Court Opinion

ID: 8412493
Source: CourtListenerOpinion
Date Created: 2022-11-02 19:43:45.567327+00
Date Added: 2024-06-11T16:47:57.692566
License: Public Domain

JAMES E. GRAVES, JR., Circuit Judge,
dissenting:
I dissent from the majority’s opinion and would deny the petition for review and grant the cross-petition for enforcement.
In enacting the National Labor Relations Act (“NLRA” or “Act”), Congress expressed an unequivocal intent:
It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining and by protecting the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection.
29 U.S.C. § 151 (emphasis added).
It is through this lens that we must view the case before us. Though it may seem, at first glance, counterintuitive that an employer is prohibited from discriminating against a union salt1 who applies for a job with the express intention of organizing the workplace, Congress was clear that this activity is protected. Id.; see also NLRB v. Town & Country Elec., 516 U.S. 85, 87, 90-92, 116 S.Ct. 450, 138 L.Ed.2d 371 (1995) (ruling that union salts are protected as “employees” under the NLRA). This is especially the case when, as here, the employers are organized into their own associations:
The inequality of bargaining power between employees who do not possess full freedom of association or actual liberty of contract, and employers who are organized in the corporate or other forms of ownership association substantially burdens and affects the flow of commerce, and tends to aggravate recurrent business depressions, by depressing wage rates and the purchasing power of wage earners in industry and by preventing the stabilization of competitive wage rates and working conditions within and between industries.
29 U.S.C. § 151.
It is my opinion that we lack jurisdiction to consider the National Labor Relations Board’s (“NLRB” or “Board”) order in Indep. Elec. Contractors of Houston, Inc., 355 NLRB No. 225, 2010 WL 3864537 (Sept. 30, 2010) (“September Order”), as well as the merits of certain of IEC-Houston’s arguments. Moreover, even if we could consider all of IEC-Houston’s arguments, they fail on the merits. The NLRB’s orders rest on substantial evidence and I would thus affirm.

A. Jurisdictional Issues & IEC-Houston’s First Two Arguments

1. We Lack Jurisdiction to Consider the September Order.

Under 29 U.S.C. § 160(f), “[a]ny person aggrieved by a final order of the Board granting or denying in whole or in part the relief sought may obtain a review of such order in any United States court of appeals^]” The NLRB General Counsel contends that the September Order has no *556“adverse effect”2 on IEC-Houston because it orders no relief with respect to IEC-Houston. Rather, in the September Order, the Board stated that in light of the relief ordered in KenMor Elec. Co., Inc., 355 NLRB No. 173, 2010 WL 3463868 (“August Order ”), it would not grant any further relief “even were we to proceed and find that [IEC-Houston’s referral service’s] continued operation continued to violate the Act.” The Board concluded: “A second finding combined with a second remedy would be entirely redundant.... [and] we dismiss the allegations concerning the operation of the referral service on the grounds that their adjudication would not further the remedial purposes of the Act.”
The General Counsel is correct that IEC-Houston was not “aggrieved” by the September Order, and as such, has no standing to appeal that order. IEC-Houston argues that the September Order adopts the August Order and thus operates against it, but that is incorrect. Rather, the Board determined in the September Order that making findings and ordering relief against IEC-Houston would be redundant, so it did not do so; instead, it dismissed the allegations, which in no way adversely affected IEC-Houston.
Our lack of jurisdiction over the September Order has only a limited effect on the scope of our review. The General Counsel correctly notes that, without such jurisdiction, we cannot consider evidence that was presented as part of the second case. See Fed. RApp. P. 16(a) (“The record on review or enforcement of an agency order consists of: (1) the order involved; (2) any findings or report on which it is based; and (3) the pleadings, evidence, and other parts of the proceedings before the agency.”). If the evidence supporting the August Order is otherwise sufficient, the additional evidence presented in the second case cannot render the August Order erroneous.
The majority’s opinion relegates this jurisdictional issue to a footnote, and dismisses it without referencing any supportive authority. In fact, the majority cites Deaton Truck Line, Inc. v. NLRB, 337 F.2d 697, 698 (5th Cir.1964), which — according to the majority’s own words— “supports the proposition that Section 10(f) — 29 U.S.C. § 160(f) — limits the right to review to parties aggrieved by a final Board order and that an employer is not aggrieved if he objected only to findings and conclusions underlying a Board order dismissing a complaint, not to the order itself.” This is improper, and I dissent from the majority on this limited but important jurisdictional issue.
2. IEC-Houston has Waived its Due Process and Improper “Hybrid Disparate Impact Theory of Liability” Arguments, and, Regardless, the Arguments Fail.
We also lack jurisdiction to consider the first two of IEC-Houston’s merit-based arguments because IEC-Houston did not previously object to the Board’s orders through a motion for reconsideration or otherwise. Even if we could consider those arguments, though, they fail on the merits. IEC-Houston’s three arguments on appeal are: (1) the Board denied IEC-Houston due process of law by finding a violation of § 8(a)(1) that was neither pleaded nor litigated; (2) adoption of a “hybrid disparate impact theory of liability” by the Board is error because it is not *557permitted by the NLRA or supported by substantial evidence in the record as a whole; and (3) the Board’s finding of a violation of § 8(a)(1) is not supported by substantial evidence or the NLRA.
The Supreme Court has held that, since the Board’s regulations provide “that any material error in the Board’s decision may be asserted through a motion for ‘reconsideration, rehearing, or reopening of the record’, [a] [respondent therefore cannot assert its objection on appeal ‘unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.’ ” Int’l Ladies’ Garment Workers’ Union v. Quality Mfg. Co., 420 U.S. 276, 281 n. 3, 95 S.Ct. 972, 43 L.Ed.2d 189 (1975) (quoting 29 U.S.C. § 160(e)); accord Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665-66, 102 S.Ct. 2071, 72 L.Ed.2d 398 (1982).

