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Parties Involved:
Citizens Investment Services Corporation
Petitioner
National Labor Relations Board
Respondent

Document Text:

Notice: This opinion is subject to formal revision before publication in the

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Clerk of any formal errors in order that corrections may be made before the

bound volumes go to press.

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 19, 2005 Decided December 16, 2005

No. 04-1317

CITIZENS INVESTMENT SERVICES CORPORATION,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

Consolidated with

No. 04-1334

On Petition for Review and Cross-Application for

Enforcement of an Order of the

National Labor Relations Board

James P. Hollihan argued the cause and filed the briefs for

petitioner. Burton J. Fishman entered an appearance.

Christopher W. Young, Attorney, National Labor Relations

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

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were Arthur F. Rosenfeld, General Counsel, John H. Ferguson,

Assistant General Counsel, Aileen A. Armstrong, Deputy

Associate General Counsel, and Meredith L. Jason, Attorney.

Before: HENDERSON, ROGERS and GARLAND, Circuit

Judges.

Opinion for the Court filed by Circuit Judge ROGERS.

Concurring opinion filed by Circuit Judge HENDERSON.

ROGERS, Circuit Judge: The only question in this appeal is

whether substantial evidence on the record considered as a

whole supports the finding of the National Labor Relations

Board that Citizens Investment Services Corporation (“the

Company”) violated section 8(a)(1) of the National Labor

Relations Act (“the Act”), 29 U.S.C. § 158(a)(1) (2000), by

discharging financial consultant Christopher Hayward because

of his protected concerted activity of protesting compensation

terms and payments for financial consultants. Because there is

substantial evidence, and consistent with our limited scope of

review, we deny the Company’s petition for review and grant

the Board’s cross-petition for enforcement.

I.

Section 7 of the Act, 29 U.S.C. § 157, guarantees

employees the right to engage in “concerted activities” not only

for self-organization but also “for the purpose of . . . mutual aid

or protection . . . .” The broad protection of Section 7 applies

with particular force to unorganized employees who, because

they have no designated bargaining representative, must “speak

for themselves as best they [can].” NLRB v. Washington

Aluminum Co., 370 U.S. 9, 14 (1962).

The right to engage in concerted activities is protected by

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Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1), which makes

it an unfair labor practice for an employer “to interfere with,

restrain, or coerce employees in the exercise of the rights

guaranteed in [S]ection 7.” Accordingly, an employer violates

Section 8(a)(1) by discharging an employee for engaging in

concerted activities protected by the Act. Gold Coast Rest.

Corp. v. NLRB, 995 F.2d 257, 263-64 (D.C. Cir. 1994).

The events at issue followed a change in ownership and

management of a financial services company. In 2001, Citizens

Financial Group (“Citizens”) acquired the commercial banking

operations of Mellon Bank, N.A., including the brokerage and

investment counseling business of a subsidiary of Mellon,

Dreyfus Investment Services Corporation (“Dreyfus”). Citizens

created a subsidiary, the Company, in order to house the

business acquired from Dreyfus and Mellon. During the

acquisition, Citizens offered certain Dreyfus financial

consultants employment at the Company. During the

negotiations with the Dreyfus financial consultants in October

2001, Dreyfus proposed commission terms that were less

favorable to experienced financial consultants than those

originally proposed in September 2001. Certain experienced

Dreyfus consultants complained about the changes immediately.

Christopher Hayward, who had worked for Dreyfus for six years

and who was involved in these complaints, nonetheless accepted

employment with the Company. In January 2002, the Company

distributed a final commission schedule that included relatively

unfavorable terms for more experienced financial consultants.

By April 2002, Hayward also began to complain that

commissions were not being correctly calculated based upon the

schedule. Hayward was discharged on July 2, 2002. The

decision to discharge him was made by John Halechko (a Senior

Vice President and Director of Investment Sales), Eric Hosie (a

Regional Sales Manager in an adjacent territory), Barbara Blyth

(a Human Resources Group Manager for Citizens), and David

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Hunter (the Regional Sales Manager for the Pittsburgh area). 

