Opinion ID: 692266
Heading Depth: 2
Heading Rank: 2

Heading: The Board's Materiality Standard and Its Application in This Case

Text: 19 As noted above, the Board provided the following explanation of its materiality standard: 20 [C]oncealed evidence is material if it would make a critical difference between establishing a violation and not doing so. Thus, if the absence of that evidence results in the dismissal or withdrawal of the charge, the subsequent discovery of that evidence will permit the resurrection of the charge.... 21 Brown & Sharpe II, 312 N.L.R.B. at 445. This standard makes no sense, however, because it is internally inconsistent. The Board's initial statement of its test--that concealed evidence is 'material' if it would make a critical difference between establishing a violation and not doing so--simply cannot be read consistently with its second articulation of the test--that if the absence of that evidence results in the dismissal or withdrawal of the charge, the subsequent discovery of that evidence will permit the resurrection of the charge. The first statement of the test, which essentially requires that allegedly concealed evidence, to be material, be dispositive of the unfair labor practice claim, is a much higher standard than the second articulation of the test, which appears to require only evidence sufficient to defeat a motion to dismiss the charge. These are two incompatible standards. 22 Even Board counsel, whose task it was to present and defend the Board's position to this court on petition for review, was unable to make sense of the Board's enunciated rule. In its brief to the court, the Board states that [t]he question presented here is whether the committee documents that allegedly had been concealed could somehow have made a critical difference in the General Counsel's original decision to dismiss the unfair labor practice charge. Brief for the NLRB at 25-26. This restatement of the rule, however, could not possibly be the standard relied on by the Board, because it directly conflicts with the actual result reached by the Board. The General Counsel obviously thought that the newly discovered evidence made a critical difference in his original decision to dismiss the charge, for he sought to reinstate the charge based on that evidence. Thus, if the NLRB had actually applied the test asserted by counsel on review, it surely would have found that the newly discovered evidence was material and then moved to the question of whether the evidence was fraudulently concealed. Contrary to Board counsel's assertion, it appears that in applying its materiality standard to the facts of this case, the Board relied solely on the first part of its test. The Board found that, although the [steering committee] documents may be relevant to the charge of surface bargaining, they do not make a critical difference in establishing a violation. Brown & Sharpe II, 312 N.L.R.B. at 446. Based on this finding, the Board determined that the documents do not constitute material facts. Id. 23 If the Board indeed meant to require that allegedly concealed evidence must be dispositive of the unfair labor practice charge at issue, we conclude that this standard has at least two critical flaws. First, any standard requiring dispositive evidence to avoid the strictures of section 10(b) is contrary to the concept of tolling, and is thus wrong as a matter of law. The purpose of tolling the limitations period is to allow consideration of the merits of claims that would otherwise be time-barred. See, e.g., Hohri v. United States, 782 F.2d 227, 246-53 (D.C.Cir.1986) (remanding certain claims for trial on the merits after determining that defendant United States's fraudulent concealment of facts giving rise to cause of action tolled applicable statute of limitations), vacated on other grounds, 482 U.S. 64, 107 S.Ct. 2246, 96 L.Ed.2d 51 (1987); Hobson v. Wilson, 737 F.2d 1, 32-42 (D.C.Cir.1984) (holding that certain claims were properly tried to jury because defendants' fraudulent concealment tolled applicable limitations period), cert. denied, 470 U.S. 1084, 105 S.Ct. 1843, 85 L.Ed.2d 142 (1985). Thus, by requiring a complainant to show that he or she can prevail on the merits in order to allow tolling for a hearing on the merits, the Board effectively nullifies the purpose of tolling. 24 Second, we find that, while the Board purported to adopt this circuit's standard for materiality in fraudulent concealment cases, the test applied by the Board here is cut from whole cloth, finding no support in our cases. Normally, we would not require the Board to apply any particular standard where, as here, the Board is making policy under an ambiguous provision of the NLRA. See NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786, 110 S.Ct. 1542, 1549, 108 L.Ed.2d 801 (1990) ([T]he NLRB has the primary responsibility for developing and applying national labor policy.); Exxel/Atmos, Inc. v. NLRB, 28 F.3d 1243, 1249 (D.C.Cir.1994) (It is up to the Board, not the courts, to make labor policy.). Here, however, the Board itself explicitly decided to adopt this court's standard in a particular context. In District Lodge 64, 949 F.2d at 449, we clearly stated that, while the Board on remand might consider using this circuit's standard for materiality in the fraudulent concealment context, the Board may wish to use another standard, and may well be free to do so. Having chosen on remand to adopt our standard, see Brown & Sharpe II, 312 N.L.R.B. at 444 (We agree with the Fitzgerald standard.), and thus having already exercised its policymaking authority, the Board was obliged to apply the applicable standard according to its terms. 