Lead Opinion
After agreeing to a representation election in which the union prevailed, employer SSC Mystic challenged the results. For the reasons set forth below, we reject each of Mystic’s arguments and affirm the decision of the National Labor Relations Board upholding the outcome.
I
SSC Mystic (Mystic) operates Pendleton Health & Rehabilitation, a nursing home in Mystic, Connecticut. On February 25, 2013, the Service Employees International Union, Local 1199 (Union), filed a petition with the National Labor Relations Board (NLRB) seeking to represent nurses at the facility. In response, the NLRB Regional Director issued a Notice of Election. The Union and the company entered a Stipulated Election Agreement that, among other things, provided that either party could ask the Board to review any decision the Regional Directors made. See 29 C.F.R. § 102.69(c). .
Mystic vigorously opposed the Union. Its campaign included posting anti-union material in the workplace and sending the material by mail to employees’ homes. Mystic also held meetings at work to make the case against the Union to its employees, who were required to attend. It also distributed anti-union bracelets for employees to wear.
Separately, a supervisor named Diane Mackin engaged in a campaign of urging employees to sign Union authorization cards and to vote for the Union in the election. She frequently discussed the virtues of organizing. To those who opposed the Union, Mackin would speak coldly or refuse to speak at all. Mackin also claimed that the Union would help her get her job back if Mystic fired her for her advocacy.
After an employee reported Mackin’s pro-union conduct to management, the company reprimanded her on March 12, 2013. Mystic explained to Mackin that her conduct violated her professional responsibilities as a supervisor and, more seriously, might be illegal pressure on employees in violation of the National Labor Relations Act (NLRA). Mystic warned Mackin that she would be fired if she did not end her support for the Union. Mystic then posted a notice in the workplace acknowledging, without identifying Mackin by name, that a supervisor had been involved in electioneering advocacy on behalf of the Union. In an effort to limit any effect Mackin’s conduct may have had on employees’ plans to vote, the notice explained that neither the company nor its supervisors intended to place pressure on employees. Despite all this, Mackin continued to openly advocate for the Union in the election and Mystic fired her on March 19, 2013.
The election continued for the next sixteen days. On April 4, 2013, the Union won the election. Of the 112 employees in the bargaining unit, 104 voted in the elec
Mystic filed objections to the election with the NLRB arguing principally that Mackin’s conduct had tainted the election so thoroughly that its result should be set aside. Mystic also alleged that Mackin was acting as an agent of the Union when she “polled” employees, or interrogated them regarding their support for the Union in a way that could coerce them and infringe on their free choice. Because Mackin .was allegedly acting as a Union agent, the company argued that the Union should be held responsible for that misconduct.
On May 8 and 9, 2013, an NLRB Hearing Officer held a hearing to consider Mystic’s objections. A party to a representation proceeding may apply for and receive a subpoena for the production of any evidence. 29 C.F.R. § 102.31. Exercising that power, Mystic subpoenaed any records of telephone calls between Mackin and the Union organizer assigned to the election. The Union opposed this subpoena. Mystic argued that it needed these records to prove that Mackin was a Union agent when she coercively interrogated employees regarding their support for the Union. The Hearing Officer refused to enforce the subpoena, concluding that records could not prove that Mackin was acting as the Union’s agent. Instead, the Hearing Officer directed the Union to produce the organizer himself to testify about his relationship with Mackin. The Union did not do so. Neither the parties nor the Hearing Officer mentioned the subpoéna or the organizer again on the record.
At the close of the hearing, the Hearing Officer upheld the election result, concluding that even though Mackin had exerted impermissible pressure on employees, her misconduct had not materially affected the outcome of the election. The Hearing Officer also rejected Mystic’s argument that Mackin was acting as a Union agent, reasoning that the company had failed to present any evidence supporting its claim. Finally, the Hearing Officer concluded that the Board should continue conducting elections and adjudicating disputes until the Supreme Court decided the legality of the Board’s composition in Noel Canning.