a. Due Process Argument

IEC-Houston contends it was denied due process because the Board found that IEC-Houston committed an independent violation of § 8(a)(1), even though the Union’s charges and the General Counsel’s complaint alleged only hiring discrimination under § 8(a)(3) and a subsidiary violation of § 8(a)(1). Indeed, the administrative law judge’s (“ALJ”) decision rested on § 8(a)(3), but the Board’s decision did not.
The Union correctly argues that IEC-Houston has waived this due process argument. Section 10(e) of the NLRA states that a court may not consider an objection not raised before the Board “unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” 29 U.S.C. § 160(e). Logically, IEC-Houston could not have raised its due process argument regarding the Board’s “novel theory of liability” before the Board issued its decision, but it could have raised the argument on a motion for reconsideration under 29 C.F.R. § 102.48(d)(1).
The Supreme Court has specifically held that when an employer neglects to file a motion for reconsideration before the Board, the employer waives its argument that it was denied due process because the Board based its ruling on an uncharged theory of liability under § 8(a)(1). Int’l Ladies’ Garment Workers’ Union, 420 U.S. at 281 n. 3, 95 S.Ct. 972 (holding that because the employer “failed to file a petition for reconsideration as permitted by Board Rules and Regulations,” the employer could not assert its objection on appeal).
That is precisely the situation here. It makes no difference that the due process issue was discussed in the Board’s majority opinion and dissent. Woelke & Romero, 456 U.S. at 665-66, 102 S.Ct. 2071 (issue waived when party did not file motion for reconsideration, even though Board addressed issue); NLRB v. Ferguson Elec. Co., Inc., 242 F.3d 426, 435 (2d Cir.2001) (“Even when the Board itself raises and decides an issue sua sponte, an objection must be filed with the Board to preserve the issue for a reviewing court.”). Because IEC-Houston had the ability to file a motion for reconsideration, there are no extraordinary circumstances that would justify it raising this issue without having brought its objection before the Board. See Gulf States Mfg. Inc. v. NLRB, 704 F.2d 1390, 1396-97 (5th Cir.1983) (finding no jurisdiction to hear an argument not raised before the Board because extraordinary circumstances did not exist — the party could have raised the issue in supplement to its objections or in a motion for reconsideration of the Board’s decision).
IEC-Houston asserts that it did raise a due process objection in its exceptions to the ALJ’s decision. In those exceptions, IEC-Houston stated that it was denied *558due process of law because issues concerning the $50 fee, the shared man program, and its failure to give applicants information were not fully and fairly litigated. These objections, however, in no way informed the Board that IEC-Houston was objecting to the Board’s finding of an independent violation under § 8(a)(1) when the complaint alleged discrimination under § 8(a)(3).
IEC-Houston also argues that, given the 15-year duration of these cases, “the last thing the Board needs is more time to reconsider its decision,” and that any motion for reconsideration would have beén futile. This unsupported legal conclusion, however, does not demonstrate that a motion for reconsideration would have been futile. Cf. NLRB v. Robin Am. Corp., 667 F.2d 1170, 1171 (5th Cir.1982) (holding a party’s argument was not waived when an objection to the Board would have been futile because the decision changing the applicable legal standard and providing the basis for the objection did not come until the case was already before the court of appeals). IEC-Houston does not satisfactorily argue any retroactive changed legal standard that would justify its failure to object to the Board’s orders. IEC-Houston has thus waived its due process argument.
Again, the majority’s opinion improperly dismisses this jurisdictional issue. In fact, the majority cites a decision from our circuit holding that, “absent extraordinary circumstances, the failure to raise an argument before the Board renders us without jurisdiction to consider that argument.... This rule is mandatory, not discretionary.” Houston Bldg. Servs., 128 F.3d 860, 863 (5th Cir.1997) (internal quotation marks and citation omitted). Therefore, I dissent from the majority regarding its consideration of the merits of IEC-Houston’s due process.
Even if IEC-Houston had not waived this argument, however, the Board’s reliance on § 8(a)(1) does not violate IEC-Houston’s due process rights. The Board may find an unalleged violation if (1) “the issue is closely connected to the subject matter of the complaint” and (2) “has been fully litigated.” Pergament United Sales, Inc., 296 NLRB 333, 334 (1989), enf'd, 920 F.2d 130 (2d Cir.1990). Under the “closely connected” standard, the employer must be informed of “the acts forming the basis of the complaint,” but not necessarily “the legal theory upon which the General Counsel intends to proceed.” Pergament, 920 F.2d at 135.
The NLRB has held that a finding of a § 8(a)(1) violation when the complaint alleged only a § 8(a)(3) violation does not violate due process when both allegations “plainly focus on the same set of facts.... ” Cardinal Home Prods., Inc., 338 NLRB 1004, 1007 (2003). That is clearly the case here. This is not a case, as the majority writes, in which the legal violation found by the Board raises entirely-different issues from the legal violation charged. See Champion Int’l Corp., 339 NLRB 672, 673 (2003) (distinguishing Per-gament and Cardinal, and finding a due process violation where the alleged and actual violations differed substantially). To the contrary, the issue of hiring discrimination has been fully and fairly litigated; indeed, most of the parties’ arguments go to that issue. Moreover, to the extent that the Board’s decision is based on admissions in the IEC-Houston newsletter, any risk of unfair surprise to IEC-Houston is mitigated. See Pergament, 920 F.2d at 136 (finding no due process violation when a shift in the legal theory was based on the employer’s own testimonial admission).
The majority’s attempt at distinguishing Pergament is unavailing. It asserts “[t]he *559problem with Pergament, and the related eases cited by the NLRB,3 is that they extended the same operative facts of the charge to other, well-defined theories of violation.” Nevertheless, as further discussed below in part B, a § 8(a)(1) violation is a well-defined theory of violation. Thus, in addition to having been waived, IEC-Houston’s due process argument is meritless.

