Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-06-01365/USCOURTS-caDC-06-01365-0/pdf.json

Parties Involved:
National Labor Relations Board
Respondent
W&M Properties of Connecticut, Inc.
Petitioner

Document Text:

United States Court of Appeals 

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 16, 2007 Decided February 8, 2008 

No. 06-1365 

W&M PROPERTIES OF CONNECTICUT, INC., 

PETITIONER

v. 

NATIONAL LABOR RELATIONS BOARD, 

RESPONDENT

Consolidated with 

06-1395 

On Petition for Review and Cross-Application for 

Enforcement 

of an Order of the National Labor Relations Board 

Peter D. Stergios argued the cause for petitioner. With 

him on the briefs was Patrick M. Collins. 

Jeffrey J. Barham, Attorney, National Labor Relations 

Board, argued the cause for respondent. With him on the brief 

were Ronald E. Meisburg, General Counsel, John H. 

Ferguson, Associate General Counsel, Linda Dreeben, 

Assistant General Counsel, and Julie B. Broido, Senior 

Attorney. 

USCA Case #06-1365 Document #1097956 Filed: 02/08/2008 Page 1 of 13
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Before: BROWN and GRIFFITH, Circuit Judges, and 

EDWARDS, Senior Circuit Judge. 

Opinion for the Court filed by Circuit Judge GRIFFITH. 

GRIFFITH, Circuit Judge: In this case, the National Labor 

Relations Board determined that an employer’s decision not 

to retain employees of a newly acquired business was 

unlawfully animated by a desire to avoid dealing with a labor 

union, in violation of the National Labor Relations Act. 

Because the Board’s order is a product of reasoned 

decisionmaking and is supported by substantial evidence in 

the record, we deny the employer’s petition for review and 

grant the Board’s cross-application for enforcement. 

I. 

W&M Properties of Connecticut, Inc. (“W&M”) is a real 

estate management and marketing firm. In 2001, W&M 

expanded its portfolio of managed commercial properties by 

purchasing from TrizecHahn Corporation an 800,000-squarefoot office complex called First Stamford Place. Prior to 

W&M’s purchase, maintenance at First Stamford Place had 

been provided by a seven-person engineering staff employed 

by TrizecHahn. These TrizecHahn engineers were union 

members, having elected as their representative the 

International Union of Operating Engineers, Local 30, AFLCIO (“Local 30”). 

Beginning in September 2000, W&M conducted due 

diligence to determine what improvements would be 

necessary to bring the property up to its standards. After 

touring First Stamford Place and settling upon a staffing 

model, W&M Senior Vice President Richard Heller 

conducted a series of job interviews to hire the necessary 

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engineers. TrizecHahn employees participated in this process, 

as did outside applicants. The union membership of the 

TrizecHahn engineers did not go unnoticed. One W&M 

interviewer made clear to a job applicant that First Stamford 

Place would not have a unionized workforce, and several 

TrizecHahn employees were questioned about their union 

membership. 

W&M offered jobs to two of the TrizecHahn engineers, 

Hector Benitez and Omar Perez, but not to the others, Liam 

McGoohan, Stephen Bonos, Richard Stofko, Henry Cassidy, 

and Paul Schmitt. Benitez accepted the offer and Perez 

declined. W&M filled the remaining positions with four 

outside applicants and one employee transferred from another 

W&M property, for a total of six engineers. The reconstituted 

engineering staff of First Stamford Place lacked a majority of 

union workers, with Benitez as the lone union member. As a 

result, W&M refused to bargain with Local 30 and made 

certain unilateral changes to the working environment at First 

Stamford Place. 

Local 30 filed a charge with the National Labor Relations 

Board (“Board”), alleging violations of the National Labor 

Relations Act (“NLRA”).1

 An administrative law judge was 

assigned to determine whether W&M had violated § 8(a)(1), 

§ 8(a)(3), or § 8(a)(5) of the NLRA by interfering with the 

employees’ right to unionize, failing to hire the union 

employees, and refusing to bargain with the union. W&M 

argued that its refusal to hire McGoohan, Bonos, Stofko, and 

Cassidy was motivated by its determination, on the basis of 

subjective and objective evaluations, that those engineers 

 

1

 The General Counsel’s complaint did not name Schmitt as a 

victim of anti-union discrimination, so W&M’s refusal to hire him 

is not at issue in this case. 

