Court Opinion

ID: 3036631
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:54:39.86491+00
Date Added: 2024-06-11T11:48:42.658665
License: Public Domain

FOR PUBLICATION
 UNITED STATES COURT OF APPEALS
      FOR THE NINTH CIRCUIT

HEALTHCARE EMPLOYEES UNION,          
LOCAL 399, AFFILIATED WITH THE
SERVICE EMPLOYEES INTERNATIONAL
UNION, AFL-CIO,
                       Petitioner,        No. 03-72029
               v.                         NLRB No.
                                          31-CA-24325
NATIONAL LABOR RELATIONS
BOARD,                                     OPINION
                      Respondent,
ST. VINCENT MEDICAL CENTER,
           Respondent-Intervenor.
                                     
        On Petition for Review of an Order of the
            National Labor Relations Board

                  Argued and Submitted
          February 9, 2005—Pasadena, California

                  Filed March 17, 2006

    Before: Harry Pregerson, William C. Canby, Jr., and
             Robert R. Beezer, Circuit Judges.

               Opinion by Judge Pregerson;
                Dissent by Judge Beezer

                           2743
            HEALTHCARE EMPLOYEES UNION v. NLRB           2747

                         COUNSEL

David A. Rosenfeld (brief & argued) and M. Suzanne Murphy
(brief), Weinberg, Roger & Rosenfeld, Oakland, California,
attorneys for the petitioner.

Meredith L. Jason (argued) and David Habenstreit and Jill A.
Griffin (brief), National Labor Relations Board, Washington,
D.C., attorneys for the respondent.

Gordon A. Letter (brief and argued), Littler Mendelson, Los
Angeles, California, attorneys for the respondent-intervenor.

                         OPINION

PREGERSON, Circuit Judge:

   Healthcare Employees Union Local 399 (the “Union”) peti-
tions this court to review a final order of the National Labor
2748         HEALTHCARE EMPLOYEES UNION v. NLRB
Relations Board (the “Board” or “NLRB”). The Board’s order
dismissed the Union’s unfair labor practice charge against St.
Vincent Medical Center (“St. Vincent”).

   In its unfair labor practice charge, the Union alleged that St.
Vincent subcontracted out the work of the hospital’s respira-
tory care department on the eve of a union election to prevent
employees in that department from voting in the election, in
violation of Sections 8(a)(1) and 8(a)(3) of the National Labor
Relations Act (“NLRA”), 29 U.S.C. §§ 158(a)(1), 158(a)(3).

   After a hearing, an administrative law judge (“ALJ”) ruled
that the Union failed to carry its burden of persuasion that
anti-union animus was a motivating factor in St. Vincent’s
subcontracting decision and dismissed the complaint. That
ruling was affirmed by the Board. In addition, the Board ruled
that even if the Union had carried its burden of persuasion, St.
Vincent demonstrated that it would have subcontracted out
the work of the department in the absence of union organizing
activity.

  We have jurisdiction under 29 U.S.C. § 160(f). For the rea-
sons stated below, we grant the Union’s petition for review
and remand for further proceedings.

      FACTUAL AND PROCEDURAL BACKGROUND

   St. Vincent Medical Center is an acute care hospital located
in Los Angeles, California. Before subcontracting1 out the
work of the respiratory care (“RC”) department in February
2000, St. Vincent employed twenty-seven respiratory care
therapists. RC therapists are responsible for administering res-
piratory care treatment (i.e., administering intubations, venti-
  1
    We use “subcontracting,” “subcontracting out,” and “outsourcing”
interchangeably in this opinion to refer to the arrangement whereby St.
Vincent contracted with a third party to operate the Respiratory Care
department at the hospital.
              HEALTHCARE EMPLOYEES UNION v. NLRB                    2749
lators, or life support systems) throughout the hospital. In
addition to providing respiratory care treatment, RC therapists
are responsible for assessing each patient’s health and report-
ing each patient’s status to on-coming shift employees and
doctors.

  A. Management Problems in the Respiratory Care
  Department

   St. Vincent contends that it outsourced the work of its RC
department in February 2000 because it was unable to find
and train suitable managers. St. Vincent’s difficulty with man-
agement of the RC department had existed for a long time
before the work of that department was actually subcontracted
out. In fact, while the RC department’s problems became
more evident in the three years before the outsourcing deci-
sion, the hospital had comparable problems with its RC
department for nearly thirteen years.

   Despite the replacement of the RC department’s manager
in early 1999, the department’s productivity standards contin-
ued to remain lower than those of other departments. Several
RC employees testified that during 1999 they encountered
problems that hindered them from accomplishing their
assigned tasks. During that time they complained regularly to
management about a lack of proper billing codes, lack of
proper respiratory equipment, and general staffing problems.

   The ongoing problems in the RC department did not go
unnoticed by upper-level management.2 In the summer and
fall of 1999 Ray Hancock and Ramon Suarez, both RC
department managers, met regularly with Zita Uy, assistant
  2
   The hospital’s Charge Audit Committee (founded in April 1999 and
responsible for auditing charts, documentation, and billing in the various
departments), issued regular reports in summer and fall of 1999 scrutiniz-
ing the RC department’s problems with tracking treatments and with pro-
viding proper billing information.
2750           HEALTHCARE EMPLOYEES UNION v. NLRB
administrator for the RC department, to discuss the problems
in the RC department.

