Court Opinion

ID: 9779554
Source: CourtListenerOpinion
Date Created: 2023-08-29 23:08:34.482909+00
Date Added: 2024-06-11T11:21:50.919379
License: Public Domain

Case: 22-60442        Document: 00516877082             Page: 1      Date Filed: 08/29/2023

             United States Court of Appeals
                  for the Fifth Circuit                                              United States Court of Appeals
                                     ____________                                             Fifth Circuit

                                                                                            FILED
                                                                                      August 29, 2023
                                      No. 22-60442
                                     ____________                                      Lyle W. Cayce
                                                                                            Clerk
   The Atlantic Group, Incorporated,

                                                          Petitioner—Cross-Respondent,

                                            versus

   National Labor Relations Board,

                                          Respondent—Cross-Petitioner.
                     ______________________________

                   Appeal from the National Labor Relations Board
                             Agency Nos. 16-CA-260413,
                           16-CA-262499, 16-CA-263091,
                                   16-CA-263222
                    ______________________________

   Before Higginbotham, Graves, and Douglas, Circuit Judges.
   Per Curiam:*
         The Atlantic Group petitions for review of a National Labor Relations
   Board (“NLRB” or the “Board”) decision finding it violated Sections
   8(a)(5) and (1) of the National Labor Relations Act (“NLRA” or “the Act”)
   by laying off unit employees without providing the International Brotherhood
   of Electrical Workers, Local Union 220 (the “Union”) prior notice and an

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
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   opportunity to bargain and by refusing to bargain with the Union while its
   request for review was pending. The Board further found that the Atlantic
   Group violated Section 8(a)(1) of the NLRA by threatening employees with
   job loss if they selected the Union as their bargaining representative. The
   NLRB cross-applies for summary enforcement of the Board’s order.
   Because substantial evidence supports the Board’s decision, we ENFORCE
   the order in full.
                                         I.
                                         A.
          The Atlantic Group, a subsidiary of Day & Zimmermann, provides
   maintenance and modification services to several dozen nuclear and fossil-
   fuel powerplants. In late January of 2020, the Atlantic Group began a five-
   year contract to perform maintenance work at the Comanche Peak Nuclear
   Power Plant in Glen Rose, Texas.
          The plant, owned and operated by Luminant Generation Company,
   contains two nuclear reactors. When the plant is “online,” or generating
   electricity, the Atlantic Group’s “core” employees provide services
   including mopping floors, cutting grass, building scaffolds, painting, and
   repairing air conditioning units.         When the plant is “offline” for
   maintenance, and not generating electricity, a separate group of temporary
   employees work on distinct tasks specific to plant-shutdown periods.
          Shortly after the Atlantic Group began operations at the plant, in early
   February, the employees started a campaign to be represented by the Union.
   Later that month, the Union filed a petition with the NLRB’s regional office
   to represent the Atlantic Group’s “core” employees, specifically excluding
   the outage employees. After approval by the NLRB’s Regional Director, a
   mail ballot election commenced on April 20, 2020.

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          At some point prior to the election, Jerry Bales, the site
   superintendent, addressed a group of bargaining-unit employees at an on-site
   meeting, making comments indicating that employees would be left jobless if
   they proceeded with the Union. Shortly after Bales’ remarks, the mail-ballot
   count was held on May 29, 2020. A majority of votes were cast in favor of
   union representation. On June 8, 2020, the NLRB’s Regional Director
   certified the Union as the exclusive collective-bargaining representative of
   the unit employees. About two weeks later, the Atlantic Group filed a request
   for review of the certification with the Board.
          On June 22 and 25, 2020, the Union requested in writing that the
   Atlantic Group recognize and bargain with it, and provide information
   needed for collective-bargaining purposes. On June 30, the Atlantic Group
   informed the Union that it would refuse to recognize, bargain with, or
   provide information on the grounds that its challenge to the results of the
   representation election was pending before the NLRB.
          Following certification, in July 2020, bargaining-unit electricians
   David Smith and Jose Mendez, who worked for the Atlantic Group since it
   began operations at the plant in January, were assigned to a project involving
   the replacement of air compressors. After Luminant informed the Atlantic
   Group that the project was delayed, the Atlantic Group issued a layoff notice
   to Smith on July 16, and to Mendez on July 20, citing a lack of work. The
   Atlantic Group did not notify the Union in advance of these layoffs, nor
   provide the Union an opportunity to bargain over them. From the time work
   commenced at Comanche Peak in January 2020 through July 2020, four
   other layoffs occurred: Teressa Milton, Bradley Sutter, James Foos, and Joe
   Ortiz. Milton, Bradly, and Foos (the “lake employees”) were employed
   helping the public utilize the lake facility for boating and fishing and were
   terminated at the onset of the COVID-19 pandemic. Ortiz, an insulator
   journeyman, was laid off due to lack of work at the end of an outage period.

