Mulligan said MikLin was in the process of reforming its policies. The organizers provided Mulligan a printed version of their letter and press release and warned that, unless MikLin took action to fix the sick day policy within ten days, employees would display sandwich posters throughout the area. Employees who attended felt they had achieved some “common ground.”
MikLin posted a new sick leave policy in each store on March 16. The new policy provided a sliding scale of disciplinary points for absences. An employee who did not report but found a replacement would receive no points. An absent employee who
On March 20, IWW supporters implemented their threat to plaster the city with a new version of the Sick Day posters they had placed in MikLin stores in January and February. The bottom of the publicly distributed posters incorporated one change: rather than asking for support of the employees’ request for paid sick leave, the public posters listed Robert Mulligan’s personal telephone number and instructed customers to call him to “LET HIM KNOW YOU WANT HEALTHY WORKERS MAKING YOUR SANDWICH!” A copy of the publicly distributed posters appears as Appendix A to this opinion. Organizers placed posters in various locations near MikLin stores, including lampposts, trash cans, and mailboxes. Robert Mulligan testified that he was “bombarded by phone calls” for close to a month from people who thought it was unsafe to eat at Jimmy John’s. Concerned about the effect on MikLin’s business, Mulligan and some managers took down the public posters. On March 22, MikLin fired six employees who coordinated the attack and issued written warnings to three who assisted.
The IWW continued its sick leave attack. In a press release issued a day after the terminations, a discharged employee stated: “It just isn’t safe — customers are getting their sandwiches made by people with the flu, and they have no idea.... [Rjather than safeguard public health and do the right thing for their employees and their customers, Jimmy John’s owners Mike and Rob Mulligan are trying to silence us.” On March 30, the IWW issued another press release stating that “[c]us-tomers have a right to know that their sandwich could be filled with germs,” that IWW members have a duty to speak out on this “public health issue,” and that employees “blew the whistle by posting 3000 copies of a poster advising the public of health risks at the sandwich chain.” The release quoted one employee as stating: “The unfettered greed of franchise owner Mike Mulligan and Jimmy John Liautaud himself jeopardizes the health of thousands of customers and workers almost every day. We will speak out until they realize that no one wants to eat a sandwich filled with cold and flu germs.”
B. The NLRB Proceedings. Following a two-day evidentiary hearing, the Board’s Administrative Law Judge (“ALJ”) concluded that MikLin violated Sections 8(a)(1) and 8(a)(3) of the Act. Citing prior Board decisions, the ALJ ruled that “Section 7 [29 U.S.C. § 157] protects employee communications to the public that are part of and related to an ongoing labor dispute,” such as the Sick Day posters and related press releases, unless they are “so disloyal, reckless, or maliciously untrue as to lose the Act’s protections.” To lose Section 7 protection, “an employee’s public criticism ... must evidence ‘a malicious
The ALJ found that the Sick Day posters were not maliciously untrue. While “it is not literally true that employees could not call in sick,” the ALJ observed, employees “are subject to discipline if they call in sick without finding a replacement.” Thus, the assertion, “SHOOT, WE CAN’T EVEN CALL IN SICK,” was “protected hyperbole.” The ALJ acknowledged record evidence that MikLin had served more than six million sandwiches over its ten-year existence and had been investigated by the Minnesota Department of Health only two times for food borne disease— once in 2006 and once in 2007, when the investigating sanitarian “noted overall compliance with food code requirements and no critical violations.” The ALJ found, however, “it is at least arguable that [Mik-Lin’s] sick leave policy subjects the public to an increased risk of food borne disease,” and MikLin “could have waged its own publicity campaign” to attract consumers. The ALJ made no mention of the false assertion in the open letter accompanying the IWW press release that health code violations occurred at MikLin stores nearly every day. Nor did the ALJ even attempt to analyze and apply the disloyalty principle of Jefferson Standard.