  B.    The Union Campaign

   The Union began its campaign to organize the hospital’s
technical staff in July 1999, when it assigned between three
and four full-time organizers to St. Vincent.3 Union organiz-
ers, easily identified by their distinctive T-shirts, spoke openly
to employees at the hospital and passed out pro-union fliers
several times a week. In early July, the Union picketed in
front of the hospital as hospital managers stood by watching.4
Union organizers also stationed themselves in the hospital
cafeteria between ten and twenty times a month and spoke to
employees about the Union. As the campaign progressed,
Union organizers made regular home visits to hospital staff to
discuss the benefits of joining the Union. The Union’s efforts
proved successful, as the ALJ found that most of the Union’s
success in securing union authorization cards from employees
occurred after mid-1999.5

   The ALJ concluded that St. Vincent “admittedly made a
studied effort to keep track of [the Union.]”6 Mary Hill, direc-
  3
     In early 1998, the Union first undertook to organize the hospital’s tech-
nical staff, which included the RC department. At that time, the Union
assigned one part-time organizer to the campaign. The ALJ found that
while the organizing activities were initially minimal, St. Vincent manag-
ers became aware of the organizing activities almost immediately.
   4
     It is unclear from the record exactly who from management was watch-
ing and whether the Union picketed the hospital on several occasions or
on a single day.
   5
     An employee signs a union authorization card to demonstrate his or her
willingness to become a member of the union. A union will normally sub-
mit the signed authorization cards to the Board in support of its petition
for an election. See Patrick Hardin & John E. Higgins, Jr., The Developing
Labor Law 501 (4th ed. 2001).
   6
     The ALJ’s findings and rulings can be found with the Board’s decision
in St. Vincent Med. Ctr., 338 NLRB No. 130, 2003 WL 1785029 (Mar. 31,
2003).
              HEALTHCARE EMPLOYEES UNION v. NLRB                      2751
tor of human resources for the hospital, testified that she
asked her supervisors and managers to “let [her] know of any
Union activity, whether that be leafletting or if employees are
informing them of home visits, presence in the cafeteria, that
sort of thing.” Several RC department managers and one
Union organizer testified about their open encounters with
each other in and around the hospital.7 Moreover, one RC
employee, Steven Rush, testified that during an RC depart-
ment meeting in the fall of 1999, either Uy or Hill stated that
“unions were bad for the hospital” and that the RC department
could “work out problems on [its] own with staff and manage-
ment.”8 Another RC employee testified that during a meeting
in 1999, Hancock, an RC department manager, stated that the
Union only wanted money from the RC employees.9

   The RC department, which made up twenty-five percent of
the technical staff at the hospital, overwhelmingly supported
the Union. The ALJ found that

     [St. Vincent] could not have failed to have identified
     the RC employees as the core of the Union’s sup-
   7
     On one occasion, Uy identified herself to a Union organizer as the head
administrator of the RC department and asked for leaflets. Hancock, the
manager of the RC department, testified that he also saw some of the
Union fliers during 1999. One union organizer, Terence Courtney, testi-
fied that he and Bill Parente, the hospital president, would see each other
regularly as Parente drove in and out of the hospital. Courtney testified
that Parente knew him on a first name basis.
   8
     The record does not reveal who exactly made the comments.
   9
     The Union also points out that Hancock stated in one meeting in 1999
that the hospital “didn’t like unions.” But the ALJ specifically credited
Hancock’s denial of this statement. “Credibility determinations by the ALJ
are given great deference, and are upheld unless they are inherently
incredible or patently unreasonable.” Retlaw Broadcasting Co. v. NLRB,
53 F.3d 1002, 1006 (9th Cir. 1995) (internal quotations marks and citation
omitted). The Union offers no reason why the ALJ’s determination of
Hancock’s credibility is incredible or patently unreasonable. We therefore
defer to the ALJ’s credibility determination and uphold his finding that
Hancock never stated that the hospital “didn’t like unions.”
2752          HEALTHCARE EMPLOYEES UNION v. NLRB
       porters among the hospital’s employees, and that [St.
       Vincent] may well have deduced, and probably did
       deduce, from such intelligence that the RC employ-
       ees were the most likely proselytes of the Union’s
       cause in other departments.

   A lead organizer for the union, Roberto De La Cruz, testi-
fied that the RC department was “one of the strongest units”
and that RC employees were “instrumental in pushing the
[organizing] drive.” De La Cruz testified that the RC employ-
ees comprised a majority of the organizing committee, which
helped “[the Union staff] strategize as to how to proceed in
the campaign and [identify] other workers.” Between nine and
twelve RC employees were openly pro-union. They discussed
the Union with co-workers at work, openly talked to Union
organizers, and passed out pro-union fliers in front of the hos-
pital. De La Cruz testified that Union organizers held the RC
department out to other departments in the technical staff as
a strong pro-union department. About ninety-five percent of
the RC employees ultimately signed union authorization
cards.

   In a flier dated November 10, 1999, and distributed
throughout the hospital’s technical staff, the Union announced
that it was a “few weeks” away from filing an election peti-
tion with the Board. The flier also announced that once the
election petition was filed, the Board would set an election
within forty-five to sixty days.10

   On January 5, 2000, the Union filed a petition for an elec-
tion with the Board for the bargaining unit of one-hundred
technical staff employees, which included the twenty-seven
RC therapists. On January 21, 2000, the parties stipulated to
an election to be conducted by the Board on February 18,
2000.
  10
    St. Vincent produced the flier at the hearing pursuant to a subpoena.
             HEALTHCARE EMPLOYEES UNION v. NLRB                  2753
  C.    Subcontracting Discussions

   In July 1999, the same month that the Union began its cam-
paign to organize the technical staff, Uy met with Eleanor
Ramirez, the senior assistant administrator in charge of
patient services. During that meeting Uy and Ramirez first
discussed subcontracting out the work of the RC department.
Uy testified that she and Ramirez briefly discussed the suc-
cessful use of subcontracting to alleviate “quality issues” in
other departments at St. Vincent. She further testified that she
and Ramirez agreed to reassess the situation “later on that
year.” They did not, however, speak to Bill Parente, the hospi-
tal president, or other St. Vincent managers about subcon-
tracting out the work of the RC department.