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were unsuitable for the task of maintaining First Stamford 

Place according to W&M’s standards. 

The administrative law judge ruled against W&M, 

finding that anti-union animus motivated its hiring decisions. 

W&M filed exceptions. The Board adopted most of the 

administrative law judge’s findings in an order dated 

September 20, 2006. As a remedy, the Board ordered W&M 

to bargain with Local 30, hire and make whole McGoohan, 

Bonos, Stofko, and Cassidy, and make whole other employees 

aggrieved by the unilateral changes to working conditions at 

First Stamford Place. W&M did not file a motion for 

reconsideration with the Board, opting instead to go straight 

to court. W&M petitions for review of the Board’s order and 

the Board cross-applies for enforcement of its order. 

II. 

Before discussing the merits of W&M’s petition, we must 

first address a jurisdictional bar to our consideration of one of 

its arguments. Section 10 of the NLRA, which creates and 

limits our jurisdiction to review the Board’s orders, provides: 

“No objection that has not been urged before the Board . . . 

shall be considered by the court, unless the failure or neglect 

to urge such objection shall be excused because of 

extraordinary circumstances.” 29 U.S.C. § 160(e); see also id.

§ 160(f) (incorporating subsection (e)’s jurisdictional 

constraint). We are therefore powerless, in the absence of 

“extraordinary circumstances,” to consider arguments not 

made to the Board. 

W&M claims for the first time in its opening brief that 

the Board’s chosen remedy was unlawfully punitive. This 

argument was not made to the Board and so comes too late. 

See Quazite Div. of Morrison Molded Fiberglass Co. v. 

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NLRB, 87 F.3d 493, 497 (D.C. Cir. 1996). If aggrieved by the 

Board’s remedy, W&M should have filed a motion for 

reconsideration pursuant to the Board’s rules and regulations. 

See, e.g., Int’l Ladies’ Garment Workers’ Union v. Quality 

Mfg. Co., 420 U.S. 276, 281 n.3 (1975); United Food & 

Commercial Workers Union Local 204 v. NLRB, 506 F.3d 

1078, 1087 (D.C. Cir. 2007); Cobb Mech. Contractors v. 

NLRB, 295 F.3d 1370, 1377–78 (D.C. Cir. 2002); Epilepsy 

Found. of Ne. Ohio v. NLRB, 268 F.3d 1095, 1101–02 (D.C. 

Cir. 2001); Glaziers’ Local No. 558 v. NLRB, 408 F.2d 197, 

202–03 (D.C. Cir. 1969); see also 29 C.F.R. § 102.48(d)(1) 

(establishing procedures for motions for reconsideration). 

Such a motion would have given the Board notice of W&M’s 

objection, Local 900, Int’l Union of Elec., Radio & Mach. 

Workers v. NLRB, 727 F.2d 1184, 1192 & n.8 (D.C. Cir. 

1984), and an opportunity to fix its supposed mistake, see 

Elastic Stop Nut Div. of Harvard Indus. v. NLRB, 921 F.2d 

1275, 1284 (D.C. Cir. 1990). “[O]rderly procedure and good 

administration require that objections to the proceedings of an 

administrative agency be made while it has opportunity for 

correction in order to raise issues reviewable by the courts.” 

United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33, 

37 (1952). 

By failing to file a motion for reconsideration, W&M 

waived its challenge to the Board’s remedy and deprived us of 

jurisdiction to consider it. Woelke & Romero Framing, Inc. v. 

NLRB, 456 U.S. 645, 665–66 (1982). Contrary to W&M’s 

suggestion, there are no “extraordinary circumstances” 

excusing this error under § 10 of the NLRA. W&M argues 

that its failure to file should be forgiven because a motion for 

reconsideration would have been futile in light of the new 

remedial framework announced in Planned Building Services, 

Inc., 347 N.L.R.B. No. 64, 2006 WL 2206975 (2006). W&M 

relies on NLRB v. FLRA, a case in which we entertained an 

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argument that had not been urged before the Federal Labor 

Relations Authority (“Authority”) by taking a rather broad 

view of “extraordinary circumstances” in the waiver provision 

of the Federal Labor Relations Act. See 2 F.3d 1190, 1195–96 

(D.C. Cir. 1993) (per curiam) (construing 5 U.S.C. § 7123(c)). 