Mystic filed objections to the Hearing Officer’s ruling with the Board, arguing that the Hearing Officer’s findings and conclusion were in error. Nonetheless the Board ratified the Hearing Officer’s legal and factual determinations and certified the election result. SSC Mystic Operating Co., No. 01-RC-098982,
Once the Board had certified the election result, the Union asked Mystic to bargain, but the company refused. Accordingly, the Union filed an unfair labor practice charge against Mystic, alleging that its refusal to bargain violated the NLRA. See 29 U.S.C. § 158(a)(1), (5) (prohibiting an employer from refusing to bargain with representatives of its employees or interfering with employees’ rights to organize). The Board’s General Counsel issued a complaint and moved for summary judgment. In response, Mystic argued that the Hearing Officer erred in refusing to enforce Mystic’s subpoena and should have held that Mackin’s conduct impermissibly contaminated the election. For the first time, Mystic also raised the argument that the Regional Director, as opposed to the Board itself, had no power to conduct the representation election because he could not exercise the Board’s delegated authority when the Board had no quorum and could not act itself.
The Board granted summary judgment against Mystic on March 31, 2014. SSC Mystic Operating Co. LLC d/b/a Pendleton Health & Rehab. Ctr., 360 N.L.R.B. No. 68 (2014). The Board rejected Mystic’s arguments that the Hearing Officer had made substantive and procedural errors, finding that Mystic had not produced any arguments or evidence not already made and rejected when the Board certified the election result. The Board also rejected Mystic’s new argument that the Regional Director lacked authority to administer this representation election because the Board lacked a quorum. The Board interpreted the statute to mean that the Regional Directors “remain vested with the authority to conduct elections,” pursuant to the Board’s original delegation of that authority in 1961, “regardless of the Board’s composition at any given moment.” Id. at *1 n. 1.
Mystic filed a timely petition for review of the Board’s order, and the Board cross-applied for enforcement. We have jurisdiction under 29 U.S.C. § 160(e), (f).
On appeal, Mystic raises three challenges, each with its own standard of review. First, Mystic argues that the Board could not interpret the NLRA to permit Regional Directors to continue conducting elections when the Board lacked authority to act due to lack of a quorum. Absent plain meaning to the contrary, a court is obliged to defer to an agency’s reasonable interpretation of its statutory jurisdiction pursuant to the familiar Chevron doctrine. City of Arlington v. FCC, — U.S. -,
Second, Mystic argues that substantial evidence did not support the Hearing Officer’s decision to certify the election results. We review the substance of NLRB decisions under a “highly deferential standard” and will set them aside 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.’ ” Waterbury Hotel Mgmt., LLC v. NLRB,
Finally, Mystic challenges the Hearing Officer’s refusal to enforce its subpoena. We review refusals to enforce subpoenas for abuse of discretion. Joseph T. Ryerson & Son, Inc. v. NLRB,
A
Mystic insists that the Regional Director did not have authority to conduct this election because the Board had no quorum at the time the representation election took place. We disagree; as we recently explained in UC Health v. NLRB, No. 14-1049, slip op. at 8-19 (D.C.Cir.2015),
As an initial matter, the Board argues that Mystic waived this argument by failing to raise it during the representation proceeding. The Board made the same argument in UC Health, and we rejected it there. We do so here for the same reasons: Our precedents make clear that a challenge1 to agency action based on the agency’s lack of authority to take any action at all need not be raised below and may be made for the first time on appeal. See UC Health, No. 14-1049, slip op. at 6-7,
Mystic makes one additional argument on this score that we did not confront in UC Health. Mystic insists that Regional Director Jonathan Kreisberg did not have authority to conduct this election even if the Regional Directors as a class could do so. In 2010, Kreisberg was appointed as the Regional Director for Connecticut, which was at that time Region 34 of the NLRB’s regions. In 2012, while the Board lacked a quorum, the NLRB reorganized the regions and Kreisberg’s jurisdiction expanded to cover both Connecticut and Massachusetts, now identified as new Region 1. Mystic insists that because the Board had no quorum in 2012, it could not validly- appoint Kreisberg to his new post as the Regional Director of new Region 1 at that time.