   On November 18, 1999, eight days after the Union
announced it was close to filing an election petition with the
Board, Uy met with RC department managers Suarez and
Hancock to discuss the RC department. At that meeting, both
Hancock and Suarez raised the option of subcontracting out
the work of the RC department. Suarez stated that he was
unable to manage the department. He also stated that both he
and Hancock agreed that someone more experienced would
be a better department manager. The next day, Ramirez
authorized Uy to investigate potential subcontracting vendors.

   On December 20, 1999, Uy and Ramirez met again to dis-
cuss subcontracting.11 Uy testified that she and Ramirez rec-
ognized that subcontracting would “be very expensive” and
financially infeasible. But she testified that neither she nor
Ramirez wanted to simply change managers. Uy stated that
she had tried unsuccessfully to replace managers before and
wanted to try a different approach. Both Uy and Ramirez tes-
  11
     The ALJ found that in mid-December 1999, around the same time that
St. Vincent managers discussed outsourcing the RC department, RC
department employees engaged in concerted activity by collectively pro-
testing the implementation of new overtime pay provisions.
2754        HEALTHCARE EMPLOYEES UNION v. NLRB
tified that they believed one of the primary benefits to out-
sourcing was that the burden of finding good managers for the
department would fall on the subcontractor, not on St. Vin-
cent. While Ramirez testified that she knew that the RC
employees would be disenfranchised by outsourcing the work
of the department, she also testified that this “was not what
[she] would call a big player role in our discussions.”

   On December 22, 1999, Uy, Ramirez, Hill, and Parente met
by phone to discuss subcontracting. Uy testified that no one
mentioned the Union during the conversation. Parente, the
ultimate decision maker, approved moving forward with find-
ing a subcontractor.

   Five days later, Uy announced to RC employees manage-
ment’s intent to investigate outsourcing the work of the RC
department. Uy told employees that it would take between
thirty and sixty days to investigate possible subcontractors.
According to Uy, she explained to the RC employees that the
decision was a “business decision” motivated by “concerns
about quality issues” and the various complaints received con-
cerning the department.

  D. Implementing       Subcontracting    —    January     and
  February 2000

   On or around January 3, 2000, Uy contacted Total Rehab
Care and Interstate Rehab Care and solicited proposals for
taking over the RC department. Uy stated that the successful
bidder must provide an experienced respiratory manager and
agree to hire all current employees at similar wages and bene-
fits. Theodore Weiner, the president and CEO of Total Rehab
Care, testified that his company was too small to handle a
subcontracting arrangement involving twenty-seven employ-
ees before February 15, 2000, the start-up date required by St.
Vincent. February 15, 2000, was three days before the sched-
uled Union election.
              HEALTHCARE EMPLOYEES UNION v. NLRB                     2755
   The two companies ultimately contacted each other and
submitted a combined proposal, which St. Vincent received
on January 26, 2000. The proposal was submitted under the
name of California Respiratory Services, a subsidiary of Inter-
state Rehab Care. Under the proposal, Weiner would work for
Total Rehab Care, which contracted with California Respira-
tory Services to provide management services. Though the
proposal was open until March 26, 2000, St. Vincent agreed
to the proposal on or about January 26, 2000 — the same day
it was received.

   On February 1, 2000, about three weeks after the Union
filed its election petition with the Board, St. Vincent manage-
ment informed the RC department of the outsourcing deci-
sion. Ramirez announced that California Respiratory Services
would take over the RC department, and that, effective Febru-
ary 5, 2000, California Respiratory Services would directly
employ the RC employees.

   Parente, the hospital president, testified that he did not
decide to subcontract the work of the RC department to pre-
vent the RC therapists from voting in the upcoming union
election. He did admit, however, that he was aware of the
union election scheduled for February 18, 2000 when he made
his final decision to subcontract a little over two weeks ear-
lier. When pressed by the ALJ to explain the timing of the
subcontracting decision, Parente responded that it was not
precipitated by any “emergency” in patient care.12 Rather, Par-
ente explained that “it was a reasonable management decision
within our prerogative at the time and we made the decision”
and that “there was a strong possibility that a serious error
could occur in a treatment of a patient.”
  12
    As the ALJ stated at the hearing, he was unable to find that “there was
any emergency of any sort, either in July 1999 or in December 1999, nor
in January or February of 2000.” One RC employee even testified that Uy
presented the RC department with the results of a patient survey from
December 1999 rating the RC department as the most appreciated among
the hospital staff.
2756        HEALTHCARE EMPLOYEES UNION v. NLRB
   Parente further testified that he did not want to outsource
the work of RC department managers while continuing to
directly employ RC therapists. He explained that such an
arrangement would create a “divided accountability” problem.
Parente stated that in his opinion, “the [RC] employees and
the manager [of the RC department] belong in the same orga-
nization.” He also explained that the subcontracting arrange-
ment in another department of the hospital “was a workable
model that would have achieved [St. Vincent’s] goals.” Con-
trary to Parente’s goal of preventing divided accountability,
Weiner, the new RC manager, and the RC employees were
not employed by the same employer because the RC employ-
ees worked directly for California Respiratory Services while
Weiner and the department managers worked for Total Rehab
Care. This arrangement clearly resulted in divided account-
ability because the RC therapists were accountable to Califor-
nia Respiratory Services while the managers were
accountable to Total Rehab Care.