Based on a charge filed by Hayward alleging that he was

terminated as a result of his protected concerted activities, the

General Counsel to the Board filed a complaint alleging that the

Company, as a result of interfering with the exercise of Section

7 rights, had violated Section 8(a)(1) of the Act. The

Administrative Law Judge (“ALJ”) found that the Company had

violated Section 8(a)(1) and ordered that Hayward be reinstated

or offered a position commensurate with his prior position, that

any unfavorable references to the discharge be removed from

Hayward’s personnel files, and that Hayward be made whole for

any losses that he suffered as a result of his unlawful discharge.

The Board affirmed, as relevant, the findings and order of the

ALJ, and the Company petitions for review.

II.

The Company challenges the Board’s findings at each step

of the analysis under Wright Line, 251 N.L.R.B. 1083 (1980),

enforced, 662 F.2d 899 (1st Cir. 1981). Under Wright Line, the

General Counsel must make a prima facie showing sufficient to

support the inference that the employee is engaged in protected

conduct and the employer was so aware, and that the protected

activity was a motivating factor in the employer’s decision to

take adverse action; the employer may rebut the inference by

showing by a preponderance of evidence that the same action

would have taken place even in the absence of the protected

conduct. Laro Maint. Corp. v. NLRB, 56 F.3d 224, 228 (D.C.

Cir. 1995); see NLRB v. Transp. Mgmt. Corp. 462 U.S. 393,

401-03 (1983).

The Company makes no reference in its briefs to our

standard of review, which is limited. Determining whether

activity is concerted and protected within the meaning of

Section 7 is a task that “implicates [the Board’s] expertise in

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labor relations.” NLRB v. City Disposal Sys., Inc., 465 U.S. 822,

829 (1984). The Board’s determination that an employee has

engaged in protected concerted activity is entitled to

considerable deference if it is reasonable. Id. The Board’s

determination of questions of motive is “give[n] even greater

deference” by the court. Frazier Indus. Co. v. NLRB, 213 F.3d

750, 756 (D.C. Cir. 2000); see Laro, 56 F.3d at 229. The

Board’s findings of fact, if supported by substantial evidence on

the record considered as a whole, are conclusive even if a

reviewing court on de novo review would reach a different

result. United Servs. Auto. Ass’n v. NLRB, 387 F.3d 908, 913

(D.C. Cir. 2004). The court will not overturn the Board’s

acceptance of an ALJ’s resolution of conflicting testimony

unless the ALJ’s determinations are “hopelessly incredible” or

“self-contradictory.” Teamsters Local Union No. 171 v. NLRB,

863 F.2d 946, 953 (D.C. Cir. 1988) (quoting Conair Corp. v

NLRB, 721 F.2d 1355, 1368 (D.C. Cir. 1983)). Thus, the “Board

is to be reversed only when the record is ‘so compelling that no

reasonable factfinder could fail to find’ to the contrary.” United

Steelworkers of Am. Local 14534 v. NLRB, 983 F.2d 240, 244

(D.C. 1993) (quoting INS v. Elias-Zacarias, 502 U.S. 478, 484

(1992)).

A.

The Company acknowledges that under Meyers Industries

Inc., 281 N.L.R.B. 882, aff’d sub nom Prill v. NLRB, 835 F.2d

1481 (D.C. Cir. 1987), concerted activity may be found when an

employee’s activity is undertaken with or on the authority of

other employees, and not solely on behalf of the employee

himself. Thus, concerted activity includes circumstances where

individual employees work to initiate, induce or prepare for

group action. United Servs. Auto. Ass’n, 387 F.3d at 914.

Similarly, an individual “who brings a group complaint to the

attention of management is engaged in concerted activity even

though he was not designated or authorized to be a spokesman

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by the group.” Prill v. NLRB, 755 F.2d 941, 954 (D.C. Cir.

1985). 

The Company maintains that there is “no evidence . . . that

Hayward [acted] based on authorization from other employees”

and “no evidence suggests that . . . discussions [at group

meetings] took the form of group ‘complaints’ or protests,” as

opposed to individual inquiries about the status of delayed

payments. Petitioner’s Br. at 14. There also is, the Company

maintains, “no evidence that the group nature of these

discussions [about compensation issues] was ever

communicated to management.” Id. at 15-16. To reach these

conclusions, however, the Company ignores the evidence before

the Board with regard to the discussions following its

distributions of several drafts of its FY 2002 incentive plan for

financial consultants.