The Board again argues that Mystic waived this argument because it was never made until the opening brief in this appeal. We disagree. Because this challenge and the argument that Regional Directors may not conduct elections while the Board lacks a quorum are both premised on the Board’s lack of authority to act, we believe both are properly before us no matter when they were first raised. Nonetheless we reject Mystic’s argument on the merits here as well. Mystic’s nursing home is located in Mystic, Connecticut, inside the boundaries of old Region 34, which covered Connecticut alone. Mystic does not and could not contest that Kreisberg was validly appointed to administer old Region 34. There may be some question whether the Board had authority in 2012 to expand
B
Mystic argues that Diane Mackin’s supervisory misconduct tainted the outcome of the election. We find that substantial evidence supports the Board’s conclusion to the contrary.
1
Section 7 of the NLRA secures the rights of employees “to form, join, or assist labor organizations, to bargain collectively through representatives uf their own choosing, and to engage in other concerted activities for the purpose of collective bargaining,” as well as to refrain from all such activities. 29 U.S.C. § 157. To ensure that employees are fully able to exercise their section 7 rights, the Board requires that elections take place under “laboratory conditions” free from coercion by the union or the employer. Harborside Healthcare, Inc.,
Of course, as a general matter, supervisors may be more likely to urge employees to oppose union organization than to support it because their interests are more aligned with those of the employer than those of the employees who seek to organize. However, pro-union supervisory conduct is just as impermissible because it poses the same risk of interfering with the free choice of employees. Harborside,
The Board measures the effect of a supervisor’s impermissible conduct by also taking into account any “mitigating circumstances” that may have “sufficiently negated” the coercive activities such that the election result was not materially affected. Veritas Health Servs., Inc. v. NLRB,
Separately, the Board also determines whether any anti-union effort by the employer itself had the effect of counteracting a supervisor’s pro-union conduct. Harborside,
The record is clear and both parties acknowledge that Mackin’s pro-union conduct satisfies the first step of the Har-borside analysis. Nonetheless, at the second step of Harborside, the Board reasonably determined that Mackin’s efforts did not materially affect the election’s outcome because Mystic adequately made up for them by disavowing Mackin’s conduct and by running its own anti-union campaign.
Substantial evidence supported this determination. Mystic required employees to attend anti-union meetings, sent materials to their homes, posted materials in the workplace, and even distributed anti-union bracelets for employees to wear at work as a way of showing their opposition to the Union. Mystic’s campaign was much like another employer’s efforts to defeat a un
Mystic argues otherwise by attempting to minimize the significance of each element of its own anti-union program. It insists that few employees saw the anti-union materials, attended the anti-union meetings, or understood the intent behind the anti-union bracelets. None of these challenges to the Board’s determination succeed. A number of employees testified that they received Mystic’s anti-union materials through the mail or saw them posted in the workplace, and one even testified that she knew of other employees who had discussed the materials during the election. Although some employees testified that the anti-union meetings were sparsely attended, there was also testimony that “a lot” of the staff attended a meeting at one point or another. And while one employee testified that she did not recognize Mystic’s anti-union bracelet, a number of other employees testified that they knew what the bracelets were for, wore bracelets themselves, and saw others wearing them. We cannot say that “no reasonable factfinder” could decide, as the Board did here, that Mystic’s campaign was effective at neutralizing Mackin’s pro-union advocacy. Kiewit Power Constructors Co. v. NLRB,
Substantial evidence also supported the conclusion that Mystic limited the effect of Mackin’s conduct when it posted a public notice that disavowed her pro-union behavior, discussed the notice at mandatory employee meetings, and ultimately fired her. See, e.g., Terry Machine, 356 N.L.R.B. No. 120, at *3 (finding that an employer’s “explicit disavowals” and “widely disseminated termination threat ... relieved any potential continuing pressure employees might have felt” from pro-union supervisory conduct). Mystic argues otherwise by suggesting that few employees ever saw the notice, that most employees did not attend the mandatory meetings and so would never have heard it discussed, and that any employees who were aware that the notice existed would not have realized it referred to Mackin because it did not identify her by name. We think the Board could reasonably reach the opposite conclusion on each count. Five employees testified that they saw the notice, and we have already noted that there was testimony indicating that “a lot” of employees attended the mandatory anti-union meetings at which the notice was discussed. One employee who saw the notice indicated that she knew the notice applied to Mackin in particular. Another testified that she understood the notice to refer to all supervisors who may have been inappropriately discussing the election — obviously including Mackin. Most significantly, Mackin told a number of employees around the time the notice was posted that