   The ALJ found that “[a]fter the subcontracting took effect,
the same employees continued to do largely the same work in
the same place,” and that “the same supervisors . . . were also
hired by the subcontractor.” Nevertheless, Weiner testified
that the RC department improved somewhat after the subcon-
tracting. Fewer physicians complained about RC department
services and some hospital staff members even commented on
the improvement of the RC department.

  E. The Present Unfair Labor Practice Charges and the
  NLRB’s Decision

   On February 2, 2000, the Union filed an unfair labor prac-
tice charge against St. Vincent. The Union charged that St.
Vincent subcontracted out the work of the RC department to
prevent RC department employees from voting in the Union
election, in violation of Sections 8(a)(1) and 8(a)(3) of the
NLRA.
            HEALTHCARE EMPLOYEES UNION v. NLRB               2757
  On March 22, 2000, the Board’s General Counsel issued a
complaint against St. Vincent and a notice of hearing. In its
answer to the complaint, St. Vincent denied the allegations
and alleged as an affirmative defense that its subcontracting
decision was based on valid business reasons unrelated to the
union organizing activities of the RC department.

   The matter was heard before an ALJ. See St. Vincent Med.
Ctr., 338 NLRB No. 130, 2003 WL 1785029, *1 (Mar. 31,
2003). The ALJ analyzed the General Counsel’s case under
Wright Line, 251 N.L.R.B. 1083, enforced, 662 F.2d 899 (1st
Cir. 1981), cert. denied, 455 U.S. 989 (1982). The ALJ cred-
ited the General Counsel’s “clear evidence” that St. Vincent
knew that the RC department was the “core” of the Union’s
organizing drive, and that the Union’s organizing campaign
burgeoned in July 1999. The ALJ also concluded that the tim-
ing of the terminations militated in favor of the General Coun-
sel’s case:

    Announcing the change in the status of the employ-
    ees, and subcontracting out their work, only about 3
    weeks after the filing of the petition for an election
    seems on its face so suspicious that if there were any
    evidence of animus or direct intent to discriminate
    that one would not hesitate to find the subcontracting
    to have been violative of the [NLRA] . . . .

   In further support of the General Counsel’s case, the ALJ
found that the alleged motivation behind St. Vincent’s sub-
contracting decision “seem[ed] to lack plausibility” and noted
the “seeming lack of a clear rationale for the way in which
[the subcontracting decision] was carried out.” The ALJ noted
that St. Vincent’s asserted business justification was “almost
too much to believe” and that “[o]n its surface it appear[ed]
to be a fabrication, and not a very good one at that.”

  Notwithstanding these findings, the ALJ found that there
was no reason “to ignore or disbelieve the testimony of [St.
2758        HEALTHCARE EMPLOYEES UNION v. NLRB
Vincent’s] witnesses to the effect that since the subcontracting
the problems have largely vanished.” After crediting St. Vin-
cent on this point, the ALJ concluded that the General Coun-
sel failed to carry its burden of persuasion under Wright Line.
The ALJ stated that “no matter how improbable [St. Vin-
cent’s] action, or its timing, in subcontracting may seem . . .
on the surface, there is no reasonable basis on this record . . .
causing me to doubt or challenge the very fact of its success
in, at long last, remedying the RC department’s longstanding,
seemingly intractable, problems.” After finding that changing
managers is a “time honored and frequently used solution to
management problems,” the ALJ concluded, “no matter how
reluctantly,” that St. Vincent’s decision “passe[d] muster.”

   The Union and the General Counsel appealed the ALJ’s
decision to the Board. In its brief boilerplate decision, the
Board affirmed the ALJ’s rulings and findings. Furthermore,
the Board concluded that

    [a]ssuming arguendo that the General Counsel satis-
    fied his initial burden under Wright Line, we find
    that [St. Vincent] has proven its affirmative defense
    under Wright Line of demonstrating that it would
    have taken the same action even in the absence of
    the employees’ protected activities. Specifically, [St.
    Vincent] has established that it implemented its sub-
    contracting decision within the 30-to-60 day time-
    frame it announced prior to the filing of the petition
    for a representation election.

St. Vincent Med. Ctr., 2003 WL 1785029, at *1 n.4 (internal
citation omitted).

   The Union filed this petition for review pursuant to Section
10(f) of the NLRA, 29 U.S.C. § 160(f). The Union challenges
both the Board’s conclusion that the General Counsel failed
to carry its burden of persuasion, and its conclusion that St.
Vincent established its affirmative defense under Wright Line.
              HEALTHCARE EMPLOYEES UNION v. NLRB                     2759
The Union argues that neither conclusion is supported by sub-
stantial evidence on the record as a whole.