We do not think it can seriously be questioned that there

was substantial evidence Hayward was engaged in protected

concerted activity. Citizens distributed several versions of its

compensation plans and certain senior financial consultants,

including Hayward, responded to the management at Citizens

and then the Company with critical comments about the

compensation for senior financial consultants. Hayward and

other senior financial consultants also complained about the

accuracy of the Company’s calculation of their own commission

payments. Such complaints are plainly protected. See Eastex,

Inc. v. NLRB, 437 U.S. 556, 569 (1978). The evidence also

showed that Hayward engaged in two types of concerted

activity: individual acts taken in order to bring the complaints of

the group of experienced financial consultants to the Company’s

management, see Phillips Petroleum Co., 339 N.L.R.B. No. 111,

2003 WL 21802939, at *3 (2003), and group activities designed

to advance the interests of these consultants. The first is evident

in Hayward’s April 2002 email to Halechko regarding the

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payment of certain commissions and reporting on “the general

consensus” among his fellow employees, and in Hayward’s June

6 email to Hunter which he signed as “union president.”

Whether a joke or not, the reference to “union president”

indicates that Hayward was representing the collective view.

The second is evident in his conduct at the Company’s quarterly

business meeting when, on behalf of the group, Hayward invited

the Human Resources Group Manager Blyth to join them at the

table where the senior financial consultants were sitting to

discuss compensation problems, and at Regional Sales Manager

Hunter’s monthly meetings, where Hayward repeatedly raised

compensation issues.

Further, the evidence shows management at various levels

was aware of Hayward’s participation and would, especially in

light of Hayward’s vocal complaints during group meetings,

have understood his participation to be associated with the

group’s common concerns. See NRLB v. Talsol Corp., 155 F.3d

785, 791, 796-97 (6th Cir. 1998); El Gran Combo de Puerto

Rico v. NLRB, 853 F.2d 996, 1003, 1005 (1st Cir. 1988);

Rockwell Int’l Corp. v. NLRB, 814 F.2d 1530, 1535 (11th Cir.

1987). Halechko acknowledged that issues raised in the emails

of Edward Chess Jr., Hayward’s co-worker, which also were

voiced by Hayward, were “valid and important to many of your

peers,” and asked that Chess “elaborate on what other decisions

being made are becoming dissatisfiers [sic] for the group.”

After Hayward asked Blyth to sit with the senior financial

consultants at the Company’s quarterly dinner meeting and

suggested that he might follow up with her at a later time, she

told Hunter that he “had some very unhappy [financial

consultants] . . . in how they’re being paid.” 

B.

Whether a discharge violates Section 8(a)(1) depends on the

employer’s motive. The Company contends that the Board’s

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finding that Hayward’s discharge was unlawfully motivated

improperly substitutes the Board’s business judgment for that of

Company management. As the Company views the evidence,

Hayward engaged in a course of conduct that challenged the

authority of management to implement philosophical and

organizational changes in the manner in which the Company

marketed its financial consulting services. In what it describes

as undisputed evidence, the Company claims that (1) Hayward

openly denigrated the skills and qualifications of newly-hired

financial consultants, (2) openly criticized the integrity and

management structure at the Company, and (3) eagerly

scheduled meetings when called by the manager of another

district to make a sale outside of Hayward’s geographic territory

(a practice the Company refers to as “poaching”) in conjunction

with denigrating a junior financial consultant who was unable to

complete the sale. Regarding its affirmative defense, the

Company maintains that the Board wrongly dismissed, in a

superficial manner, the reasons articulated by the Company for

its decision to discharge Hayward based on the ALJ’s faulty

view that Hayward’s objectionable conduct was simply not

serious enough to justify terminating the employment of one of

the Company’s leading producers. For example, the Company

— asserting without evidentiary support that Hayward was a

Vice President with responsibility for mentoring junior

employees — takes issue with the ALJ’s evaluation of the

seriousness of Hayward’s statement to a junior financial

consultant suggesting that only sycophants will get ahead in the

new organization.