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           On September 2, 2020, the Board denied the Atlantic Group’s request
   for review of the Regional Director’s decision. Finally, on October 2, 2020,
   the Atlantic Group agreed to recognize and bargain with the Union, and the
   parties agreed to meet to begin formal negotiations for a collective-bargaining
   agreement.
                                                 B.
           Based on the foregoing credited facts, the Board found, in agreement
   with the ALJ, that the Atlantic Group violated Section 8(a)(1) of the NLRA,
   29 U.S.C. § 158(a)(1), by threatening employees with job loss, and violated
   sections 8(a)(5) and (1) of the Act,1 29 U.S.C. §§ 158(a)(5), (1), by failing to
   recognize and bargain with the Union and by failing to furnish and/or
   unreasonably delaying in furnishing the Union with requested, relevant, and
   necessary information.2 A majority of the Board further found in agreement
   with the ALJ that the Atlantic Group violated Sections 8(a)(5) and (1) of the
   Act, 29 U.S.C. § § 158(a)(5), (1), by firing employees Smith and Mendez
   without giving the Union prior notice and an opportunity to bargain.
           The Board ordered the Atlantic Group to cease and desist from the
   unfair labor practices found and from, in any like or related manner,

           _____________________
           1
             A section 8(a)(5) violation produces a derivative violation of section 8(a)(1).
   Allied Chem. & Alkali Workers of Am. v. Pittsburgh Plate Glass Co., 404 U.S. 157, 163 n. 6
   (1971).
           2
              As noted by the NLRB, the Atlantic Group fails to challenge the Board’s finding
   that it violated Section 8(a)(5) and (1) of the Act by failing to furnish and/or timely furnish
   the Union with requested information. Accordingly, the NLRB requests summary
   enforcement of the corresponding portion of the Board’s order requiring the Atlantic
   Group to furnish this information. By failing to address the violation in its brief, the
   Atlantic Group has waived any argument against this unfair-labor practice and the Board’s
   order to this point is summarily ENFORCED.

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   interfering with, restraining, or coercing employees in the exercise of their
   rights under Section 7 of the Act, 29 U.S.C. § 157. The order requires the
   Atlantic Group to: offer Smith and Mendez reinstatement to their former
   jobs or to substantially equivalent positions if those jobs no longer exist; make
   them whole for any loss of earnings and benefits; compensate them for any
   adverse tax consequences of a lump-sum backpay award; remove from its
   files any reference to the unlawful layoffs; recognize and, on request, bargain
   with the Union; furnish in a timely manner the information requested by the
   Union on June 22 and 25, 2020, to the extent that it has not already done so;
   and post a remedial notice.
                                          II.
          The Court will enforce the NLRB’s decision if it is reasonable and
   supported by substantial evidence in the record as a whole. Strand Threatre
   of Shreveport Corp. v. NLRB, 493 F.3d 515, 518 (5th Cir. 2007) (citation
   omitted); see 29 U.S.C. § 160(e) (“The findings of the Board with respect to
   questions of fact if supported by substantial evidence in the record considered
   as a whole shall be conclusive.”); Universal Camera Corp. v. NLRB, 340 U.S.
   474, 491 (1951). Substantial evidence is “such relevant evidence as a
   reasonable mind would accept to support a conclusion.” Universal Camera,
   340 U.S. at 477; see also Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S.
   359, 377 (1998) (substantial evidence requires a degree of evidence that
   “could satisfy a reasonable factfinder”). “Reasonable inferences drawn by
   the Board from its findings of fact may not be displaced even if the court
   might have reached a different view had the matter been before it de novo.”
   United Supermarkets, Inc. v. NLRB, 862 F.2d 549, 551 (5th Cir. 1989). Said
   differently, this court will not “reweigh the evidence, try the case de novo, or
   substitute [its] judgment for that of the Board even if the evidence
   preponderates against the [Board’s] decision.” El Paso Elec. Co. v. NLRB,
   681 F.3d 651, 656 (5th Cir. 2012) (internal quotation and citation omitted).

