# United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 16, 2007 Decided February 8, 2008

No. 06-1365

W&M P ROPERTIES OF C ONNECTICUT

, I NC

., P ETITIONER

v.

N ATIONAL L ABOR R ELATIONS B OARD

, R ESPONDENT

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.2

Before: B ROWN and G RIFFITH

, Circuit Judges , and

E DWARDS

, Senior Circuit Judge

.

Opinion for the Court filed by Circuit Judge G RIFFITH

.

G RIFFITH

, 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 Na tional 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 employe r’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 mana ged commercial properties bypurchasing 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 Opera ting 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 interv iews to hire the necessary3

engineers. TrizecHahn employees pa rticipated in this process, as did outside applicants. Th e 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, Rich ard 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 th e 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 hi re McGoohan, Bonos, Stofko, and Cassidy was motivated by its de termination, 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.4

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 Bo ard 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 cha nges 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 re view 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 considerat ion 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 subs ection (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 Morris on Molded Fiberglass Co. v.5

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 give n 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]rd erly 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 “extr aordinary 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 an6

argument that had not been ur ged before the Federal Labor Relations Authority (“Authority”) by taking a rather broad view of “extraordinary circumstan ces” 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 circum stances” 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 be fore the decision under review here, it is manifestly clear it would have been a useless
exercise for W&M to seek r econsideration by the Board in this case.” Reply Br. at 11. Such an assessment of the Board’s likely disposition, relying on highl y 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 excuse d 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 ci rcumstances” justifying this mistake, we conclude that the argument is waived and that we therefore lack jurisdiction to consider it.7

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 substantia l 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 prov ide 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 s upply a reasoned analysis indicating that prior policie s 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 lin e 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 departed8

from precedent regarding the standard used to evaluate
failure-to-hire claims in th e 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 pa rtial 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 discri minatory-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 th e employer was hiring, and that the unhired applicant had releva nt 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 cl aims, 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 empl oyee was qualified to hold the9

same job he had performed for the predecessor employer. Planned Building acted on this realiz ation 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 ra tionale 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 essent ially 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 qua lification 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 c ontention mistakenly assumes that the presumption of qualif ication is irrebuttable. A successor employer is well-positio ned 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 jus tification for its departure from precedent, the Board avoi ded a finding of arbitrary and capricious action under the Admi nistrative Procedure Act, 5 U.S.C. § 706(2)(A). See Titanium Metals Corp. v. NLRB , 392 F.3d 439, 446 (D.C. Cir. 2004).10

Labor Violations

The Board found that W&M violated the NLRA by interfering with the employees’ ri ght to unionize, declining to hire its predecessor’s employ ees 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 ev idence 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 whethe r we might rule differently de novo, Evergreen Am. Corp. v. NLRB , 362 F.3d 827, 837 (D.C. Cir. 2004). Greater stil l 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 viol ates § 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 em ployer’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 the11

circumstances,” Vincent Indus. Plastics, Inc. v. NLRB , 209 F.3d 727, 737 (D.C. Cir. 2000), fo und that Heller’s coercive questioning of Perez violat ed § 8(a)(1) of the NLRA. Substantial evidence supports this conclusion. Testifying
before the administrative la w 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 member ship 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 s ubstantial eviden ce 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 animus12

against the TrizecHahn engine ers. Gerrit Blauvelt, W&M’s Director of Property Management , told one job applicant that W&M would never recognize Lo cal 30 because the owners did not want a unionized workforce at First Stamford Place,
and told another that “if a nyone 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 disrepai r; on its neutral and objective hiring criteria; and on its interviews, which revealed certain employees to be unsatisfact ory. 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 Pl ace. The Board inferred from the hiring of Benitez and outsi de applicant Adalberto Sotillo,
both of whom lacked relevant e xperience, 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’ clai ms that subjective but neutral
observations from the interviews supported the decision not to
hire. Substantial evid ence supports the findi ng of a violation of § 8(a)(3) of the NLRA becau se, taken together, these items from the record are enough to pe rsuade 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 th at W&M’s objection to the administrative law judge’s conclu sion on the § 8(a)(5) refusalto-bargain charge depended on its contention that the13

§ 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 th e Board’s cross-application to
enforce its order.

So ordered.