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Parties Involved:
Medco Health Solutions of Las Vegas, Inc.
Petitioner
National Labor Relations Board
Respondent
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO, CLC, Local 675
Intervenor for Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 20, 2012 Decided December 14, 2012 

No. 11-1282 

MEDCO HEALTH SOLUTIONS OF LAS VEGAS, INC., 

PETITIONER

v. 

NATIONAL LABOR RELATIONS BOARD, 

RESPONDENT

UNITED STEEL, PAPER AND FORESTRY, RUBBER,

MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND SERVICE 

WORKERS INTERNATIONAL UNION, AFL-CIO, CLC, LOCAL 

675, 

INTERVENOR

Consolidated with 11-1321 

On Petition for Review and Cross-Application for 

Enforcement 

of an Order of the National Labor Relations Board 

Marc L. Zaken argued the cause and filed the briefs for 

petitioner. 

USCA Case #11-1282 Document #1410076 Filed: 12/14/2012 Page 1 of 14
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Amy H. Ginn, Attorney, National Labor Relations 

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

were John H. Ferguson, Associate General Counsel, David 

Habenstreit, Assistant General Counsel, and Jill A. Griffin, 

Supervisory Attorney. Daniel A. Blitz, Attorney, entered an 

appearance. 

Amanda M. Fisher argued the cause and filed the brief 

for intervenor. Daniel M. Kovalik entered an appearance. 

Before: ROGERS and KAVANAUGH, Circuit Judges, and 

WILLIAMS, Senior Circuit Judge. 

Opinion for the Court filed by Senior Circuit Judge

WILLIAMS. 

WILLIAMS, Senior Circuit Judge: This case arises mainly 

from an employer’s belief that exclaiming “WOW” to 

celebrate workers’ special achievements would hearten the 

workers and quicken their zeal. As so often in human 

relationships, things proved more complicated. 

Petitioner Medco Health Solutions of Las Vegas, Inc. is a 

pharmacy benefits management company that sells 

pharmaceuticals out of a mail-order facility in Las Vegas, 

Nevada. It receives and fills prescriptions through an 

automated process and mails completed orders to patients. 

The company employs nearly 850 people at its Las Vegas 

facility, including pharmacists, coverage review 

representatives, and pharmacy technicians. These workers are 

represented by the United Steel Workers Local No. 675. The 

pharmacists belong to the “pharmacists unit,” the others to the 

confusingly labeled “pharmacy unit.” 

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In the summer of 2009, in an effort to encourage superior 

performance, Medco introduced what it called the “WOW 

program.” (WOW is apparently just an exclamation, not an 

acronym.) The program centers on weekly events at which 

designated employees receive “WOW awards” in recognition 

of their achievements. The awards do not entitle the recipient 

to monetary compensation, and they carry no weight in 

determining promotions or wage increases (though 

presumably the conduct underlying the awards may do so). 

Employees may decline WOW awards and are not required to 

attend the weekly recognition ceremonies. 

Medco thought the program was a nice gesture, one that 

employees would appreciate. It clearly believed that 

customers and potential customers—e.g., firms that use 

Medco to meet the pharmacy needs of insured workers—

would view the program as manifesting Medco’s commitment 

to service. When Medco’s managers showed the 

representatives of such firms around the facility, a regular stop 

was an installation in the cafeteria called the “Wall of WOW,” 

displaying recent WOW awardees, along with the reasons 

they received their awards. Approximately one hundred such 

customer tours take place each year, about two a week. 

Medco also featured the WOW program in a slide 

presentation that it routinely showed to tour groups. 

Not all employees shared Medco’s sunny outlook on the 

program. On February 12, 2010, employee Michael Shore 

(vice-chairman of the “pharmacy unit”) wore a T-shirt to 

work, its front bearing the union logo and its back the 

message, “I don’t need a WOW to do my job.” 

 The same day, representatives of the Land O’Lakes 

company, a Medco client, were scheduled to tour the facility. 