A divided panel of the Board affirmed the ALJ’s findings and conclusions. MikLin Enters., Inc., 361 N.L.R.B. No. 27, at *7 (2014). The majority concluded “that neither the posters nor the press release were shown to be so disloyal; reckless, or maliciously untrue as to lose the Act’s protection.” The public communications “were clearly related to the ongoing labor-dispute concerning the employees’ desire for paid sick leave.... Indeed, any person viewing the posters and press release would reasonably understand that the motive for the communications was to garner support for the campaign to improve the employees’ terms and conditions of employment by obtaining paid sick leave rather than to disparage [MikLin] or its product.” Nor were any of the statements maliciously untrue.
Turning to the question of disloyalty, the majority noted that “Board law has developed considerably in its approach to the question of employee disloyalty.” “To lose the Act’s protection as an act of disloyalty, an employee’s public criticism of an employer must evidence a malicious motive,” even if the-public communication “raise[s] highly sensitive issues such as public safety.” Accepting the majority’s summary of prior Board decisions, the dissenting Member would nonetheless have held the Sick Day posters and press release unprotected, because “it is well established that employees lose the Act’s protection if their means of protest are ‘flagrantly disloyal, wholly incommensurate with any grievances which they may have, and manifested by public disparagement of the employer’s product or undermining of its reputation,’” quoting Five Star Transportation, Inc.,
II. “Sick Day” Poster Issues.
It is well established that an employer commits an unfair labor practice if it discharges employees for engaging in concerted activities that are protected by Section 7 of the NLRA, including communications to third parties or to the public that seek to “improve their lot as employees through channels outside the immediate employee-employer relationship.” Eastex, Inc. v. NLRB,
A. In Jefferson Standard, the Court upheld the Board’s decision that a broadcasting station did not violate the Act when it fired technicians who distributed handbills “making a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.”
The Supreme Court, in affirming the Board, decided the case on broader grounds. After quoting the “for cause” language of Section 10(c), the Court declared that “[t]here is no more' elemental cause for discharge of an employee than disloyalty to his employer.” Jefferson Standard,
Even if the attack were to be treated, as the Board has not treated it, as a concerted activity wholly or partly within the scope of those mentioned in § 7, the means used by the technicians in conducting the attack have deprived the attackers of the protection of that section, when read in the light and context of the purpose of the Act.
Id. at 477-78,
The Supreme Court’s decision not to remand in Jefferson Standard made clear that the Court’s disloyalty ruling includes communications that otherwise would fall within Section 7 protection, if those communications “mak[e] a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.”
B. Board decisions applying Jefferson Standard initially recognized that employers may protect their businesses from detrimental product disparagement whether or not an employee attack referenced a labor dispute. See Patterson-Sargent Co.,
Though the Supreme Court’s interpretation of the NLRA in Jefferson Standard remains unchanged, “Board law has developed considerably in its approach to the question of employee disloyalty.” MikLin, 361 N.L.R.B. No. 27, at *5 n.18. In 1987, the Board articulated its modern interpretation: “Jefferson Standard held that employees may engage in communications with third parties in circumstances where the communication is related to an ongoing labor dispute and when the communication is not so disloyal, reckless, or maliciously untrue to lose the Act’s protection.” Emarco, Inc.,
The issue in this case is the Jefferson Standard disloyalty principle — Section 10(e) permits an employer to fire an employee for “making a sharp, public, disparaging attack upon the quality of the company’s product and its business policies, in a manner reasonably calculated to harm the company’s reputation and reduce its income.”