b. “Hybrid Disparate Impact Theory of Liability’’ Argument

IEC-Houston argues that “extraordinary circumstances” exist giving this court jurisdiction to adjudicate this second argument despite IEC-Houston’s failure to object to the Board’s orders because “the Board was outside the orbit of its authority when it decided to import Title VII disparate impact theory to the NLRA.”
Circuit courts may exercise jurisdiction over objections where the Board has “patently travelled outside the orbit of its authority.” NLRB v. Blake Constr. Co., 663 F.2d 272, 284 n. 34 (D.C.Cir.1981) (citing, e.g., NLRB v. Cheney Cal. Lumber Co., 327 U.S. 385, 388, 66 S.Ct. 553, 90 L.Ed. 739 (1946)). Here, however, the Board did not patently travel outside its orbit of authority. The fact that the Board changed the basis for the violation and declared a § 8(a)(1) violation does not justify an exception to § 10(e) requirements. See Int’l Ladies’ Garment Workers’ Union, 420 U.S. at 281 n. 3, 95 S.Ct. 972.
Furthermore, IEC-Houston’s assertion that the NLRA, unlike Title VII, “does not allow disparate impact as a theory of liability” is immaterial to our review. The Board explicitly stated it was not relying on a disparate impact theory to support its unfair labor practice finding. The Board simply found that the referral system had an inherent tendency to interfere with union-affiliated and salt applicants, and did not discuss any effect on non-union applicants. The General Counsel is correct that “it is no defense for IEC-Houston to ... insist that the consequences of the system fell to some extent on both [union and non-union] categories of applicants.” The majority’s finding that there could not have been any anti-union animus because the referral system predated the Union’s COMET campaign is likewise immaterial because the Board’s ruling was not dependent on animus.
For these reasons, IEC-Houston’s argument that the Board has patently travelled outside the orbit of its authority in declaring a § 8(a)(1) violation fails. Therefore, there were no “exceptional circumstances” justifying IEC-Houston’s failure to object to the Board’s order through a motion for reconsideration or otherwise, and we are without jurisdiction to consider IEC-Houston’s “hybrid disparate impact theory of liability” argument.