Word that Shore had been wearing the T-shirt in the cafeteria 

during his lunch break reached Vice President and General 

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Manager Tom Shanahan, who summoned Shore to his office. 

Shanahan expressed surprise and disappointment at Shore’s 

decision to wear the shirt, which he felt was “insulting” to 

Medco, and asked Shore to remove it. Shanahan added that if 

Shore did not feel he could support the WOW program, “there 

were plenty of jobs out there.” Shore complied with 

Shanahan’s request and did not wear the T-shirt again. In the 

ensuing proceedings before the National Labor Relations 

Board, Medco invoked in support of its conduct a provision of 

its dress code then in effect banning “Phrases, Words, 

Statements, pictures, cartoons or drawings that are degrading, 

confrontational, slanderous, insulting or provocative.” Medco 

appears never to have objected to clothing bearing a union 

logo or name.

Out of these events sprang charges of violations of 

§ 8(a)(1) of the National Labor Relations Act, 29 U.S.C. 

§ 158(a)(1), charges that the Board upheld in almost every 

aspect. Medco Health Solutions of Las Vegas, Inc., 357 

NLRB No. 25, at 1 (2011). 

At the same time another dispute arose, unrelated except 

that it involved a dress code provision, Medco, and the same 

general time period. This clash started November 19, 2009, 

when Medco notified the chairman of the pharmacists unit of 

a change in dress code policy to be announced the following 

day. The Board’s General Counsel charged Medco with 

violating §§ 8(a)(1) & (5) of the Act, 29 U.S.C. §§ 158(a)(1) 

& (5), by refusing to bargain over the change, and the Board 

upheld the charge. Medco, 357 NLRB No. 25, at 2. 

Medco now timely petitions for review of the Board’s 

order as to both matters, and the Board cross-applies for 

enforcement. As to the amendment of the dress code, we 

uphold the Board. Various aspects of the T-shirt dispute, 

however, require us to remand the matter to the Board for 

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further proceedings. The dress code amendment issue being 

fairly simple, we will clear it out of the way first, then tackle 

the T-shirt question. 

* * * 

Pharmacists’ dress code changes. On November 19, 

2009, Medco alerted William Webb, chairman of the 

pharmacists unit, to a change in dress code policy to be 

announced the following day. Effective January 1, 2010, the 

company would require pharmacists to wear lab coats during 

working hours and dress in business casual on scheduled tour 

days. Management also told Webb that if the union had any 

questions or concerns it should let Medco know by the 

following day.

On December 9, Webb emailed Medco a request to 

bargain over the issue. Medco responded that it “would be 

happy to . . . discuss the upcoming change,” but said it did 

“not believe this is a mandatory subject for bargaining.” Joint 

Appendix (“J.A.”) 497. The next day, Medco and the union 

met to discuss the changes to the dress code. Medco began 

the meeting by reiterating its view that the dress code was not 

subject to mandatory bargaining. Union representatives left 

the meeting after concluding that Medco was immovable. 

The new dress code went into effect as scheduled. 

Medco does not now appear to contest that dress codes 

qualify as a mandatory subject of bargaining contemplated by 

the Act. See Yellow Enterprise Systems, 342 NLRB 804, 827 

(2004). Rather, it argues that the United Steel Workers had 

agreed that a management rights clause in an expired contract 

between Medco and a predecessor union would remain in 

effect while the United Steel Workers negotiated a new 

collective bargaining agreement with Medco. This clause, it 

contends, entitled Medco to promulgate the dress code 

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changes when the union failed to raise questions or concerns 

within 24 hours of Medco sharing the policy with the union 

chair of the pharmacists unit. But the ALJ explicitly refused 

to credit the testimony offered by Medco in support of the 

alleged agreement to let the old contract continue in effect, 

and the Board accepted that ruling. 357 NLRB No. 25, at 2-3. 