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                                         III.
                                 A. Layoff Charge
          The Atlantic Group argues that the Board lacked substantial evidence
   to conclude that it made a unilateral change by laying off Smith and Mendez.
   It claims that it demonstrated a past practice of layoffs based on having laid
   off ten percent of its workforce due to “lack of work” since it began work in
   January. Further, it claims it has demonstrated a past policy of layoffs based
   on its employee handbook and employment agreements.                   The NLRB
   counters that substantial evidence supports the Board’s finding that the
   layoffs of Smith and Mendez were fundamentally different than the other
   layoffs at the company, and that the handbook and employment agreements
   were ambiguous and failed to establish a past policy.
          Layoffs are a mandatory subject of bargaining, and employers are
   required to provide unions with notice and an opportunity to bargain before
   laying off unit employees. 29 U.S.C. § 158(d) (“[T]he duty to bargain
   collectively shall also mean that no party to such contract shall terminate or
   modify    such   contract”    without       following   appropriate    bargaining
   procedures.). An employer’s failure to provide notice and an opportunity to
   bargain over the layoffs ordinarily constitutes a unilateral change in violation
   of Sections 8(a)(5) and (1). See Cascades Containerboard Packaging, 370
   NLRB No. 76, slip op. at 1 fn. 1 and 15 (2021); NLRB v. W.R. Grace & Co.,
   571 F.2d 279, 282 (5th Cir. 1978) (“It is well-settled that an employer violates
   its duty to bargain collectively when it institutes changes in employment
   conditions without first consulting the union.”). However, an employer may
   defend against a unilateral change allegation by establishing that its actions
   were in accordance with its past practice and thus do not constitute a change
   at all. See Bemis Co., 370 NLRB No. 7, slip op. at 1 fn. 3 (2020); see generally
   NLRB v. Katz, 369 U.S. 736 (1962). In other words, the question is “whether

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   the employer’s action is similar in kind and degree to what the employer did
   in the past.” Raytheon Network Centric Sys., 365 NLRB No. 161, slip op. at 13
   (2017). If it did not “materially vary in kind or degree,” a past-practice
   defense may apply. Id. In those circumstances, the employer has the burden
   of showing that its prior actions were similar in kind and degree, and that they
   occurred with such regularity and frequency that employees could reasonably
   expect the practice to recur on a consistent basis. See id.; NLRB v. Allis-
   Chambers Corp., 601 F.2d 870, 875 (5th Cir. 1979).
          The Board determined that the Atlantic Group had failed to meet its
   burden of establishing the existence of a past practice applicable to layoffs.
   Relying on the testimony of Kevin Crabtree, the Atlantic Group’s site
   supervisor, the Board noted that it is undisputed that Smith and Mendez
   were laid off “due to lack of work” when their air compressor replacement
   project was delayed. First looking at the termination of the lake employees,
   the Board concluded that their termination was different in kind than that of
   Smith and Mendez. Because the lake facility closed to the public during the
   pandemic, Crabtree testified to the uncertainties underlying the layoffs,
   noting that their change of status forms included a notation that they were
   “laid off due to COVID-19.” The Board concluded that “the layoffs of the
   lake employees were different in kind from those of Smith and Mendez, as
   they were not due to the fluctuations in the Respondent’s workload or any
   standard business and economic considerations but instead to the distinctive
   and unforeseeable effects of the COVID-19 pandemic.”
          The Board noted that COVID-19 represented an “extraordinary
   circumstance,” citing cases in which it has stressed the uniqueness of the
   pandemic.     See, e.g., Aspirus Keweenaw, 370 NLRB No. 45 (2020)
   (recognizing the COVID-19 pandemic as an “extraordinary circumstance”);
   NP Palace LLC d/b/a Tex. Station Gambling Hall and Hotel, 370 NLRB No.
   11, slip op. at 3 (2020) (“Nor does the Employer have any ‘past practice’