B. The Board’s finding of a violation of § 8(a)(1) is supported by substantial evidence.

I also dissent from the majority and maintain that substantial evidence supports the Board’s finding of a § 8(a)(1) violation. We affirm the Board’s factual determinations if they are supported by substantial evidence. Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951). Substantial evidence is “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Brown & Root, Inc. v. NLRB, 333 F.3d 628, 633 (5th *560Cir.2003) (quoting Universal Camera, 340 U.S. at 477, 71 S.Ct. 456). Pursuant to this standard, “the ALJ’s decision must be upheld if a reasonable person could have found what the ALJ found, even if the appellate court might have reached a different conclusion.... ” Valmont Indus. v. NLRB, 244 F.3d 454, 463 (5th Cir.2001) (internal quotation marks and citation omitted). We must also consider evidence in the record that detracts from the Board’s findings. Asarco, Inc. v. NLRB, 86 F.3d 1401, 1406 (5th Cir.1996).
The standard of review for questions of law decided by the Board is de novo, and we affirm if the NLRB provides a “reasonably defensible” interpretation of the Act. Standard Fittings Co. v. NLRB, 845 F.2d 1311, 1314 (5th Cir.1988) (citing, e.g., Pattern Makers’ League v. NLRB, 473 U.S. 95, 105 S.Ct. 3064, 87 L.Ed.2d 68 (1985)). Therefore, we defer to the legal conclusions of the Board if reasonably grounded in the law and not inconsistent with the NLRA. Tellepsen Pipeline Servs. Co., v. NLRB, 320 F.3d 554, 559 (5th Cir.2003) (citing Valmont, 244 F.3d at 464). “With respect to mixed questions of law and fact, this court must sustain the Board’s application of its legal interpretations to the facts of the particular case when supported by substantial evidence based upon the record considered as a whole.” Tellepsen, 320 F.3d at 559 (citing Beth Israel Hosp. v. NLRB, 437 U.S. 483, 501, 98 S.Ct. 2463, 57 L.Ed.2d 370 (1978)).
Section 8(a)(1) of the NLRA (29 U.S.C. § 158(a)(1)) penalizes an employer that attempts “to interfere with, restrain, or coerce employees in the exercise” of their § 7 rights. Section 7 of the NLRA (29 U.S.C. § 157) gives employees “the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities.... ” Again, the Supreme Court has held that this right to self-organization includes the right to seek work as a union member, organizer, or salt without penalty. NLRB v. Town & Country, 516 U.S. at 87, 90-92, 116 S.Ct. 450 (holding paid salts are protected as “employees” under the NLRA).
A ruling that an employer violated § 8(a)(1) “does not depend on the [employer’s] motive or the success or failure of the coercion, but depends instead on whether the [employer] engaged in conduct that may reasonably tend to interfere with the free exercise of rights under the Act.” Naomi Knitting Plant, 328 NLRB 1279, 1280 (1999) (emphasis added); see also Mobil Exploration & Producing U.S., Inc. v. NLRB, 200 F.3d 230, 239 (5th Cir.1999) (quoting Crown Cent. Petroleum Corp. v. NLRB, 430 F.2d 724, 729 (5th Cir.1970)) (“[I]t is the tendency of an employer’s conduct to interfere with the rights of his employees protected by Section 8(a)(1), rather than his motives, that is controlling.”).
The employer’s conduct need only reasonably tend to interfere with § 7 rights, and if such a tendency is found, “the burden is on the employer to demonstrate a legitimate and substantial business justification for its conduct.” ANG Newspapers, 343 NLRB 564, 565 (2004). “Initially, the responsibility to draw the line between these conflicting rights rests with the Board, and its determination, unless illogical or arbitrary, ought not be disturbed.” Crown, 430 F.2d at 730 (emphasis added) (internal quotation marks and citation omitted).