                    STANDARD OF REVIEW

   “Courts of appeals may overturn Board decisions only if
the Board’s findings of fact are not supported by substantial
evidence, or if the Board has incorrectly applied the law.”13
Cal. Pac. Med. Ctr. v. NLRB, 87 F.3d 304, 307 (9th Cir.
1996); see also NLRB v. Nevis Indus., Inc., 647 F.2d 905, 908
(9th Cir. 1981) (“The Board’s findings must be enforced if
supported by substantial evidence, even if this court might
reach a different conclusion based on the same evidence.”).
However, “[t]he substantial evidence test requires a case-by-
case analysis and a review of the whole record,” Cal. Pac.
Med. Ctr., 87 F.3d at 307, and requires a reviewing court to
“take into account whatever in the record fairly detracts” from
the Board’s conclusions, Universal Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951).

   Similarly, while we should be mindful that “the determina-
tion of motive is particularly within the purview of the
NLRB,” Lippincott Indus., Inc. v. NLRB, 661 F.2d 112, 116
(9th Cir. 1981), “we may set aside the Board’s determination
of motive if we find that it is not supported by substantial evi-
dence,” Dash v. NLRB, 793 F.2d 1062, 1066 n.6 (9th Cir.
1986).
  13
     Counsel for the Board, relying on Chamber of Commerce v. NLRB,
574 F.2d 457, 463 (9th Cir. 1978), states in its brief that we must uphold
the Board’s decision unless it has no rational basis. The weight of author-
ity, however, makes clear we review the Board’s conclusions for “substan-
tial evidence in the record as a whole.” See Universal Camera Corp. v.
NLRB, 340 U.S. 474, 488 (1951); see also Dash v. NLRB, 793 F.2d 1062,
1065-66 (9th Cir. 1986); Gen. Teamsters Local 162 v. NLRB, 782 F.2d
839, 842 (9th Cir. 1986).
2760           HEALTHCARE EMPLOYEES UNION v. NLRB
                               ANALYSIS

   [1] Section 8(a)(3) of the NLRA prohibits an employer
from discriminating against employees “in regard to hire or
tenure of employment . . . to discourage membership in any
labor organization.” 29 U.S.C. § 158(a)(3).

   [2] Subcontracting decisions are not immune from the
reach of the NLRA. Thus, it is well-established that an
employer violates Section 8(a)(3) of the NLRA where it
“close[s] a part of [its] operations, discharge[s] the employees
involved, and subcontract[s] the work for anti-Union pur-
poses.”14 Great Chinese Am. Sewing Co. v. NLRB, 578 F.2d
251, 255 (9th Cir. 1978); see also Textile Workers Union of
Am. v. Darlington Mfg. Co., 380 U.S. 263, 272 n.16 (1965);
Reno Hilton Resorts v. NLRB, 196 F.3d 1275, 1282-83 (D.C.
Cir. 1999); NLRB v. Joy Recovery Tech. Corp., 134 F.3d
1307, 1314-15 (7th Cir. 1998).

  In a Section 8(a)(3) case such as this, the Board uses the
burden-shifting scheme set forth in Wright Line to determine
whether an employer was motivated by anti-union animus.
See 251 N.L.R.B. at 1089; NLRB v. Transp. Mgmt. Corp., 462
U.S. 393, 399-403 (1983) (upholding Wright Line burden
shifting scheme under the NLRA), overruled on other
grounds by Office of Workers’ Comp. Program v. Greenwich
Collieries, 512 U.S. 267, 276-78 (1994); see also Dash, 793
F.2d at 1066. Under Wright Line, the Board requires that

       the General Counsel make a prima facie showing
       sufficient to support the inference that protected con-
  14
    The Union does not argue that St. Vincent violated Section 8(a)(1) of
the NLRA for reasons different from those it relies on to support its Sec-
tion 8(a)(3) charge. Consequently, we treat the Union’s charge under Sec-
tion 8(a)(1) as a derivative of its Section 8(a)(3) charge. See NLRB v.
Swedish Hosp. Med. Ctr., 619 F.2d 33, 35 (9th Cir. 1980) (“Any violation
of Section 8(a)(3) . . . necessarily includes a derivative violation of Section
8(a)(1).”).
            HEALTHCARE EMPLOYEES UNION v. NLRB              2761
    duct was a ‘motivating factor’ in the employer’s
    decision. Once this is established, the burden will
    shift to the employer to demonstrate that the same
    action would have taken place even in the absence of
    protected conduct.

251 N.L.R.B. at 1089. While the General Counsel retains the
ultimate burden of persuasion, “once the General Counsel
establishes that anti-union animus was a motivating factor, the
employer bears the burden of establishing any affirmative
defense such as the inevitability of termination.” Schaeff Inc.
v. NLRB, 113 F.3d 264, 267 n.5 (D.C. Cir. 1997).

  A.   The General Counsel’s Case

   [3] The Union challenges the Board’s conclusion that the
General Counsel failed to present sufficient evidence of anti-
union animus to sustain its burden of persuasion. An
employer will seldom admit that it was motivated by anti-
union animus when it made its adverse employment decision.
See Shattuck Denn Mining Corp. v. NLRB, 362 F.2d 466, 470
(9th Cir. 1966) (“Actual motive, a state of mind, being the
question, it is seldom that direct evidence will be available
that is not also self-serving.”). For that reason, circumstantial
evidence is sufficient to establish anti-union motive. See New
Breed Leasing Corp. v. NLRB, 111 F.3d 1460, 1465 (9th Cir.
1997); see also Folkins v. NLRB, 500 F.2d 52, 53 (9th Cir.
1974) (per curiam).