Medco offers nothing to suggest that this case is among the 

rare instances where we can properly overturn such a 

credibility finding. See, e.g., Federated Logistics & 

Operations v. NLRB, 400 F.3d 920, 923 (D.C. Cir. 2005). 

Medco argues in the alternative that it did bargain with 

the Union, and that the Board erred by focusing solely on 

Medco’s statement that it would not bargain. Medco urges us 

to look at the totality of its conduct, which it asserts 

demonstrated a good-faith effort to bargain that ended in 

impasse. But in fact that pattern consisted of repeatedly 

denying any intent to bargain, and then declining to entertain 

any concessions. Sustaining Medco’s objection would require 

us and the Board to accept the idea that such a strategy 

amounts to “bargaining” under the Act, a notion that would 

vitiate § 8(a)(5)’s language making it an unfair labor practice 

to “refuse to bargain.” 

The anti-WOW T-shirt. After a hearing on the General 

Counsel’s complaint, an ALJ found against Medco with 

respect to the T-shirt charge. Specifically, he found: (1) that 

Shore’s wearing of the T-shirt was a “union supported protest 

of a working condition” protected by § 7 of the Act; (2) that 

Medco, through Shanahan’s observation that if Shore did not 

feel he could support the WOW program there were plenty of 

jobs out there, had unlawfully invited Shore to quit his 

employment in response to his protest of working conditions; 

and (3) that Medco’s application to Shore of the dress code’s 

ban on “insulting” language had restricted the employees’ § 7 

rights in violation of § 8(a)(1). 357 NLRB No. 25, at 7-8 & 

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n.3. Finally, reading the dress code’s prohibitions on 

“provocative” and “confrontational” statements as being 

reasonably understandable as restraining protected activity, 

the ALJ found that Medco had violated § 8(a)(1) by 

“maintaining overly broad work rules,” seemingly a kind of 

facial invalidation. Id. at 8.

In affirming, the Board departed from the ALJ’s analysis 

only in declining to reach the merits of his finding that 

employees would reasonably read the dress code to restrict § 7 

activity, explaining that such a violation would not change the 

remedy awarded the union. Id. at 2. Yet, among the other 

remedies, the Board ordered Medco to cease enforcement of 

and to rescind the ban on “provocative, insulting, or 

confrontational” statements. Id. at 3-4. 

Section 7 of the Act grants employees the right “to 

engage in . . . concerted activities for the purpose of collective 

bargaining or other mutual aid or protection.” 29 U.S.C. 

§ 157. Section 8(a)(1) enforces § 7 by making it unlawful for 

employers to “interfere with, restrain, or coerce” employees’ 

exercise of their rights under that provision. Id. § 158(a)(1). 

Medco contends that Shore’s behavior was not protected 

by § 7, and that therefore no § 8(a)(1) violation occurred. Its 

challenge rests on three arguments. First, it claims that 

Shore’s activity was not concerted because he was not acting 

on behalf of his colleagues or in furtherance of a group 

purpose. Second, Medco asserts that, even if Shore’s 

behavior was concerted, it was not for the purpose of 

“collective aid or protection” in that it did not seek to improve 

a term or condition of employment. Finally, Medco maintains 

that even if Shore’s behavior was concerted and relating to a 

condition of employment, it was not protected by § 7 because 

of “special circumstances”—principally that the message on 

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Shore’s shirt disparaged Medco and threatened to harm 

Medco’s relationship with its customers. 

 In fact the record adequately supports the Board’s 

conclusion that Shore was engaging in concerted activity in 

wearing the T-shirt. The shirt’s presence in Las Vegas 

stemmed from a January 2010 trip by pharmacy unit 

chairperson Marissa Osterman to Tampa for a meeting of 

union leaders from across Medco offices. There she received 

the T-shirt from the president of a Medco sister unit in 

Pittsburgh. The shirt had been designed for a union unity 

protest against the WOW program. She brought it back to Las 

Vegas and gave it to Shore. 