In our view, the Board fundamentally misconstrued Jefferson Standard in two ways. First, while an employee’s subjective intent is of course relevant to the disloyalty inquiry — “sharp, public, disparaging attack” suggests an intent to harm— the Jefferson Standard principle includes an objective component that focuses, not on the employee’s purpose, but on the means used — whether the disparaging attack was “reasonably calculated to harm the company’s reputation and reduce its income,”
Second, the Board’s definition of “malicious motive” for these purposes excludes from Jefferson Standard’s interpretation of Section 10(c) all employee disparagement that is part of or directly related to an ongoing labor dispute. While the employees “may have anticipated that some members of the public might choose not to patronize [MikLin’s] restaurants after reading the posters or press release,” the Board ruled, their public communications were protected activity because “there is no evidence that [their] purpose was to inflict harm on [MikLin].” Rather, “they were motivated by a sincere desire to improve their terms and conditions of employment.” MikLin, 361 N.L.R.B. No. 27, at *6. In other words, the Board refuses to treat as “disloyal” any public communication intended to advance employees’ aims in a labor dispute, regardless of the manner in which, and the extent to which, it harms the employer. As the Court held in Jefferson Standard that its disloyalty principle would apply even if the employees had explicitly related their public disparagement to their ongoing labor dispute,
By requiring an employer to show that employees had a subjective intent to harm, and burdening that requirement with an overly restrictive need to show “malicious motive,” the Board has effectively removed from the Jefferson Standard inquiry the central Section 10(c) issue as defined by the Supreme Court— whether the means used reflect indefensible employee disloyalty. This is an error of law. See George A. Hormel & Co. v. NLRB,
Rather than employee motive, the critical question in the Jefferson Standard disloyalty inquiry is whether employee public communications reasonably targeted the employer’s labor practices, or indefensibly disparaged the quality of the employer’s product or services. The former furthers the policy of the NLRA; the latter does not. See Jefferson Standard,
C. The Board argues, and our dissenting colleagues agree, that its decision is entitled to judicial deference under Chev
In the first place, we doubt the statement in Brand X even applies in this case, where the Board itself purported to interpret Jefferson Standard, not apply its own contrary interpretation of the proper interplay between Section 7 and Section 10(c) of the NLRA: “In protecting employee communications that are critical of the employer or its product where the communications relate to a labor dispute, the Board has adhered to the specific holding of Jefferson Standard, ... and its approach has been upheld by numerous courts.” MikLin, 361 N.L.R.B. No. 27, at *5. Brand X does not require a court to defer to an agency’s interpretations of judicial precedent. Numerous prior court of appeals decisions have held that the Board’s interpretation of judicial precedent “is not entitled to judicial deference.” N.Y., N.Y., LLC v. NLRB,
Second, it is far from settled that Brand X applies to prior decisions of the Supreme Court such as Jefferson Standard. See Brand X,
Third, the Court in Chevron recognized that statutory construction is first and foremost a judicial function: “If a court, employing traditional tools of statutory construction, ascertains that Congress had an intention on the precise question at issue, that intention is the law and must be given effect.”
Finally, it is important to recall that in Jefferson Standard the Court went beyond the Board’s ruling, based on Section 7, and defined the interplay between Section 7 and Section 10(c) of the Act. The Court noted that Section 10(c), part of the Labor Management Relations Act of 1947, commonly known as the Taft-Hartley Act, amended Section 10(c) so as to limit the Board’s authority to interfere with an employer’s right to discharge employees “for cause.”
D. Turning to the merits of this case, we review the Board’s factual findings for “substantial evidence on the record as a whole.” Cellular Sales of Mo., LLC v. NLRB,
The attack was “sharp,” proceeding “in a manner reasonably calculated to harm the company’s reputation and reduce its income.” Id. at 471,
Allegations that a food industry employer is selling unhealthy food are likely to have a devastating impact on its business, what the D.C. Circuit called the “equivalent of a nuclear bomb” in a labor-relations dispute. Diamond Walnut Growers,
The employees’ public claims about their employer’s product were also “materially false and misleading.” St. Luke’s,
From the array of possible tactics, the employees selected public communications that were sure “to harm [MikLin’s] reputation and reduce its income.” Jefferson Standard,
E. After learning that IWW supporters were about to “plaster” the area surrounding MikLin stores with Sick Day posters, Robert Mulligan posted this message on an employee-created “Jimmy John’s Anti-Union” Facebook page:
... [T]he IWW are threatening to put up thousands of posters that threaten our business and your jobs. They plan on doing this if we don’t meet with them which we will not do. I encourage anyone to take down any posters they may see around the twin cities. These posters are defamatory.