W&M’s argument under NLRB v. FLRA fails. 

The “extraordinary circumstances” we found in NLRB v. 

FLRA consisted of the “patent futility” of filing a motion for 

reconsideration in that case. Id. at 1196. The petitioner in 

NLRB v. FLRA established patent futility by pointing to 

instances in which the agency had already rejected its 

contested argument in other proceedings. See id. By contrast, 

W&M offers nothing but its own forecast regarding how the 

Board might view its argument in light of the recently decided 

adverse precedent in Planned Building. W&M claims that, 

“[g]iven the Board’s fanfare in unveiling [a new remedial 

standard] just seven weeks before the decision under review 

here, it is manifestly clear it would have been a useless 

exercise for W&M to seek reconsideration by the Board in 

this case.” Reply Br. at 11. Such an assessment of the Board’s 

likely disposition, relying on highly subjective indicia such as 

“the Board’s fanfare,” is insufficient to prove patent futility 

because it does not show that a motion for reconsideration 

was “clearly doomed” by the agency’s rejection of identical 

arguments. See Ga. State Chapter Ass’n of Civilian 

Technicians v. FLRA, 184 F.3d 889, 892 (D.C. Cir. 1999). As 

we have noted, “the requirement that a litigant present such a 

petition is ordinarily not excused simply because the [agency] 

was unlikely to have granted it.” Id. (citation and internal 

quotation marks omitted). Given W&M’s failure to urge its 

remedial challenge before the Board and its inability to 

establish “extraordinary circumstances” justifying this 

mistake, we conclude that the argument is waived and that we 

therefore lack jurisdiction to consider it. 

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III. 

Turning to the merits that we may properly consider, 

W&M levels two charges against the Board’s order: first, that 

the Board impermissibly departed from precedent in 

analyzing the decision not to hire TrizecHahn’s union 

member employees; and second, that the findings of labor 

violations lack the support of substantial evidence in the 

record. “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.’ ” Waterbury Hotel Mgmt., 

LLC v. NLRB, 314 F.3d 645, 650 (D.C. Cir. 2003) (quoting 

Plumbers & Pipe Fitters Local Union No. 32 v. NLRB, 50 

F.3d 29, 32 (D.C. Cir. 1995)). Applying this deferential 

standard of review, we find no fault with the Board’s 

decision. 

Departure From Precedent 

The Board is not at liberty to ignore its prior decisions, 

LeMoyne-Owen College v. NLRB, 357 F.3d 55, 60–61 (D.C. 

Cir. 2004), but must instead provide a reasoned justification 

for departing from precedent, Titanium Metals Corp. v. 

NLRB, 392 F.3d 439, 446 (D.C. Cir. 2004). As we explained 

in Greater Boston Television Corp. v. FCC, “an agency 

changing its course must supply a reasoned analysis 

indicating that prior policies and standards are being 

deliberately changed, not casually ignored, and if an agency 

glosses over or swerves from prior precedents without 

discussion it may cross the line from tolerably terse to 

intolerably mute.” 444 F.2d 841, 852 (D.C. Cir. 1970) 

(footnotes omitted). In Planned Building Services, Inc., 347 

N.L.R.B. No. 64, slip op. at 4–5 (2006), the Board departed 

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from precedent regarding the standard used to evaluate 

failure-to-hire claims in the successorship context. W&M 

challenges the Board’s application of the new Planned 

Building standard to the facts of this case, arguing that the 

Board should have retained the old standard from FES (Div. 

of Thermo Power), 331 N.L.R.B. 9 (2000), enforced, 301 F.3d 

83 (3d Cir. 2002). Because the Board provided a reasoned 

justification for its partial abandonment of FES in Planned 

Building, we will not upset its new standard. 