Although we acknowledge that the question of motive

presents a close question, “much of the conflict about what was

said and what could reasonably be understood in the context of

what had previously happened [would] cal[l] for credibility

determinations that this court is ill-positioned to second-guess,”

W.C. McQuaide, Inc. v. NLRB, 133 F.3d 47, 53 (D.C. Cir. 1998),

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or would necessarily implicate the Board’s expertise in drawing

reasonable inferences from the evidence to make a

determination about an employer’s motive, and so merit the

court’s deference. The Company points to certain evidence in

the record to support its interpretation of events. Contrary to the

Company’s contentions, however, an examination of the

evidence before the Board reveals that there was substantial

evidence that Hayward was not the only person in his position

who criticized the newly hired financial consultants or openly

criticized the Company’s management structure. Such evidence

included evidence that in handling accounts outside of his

geographic district, Hayward neither initiated nor acted contrary

to Company policy but obtained the necessary approvals.

Moreover, at no time throughout his course of conduct,

identified by the Company as the reason for his discharge, did

the Company impose any discipline on Hayward, who remained

one of its top producers. Instead of being disciplined under the

progressive disciplinary measures as called for by the

Company’s employee manual, Hayward was discharged. Where

there is substantial evidence, the court must defer to the Board’s

findings.

The evidence before the Board indicates that the principal

concern of the senior financial consultants was the structure of

the Company’s incentive compensation plan, particularly its

failure to provide for trail payments, i.e., commissions paid to

consultants for ongoing management of investments originally

purchased in prior years. In determining the Company’s

motivation for discharging Hayward, the Board looked to direct

evidence from which it inferred that the Company took a dim

view of the consultants’ complaints about that plan. It pointed

to Halechko’s response to Chess’s October 2001 email, which

stated that Halechko was open to financial consultants’

suggestions as long as they were framed in a manner that didn’t

“piss [him] off”; to financial consultant Jeffrey Russo’s

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testimony, which the ALJ credited, that the supervisors

expressed exasperation about the complaints and that Hosie told

Russo that the Company’s concern about Russo’s future with the

Company stemmed from Russo’s “complaining about

compensation and the trails and everything else,” that Hayward

complained a lot as well, and that he, Hosie, was in place to “fix

or get rid of the problem”; and to Hunter’s testimony drawing

“the direct connection between Hayward’s concerted activity

with his peers and the Company’s animus against him.” Other

direct evidence supported the inference drawn by the Board

regarding management’s attitude, specifically, Hayward’s

testimony, which the ALJ credited, regarding Blyth’s

uncomfortable reaction to Hayward’s invitation to speak

informally to the senior financial consultants about their

complaints at the quarterly company dinner; the Board observed

that Hayward’s account of Blyth’s reaction, which Hayward

paraphrased as “this doesn’t look good, me talking to you guys,”

reflected her “awareness that management considered the

experienced consultants to be pariahs due to their complaints.”

Although the Company contends the evidence shows that

management was open to receiving criticisms about its

compensation plan, and there is such evidence, as noted, this is

not the same as showing that there was not substantial evidence

to support the inferences drawn by the Board. The problems in

transition may have exacerbated the situation for the Company,

which claimed it had to rely on Dreyfus for information relating

to individual compensation, but this does not explain what the

Board characterized as the tone of the Company’s responses to

expressions of concern about the structure of the compensation

plan itself. 

In addition, the Board relied on circumstantial evidence of

the type that the Board has previously considered highly

probative, namely, the failure to follow the Company’s formal

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disciplinary process, which called for progressive discipline and

was outlined in the employee handbook, and the timing of

Hayward’s discharge. A failure to use the progressive discipline

system supports the inference of unlawful motive. See SCA

Tissue N. Am. LLC v. NLRB, 371 F.3d 983, 991 (7th Cir. 2004);

NLRB v. Dynatron/Bondo Corp., 176 F.3d 1310, 1321 (11th Cir.

1999). There was substantial evidence regarding the

discriminatory manner in which the Company dealt with

Hayward as compared to other complainers, such as Chess and

Russo, who were not discharged even though there were not

substantial differences in the nature of the employees’

complaints. See Laro, 56 F.3d at 230; Gold Coast Rest. Corp.,

995 F.2d at 264-65. Chess, like Hayward, was critical of

management as well as the terms of the Company’s proposal to

split the commissions between junior and senior financial

consultants. Russo, like Hayward, spoke out at the monthly

meetings about the errors in his commission checks. Yet only

Hayward was discharged. See MECO Corp. v. NLRB, 986 F.2d

1434, 1437 (D.C. Cir. 1993). 