The ALJ concluded this post violated Section 8(a)(1) because its target, the sandwich posters, was concerted activity protected by Section 7. The Board affirmed the’ ALJ, one member dissenting. Section 8(a)(1) forbids employers to “interfere with, restrain, or coerce” employees in the exercise of their Section 7 rights. Because we conclude the posters were not protected Section 7 activity, substantial evidence does not support the Board’s decision. Soliciting employees to remove unprotected public communications did not “interfere with, restrain or coerce” employees in their exercise of Section 7 rights. We decline to enforce this portion of the Board’s Order.
III. Other Issues.
MikLin also appeals the Board’s conclusion that it committed two other violations of Section 8(a)(1) during the IWW’s organizing campaign in late 2010 and early 2011. “We will enforce the Board’s order as long as the Board correctly applied the law, and its findings are supported by substantial evidence, even if we might have reached a different decision on de novo review.” NLRB v. Rockline Indus., Inc.,
A. Facebook Postings by MikLin Supervisors. In response to the IWW’s public organizing campaign, a rank-and-file Mik-Lin employee created the “Jimmy John’s Anti-Union” Facebook page. Its membership grew to include Robert Mulligan, MikLin managers, and other employees who opposed the IWW. The Facebook page was open to viewing by anyone with a Facebook account, including IWW supporters and neutral employees.
Rene Nichols was assistant manager of the MikLin store where IWW-supporter David Boehnke worked. Nichols posted on the Facebook page listing Boehnke’s telephone number and suggesting that employees text Boehnke to “let him know
The ALJ ruled that Nichols’s posts violated Section 8(a)(1) by encouraging employees to harass Boehnke for protected activities. The Board affirmed that ruling and also ruled that managers Guerrero and Erickson violated Section 8(a)(1) by encouraging employees to disparage a union supporter. The Board found that Nichols’s posts, and the Guerrero and Erickson posts encouraging other employees to widely disseminate a degrading picture of an employee leader of the IWW, “would reasonably intimidate both Boehnke and other employees who would not want to be subject to the same kind of humiliation and ridicule, thereby dissuading them from supporting the Union.” MikLin, 361 N.L.R.B. No. 27, at *8.
Section 8(c) of the Act provides that “[t]he expressing of any views, argument, or opinion ... shall not constitute or be evidence of an unfair labor practice ... if such expression contains no threat of reprisal or force or promise of benefit.” “Accordingly, to violate Section 8(a)(1), a statement must contain a threat of reprisal or force or promise of benefit.” Greater Omaha Packing Co. v. NLRB,
We conclude that substantial evidence supports the Board’s conclusion that the supervisors’ public effort to disparage and degrade union leader Boehnke restrained or coerced MikLin employees in the exercise of their Section 7 rights, by causing other employees to fear they would incur similar treatment if they supported the IWW. Though we now hold that MikLin lawfully terminated Boehnke prior to most of these posts for his role in the Sick Day poster attack, the degrading posts targeted Boehnke for his general support of the IWW and thus coerced other employees not to engage in protected activity. We enforce this portion of the Board’s Order..
B. Removal of In-Store Union Literature. After the IWW lost the representation election, it filed unfair labor practice charges and objections to the election with the Board. The parties settled this dispute with a Board-approved “Stipulation to Set Aside Election” in which they agreed that the October 2010 election was set aside and the IWW could request a “Rerun Election.” The settlement included a provision that MikLin “does not admit to violating the National Labor Relations Act as alleged, and approval by the Regional Director does not constitute a determination that [MikLin] has violated the Act.”