To trace the development of the failure-to-hire standard 

as it applies to this successorship case, we begin with the 

Board’s analysis of discriminatory-firing claims in Wright 

Line, 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st 

Cir. 1981). Under Wright Line, if the General Counsel proves 

that protected union conduct was a motivating factor in the 

employer’s decision to terminate an employee, the burden 

shifts to the employer, who must prove that it would have 

made the same decision regardless of the union conduct. See 

Office of Workers’ Comp. Programs v. Greenwich Collieries, 

512 U.S. 267, 277–78 (1994); NLRB v. Transp. Mgmt. Corp., 

462 U.S. 393, 399–403 (1983) (citing Wright Line). In FES, 

the Board adapted the Wright Line standard to the failure-tohire context by adding two items to the General Counsel’s 

initial burden of proof: that the employer was hiring, and that 

the unhired applicant had relevant experience or training for 

the job. See FES, 331 N.L.R.B. at 12–13. This change ensured 

that employers would only have to guard against the 

discrimination claims of qualified job applicants. 

The FES addendum to the Wright Line formula made 

sense for most failure-to-hire claims, but not for the subset of 

cases involving successor employers. In applying FES to 

successorship cases, the Board came to see the pointlessness 

of establishing that an employee was qualified to hold the 

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same job he had performed for the predecessor employer. 

Planned Building acted on this realization by removing the 

FES burden from successor’s-failure-to-hire cases, in essence 

treating the decision not to hire a predecessor’s employee as it 

would a firing. See Planned Building, slip op. at 4–5. 

The Board provided a sound rationale for this change, 

explaining that elimination of the FES burden in the 

successorship context promotes efficiency by removing an 

extraneous analytical step. See id. at 4 (“[I]t serves no purpose 

to require the General Counsel to demonstrate, in each 

successorship case, that the employees have relevant 

experience or training for essentially the same jobs in the 

successor’s work force that they performed in the 

predecessor’s work force.”). The FES elements of job 

availability and applicant qualification are presumptively 

satisfied in a successorship case, so the inquiry reverts to the 

Wright Line analysis. See id.

W&M challenges the Board’s rationale by attacking a 

Planned Building straw man. W&M argues that the 

presumption that a predecessor’s employees are qualified to 

work for a successor prevents a successor from choosing its 

own personnel policies. This contention mistakenly assumes 

that the presumption of qualification is irrebuttable. A 

successor employer is well-positioned to explain to the Board 

how its employment expectations differ from those of its 

predecessor. Nothing in Planned Building prevents a 

successor employer from making this point. 

By providing a reasoned justification for its departure 

from precedent, the Board avoided a finding of arbitrary and 

capricious action under the Administrative Procedure Act, 5 

U.S.C. § 706(2)(A). See Titanium Metals Corp. v. NLRB, 392 

F.3d 439, 446 (D.C. Cir. 2004). 

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Labor Violations 

The Board found that W&M violated the NLRA by 

interfering with the employees’ right to unionize, declining to 

hire its predecessor’s employees because of their union 

membership, and refusing to bargain with the union. See 29 

U.S.C. § 158(a)(1), (3), (5) (proscribing such conduct). We 

review the Board’s order to determine whether it enjoys the 

support of substantial evidence in the record. Waterbury Hotel 

Mgmt., LLC v. NLRB, 314 F.3d 645, 650 (D.C. Cir. 2003). 

Our review of the Board’s factual conclusions is “highly 

deferential,” Capital Cleaning Contractors, Inc. v. NLRB, 147 

F.3d 999, 1004 (D.C. Cir. 1998), for we must treat the 

Board’s findings of fact as “conclusive” if supported by 

substantial evidence, 29 U.S.C § 160(e). We will not disturb 

the Board’s “reasonably defensible” interpretation of the 

facts, Traction Wholesale Ctr. Co. v. NLRB, 216 F.3d 92, 99 

(D.C. Cir. 2000), regardless whether we might rule differently 

de novo, Evergreen Am. Corp. v. NLRB, 362 F.3d 827, 837 

(D.C. Cir. 2004). Greater still is the deference due a 

credibility determination or a finding regarding motive. See 

Capital Cleaning, 147 F.3d at 1004. 

W&M challenges the finding that it unlawfully 

interrogated Perez about his union membership. Coercive 

interrogation of this sort violates § 8(a)(1) of the NLRA, 

which makes it an unfair labor practice “to interfere with, 

restrain, or coerce employees in the exercise of” their right to 

unionize. 29 U.S.C. § 158(a)(1). The standard for unlawful 

interrogation is whether an employer’s questions about union 

membership “reasonably tended to interfere with, restrain, or 

coerce.” Facchina Constr. Co., 343 N.L.R.B. 886, 886 

(2004), enforced mem., 180 Fed. Appx. 178 (D.C. Cir. 2006). 