Even if employees somehow missed the existence or significance of the notice, they could not have misunderstood that Mystic was disavowing Mackin’s pro-union behavior when it took the much more dramatic step of firing her. Though some employ^ ees testified that they did not know why Mackin was terminated, the Hearing Officer specifically found, and the Board subsequently agreed, that this testimony was not credible. See SSC Mystic,
We also agree with the Board that Mac-kin’s firing limited the effect of her conduct despite the fact that she assured employees that the Union would help her get her job back. Mystic insists to the contrary that these assurances “blunted the impact” of Mackin’s discharge by leading employees to believe that she would return to the workplace and regain the power to retaliate against the Union’s opponents. But the opposite seems to be true. The record shows that several different employees who were subject to Mackin’s pro-union pressure ended up opposing the Union by the time of the election, two weeks after Mackin was fired. Whatever the immediate effect of Mackin’s campaign, employees who were among its targets were unafraid to oppose the Union after her discharge. And Mystic produced no evidence indicating that employees she pressured to support the Union actually did so. The Board was entitled to conclude from this that Mackin’s firing had broken whatever hold she might have exercised over employees.
In short, substantial evidence supports the Board’s conclusion that Mystic’s efforts to limit Mackin’s effectiveness and its own anti-union campaign cancelled out Mac-kin’s efforts on the Union’s behalf and preserved the environment necessary for a valid representation election.
The Hearing Officer also noted that a number of other factors diminished the likelihood that Mackin influenced the election result. For example, Mackin was the sole pro-union organizer, naturally limiting the total amount of pressure that could be brought to bear on the Union’s side of the ledger. And the election was not a close one. The Union won by sixty-four votes to forty, or almost one quarter of the entire voting population, indicating that any influence Mackin might have wielded over a few employees could not possibly have altered the result. Nor did Mackin’s conduct “linger[ ],” Harborside,
Mystic points to Veritas Health Ser- . vices, arguing that much more is required to neutralize the impact of a supervisor’s pro-union activity than was present here. In Veritas, supervisors who pressured employees on behalf of the union ultimately switched sides and became fervent anti-union advocates, speaking directly to employees in the workplace and sending letters to most of the staff explaining that they no longer supported unionization. Veritas,
Finally, Mystic insists that the Board unfairly showed more lenience toward Mackin’s pro-union conduct than it would have shown had Mackin successfully urged employees to vote against the Union instead. See Harborside,
Mackin’s campaign to help the Union succeed was inappropriate. However, a number of factors showed its limited effectiveness: Mackin acted alone; she was
C
Finally, Mystic argues that the Hearing Officer erred by refusing to enforce Mystic’s subpoena of Mackin’s telephone records, which the company claims would show that Mackin was acting as the Union’s agent. Refusing to enforce this subpoena did not prejudice Mystic. See Ryerson,
Mystic insists otherwise and points to our recent decision in Ozark Automotive Distributors, Inc. v. NLRB,
Mystic also argues that the Board’s decision in this case is undermined by its decision in Voith Industrial Services, Inc., No. 09-CA-075496,
Ill
For the foregoing reasons, we deny Mystic’s petition for review and grant the NLRB’s cross-application for enforcement of its order.
Notes
. Mystic also originally claimed that Mackin had threatened the job security of employees who did not support the Union and had accused the company of criminal behavior. Mystic has abandoned these arguments on appeal.
. After Mystic filed its objections with the NLRB and after both the Hearing Officer and the Board made their decisions, the Supreme Court affirmed our judgment in Noel Canning but on different grounds. See NLRB v. Noel Canning, -U.S. -,
. We note that the employer in UC Health and in this case raised their objections to the authority of the Regional Director at different points in the administrative process. But these slight factual differences between the cases are immaterial because, as we explained in UC Health, our precedents make clear that an employer can raise for the first time on appeal a challenge to the authority of the Board to take any action at all, irrespective of whether the employer ever made that objection below. See UC Health, No. 14-1049, slip op. at 6-7, 803 F.3d at 672-73.