IEC-Houston argues that its referral operation as a whole cannot violate § 8(a)(1) if the individual components of the operation are lawful. In his dissent from the August Order, Board Member Schaumber refers to the Board majority’s *561reasoning in this regard as “reverse alchemy, through which lawful policies, when combined, are transmuted into a violation of the Act.” Both IEC-Houston and Member Schaumber are wrong. We have specifically ruled that separate incidents, though lawful when viewed in isolation, must be considered collectively to determine whether a violation of § 8(a)(1) has occurred. NLRB v. Builders Supply Co. of Houston, 410 F.2d 606, 608 (5th Cir.1969) (internal quotation marks and citation omitted) (“Certainly, if we isolate each incident and examine it separately, there is little to suggest any unlawful activity on the part of the respondent. But viewing these incidents collectively, as we must, ..., we are constrained to hold that they amounted at the very least to an uncoordinated pattern of coercion.”); see also Progressive Elec., Inc. v. NLRB, 453 F.3d 538, 548 (D.C.Cir.2006) (internal quotation marks and citation omitted) (“While we doubt any of these actions ... would be independently sufficient, the Board reasonably found they were collectively part and parcel of [the employer’s] overall scheme to refuse to consider and hire the Union Applicants.”).
The Board thus properly ruled that, viewed in its totality, IEC-Houston’s “closed and opaque” system was harmful to union salts. The referral system and shared man program, standing alone, had a reasonable tendency to interfere with the salts’ § 7 rights. The anti-union explanation for these programs contained in the IEC-Houston newsletters, and the fact that Lockwood, Rath, and Gafford were not hired despite the great demand for skilled electricians in the Houston area during this period, only further buttress the Board’s ruling. Therefore, we ought not disturb the Board’s conclusion that IEC-Houston’s referral operation, as a whole, “interfered with the right of job applicants who were union members and ‘salts’ to be hired on an equal basis with other nonunion applicants.”4
The majority’s opinion runs counter to the Act’s express policy of “encouraging practices fundamental to the friendly adjustment of industrial disputes arising out of differences as to wages, hours, or other working conditions [ ] by restoring equality of bargaining power between employers and employees.” 29 U.S.C. § 151. Substantial evidence supports the Board’s well-reasoned August Order, and I therefore dissent from my colleagues and would deny the petition for review and grant the cross-petition for enforcement.

. “Salts” are union organizers that apply for work with the intention of encouraging coworkers to form a union.

. Liquor Salesmen's Union Local 2 v. NLRB, 664 F.2d 1200, 1206 n. 8 (D.C.Cir.1981) (citation omitted) (ruling that an "adverse effect in fact" is required for a party to have standing under 29 U.S.C. § 160(f)).

. Casino Ready Mix, Inc. v. NLRB, 321 F.3d 1190, 1200 (D.C.Cir.2003) (quoting Pergament, 296 NLRB at 334); Cardinal, 338 NLRB at 1007 (same); Williams Pipeline Co., 315 NLRB 630, 630 (1994) (same).

. IEC-Houston's argument that, by using the phrase "equal basis,” the Board was implying that an employer must hire union and nonunion employees on a 50-50 basis is incorrect. Rather, the Board is referring to the unlawfulness of discriminating against union-affiliated applicants.