   “Motive is a question of fact, and the NLRB may rely on
both direct and circumstantial evidence to establish an
employer’s motive, considering such factors as the employ-
er’s knowledge of the employee’s union activities, the
employer’s hostility toward the union, and the timing of the
employer’s action.” Power, Inc. v. NLRB, 40 F.3d 409, 418
(D.C. Cir. 1994); see also E.C. Waste, Inc. v. NLRB, 359 F.3d
36, 42 (1st Cir. 2004) (“To determine motive, the Board may
2762        HEALTHCARE EMPLOYEES UNION v. NLRB
rely on indirect evidence and inferences reasonably drawn
from the totality of the circumstances.”).

    1.   Evidence of St. Vincent’s Motive

   After carefully reviewing the record as a whole, we con-
clude that substantial evidence does not support the Board’s
finding that the General Counsel failed to show that anti-
union animus was a motivating factor in St. Vincent’s deci-
sion to subcontract out the RC department. As discussed
below, in the face of strong circumstantial evidence of anti-
union animus, the ALJ improperly credited evidence of post-
subcontracting improvements in the RC department as a basis
for dismissing the General Counsel’s case.

   [4] Circumstantial evidence of anti-union animus is com-
pelling in this case. First, there is ample evidence that St. Vin-
cent knew about the union activity in the hospital in general,
and in the RC department in particular. The head of human
resources for the hospital specifically directed hospital man-
agers to monitor all Union activity. Several RC department
managers also testified that they identified themselves to
Union organizers on various occasions during the second half
of 1999 and asked to see Union fliers. Finally, several hospital
managers, including the hospital president, testified that they
were aware of the impending Union election when the sub-
contracting decision was made. The testimony of St. Vin-
cent’s managers regarding their awareness of the Union’s
campaign is consistent with the clear evidence that the Union
was openly and actively soliciting support in the hospital
throughout the second half of 1999.

   [5] Likewise, employee Rush testified that either Uy or Hill
stated during an RC department meeting that “unions were
bad for the hospital” and that the RC department’s problems
could be resolved without a union. Rush’s testimony further
establishes that RC department managers were aware of the
support for the Union among RC employees, and were critical
            HEALTHCARE EMPLOYEES UNION v. NLRB            2763
of the Union’s efforts to organize technical staff employees.
Even if St. Vincent’s managers did not violate the NLRA by
making these comments, the Board should treat these com-
ments as background evidence of anti-union animus. See, e.g.,
Tim Foley Plumbing Servs., 337 N.L.R.B. 328, 329 (2001)
(“[T]he Board has held that an employer’s antiunion com-
ments, while themselves lawful, may nevertheless be consid-
ered as background evidence of animus toward employees’
union activities.”); see also NLRB v. Vemco, Inc., 989 F.2d
1468, 1473-75 (6th Cir. 1993) (concluding that an employer’s
anti-union speech, while lawful under the NLRA, may be
considered as background evidence of animus).

   [6] Second, the inference of anti-union animus raised by the
timing of St. Vincent’s decision to subcontract is “stunningly
obvious.” See NLRB v. Rubin, 424 F.2d 748, 750 (2d Cir.
1970). As the ALJ found, “[f]rom [St. Vincent’s] standpoint
the timing of the action could scarcely be imagined as worse.”
St. Vincent subcontracted out the department on February 5,
2000, less than a month after the Union filed its petition for
an election with the Board, and less than two weeks before the
scheduled election. The effect of St. Vincent’s decision to
outsource operation of the RC department, of course, was the
disenfranchisement of twenty-five percent of the employees
(ninety-five percent of whom had already expressed their
desire to join the Union) who were otherwise eligible to vote
in the representation election.

   [7] Courts have consistently treated an employer’s adverse
employment action occurring between the filing of a petition
for a representation election with the Board and the ensuing
election as raising a powerful inference of anti-union animus.
See, e.g., E.C. Waste, Inc., 359 F.3d at 43 (“[T]he probative
value of the timing of the Company’s action — firing [an
employee] in the critical interval between the time that the
Union filed its petition for recognition and the planned repre-
sentation election — is obvious.”); Joy Recovery Tech. Corp.,
134 F.3d at 1314 (concluding that “[i]n this case, timing is
2764        HEALTHCARE EMPLOYEES UNION v. NLRB
everything,” where “[t]he closing of the department comes on
the heels of the union’s organizational activity,” including fil-
ing a petition for a representation election); Power, Inc., 40
F.3d at 418 (“The timing of the layoff, just two weeks before
the scheduled union election, gives further credence to the
charge of anti-union animus.”); NLRB v. Rain-Ware, Inc., 732
F.2d 1349, 1354 (7th Cir. 1984) (concluding that “[t]he timing
of the layoffs and warehouse closing provides the strongest
support for connecting anti-union sentiment with the layoffs,”
where the layoffs and warehouse closing closely followed a
demand for union recognition). Because St. Vincent subcon-
tracted out its entire RC department less than two weeks
before the scheduled union election, the timing of its decision
raises an unmistakable inference of anti-union animus.

   [8] The timing of the decision to subcontract out the work
of the RC department is also suspicious because the manage-
ment problems in the RC department existed for more than a
decade before St. Vincent decided to subcontract out the work
of the department. See Reno Hilton Resorts, 196 F.3d at 1283
(concluding that “[t]he timing of the decision to contract out
is suspect” where it “came on the heels of heavy union activi-
ty” and the employer knew of the purported rationale for its
subcontracting decision long before it implemented that deci-
sion); see also Joy Recovery Tech. Corp., 134 F.3d at 1314-15
(concluding that the timing of the employer’s subcontracting
decision based on financial concerns was suspicious where it
came “on the heels of the union’s organizational activity” and
employer had maintained the department unprofitably for “a
significant period of time”). Even in mid-1999, only a few
months before the Union announced that it was close to seek-
ing a representation election, the ALJ found that St. Vincent
was in no hurry to remedy the RC department management
problems. Indeed, Parente testified that the decision to sub-
contract was not caused by an emergency in patient care in
the RC department. Thus, there was no obvious precipitating
event for the subcontracting decision other than the looming
union election. In essence, St. Vincent appears to have toler-
               HEALTHCARE EMPLOYEES UNION v. NLRB                      2765
ated its in-house management problems up until the very
moment that the Union sought to represent the technical staff
at the hospital.