At the evidentiary hearing, pro-union employee Travis Erickson testified that, after the settlement, MikLin posted on the employee “tack board” in the back of the store where Erickson worked the Notice to Employees required by the Stipulation and a posting giving MikLin’s “explanation to employees of what the settlement meant.” In response, Erickson posted on
The ALJ concluded that removal of the union materials’ violated Section 8(a)(1). The Board affirmed. On appeal, MikLin argues it had the right to prohibit this union literature because statements on the FAQ notice “were materially false representations of events, processes and outcomes of past NLRB proceedings, and were intended to undermine the authority of management,” citing Eastex,
Section 8(a)(1) makes it an unfair labor practice for an employer to “interfere with” employees in the exercise of their Section 7 rights, which include the right “to bargain collectively through representatives of their own choosing.” As the Supreme Court said in Central Hardware Co. v. NLRB,
includes both the right of union officials to discuss organization with employees, and the right of employees to discuss organization among themselves.... But organization rights are not viable in a vacuum; their effectiveness depends in some measure on the ability of employees to learn the advantages and disadvantages of organization from others.
“The inquiry under § 8(a)(1) is an objective one which asks whether, considering the entire factual context, the employer’s conduct reasonably tends to interfere with the employees’ exercise of their section 7 rights.” Mississippi Transp., Inc. v. NLRB,
Here, some MikLin employees engaged in a concerted organizing campaign that resulted in a contested election followed by the filing of unfair labor practice charges and election objections that were settled by a Board-approved Stipulation authorizing a Rerun Election. The record contains undisputed testimony that Mik-Lin posted its explanation of these NLRB proceedings on employee “tack boards” in the back of its stores and then removed the IWW’s responsive FAQ notice, explaining that “[y]ou guys can put up anything you want about who you are and what you stand for, but you’re not allowed to put up stuff talking about the election.” A more clear-cut ease of interfering with the employees’ Section 7 right to effectively communicate about their ongoing organizational activity is hard to imagine. While employees have no statutory right to use their employer’s bulletin boards, “where by policy or practice, the company permits employee access to bulletin boards for any purpose, section 7 ... secures the employees’ right to post union materials.” Roadway Exp., Inc. v. NLRB,
MikLin introduced no evidence supporting its implausible contention that removal of an IWW flyer that gave employees the union’s contrary interpretation of the
IV. Conclusion.
For the foregoing reasons, we grant enforcement of the Board’s Decision and Order except as to paragraphs 4, 5, and 6 of the Amended Conclusions of Law and paragraphs 1(d), 1(e), and 2(a)-(g) of the Order. We note that, after we enforced its order in part in Greater Omaha, the Board filed a proposed form of judgment, which we entered when the company filed no objection.
Notes
. On this issue, we disagree with the contrary conclusion of the panel majority in DirecTV, Inc. v. NLRB,
. To be unprotected on this ground, employee public statements must be "made with knowledge of their falsity or with reckless disregard for their truth or falsity.” MikLin, 361 N.L.R.B. No. 27, at *3 (quotation omitted). This standard derives from the Supreme Court’s decision in Linn v. United Plant Guard Workers of Am., Local 114,
. Of course, if employees actually harbor an intent to harm their employer’s business for improper motives, their conduct falls outside the protection Section 7 affords. See NLRB v. Red Top, Inc.,
. The Board did not cite Diamond Walnut Growers or St. Luke's, the most relevant circuit court authorities. It dismissed Coca Cola as Board precedent that "has been implicitly overruled.” MikLin, 361 N.L.R.B. No. 27, at *5 n.18.
. The Board majority emphasized "there is no evidence that the communications were made ‘at a critical time in the initiation’ of [Mik-Lin’s] business,” a fact present in Jefferson Standard. MikLin, 361 N.L.R.B. No. 27, at *6 (emphasis added). Either the Board was limiting Jefferson Standard to its facts — a clear error of law — or its interpretation of the evidence in this case was simply disingenuous. Employees' conscious decision to scare Mik-Lin customers during flu season was strong evidence of their intent to disparage MikLin "at a critical time.”