Although the Company suggests that Hayward was not a

candidate for corrective action because he had been repeatedly

warned and failed to change his conduct, the Board could

reasonably decide not to credit this evidence. Hunter testified

that he warned Hayward informally about the tone of his

complaints and his activities in response to requests for

assistance from a branch outside of his geographic district. The

Board observed that “none of the purported admonitions is

documented in any way” and explained that crediting Hunter’s

testimony would show only admonitions of the type that “would

form a component of virtually every employment relationship,”

as there are no perfect employees. Taking issue with the

Board’s assessment of the seriousness of Hayward’s conduct,

the Company offers no explanation for the fact that conduct it

now maintains was serious enough to cause the discharge of a

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highly productive employee was not, at the time, serious enough

to trigger the procedures indicated in the employee handbook,

whereby the employee’s alleged breaches of business decorum

would be documented in the form of a written Performance

Improvement Plan. There is no evidence to support the

Company’s assertion that Hayward was, as a Vice President and

a member of management, not subject to the handbook.

The timing of Hayward’s discharge also supports the

Board’s finding of unlawful motive. The Company discharged

him two weeks after he had identified himself as “union

president” in an email to Hunter. The Company’s argument that

only Hunter saw the email and he was no longer Hayward’s

supervisor ignores that Hunter participated in the conference

during which the decision to discharge Hayward was made, and

that Hunter’s recommendation of discharge was based, at least

in part, on Hayward’s complaints about the compensation issue.

See Tasty Baking Co. v. NLRB, 254 F.3d 114, 125-26 (D.C. Cir.

2001); Reno Hilton Resorts v. NLRB, 196 F.3d 1275, 1283 (D.C.

Cir. 1999). 

Finally, there was substantial evidence to support the

Board’s conclusion that the Company’s affirmative defenses

were merely pretextual excuses. The Board has explained that

the lack of clarity and consistency in explaining reasons for

termination is an important factor in evaluating the proffered

justifications, and that “when an employer vacillates in offering

a rational and consistent account of its actions, an inference may

be drawn that the real reason for its conduct is not among those

asserted.” Black Entm’t Television, 324 N.L.R.B. 1161, 1161

(1997) (quoting Sound One Corp., 317 N.L.R.B. 854, 858

(1995)). The evidence of the Company’s explanations for

Hayward’s discharge — that he had acted unethically by

poaching sales and that he was a troublemaker and not a team

player — “hardly constitute[s] the showing that [the employer]

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must make” in order to meet its burden to show it would have

discharged Hayward regardless of his protected concerted

conduct. O’Dovero v. NLRB, 193 F.3d 532, 537 (D.C Cir.

1999). 

The Board observed that Hayward was not given a formal

written statement of the reasons for his discharge and that the

testimony of the managers left the question unclear as each

manager emphasized his or her own chosen factors. For

example, Blyth alone mentioned Hayward assigning accounts to

himself, and Hosie was the only one to mention Hayward’s

disparagement of fixed annuities as evidence Hayward was

disrespectful of the Company’s products. The Board pointed to

Hayward’s uncontroverted testimony regarding his final meeting

with management as the best illustration of the lack of clarity or

precision in the Company’s explanations. At that time, Blyth

said Hayward was being fired because of his poaching, while

Hosie and Halechko said it was because he did not fit in and was

not a team player. 

Neither explanation, the Board could reasonably conclude,

is persuasive. The Company presented the testimony of

Halechko that poaching was unethical. Nevertheless, the

Company took no disciplinary action against Hayward although

its management was informed of the pertinent details and

Hayward, who did not initiate either transaction, had made no

effort to conceal the reasons Company managers brought him in

to make the sales. Hence, the Board reasonably could discredit

the Company’s contention that it considered the poaching to be

serious unethical conduct that played a critical role in the

decision to discharge Hayward. Although the Company objects

that the Board is interfering with its business judgments, the

evidence showed that the Company failed to take action

consistent with its claim that Hayward’s conduct was a serious

breach of ethics. The court cannot conclude that the Board’s

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resolution of the conflicting evidence, in rejecting assertions that

Hayward acted unethically as not credible and a “tardily

formulated attempt to justify Hayward’s discharge,” was

“hopelessly incredible or self-contradictory.” See Teamsters

Local 171, 863 F.2d at 953 (quotations and citations omitted).