25 The second part of the Board's standard is an accurate statement of the materiality test that they purported to adopt (but failed to apply): 26 [I]f the absence of [the newly discovered] evidence results in the dismissal or withdrawal of the charge, the subsequent discovery of that evidence will permit resurrection of the charge.... 27 Id. at 445. Under this test of materiality, the standard is akin to that used when assessing pleadings on a motion to dismiss: 28 We do not provide for tolling simply because a plaintiff's ability to mount a successful case has been impaired in some degree. Instead, we provide for tolling only when concealment has so impaired the plaintiff's case that he is not able to survive a threshold motion to dismiss for failure to tender a claim that would advance beyond the pleading stage. 29 Id. at 445 n. 25 (quoting Hohri, 782 F.2d at 249-50 n. 57). 3 30 As in the context of other federal statutes of limitation, this standard adequately protects against the introduction of stale evidence and respects the policy of repose underlying section 10(b). See District Lodge 64, 949 F.2d at 445 (discussing policy of repose contemplated by section 10(b)). Under this standard, newly discovered evidence, even though material, must still have been fraudulently concealed to toll the section 10(b) limitations period under Ducane. Furthermore, the mere fact that the General Counsel decides to reinstate previously dismissed charges based on allegedly concealed evidence, as occurred in this case, is not dispositive. The threshold of materiality is not that low. Rather, it remains the province of the Board to determine whether the General Counsel's decision to reinstate the charges at issue was reasonable in light of the delineated materiality standard. 31 Applying this standard to the facts at hand, it is clear that the allegedly concealed evidence in this case was sufficient to survive a motion to dismiss. Thus, the General Counsel's decision to reinstate the charges was reasonable. In reaching the contrary conclusion, the Board in Brown & Sharpe II relied exclusively on its previous findings inBrown & Sharpe I, and restated the core conclusion of Brown & Sharpe I that the evidence does not support the allegation that the [Company] engaged in surface bargaining. 312 N.L.R.B. at 446. In District Lodge 64, we rejected that conclusion, and our reasoning applies with equal force here: 32 [E]ven assuming the claim ultimately to be completely meritless, the Board's analysis itself points to some evidence supportive of the claim. For example, the Board notes that the position paper on [mandatory] transfers states that managers have had very few problems with them. This statement surely gives some support to the union view that treatment of mandatory transfers as an absolute was contrived, even if, on balance, a fact finder would conclude that the higher levels of Brown & Sharpe's management acted in good faith in rejecting the position paper's recommendation. Our inference that the Board was demanding a good deal more than support is reinforced by its remarks that particular pieces of evidence are not inherently contradictory, seeming to suggest that only an inexplicable contradiction would be enough, regardless of whether the company offered an explanation. 33 949 F.2d at 450 (citations omitted). 34 Thus, the allegedly concealed evidence is sufficient to overcome a motion to dismiss, because the documents contain statements that certainly support a claim of surface bargaining. This is especially true when the affidavit of David Waterman, which the Board inexplicably ignored in both Brown & Sharpe I and Brown & Sharpe II, is taken into account. Waterman's affidavit suggests that Company management may have had no intention of reaching agreement with the Union during contract negotiations, and that the machine seniority and mandatory transfer issues were created by the Company simply for purposes of forestalling agreement. See Affidavit of David Waterman, reprinted in Joint Appendix 293-311. That a fact finder might ultimately conclude that Waterman's testimony is not credible is irrelevant for purposes of a motion to dismiss, for that testimony must be viewed in the light most favorable to the General Counsel. The Board's view that, when read as a whole, the committee documents do not support the Union's claim, see Brown & Sharpe II, 312 N.L.R.B. at 446, is similarly irrelevant, because that evidence too must be read in the light most favorable to the General Counsel. In sum, because the combination of the newly discovered steering committee documents and the Waterman testimony clearly supports the Union's surface bargaining allegation, that evidence was sufficient to survive the Company's motion to dismiss and is thus material evidence for purposes of the Ducane rule. 35 We therefore vacate the judgment of the Board and remand the case for a determination of whether the evidence, though material, was actually fraudulently concealed by the Company. If the Board determines that the newly discovered evidence in this case was indeed fraudulently concealed, and thus that the section 10(b) limitations period is tolled, then the Board must reach the merits of the unfair labor practice charges.