. Mystic made two other arguments attacking other potential bases for Kreisberg's authority: The Acting General Counsel, despite an authorization to manage the Board's internal administrative affairs while it lacked a quorum, did not have authority to appoint Kreis-berg as Regional Director over new Region 1 in 2012; and a nunc pro tunc order the Board issued in 2014 to approve retroactively the acts it took while it lacked a quorum could not legitimately ratify Kreisberg's control of new Region 1. The Board has clarified that it does not rely on either of these rationales to justify Kreisberg’s power to conduct this election and so we need not consider Mystic's arguments against them.
Concurrence Opinion
concurring:
I join the court’s opinion, including its rejection of Mystic’s argument that the Regional Director had no authority to conduct the representation election given the absence of a Board quorum. In rejecting that argument, our opinion relies on the explanation set forth in UC Health v. NLRB,
I write separately to note that, with regard to one aspect of the explanation in UC Health for rejecting the Board-quorum argument, I see things a bit differently. In both cases, the employer argues that our prior decision in Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB,
I would rely on the approach set out in National Cable & Telecommunications Ass’n v. Brand X Internet Services,
As a result, while the UC Health majority and dissent disagree over whether
Of course, there would be no dispute about how best to understand Laurel Baye if our court had occasion in that case expressly to apply Chevron’s two-step framework. Had we had occasion to do so, and had we resolved the interpretive question at Chevron step one, we would have confirmed that our interpretation was the “only permissible” one. See Brand X,
In saying so, I am in no way “essentially accusing] the Laurel Baye panel of disregarding governing law applying to judicial review of agency statutory interpretations,” ie., Chevron deference. UC Health, slip op. at 7,
This is all a fairly roundabout way of making what I see as the ultimate point for purposes of determining whether the Board retained freedom under Brand X to disagree with the Laurel Baye court’s interpretation: because Laurel Baye did not explicitly invoke the Chevron framework (understandably, given that the court was not asked to), we simply do not know from the Laurel Baye decision whether its rejection of the Board’s interpretation fell at Chevron step one. Judge Silberman, in his dissent in UC Health, posits that, even though Laurel Baye does not say a word about Chevron, its rejection of the Board’s interpretation must have been at Chevron step one. He suggests that, in the era of Chevron, a reviewing court can never adopt merely a “best reading” of a statute when — as in Laurel Baye — the court is faced with a contrary agency interpretation. Id. at 7-9,
I disagree.' For instance, what if an agency’s interpretation is ineligible for Chevron treatment because it was issued without the requisite procedures? See United States v. Mead Corp.,
So where does that leave us here? The question is whether, notwithstanding the Laurel Baye court’s understandable decision to refrain from expressly invoking Chevron’s two-step framework, we somehow know that the court in fact rejected the Board’s interpretation as a step one “only permissible reading” resolution. We do not. Even assuming, arguendo, that the Laurel Baye court was required to entertain Chevron at all despite the Board’s failure to claim any entitlement to Chevron deference (and assuming that the Laurel Baye court believed it was required to do so), we do not know why the court declined to give effect to the agency’s interpretation.