Concurrence Opinion
with whom BENTON, Circuit Judge, joins, concurring in the judgment.
As this case comes to us, MikLin Enterprises, Inc., does not challenge the standard applied by the National Labor Relations Board to determine whether concerted activities of an employee are so disloyal as to lose protection under Section 7 of the National Labor Relations Act. The company’s position, rather, is that the Board’s decision applying its standard in this case was unsupported by substantial evidence. I conclude that Mik-Lin’s argument has merit and therefore concur in the judgment.
The Board has interpreted the Act to mean that employee communications to third parties are unprotected by the Act if they are “flagrantly disloyal, wholly incommensurate with any grievance which [the employees] might have.” Valley Hosp. Med. Ctr.,
In my view, the Board’s conclusion blinks reality. The employees obviously intended to harm MikLin’s business: “[T]he main thrust of the contaminated-sandwich posters is to shock the public and create a generalized fear that consuming MikLin’s sandwiches will cause illness.” Id. at *12 (Johnson, M., dissenting in part). The majority opinion explains why the evidence compels a conclusion that the employees acted with malicious motive. The employees intentionally “cho[se] March as a ‘good time’ to launch their attack ‘because it was flu season.’ ” Ante, at 825. The posters, press release, and open letter included materially false and misleading statements implying that sandwich makers were working while sick in violation of the state health code. Id. at 825. “From the array of possible tactics, the employees selected public communications that were sure to harm [MikLin’s] reputation and reduce its income.” Id. (internal quotation omitted).
The substantial evidence standard of review affords the Board leeway in choosing between two fairly conflicting views of the evidence, but there are limits. See Endicott Interconnect Techs., Inc. v. NLRB,
Dissenting Opinion
with whom MURPHY, Circuit Judge, joins, dissenting in part.
I respectfully dissent from Part II of the court’s opinion.
A.
In 1953, the Supreme Court in Jefferson Standard created an exception from protection under Section 7 of the Act, introducing the concept that employees could be discharged “for cause” under Section 10(c) if they engaged in “disloyalty.” The court here concludes that Jefferson Standard set out an explicit test for determining disloyalty and asserts that the Board made an “error of law” by failing to apply the test properly. But Jefferson Standard did not set out a test to apply to determine whether an employer’s “cause for discharge” was “disloyalty to his employer.”
Jefferson Standard acknowledged that the “legal principle that ... disloyalty is adequate cause for discharge is plain enough,” but it left to the Board the “difficult[ ]” task of “determining whether, in fact, the discharges are made because of such a separable cause.”
1.
The court reads Jefferson Standard as stating that the technicians’ handbills would constitute unprotected disloyalty regardless of whether their distribution was “a concerted activity wholly or partly within the scope of those mentioned in § 7.” Id. at 477,
The Board did not look for a tangential connection or mere contemporaneousness with a labor dispute. Rather, in the first step of its analysis, the Board examined whether the communications themselves “indicate” that they are “expressly related to” or “directly linked to” an ongoing labor dispute. MikLin, 361 N.L.R.B. No. 27 at *3. The Board concluded that because they included the phrase “Help Jimmy John’s Workers Win Sick Days,” the posters and press release “clearly connected” the potential risk to the public of eating food prepared by sick employees to the central issue in the labor dispute. Id The Board asked not merely whether the communications were part of or related to a protected activity, but whether the communications indicated on their face a connection to an ongoing labor dispute. This distinction is an important one. While Jefferson Standard arguably found that the former communications can be unprotected disloyalty, it at least left open and arguably suggests that the latter communications should be protected by Section 7.