Shore testified that he had worn the T-shirt “because of 

the [union] logo, first of all,” but when asked for his opinion 

of the WOW program, he replied: “[M]y T-shirt said it all. I 

don’t need a WOW to do my job.” J.A. at 240. Although he 

testified that he did not discuss the T-shirt with anyone before 

wearing it to work, he also said that in his capacity as union 

vice-chairman he had received complaints about the WOW 

program. He added that on the day he wore his shirt he 

received words and gestures of approval from his colleagues. 

We have upheld the Board’s definition of “concerted 

activity” as encompassing “those circumstances where 

individual employees seek to initiate or to induce or to prepare 

for group action, as well as individual employees bringing 

truly group complaints to the attention of management.” Prill 

v. NLRB, 835 F.2d 1481, 1484 (D.C. Cir. 1987). In evaluating 

whether an employee acted concertedly, “[t]he touchstone for 

concerted activity . . . must be some relationship between the 

individual employee’s actions and fellow employees.” Int’l 

Transp. Service, Inc. v. NLRB, 449 F.3d 160, 166 (D.C. Cir 

2006). The account above amply shows that Shore “brought a 

group complaint to management’s attention.” His and 

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Osterman’s testimony leaves little doubt that some Medco 

employees in both Las Vegas and Pittsburgh disliked the 

WOW program and that the T-shirt reflected that discontent. 

Medco offers two specific points against this conclusion. 

First it notes Shore’s failure to discuss his T-shirt plans with 

his colleagues. But we have never said that the Board can 

find concerted action only where an employee obtained the 

consent or acknowledgment of his or her coworkers before 

bringing a group complaint to the attention of management. 

In fact, we have recognized the opposite contention. “[A]n 

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 by the 

group.” Citizens Inv. Services Corp. v. NLRB, 430 F.3d 1195, 

1198-99 (D.C. Cir. 2005) (citations omitted). 

Second, Medco asserts that Shore said he didn’t wear the 

T-shirt as a protest of the WOW program. But the passage of 

the transcript that Medco cites in support of its claim contains 

no such remark. See Petitioner’s Brief at 7 (citing J.A. at 241, 

254). We thus sustain the Board’s finding of concerted 

activity. 

Medco’s second argument is likewise unavailing. Section 

7 protects workers’ concerted action “for the purpose of 

collective bargaining or other mutual aid or protection.” 

Under this language the purposes of protected concerted 

activities extend beyond “the narrower purposes of ‘selforganization’ and ‘collective bargaining.’” Eastex, Inc. v. 

NLRB, 437 U.S. 556, 565 (1978). Before the Board, Medco 

argued that the object of Shore’s protest, the WOW program, 

is not a “term or condition of employment” (Eastex’s phrase 

for the subjects for which workers may engage in concerted 

activity, id.) because it is unrelated to “discipline,” “wage 

increases,” or “promotions” and does not involve “monetary 

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compensation.” Respondent’s Brief at 26, Medco Health 

Solutions of Las Vegas, Inc., 357 NLRB No. 25 (2011) (Nos. 

28-CA-22914, 22915). The Board rejected these arguments, 

reasoning that “a program intended to create an incentive for 

employees to work harder or be more productive” qualifies as 

a condition of employment. Medco, 357 NLRB No. 25, at 2 

n.6. The Board’s position is obviously sounder than Medco’s, 

which would exclude from § 7’s protection not only Medco’s 

WOW program but a host of other issues that are not merely 

“terms and conditions of employment” within the meaning of 

Eastex but are mandatory subjects of collective bargaining, 

such as worker safety. See, e.g., United Steelworkers, AFLCIO-CLC v. Marshall, 647 F.2d 1189, 1236 (D.C. Cir 1980). 