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   relating to laying off employees in the face of an unprecedented pandemic.”).
   In sum, the Board concluded that a past practice of laying off employees due
   to lack of work from a project delay was distinguishable from layoffs due to
   the “unique circumstances of pandemic-related shutdowns.” Further, the
   single layoff of Joe Ortiz during due to lack of work during the relevant time
   period did not demonstrate a past practice because “a single layoff, by itself,
   cannot demonstrate a past practice.” (citing Tri-Tech Servs., Inc., 340 NLRB
   894, 895 (2003)).
          The Atlantic Group also pointed to their employee agreements and
   manual to establish a past policy. The employee agreements stated: “I
   understand and fully agree that my employment with Day & Zimmermann is
   contingent upon successful completion of my background investigation and
   any training required. I also understand that my employment is conditional
   upon client approval of qualifications and staffing needs.” The relevant
   portion of the handbook stated that “All non-staff, craft positions are
   temporary, varying in length according to contract duration.” The Board
   concluded that the provisions were ambiguous, noting that the employee
   agreements appear to speak only to the initial hiring period, the manual
   describes employment as temporary and based on contract duration, and
   neither spoke to layoffs.
          The Atlantic Group points to the Board’s treatment of 800 River Rd.
   Operating Co., LLC d/b/a Care One at New Milford, 369 NLRB No. 109
   (2020) as proof of reversible error, arguing that the decision is analogous to
   the instant case. But the Board addressed 800 River Rd. and concluded that
   it was inapposite as it spoke to disciplinary policies, not layoffs. The Board
   in 800 River Rd. determined that the correct analysis of whether an employer
   maintains the status quo or enacts unilateral change is whether “an
   employer’s individual disciplinary action is similar in kind and degree to what
   the employer did in the past within the structure of the established policy or

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   practice.” 369 NLRB No. 109, slip op. at 5. Here, the Board chose not to rely
   on 800 River Rd., but regardless, the decision supports its findings here. The
   Board considered the facts and concluded that the layoffs of Smith and
   Mendez were not similar in kind and degree to its past layoffs of the lake
   employees.
          The Atlantic Group also relies on Mike-Sell’s, 368 NLRB No. 145, slip
   op. at 4 (2012), for the proposition that to establish a past practice, actions
   must be frequent, recurrent, and similar “such that employees would
   recognize an additional action as part of a familiar pattern comporting with
   the Respondent’s usual method” of conducting business. This too supports
   the Board’s determination, however, as layoffs due to COVID-19, an
   unforeseen and unprecedented global pandemic, are unlikely to establish a
   familiar pattern of termination due to lack of work from Luminant.
          It was reasonable for the Board to conclude, based on the evidence
   presented, that the Atlantic Group had failed to meet its burden to prove that
   it had a past practice or policy of laying off workers due to lack of work.
   Reasonable inferences drawn by the Board from its findings of fact may not
   be displaced, even if we would have found something different de novo, and
   even if the evidence preponderates against the Board’s decision. United
   Supermarkets, 862 F.2d at 551; El Paso Elec. Co., 681 F.3d at 656. The Board’s
   decision as to the layoff charge is therefore enforced.
                      B. Threats and Intimidation Charge
          Again, the Atlantic Group argues that the Board’s decision that it
   violated Section 8(a)(1) of the NLRA by threatening employees with job loss
   is not supported by substantial evidence, contending that the Board failed to
   consider the totality of the circumstances and that Section 8(c) and the First
   Amendment establish a right to express opinions about the possible
   consequences of unionization.      The NLRB counters that an authentic

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   transcript and recording of the meeting at issue establishes that an admitted
   company agent and supervisor told employees that voting for union
   representation would result in job loss within six months and the loss of the
   contract supporting their employment.
          Under Section 8(a)(1), an employer commits an unfair labor practice
   when it “interfere[s] with, restrain[s], or coerce[s] employees in the exercise
   of the rights guaranteed” by the Act. 29 U.S.C. § 158(a)(1). Relevant here,
   an employer violates Section 8(a) by threatening employees with job loss if
   they select a union as their bargaining representative. See NLRB v. Gissel
   Packing Co., 395 U.S. 575, 617 (1969); NLRB v. McCullough Envtl. Servs., 5
   F.3d 923, 930-31 (5th Cir. 1993). The test for whether the employer’s
   conduct violates Section 8(a)(1) is an objective test that asks whether, under
   the totality of the circumstances, the conduct had a reasonable tendency to
   coerce or interfere with employees’ rights, not whether employees are
   actually coerced. See NLRB v. Brookwood Furniture, Div. of U.S. Indus., 701
   F.2d 452, 459 (5th Cir. 1983); TRW-United Greenfield Div. v. NLRB, 637
   F.2d 410, 415-16 (5th Cir. 1981). While some employer speech is protected,
   threats and intimidation are not. As the Supreme Court explained in Gissel,
   395 U.S. at 618-19:
          [A]n employer is free to communicate to his employees any of
          his general views about unionism or any of his specific views
          about a particular union, so long as the communications do not
          contain a “threat of reprisal or force or promise of benefit” ….
          [An employer] may even make a prediction as to the precise
          effects he believes unionization will have on his company. In
          such a case, however, the prediction must be carefully phrased
          on the basis of objective fact to convey an employer’s belief as
          to demonstrably probable consequences beyond his control or
          to convey a management decision already arrived at to close the
          plant in case of unionization.