As to the Company’s defense that Hayward was discharged

because he was a troublemaker and not a team player, Board

precedent has recognized that if management perceives pressing

protected complaints in front of other employees as “making

trouble,” this attitude “supports the inference that the Company

discharged [the employee] for engaging in concerted activities.”

Dayton Typographical Serv. v. NLRB, 778 F.2d 1188, 1193 (6th

Cir. 1985). Here, the Board found such an inference. It rejected

the Company’s contention that its discharge of Hayward was

justified by Hayward’s disruptive behavior and attitudinal

problems, which the Company claims were interfering with the

efforts to build a team atmosphere among the financial

consultants, as “simply another way of indicating that he was

terminated because he engaged in protected concerted activity

when he persistently complained about the structure of the

compensation plan and the manner in which compensation was

actually being paid under that plan.”

Although the Board credited the managers’ description of

the new working environment, there was substantial evidence,

as the Board found, that this proved too much. Accepting the

testimony of Halechko, Hunter, and Hosie that Hayward’s

conduct and comments were undermining the team operation

that the Company sought to build, the evidence showed that both

Hosie and Hunter agreed that the financial consultants’

relationships with bank managers were of critical importance

and that Hayward had no problems with them. Halechko’s

testimony was not to the contrary. The evidence did show that

Hayward criticized newer financial consultants, but that he was

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one of a number of senior financial consultants who were

critical, and Halechko acknowledged that Hayward was not a

ring leader in this problem. The Board could reasonably

conclude that the evidence failed persuasively to demonstrate

that Hayward’s bad attitude was a motivating factor in

Hayward’s dismissal. Whether a court, upon de novo review,

would reach the same conclusion, is irrelevant. When viewed

in light of Hayward’s prominent and persistent involvement in

protected concerted activity, the Board determined, in the

exercise of its expertise in evaluating such claims, that the

Company’s abrupt termination of an outstanding producer with

no prior disciplinary record is more comprehensible as an effort

to punish Hayward for his protected concerted activities. Again,

the Board’s resolution of credibility in concluding that the

Company’s reasons were pretextual was not “hopelessly

incredible or self-contradictory.” Teamsters Local 171, 863

F.2d at 953 (quotations and citations omitted).

Neither Epilepsy Foundation of Northeastern Ohio v.

NLRB, 268 F.3d 1095, 1105 (D.C. Cir. 2001), Alldata Corp. v.

NLRB, 245 F.3d 803 (D.C. Cir. 2001), nor the cases from the

Eighth Circuit on which the Company relies are of particular

help to the Company. Neither of the cases from this circuit

involved protected activity, and, in each, the court concluded

there was no evidence to support the Board’s position. Epilepsy,

268 F.3d at 1105; Alldata, 245 F.3d at 809. The same cannot be

said here. Similarly St. Lukes Episcopal-Presbyterian Hospitals,

Inc. v. NLRB, 268 F.3d 575, 579-81 (8th Cir. 2001), did not

involve protected activity, and in Carleton College v. NLRB, 230

F.3d 1075 (8th Cir. 2000), the Board did not find that the

employer’s affirmative defense was pretextual, id. at 1077, but

instead erroneously reasoned, the court held, that unprofessional

insubordination could not become the proper foundation of an

affirmative defense if such behavior arose in the context of an

employee’s other protected activity, id. at 1080-81. 

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The Company, in contending that the Board has displaced

its lawful business judgment with regard to its proffered

affirmative defense, emphasizes and credits aspects of the

evidence that the Board did not emphasize and did not credit.

Because it is not the role of the court to second-guess the

Board’s evaluation of the evidence, we conclude, in light of the

substantial evidence on the record considered as a whole, that

the Company fails to demonstrate that the Board could not have

reasonably rejected the Company’s account of its motivations.

See Teamsters Local 171, 863 F.2d at 953. Accordingly,

because there was substantial evidence to support the Board’s

finding that Hayward’s protected concerted activity was a

motivating factor in the Company’s decision to discharge him,

we deny the petition for review and grant the cross-petition for

enforcement.