Before the Board and on appeal Medco has invoked New 

River Industries, Inc. v. NLRB, 945 F.2d 1290 (4th Cir. 1991), 

in which the court held that employees’ concerted satirical 

attacks, leveled at an employer’s one-time provision of free 

ice-cream cones in celebration of the firm’s execution of a 

favorable contract, were unprotected. The only links between 

the two cases are (1) ice cream (which was provided to Medco 

employees at the weekly WOW events), and (2) the satirical 

nature of the worker “protest.” But in New River the 

company’s ice cream distribution was a one-time event, and 

was related solely to management’s enthusiasm for a thirdparty contract, not to its effort to create, in the words of the 

Board, “an incentive for employees to work harder or be more 

productive.” New River is thus no obstacle to our affirming 

the Board’s finding on this point. 

 Medco’s final argument is that Shore’s wearing the Tshirt potentially affected its relationship with its customers in 

a way that created “special circumstances” justifying its 

response. Here the ALJ and Board offered no clear answer. 

The Board’s opinion adopted wholesale the ALJ’s cursory 

reasoning that no “absolute ban” was justifiable because “the 

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tours were not a daily occurrence.” 357 NLRB No. 25, at 2. 

The Board further found that, even if the tours were conducted 

daily, Medco’s argument would still fail because the company 

had not offered any evidence that the T-Shirt posed a real risk 

of harm to the customer relationship. Id.

We note first that the fact that the tours were not an 

everyday occurrence does not mean that they were so 

predictable that Medco could have devised a rule that would 

have reliably screened customers from messages such as the 

one on Shore’s T-shirt. Shanahan and another Medco 

manager both testified that unscheduled tours occurred 

periodically, and that visitors sometimes entered the Las 

Vegas facility without advance notice. See J.A. at 148, 317. 

The Board did not directly address this testimony, but rather 

observed in a footnote that “[t]he record also shows that 

employees generally received advanced notification of 

upcoming tours.” 357 NLRB No. 25, at 2 n.7. Even under 

our highly deferential standard of review, requiring us to 

affirm the Board’s application of law to facts except where 

“arbitrary or otherwise erroneous,” Guard Publishing Co. v. 

NLRB, 571 F.3d 53, 58 (D.C. Cir. 2009), the Board cannot be 

said to have offered a “reasoned explanation” for rejecting 

Medco’s argument in favor of a rule applying throughout the 

working day, see Int’l Transp. Service, 449 F.3d at 163. 

Of course if Medco could not lawfully have banned the 

anti-WOW T-shirt even at times coincident with customer 

tours, the timing issue would not help it. But on the issue of a 

partial ban, the Board’s reasoning was equally deficient. 

Medco makes a straightforward argument that the message on 

the T-shirt was insulting to the company and would have 

undermined its efforts to attract and retain customers. To that 

end, Medco has provided considerable evidence that the 

WOW program is an important element of the pitch it gives 

prospective and current clients; the company even assigns a 

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fulltime employee to manage the program. This evidence, and 

the tone of the T-shirt gibe at Medco’s management, seem to 

preclude an offhand dismissal of the contention that the Tshirt would threaten to damage Medco’s relationship with its 

customers. Yet the Board concluded that Medco had “not 

offered any evidence that the slogan reasonably raised the 

genuine possibility of harm to the customer relationship.” 357 

NLRB No. 25, at 2. 

We find this conclusion puzzling, for the Board has had 

no difficulty in identifying potential harm to customer 

relations in prior rulings. In Pathmark Stores, Inc., 342 

NLRB 378, 379 (2004), the Board held that a grocery store 

could, because of its “legitimate interest in protecting its 

customer relationship,” lawfully prohibit its employees from 

displaying the message “Don’t Cheat About the Meat!” in 

protest of the store’s use of prepackaged meat products. And 

in Noah’s New York Bagels, Inc., 324 NLRB 266, 275 (1997), 

the Board upheld a ban on T-shirts reading “If its [sic] not 

Union, its [sic] not Kosher.” In neither of these cases did the 

Board require the employer to offer additional evidence 

beyond a relationship between its business and the banned 

message. In Pathmark the Board explicitly acknowledged 

that the company had “presented no evidence that customers 

decided not to buy” its products in response to the banned 

slogan, but upheld the ban because it found “the slogan 

reasonably threatened to create concern among [the 

company’s] customers.” 342 NLRB at 379. 