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   If an employer makes an economic prediction regarding the consequences of
   unionization, “the prediction must be carefully phrased on the basis of
   objective fact” and “convey an employer’s belief as to demonstrably
   probable consequences beyond [its] control.” Gissel, 395 U.S. at 618; see also
   TRW-United, 637 F.2d at 419.
          The Board concluded that the Atlantic Group violated Section 8(a)(1)
   of the Act by threatening employees with job loss if they selected the Union
   as their bargaining representative. It noted that the record clearly established
   that Jerry Bales, the site superintendent, threatened employees with job loss
   by stating to employees at a meeting that “if this group … tries to go union,
   I do not believe that anybody in this room will have a job in six months” and
   “if we go union, that the client will pick another contractor.” Furthermore,
   the Board noted that the First Amendment and Section 8(c) of the Act did
   not protect Bales’ speech, pointing out that the Atlantic Group had failed to
   show that Bales’ predictions — that the employees would be out of a job and
   a contract — were based on objective fact.
          We enforce the Board’s decision as to the threats and intimidation
   charge, where there is no evidence that Luminant ever told the Atlantic
   Group that it would or even could cancel its contract prior to the completion
   of the five-year term if the employees unionized, nor is there evidence that
   Luminant has ever cancelled a contract due to unionization. Instead, as the
   Board emphasized, Bales referenced unspecified people at unspecified times
   in an unsubtle effort to coerce employees to vote against unionization.
          C. Refusal to Bargain Pending Request for Review Charge
          Finally, the Atlantic Group argues that it has a right to file a request
   for review and claims that if it had voluntarily bargained with the Union while
   that request was pending, the Board would find waiver of its statutory right
   to appeal. The NLRB contends that the Atlantic Group has conceded that it

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   refused to bargain with the Union without a valid excuse and at its own peril
   for months.
          Section 8(a)(5) of the Act makes it an unfair labor practice for an
   employer “to refuse to bargain collectively with the representatives of his
   employees.” 29 U.S.C. § 158(a)(5).                Absent compelling economic
   circumstances, not present here, an employer’s bargaining obligation
   commences on the date of the union’s victory in a Board-conducted election.
   W.R. Grace & Co., 571 F.2d at 282. Further, “an employer is not relieved of
   that obligation pending Board consideration, or reconsideration, of a request
   for review” of the certification of the union issued after an election.
   Benchmark Indus., Inc., 262 NLRB 247, 248 (1982), enforced mem., 724 F.2d
   974 (5th Cir. 1984). An employer who relies on its filing of a request for
   review in refusing to bargain with the certified union acts at its peril. See
   NLRB v. Allis-Chalmers Corp., 601 F.2d 870, 874 (5th Cir. 1979); W.R. Grace
   & Co., 571 F.2d at 282. This is so because if the review process does not
   vindicate the employer’s position regarding certification, the employer is
   liable for its refusal to recognize and bargain from the inception of the
   bargaining obligation. W.R. Grace & Co., 571 F.2d at 282; Allis-Chambers,
   601 F.2d at 874.
          The record establishes, and the Atlantic Group concedes, that despite
   the tally of ballots establishing that the Union won the election, and the
   subsequent certification of the Union, it refused to bargain with the Union
   for several months. In Allis-Chambers Corp., this court specifically stated,
   “[a]s a general rule, an employer that refuses to bargain on the ground that
   an election is invalid does so at its peril; if the election challenge were to prove
   fruitless, an order by the Board based on the refusal to bargain would be
   enforced.” 601 F.2d at 874. Accordingly, the Board’s order on the Atlantic
   Group’s refusal to bargain pending request for review charge is enforced.

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                                     IV.
         Because we find the Atlantic Group’s grounds for review lack merit
   and that substantial evidence supports the Board’s decision, the Atlantic
   Group’s petition for review is DENIED. The NLRB’s cross-application to
   enforce its order is GRANTED.

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