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1

 The U.S. Supreme Court articulated this now-bedrock principle

of administrative law in Universal Camera Corp v. NLRB, 340 U.S.

474, 488 (1951), in which the Court stated: “The substantiality of

evidence must take into account whatever in the record fairly detracts

from its weight. This is clearly the significance of the requirement . . .

that courts consider the whole record.” 

KAREN LECRAFT HENDERSON, Circuit Judge, concurring: 

I join the majority opinion but do so with reluctance

because this case is much closer than my colleagues

acknowledge. While we must uphold the Board’s factual

findings “if supported by substantial evidence on the record

considered as a whole,” Regal Cinemas, Inc. v. NLRB, 317

F.3d 300, 306-307 (D.C. Cir. 2003) (quoting 29 U.S.C. §

160(e) (emphasis added)), I believe the full discharge of our

duty to review the whole record results in a squeaker even

under this deferential standard of review.1

 

The evidence supporting Citizens Investment’s affirmative

defense—that it would have discharged Hayward in the

absence of any protected concerted activity—is illustrative.

The Board considered the two reasons Citizens Investment

advanced for Hayward’s termination: to wit, “two specific

instances of asserted misconduct”—both involving poaching

clients—and “a generalized allegation that Hayward had a bad

attitude and was not a team player.” J.A. 22. It found

Citizens Investment’s first rationale—the two instances in

which Hayward poached sales outside his

territory—pretextual because, in its view, management was

“not seriously perturbed” “at the time th[ese] incident[s] took

place,” management failed to discipline Hayward as a result

and “logic and common sense lead to a firm conclusion that

Hayward’s conduct was in no way objectionable.” J.A. 23. 

The Board dismissed the fact that the members of

management involved in the decision to terminate Hayward

testified that the two poaching incidents played a significant

role in their decision. For instance, John Halechko testified

that his decision to recommend that Hayward be terminated

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was based on, inter alia, Hayward’s transacting business in

other financial consultants’ territories. J.A. 391-92. Eric

Hosie, whose recommendation that Hayward be terminated

was based on his one-on-one conversations with Hayward,

testified that, as a result of their conversations, he believed

that Hayward was not a “team player.” J.A. 548. His

contemporaneous notes from a meeting with Hayward in May

2002, two months before Hayward was terminated, recited

that Hayward appeared “willing to circumvent colleagues and

tell me it is because he is better—teamwork.” J.A. 714.

Barbara Blyth attended the meeting at which the decision was

made to terminate Hayward and testified that the decision was

“primarily” based on the fact that he “cross[ed] into other

individuals’ territories.” J.A. 589-90. Her contemporaneous

notes from the meeting listed among the reasons for

Hayward’s termination “racist client,” a reference to one of

the instances in which he made a sale outside his assigned

territory. J.A. 715. 

Second, the Board concluded that Citizens Investment’s

“generalized allegation” that Hayward had a bad attitude and

was not a team player was pretextual. Its conclusion was

drawn from evidence that Hayward was not alone in his

criticism of Citizens Investment’s change in business

direction and his denigration of junior financial consultants

and, further, from its assessment that Hayward’s attitude was

no worse than that of other senior financial consultants. The

Board based this finding on two pieces of evidence: first, only

Chess, another senior financial consultant, complained to

management about newly hired financial consultants; and,

second, Halechko testified that Hayward was not the “ring

leader” of the senior consultants in belittling their juniors.

J.A. 24. Regarding the former, the Board missed the point

that Hayward’s attitude problem did not involve complaints to

management about junior consultants but rather about his

giving the new hires the cold shoulder and undermining their

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abilities, see J.A. 392, 548, 590, and about his challenging

management’s new business focus. See J.A. 463-64. And the

Board mischaracterized the latter. Halechko responded “no”

to counsel’s question whether Hayward was the “ring leader”

in “not respecting newly hired, more junior financial

consultants,” J.A. 433-34—he did not testify to Hayward’s

undercutting senior management by questioning Citizens

Investment’s business decisions, as the Board erroneously

found. J.A. 24. 