As Judge Silberman suggests, it might have been based on a conclusion that the Board, rather than arriving at an interpretation as a matter of discretion, simply believed its reading to be compelled by. the statute (in which case, for the reasons he argues, the absence of a remand would tend to indicate a step one resolution). UC Health, slip op. at 6, 8,
While the Laurel Baye court understandably did not expressly work through Chevron’s two-step framework given the absence of any request by the Board to do so, there is another way in which the Laurel Baye court could have removed any doubt about whether it considered its rejection of the Board’s interpretation to rest on the “only permissible reading” of the statute. Brand X, 545 U.S. at 984,
I do not read Laurel Baye to have done so. The opinion stops short of concluding that the statutory terms accommodate only one permissible interpretation concerning whether a Board delegee can continue to act if the Board ceases to maintain a three-member quorum. To be sure, the opinion necessarily holds that such a reading at least presents the best interpretation of the statute. But we did not go further to— and we had no necessary occasion to— decide that the best reading also was the only permissible one. To the contrary, we said that “the case before us presents a close question,” and that the Board’s interpretation was not “entirely indefensible” (which is essentially to say, it was “defensible”). Laurel Baye,
Of course, we also did not go so far as to say that a contrary reading necessarily would be reasonable. One can certainly locate language in the opinion that might have been used in service of an “only permissible reading” resolution. E.g., id. at 473 (noting that, because “[t]he statute confers no authority on” the delegee and “[t]he only authority by which the [dele-gee] can act is that of the Board,” if “the Board has no authority, it follows that the [delegee] has none”). But when read in the context of an opinion that considered the question to be “close” and a contrary reading to be somewhere in the neighborhood of a “defensible” one, the cited language is no less consistent with a “best reading” holding than with an “only permissible reading” holding. And while Laurel Baye at times invokes terms such as “unequivocal!]” and “clearly” in discussing the statute, it does so only in making the predicate point that — as the plain terms of the statute themselves specify- — the Board must “at all times” satisfy a three-member quorum requirement. Id. (quoting 29 U.S.C. § 153(b)). In my reading, we did not use those sorts of definitive terms in resolving the subsequent question ultimately at issue: whether a delegee appointed by a properly constituted Board can itself continue to act in the event the Board later slips below three members. As to the latter question, I understand our opinion to have reached a “best reading,” not an “only permissible reading.”
Mistakenly understanding a prior decision to have adopted a step one interpretation would have significant consequences. In that event, we would erroneously freeze in place our “best reading” of a statute even though Congress, according to the basic assumptions underlying Chevron, would have intended to delegate to an agency primary authority to construe the statute as it sees fit within the scope of its delegation. The result would be one Brand X specifically sought to avoid: “ ‘ossification of large portions of our statutory law,’ by precluding agencies from revising unwise judicial constructions of ambiguous statutes.”
Now suppose, conversely, that we instead err in favor of perceiving a “best reading” resolution in a prior opinion that in fact intended to go further and establish the “only permissible reading” of a statute (and thus to preclude an agency from adopting a contrary interpretation). In that event, the error would have become salient only because the agency later elected to implement a reading of the statute contrary to our prior interpretation. And the error would be short-lived: Our court (or the Supreme Court), in the process of judicial review, would have the final word on whether the agency’s reading could be squared with the statute. Our review of the Board’s interpretation in this case (and in UC Health) perfectly illustrates the point.
For those reasons, I read Laurel Baye to have decided the best reading of the Board quorum statute, not the only permissible reading, leaving the Board free under Brand X to adopt a contrary interpretation. The Board has done so, and here (and in UC Health) — unlike in Laurel Baye — seeks Chevron deference for its interpretation. For the reasons explained by the UC Health majority, I believe the Board is entitled to that deference.
Dissenting Opinion
dissenting:
Relying on UC Health v. NLRB,
Section 153(b) contains four provisions: (1) the delegation clause; (2) the vacancy clause; (3) the Board quorum requirement; and (4) the group quorum provision. New Process Steel, L.P. v. NLRB,
The majority in UC Health purports to create an exception for regional directors. I reject UC Health’s analysis for the same reason the Supreme Court rejected the Board’s rationale in New Process Steel: it “dramatically undercuts the significance of the Board quorum requirement by allowing its permanent circumvention.”
I see little point in rehashing the debate between Judge Silberman in the companion case and Judge Srinivasan in this one over the absence of a Chevron discussion in Laurel Baye. I do think it worth at least passing mention that in the Supreme Court decision which ultimately construed the same statute as Laurel Baye, New Process Steel, L.P. v. NLRB,
Because Laurel Baye concluded that § 153(b)’s quorum requirement provision' unambiguously requires the Board to have a quorum for a delegee to exercise its authority, National Cable & Telecommunications Association v. Brand X Internet Services,
I respectfully dissent.