   The Board attempts to diminish the strong inference of
anti-union animus raised by the timing of St. Vincent’s
actions. It notes that St. Vincent managers mentioned subcon-
tracting out the work of the RC department in a July 1999
meeting, months before the union election was scheduled.15
Even so, this is the same month that the Union began its orga-
nizing drive at the hospital, thereby creating the inference that
Union activity triggered the subcontracting discussion. As dis-
cussed earlier, it is undisputed that St. Vincent managers were
aware of the Union’s activities and that those activities were
markedly heightened in July 1999. Thus, the mere fact that St.
Vincent managers mentioned subcontracting in July 1999
does little to defeat the inference of anti-union animus. More-
over, the issue was not brought up again until November 18,
1999, eight days after the union circulated its November 10,
1999 flier announcing the imminent union election. This
sequence of events strengthens, rather than diminishes, the
inference of anti-union animus.

  After making substantial findings in support of the General
Counsel, the ALJ focused part of his analysis on the testi-
mony of St. Vincent’s witnesses establishing that after the
subcontracting took effect, productivity in the RC department
generally improved. Having credited this testimony, the ALJ
concluded that the General Counsel failed to carry its burden
of persuasion under Wright Line.
   15
      The Board also argues that there was no direct evidence that St. Vin-
cent management paid particular attention to the Union’s November 10,
1999, flier announcing the imminent election. Nevertheless, as discussed
earlier, St. Vincent managers paid attention to all of the Union’s activities
in the hospital. For the reasons discussed above, there is no basis to con-
clude that the flier, which St. Vincent produced at the hearing before the
ALJ pursuant to a subpoena, went unnoticed by St. Vincent management.
2766        HEALTHCARE EMPLOYEES UNION v. NLRB
   [9] Whether an employer’s decision was ultimately good or
bad, however, has no relevance in a Section 8(a)(3) case such
as this, where the critical issue is the employer’s motive. In
determining whether an employment decision violates Section
8(a)(3), the “crucial factor is not whether the business reasons
cited by [the employer] were good or bad, but whether they
were honestly invoked and were, in fact, the cause of the
change.” NLRB v. Savoy Laundry, 327 F.2d 370, 371 (2d Cir.
1964). The ALJ therefore erred in relying on evidence of the
RC department’s improved conditions to conclude that St.
Vincent was not motivated by anti-union animus in its deci-
sion to subcontract out the department.

   [10] In short, the highly suspect timing of St. Vincent’s
decision to subcontract out the RC department, when coupled
with St. Vincent’s knowledge of union activity, strongly
favored the General Counsel’s case. Contrary to the ALJ, we
conclude that the probative value of this evidence is not
diminished in any way by the evidence of improved condi-
tions in the RC department after the subcontracting took
effect.

   However, we turn to the remaining evidence in the record
to determine whether the Board’s conclusions were supported
by substantial evidence on the record as a whole.

    2.   Evidence of Pretext

   The ALJ found that “[St. Vincent’s] reasons for proceeding
as it did seem[ed] to lack plausibility” and that there was a
“seeming lack of a clear rationale for the way in which [sub-
contracting] was carried out.” Furthermore, the ALJ found
that St. Vincent’s asserted reason for subcontracting “[o]n its
surface appear[ed] to be a fabrication, and not a very good
one at that.”

  These findings, which we may weigh along with other evi-
dence opposing the Board’s ruling, further undermine the
            HEALTHCARE EMPLOYEES UNION v. NLRB               2767
Board’s conclusion that anti-union animus was not a motivat-
ing factor in the subcontracting decision. See Dash, 793 F.2d
at 1066; see also NLRB v. Searle Auto Glass, Inc., 762 F.2d
769, 773 (9th Cir. 1985). “Where the employer’s asserted jus-
tification is shifting and unreliable, its case is weakened, and
the conclusion that the true reason was for union activity is
correspondingly strengthened.” Nevis Indus., Inc., 647 F.2d at
910; see also NLRB v. Dillon Stores, 643 F.2d 687, 693 (10th
Cir. 1981) (“[A] flimsy or unsupported explanation may affir-
matively suggest that the employer has seized upon a pretext
to mask an anti-union motivation.”).

   St. Vincent asserted that it subcontracted out the work of its
RC department to remedy longstanding management prob-
lems. As both Uy and Ramirez testified, they wanted to sub-
contract out the work of the department to rid themselves of
the burden of finding reliable managers. They wanted that
burden to fall on an independent contractor. Nevertheless,
Ramirez, Hancock, and Weiner each testified that subcon-
tracting out the work of the RC therapists was not needed to
achieve this result. Ramirez testified that “[t]he transfer of the
employees had nothing to do with [California Respiratory
Services] getting us a new manager.” Weiner also testified
that he could have achieved the same results in the RC depart-
ment without requiring California Respiratory Services to
employ the RC employees directly. Hancock, too, testified
that he was not aware of any reason requiring St. Vincent to
outsource the RC employees in order to get a new manager
for the department. As each of these witnesses explained, they
were unaware of any reason why subcontracting out the RC
therapists would ameliorate the RC department’s longstanding
management problems. Thus, even if there was such a reason,
the management of the RC department failed to proffer one.