A review of the whole record, however, manifests that

Hayward’s attitude was in fact worse than that of other senior

financial consultants. Eric Hosie testified about Hayward’s

inappropriate conduct and denigrating comments. He stated

that Hayward told him that Saunders and Kennedy, two junior

consultants, were not qualified to be financial consultants. He

testified that Hayward used the two poaching incidents as

examples of Saunders’s ineptitude as a financial consultant.

J.A. 530. Hosie’s notes of his May 2002 conversation with

Hayward indicated that Hayward had “[c]rossed from

troubleshooter to maker—should help [junior consultants] not

hurt them” and that his “views on new reps [were] very poor

and likely fueling retail’s discontent.” J.A. 714. Barbara

Blyth testified that management was troubled by Hayward’s

open boasting about the two poaching incidents. Her notes

from the meeting in which the decision was made to terminate

Hayward listed among the determinative factors that Hayward

“denigrated peers (Mike Kennedy).” J.A. 715. In addition,

there was evidence that Hayward was vocal in criticizing

management’s new business direction. For instance, at an

informal gathering at a local restaurant, Hayward advised new

financial consultants that, in order to “get ahead,” they would

have to “kiss a lot of ass.” J.A. 461. He openly questioned

senior management’s restructuring of the company after

Citizens Investment took over. See J.A. 463-64 (David

Hunter, regional sales manager, testified that Hayward “did

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2

 I limit my review of the record to Citizens Investment’s

affirmative defense to illustrate that the whole record included

evidence impugning the Board’s finding of pretext. I also believe,

however, that my colleagues disregard evidence that undermines the

Board’s findings with regard to the General Counsel’s prima facie

case. For instance, the Board found that management took a “dim

view” of the senior financial consultants’ compensation-related

complaints. This finding is undercut, however, by evidence that

management expressly encouraged senior financial consultants’

compensation-related complaints. See J.A. 643 (e-mail from Halechko

to Chess in which Halechko reassured Chess he was not “complainer”

for raising concerns about his compensation and Chess’s points were

“valid and important to many of [his] peers”); J.A. 666 (Halechko

informed Hayward he did not want consultants’ compensation

concerns “swept under the rug”); J.A. 276 (Halechko encouraged

Hayward to take compensation-related concerns up corporate ladder).

Another example is the Board’s mischaracterization of Hunter’s

testimony that Hayward displayed a “constant lack of deportment” in

airing his various complaints. Hunter testified that, while Hayward

complained about everything, it was not his complaining that posed a

problem but his manner of doing so. See J.A. 458 (he “did not exhibit

any restraint or decorum in his criticism”); id. 477 (“nothing wrong

with complaining, but how you do it”). My colleagues also draw

not feel any respect for the decisions that were being made by

the senior management,” that Hayward “expressed a great

deal of—a lack of trust of John [Halechko]” and “Lisa

Binder” and that Hayward’s criticism of management

involved primarily the “structure of the program.”). Indeed,

the only evidence that Hayward’s attitude was no worse than

that of the other senior financial consultants was Halechko’s

testimony denying that Hayward was the “ring leader” in “not

respecting newly hired, more junior financial consultants.”

J.A. 433-34. 

In sum, there was, in my view, plenty of evidence to

conclude that Citizens Investment would have fired Hayward

without regard to any protected activity he engaged in.2 This

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inferences from the evidence that I believe are unwarranted.

Particularly troublesome is the leap they (and the Board) make in

interpreting the email Hayward signed as “union president, west.”

J.A. 671. While I have no quarrel with their conclusion that it

evidenced “protected concerted activity,” see maj. op. at 7-8, I do not

think it can reasonably be interpreted as “significant circumstantial

evidence of an impermissible motivation.” J.A. 20; maj. op. 13 (“The

timing of Hayward’s discharge also supports the Board’s finding of

unlawful motive. The Company discharged him two weeks after he

had identified himself as ‘union president’ in an email to Hunter.”).

Hayward had been making the same complaints for a long time and

the Board missed the joke—according to Hayward’s own testimony,

the soi-disant “union president” line was intended to describe his role

in bringing compensation issues to management’s attention in a

“funny” way. J.A. 235. The title was meant as a joke, not a

“threateningly prounion” battle cry, J.A. 24, and the Board cited no

evidence that management viewed it differently.

evidence notwithstanding, our limited scope of review

constrains me to join my colleagues in denying the petition

for review. 

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