The Board, after properly examining the “totality of the 

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circumstances,” Vincent Indus. Plastics, Inc. v. NLRB, 209 

F.3d 727, 737 (D.C. Cir. 2000), found that Heller’s coercive 

questioning of Perez violated § 8(a)(1) of the NLRA. 

Substantial evidence supports this conclusion. Testifying 

before the administrative law judge, Perez described the 

following interaction: 

[Q:] Okay. Anything else you recall being discussed 

in that meeting with Mr. Heller? 

[A:] Yes. He asked me, you know, like — he also 

asked me how long I was a member of Local 30. 

[Q:] And what did you tell him? 

[A:] I told him for almost eight years. You know, he 

also asked me, you know, like, if I was to get laid 

off, like, if the Union would get me another job. 

Questions about union membership have a tendency to 

coerce. See Allegheny Ludlum Corp. v. NLRB, 104 F.3d 1354, 

1359 (D.C. Cir. 1997). This is especially so where the 

questioning occurs behind closed doors and is initiated by a 

company official, as it was in this case. See Timsco Inc. v. 

NLRB, 819 F.2d 1173, 1178 (D.C. Cir. 1987); Perdue Farms, 

Inc., Cookin’ Good Div. v. NLRB, 144 F.3d 830, 835–36 

(D.C. Cir. 1998). A reasonable jury viewing this record could 

have found W&M’s questioning to violate § 8(a)(1) of the 

NLRA, so we conclude that substantial evidence supports the 

Board’s finding to that effect. See Allentown Mack Sales & 

Serv., Inc. v. NLRB, 522 U.S. 359, 366–67 (1998). 

W&M also challenges the finding that it discriminatorily 

refused to hire TrizecHahn’s unionized employees, in 

violation of § 8(a)(3) of the NLRA, 29 U.S.C. § 158(a)(3). 

The Board’s finding to this effect is built upon two 

propositions, each of which finds support in the record. First 

is the proposition that W&M harbored anti-union animus 

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against the TrizecHahn engineers. Gerrit Blauvelt, W&M’s 

Director of Property Management, told one job applicant that 

W&M would never recognize Local 30 because the owners 

did not want a unionized workforce at First Stamford Place, 

and told another that “if anyone was going to work for W&M 

that it would have to be non-Union.” The second proposition 

is that W&M’s excuse for not hiring the TrizecHahn 

engineers was a pretext for anti-union animus. W&M claimed 

that its decision not to hire McGoohan, Bonos, Stofko, and 

Cassidy was based on its walking tours, which showed First 

Stamford Place to be in disrepair; on its neutral and objective 

hiring criteria; and on its interviews, which revealed certain 

employees to be unsatisfactory. The Board reasonably 

discredited the disrepair argument because W&M made no 

effort to attribute the problems found to the employees not 

hired, and in fact showed an interest in hiring Joe Morra 

despite his responsibility, as Property Manager, for the poor 

condition of First Stamford Place. The Board inferred from 

the hiring of Benitez and outside applicant Adalberto Sotillo, 

both of whom lacked relevant experience, and from the failure 

to hire more qualified and better trained employees, that 

W&M’s alleged criteria were illusory. Finally, the Board 

discredited W&M officials’ claims that subjective but neutral 

observations from the interviews supported the decision not to 

hire. Substantial evidence supports the finding of a violation 

of § 8(a)(3) of the NLRA because, taken together, these items 

from the record are enough to persuade a reasonable jury that 

protected union conduct was a motivating factor in W&M’s 

decisionmaking process, and that it failed to establish an 

affirmative defense under Wright Line and Planned Building. 

See Allentown Mack, 522 U.S. at 366–67. 

Finally, the Board found that W&M’s objection to the 

administrative law judge’s conclusion on the § 8(a)(5) refusalto-bargain charge depended on its contention that the 

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§ 8(a)(3) finding was erroneous. Having properly rejected 

W&M’s challenges to the § 8(a)(3) finding, the Board 

reasonably found no merit in W&M’s exceptions to the 

administrative law judge’s findings on the § 8(a)(5) charge. 

IV. 

For the reasons set forth in this opinion, we deny W&M’s 

petition for review and grant the Board’s cross-application to 

enforce its order. 

So ordered. 

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