“[C]oncerted activity” can be “wholly or partly within the scope of’ protection under Section 7 without facially indicating a direct link to a labor dispute. Jefferson Standard,
Like Jefferson Standard, the Board draws a line between communications (like the handbills) that fall under Section 7 because they relate to or “coexist! ]” with a labor dispute — which can lose protection due to disloyalty — and those (like the poster and press release) that fall under Section 7 because they directly attack a labor practice of the company — which Jefferson Standard suggests may not lose protection based on disloyalty. Id. The Board here found the communications were not disloyal in part because the poster and press release explicitly attacked the company’s sick leave policy. MikLin, 361 N.L.R.B. No. 27 at *3. Its determination was based on a long-adhered-to rule, upheld by several courts, requiring that communications that disparage an employer’s product must directly reference a labor dispute in order to receive protection under Section 7. See Sierra Pub. Co.,
2.
The court also concludes that the Board overruled Jefferson Standard by requiring that an employee’s disparaging communication evidence a malicious motive to harm the employer. But this requirement does not come from Jefferson Standard. Me the Board acknowledges that the fust element of its test — that the communication indicate its direct relation to the labor dispute — originates from Jefferson Standard, MikLin, 361 N.L.R.B. No. 27 at *7, it makes no similar assertion with regard to the motive element. In fact, the Board cites only NLRB decisions in support of this requirement. Id at *5-6; see Veeder-Root Co.,
The Board’s reliance on motive is not an unreasonable interpretation of Section 7. Both the Supreme Court and our court have affirmed the centrality of motive in the disloyalty analysis. In NLRB v. Washington Aluminum Co.,
We went even further in NLRB v. Red Top, Inc.,
The Trial Examiner found that the committee was acting for improper and unprotected motives, that of causing Lassi-ter to be replaced as manager. The Board does not dispute this. While not expressing it clearly, the Board seems to be acting on the theory that the motivation of the employees is not determinative of the issue of whether they were engaged in a protected activity. This is not the case. It is difficult to even imagine that Congress intended the National Labor Relations Act to protect employee conspiracies against an unpopular manager. Thus the question of whether or not the three employees pressed their alleged grievances in good faith becomes vitally important.
Id. at 725-26. These cases establish that motive is not only relevant to the disloyalty analysis, it is “vitally important.” Id. at 726.
Relying solely on Jefferson Standard, the court asserts that by requiring employees to evince a motive to harm their employer, the Board has “effectively removed” an inquiry into the indefensibility of the means used by the employees. The Board’s decision here demonstrates that it did in fact examine the means used by the employees. The Board explained that the poster and press release were protected because they “did not use inflammatory language,” their “message did not stray from the context of the labor dispute,” and they “only suggested] the realistic potential for illness.” MikLin, 361 N.L.R.B. No. 27 at *7-8. It specifically examined the communications from an objective perspective, concluding that “any person viewing the posters and press release would reasonably understand that the motive for the communications was to garner support for the campaign to improve the employees’ terms and conditions of employment by obtaining paid sick leave rather than to disparage [MikLin] or its product.” Id. at *3. As the dissenting member explained, requiring a “disloyal malicious intent” does not subvert the Board’s examination of the means used because motive need not be independently proven; instead, it “may be inferred from the circumstances of a particular protest.” Id. at *12 (Johnson, M., dissenting in part); see, e.g., Five Star,
B.
When the Board adopts a standard that carries out its interpretation of the Act, its. reasonable rule is entitled to “considerable deference.” City Disposal Sys.,
At least as to the malicious motive element, traditional Chevron deference applies.
Applying Brand X here, it is evident that Jefferson Standard did not interpret Sections 7 or 10(c) to unambiguously foreclose the Board from considering whether the employee had malicious motive, nor did it unambiguously require the Board to look only at an employee’s means to determine whether an employee demonstrated detrimental disloyalty. See id. at 985,
The court refuses to follow Brand X, asserting it “would leave the Board free to disregard any prior Supreme Court or court of appeals interpretation of the NLRA.”