We do not think the Board has adequately explained why 

Medco’s claim of harm to customer relations requires 

evidence beyond what it has already adduced, while those of 

the employers in Pathmark and Noah’s New York Bagels 

required none. At oral argument Board counsel proposed to 

read these cases as limited to disparagements of an employer’s 

merchandise. But obviously an employee can harm an 

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employer’s customer relations by belittling or critiquing other 

aspects of the employer’s operations. Especially for a firm 

selling a service, concern for customers’ appraisal of its 

employees’ attitudes seems natural. Obviously we don’t mean 

to suggest that employers are free to suppress employee 

speech in the interest of presenting a Potemkin village of 

intra-firm harmony, but that is quite different from trying to 

exclude the display of slogans that an outsider might read as 

sullen resentment (especially when the object of discontent is 

something so seemingly inoffensive as the WOW program). 

We recognize that “the Board draws on a fund of 

knowledge and expertise all its own,” NLRB v. Gissel Packing 

Co., 395 U.S. 575, 612 n.32 (1969), but that expertise is 

surely not at its peak in the realm of employer-customer

relations. And the Act of course protects a wide spectrum of 

lawful means of protesting employer policies and actions, 

some of which may occur in the presence of customers. But if 

the Board wishes to locate an employee’s behavior within that 

spectrum, it must supply a more meaningful analysis than it 

has offered here. 

In describing the ALJ’s and the Board’s analyses, we 

noted that while the ALJ had not only condemned Medco’s 

application of the dress code’s ban on “insulting” language to 

Shore but also found its prohibition of “provocative” or 

“confrontational” messages overly broad, the Board explicitly 

refrained from endorsing the ALJ’s second finding. Yet the 

Board’s order directs Medco to “[r]escind the overly broad 

work rules that prohibit employees from wearing clothing 

with messages that are provocative, insulting, or 

confrontational.” 357 NLRB No. 25, at 3. In adopting this 

provision, the Board neither followed the reasoning of the 

ALJ nor substituted its own. It offered no explanation for its 

implicit ruling that each of the three adjectives was overly 

broad. 

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In the past we have found the Board “remarkably 

indifferent to the concerns and sensitivity” that lead 

employers to adopt rules intended “to maintain a civil and 

decent workplace.” Adtranz ABB Daimler-Benz Transp., N.A. 

v. NLRB, 253 F.3d 19, 25, 27 (D.C. Cir. 2001). In Lutheran 

Heritage Village-Livonia, 343 NLRB 646, 647 (2003), the 

Board appeared to accept Adtranz’s holding on employers’ 

rights to maintain such a workplace. Moreover, when a rule 

neither expressly nor inherently restricts protected activity, the 

Board appeared in Lutheran Heritage to condition any 

decision that the rule’s mere existence violated the Act on a 

finding either that the rule was promulgated in response to 

union activity or that a reasonable employee reading the rule 

would construe it to prohibit protected conduct. Id. For no 

apparent reason the Board seems to have abandoned that 

analysis in proscribing Medco’s ban on provocative and 

confrontational words. As a general matter, we suspect that 

such expressions are seldom found in civil and decent places 

of employment. 

* * * 

For the reasons above, we deny Medco’s petition to 

review the Board’s determination that Medco committed an 

unfair labor practice by refusing to bargain on its amendment 

of the pharmacists’ dress code. We grant the Board’s crossapplication for enforcement on this issue. But we set aside the 

Board’s determination that Medco violated the Act in ordering 

Shore to remove his T-shirt, and in its ban on insulting, 

provocative and confrontational expressions on clothing. We 

remand for further proceedings consistent with this opinion. 

 So ordered. 

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