Furthermore, the court’s definition of the “critical question” that the Board and courts must address in disloyalty cases unjustifiably limits the protections of the Act. It sets up a dichotomy in which communications “reasonably targeted at the employer’s labor practices” are not disloyal, but those that “indefensibly disparage! ] the quality of the employer’s product or services” are disloyal. But this dichotomy finds no support in the case law
D.
In its merits analysis, the court criticizes the Board for requiring evidence of employees’ malicious motive, but the court’s merits analysis proves how crucial motive is to a disloyalty determination. The- court looks to several aspects of the employees’ intent: that they “cho[se] March as a ‘good time’ to launch” their campaign, they “understood” the importance of MikLin’s “ ‘clean’ public image” and yet directly attacked it, and they engaged in a “calculated, devastating” attack on MikLin’s product. As the court admits, the “[e]mployees’ conscious decision to scare MikLin customers ... was strong evidence of their intent to disparage MikLin....”
In any event, according the appropriate deference to the disloyalty standard applied by the Board, I cannot say that the Board erred in finding that the poster and the press release fell short of unprotected disloyalty. Considering both the employees’ subjective intent and the reasonableness of the means used, the Board found that the communications were directly tied to the dispute over MikLin’s sick-leave policy, and the employees questioned the health of the product in an effort to solicit the public’s support to change that policy. The communications described the quality of MikLin’s product only in terms of how it was affected by the lack of paid sick leave. The posters targeted an audience within a two-block radius of a MikLin store and identified the person the audience should contact to show support. The language used was not inflammatory, or intended to degrade or humiliate. Nonetheless, reasonable minds could, and did, differ as to whether the means used by the employees crossed the line from protected concerted activity into unprotected “detrimental disloyalty.” Jefferson Standard,
E.
Because I conclude that the posters were protected activity, I would accordingly find, deferring to the factual conclusions of the Board, that MikLin co-owner Robert Mulligan’s Facebook posting, which solicited employees to remove the posters, violated Section 8(a)(1).
Appendix A
. The court cites St. Luke's Episcopal-Presbyterian Hospitals, Inc.,
. The Board’s decision to incorporate motive into its disloyalty analysis is also supported by the plain language of the term: "disloyalty ... focus[es] on one’s subjective state of mind.” Branscomb, supra,
. Even though the Board adopted the first element of its disloyalty test — the direct link— from Jefferson Standard, Brand X may apply. Nothing in Brand X limits its application based on the origin of the agency’s test. See Branscomb, supra,
. Courts have held that Brand X applies to judicial precedent from the Supreme Court. See, e.g., United States v. Home Concrete & Supply, LLC,
.Although it is not entirely clear, the court does not appear to contest my conclusion that Jefferson Standard's disloyalty principle — to
. I recognize that the Hormel court came to a different conclusion.
. Brand X rejected the court’s interpretation of the cases it cites, stating that the conclusion that stare decisis required an agency to follow the court’s' construction of a statute was based on a "mistaken reading" of the cases.
.The court also asserts that Brand X does not apply where the Board is interpreting "a statute intended to limit the Board’s authority.” Nothing in Brand X — or any other case— supports such a limitation. In any event, “[tjhere is no indication ... that [Section 10(c)] was designed to curtail the Board’s power in fashioning remedies when the loss
. In support of this distinction, the court cites Diamond Walnut, where striking union workers distributed leaflets that "described Diamond's workforce as composed of 'scabs' who packaged walnuts contaminated with 'mold, dirt, oil, worms and debris.' ”
. Similarly, while the court expressly limits its legal analysis to the disloyalty exception, its merits analysis relies heavily on an unaddressed basis for losing the Act’s protection: its conclusion that the communications were maliciously untrue. Reasonable minds could conclude that alleged falsities in the poster and press release gave MikLin cause to discharge the employees, but such a conclusion does not rest on the court's definition of disloyalty. See Five Star,