   Several of St. Vincent’s witnesses testified that subcon-
tracting out other departments in the hospital had proved suc-
cessful in the past. On appeal, the Board contends that this
evidence of past practice helps to defeat any inference of anti-
2768        HEALTHCARE EMPLOYEES UNION v. NLRB
union animus. Nonetheless, St. Vincent failed to demonstrate
why those departments were subcontracted, other than vague
assertions about “quality issues.” Without evidence that the
past subcontracting decisions were prompted by the same type
of management concerns faced by the RC department, there
is no basis to conclude that St. Vincent acted consistently with
past practice when it outsourced the work of its RC depart-
ment.

   [11] As explained earlier, Parente, the hospital president,
testified that outsourcing the RC management while continu-
ing to directly employ the RC employees would create a “di-
vided accountability” problem. But the divided accountability
problem was not alleviated by the ultimate subcontracting
arrangement. Contrary to Parente’s justification, RC depart-
ment managers and employees were not directly employed by
the same employer. Total Rehab Care, Weiner’s company,
hired all the former St. Vincent managers. It then contracted
with California Respiratory Services to provide management
services to the RC department. The RC therapists, on the
other hand, worked directly for California Respiratory Ser-
vices. This arrangement did not place the RC therapists and
the RC department managers in the same organization. Actu-
ally, the RC department arrangement would have been identi-
cal had St. Vincent simply contracted out its management
services to Total Rehab Care. In either case, RC managers and
the RC therapists would not have been employed directly by
the same employer. Because the divided accountability prob-
lem was not addressed by the subcontracting arrangement,
Parente’s testimony on this point raises the inference that this
reason was really a pretext for anti-union animus.

    3.   Conclusion

  [12] We conclude that substantial evidence in the record as
a whole does not support the Board’s ruling that the General
Counsel failed to meet its burden of persuasion under Wright
Line. We reach this conclusion because (1) the General Coun-
            HEALTHCARE EMPLOYEES UNION v. NLRB              2769
sel presented unrebutted evidence concerning St. Vincent’s
knowledge of union activity, (2) the timing of St. Vincent’s
decision to subcontract raised a compelling inference of anti-
union animus, (3) the ALJ mistakenly relied on post-
subcontracting evidence to establish the cause of the subcon-
tracting decision, and (4) St. Vincent’s business justification
was unreliable, therefore raising the inference that its justifi-
cation was merely a pretext for anti-union animus.

  We therefore examine St. Vincent’s affirmative defense to
determine if the Board’s ultimate decision in favor of St. Vin-
cent is supported by substantial evidence on the record as a
whole.

    B.   St. Vincent’s Affirmative Defense

   [13] “The pendency of a union representation election does
not prevent management from carrying on its business in the
normal fashion.” NLRB v. Anchorage Times Pub. Co., 637
F.2d 1359, 1366 (9th Cir. 1981). Thus, in a mixed-motive
case under Wright Line, an employer may avoid a Section
8(a)(3) violation where it can establish that it would have
taken the challenged action even in the absence of the pro-
tected activity. See Dash, 793 F.2d at 1066; see also Reno-
Hilton Resorts, 196 F.3d at 1284-85; Wright Line, 251
N.L.R.B. at 1089.

   The Board concluded that St. Vincent established its affir-
mative defense under Wright Line. In sum, the Board con-
cluded that St. Vincent “established that it implemented its
subcontracting decision within the 30-to-60 day timeframe it
announced prior to the filing of the petition for a representa-
tion election.” See St. Vincent Med. Ctr., 2003 WL 1785029,
at *1 n.4. The Board’s simple footnote, however, offers little
insight into this otherwise fact-intensive case. See NLRB v.
Special Mine Servs., Inc., 11 F.3d 88, 89 (7th Cir. 1993) (dis-
cussing the “depressing pattern” of Board decisions in which
2770        HEALTHCARE EMPLOYEES UNION v. NLRB
“[t]here is one serious issue, which the Board tucks into a
footnote”).

   The announcement to which the Board likely refers took
place on December 27, 1999. That announcement, however,
hardly reflects substantial evidence on the record as a whole
that St. Vincent would have subcontracted out the RC depart-
ment, when and as it did, in the absence of union activity. See
Universal Camera Corp., 340 U.S. at 488; Wright Line, 251
NLRB at 1089.

   [14] While St. Vincent adhered to its intended timeline for
subcontracting out the work of the RC department, we would
need to ignore a powerful string of coincidences to conclude
that St. Vincent would have implemented subcontracting,
when and as it did, in the absence of union activity. First,
despite experiencing management problems for more than a
decade, St. Vincent first mentioned subcontracting the same
month that the Union began its full-scale campaign to orga-
nize the technical staff. Second, though St. Vincent first dis-
cussed outsourcing in July 1999, it did not decide to
investigate subcontractors until nine days after the Union cir-
culated a flier at the hospital announcing its intent to seek a
representation election. Third, St. Vincent subcontracted the
department less than two weeks before the scheduled election,
thereby disenfranchising one quarter of the eligible voters.

   Moreover, as discussed above, the ALJ’s findings regard-
ing St. Vincent’s purported business justification substantially
detract from the Board’s conclusion. St. Vincent’s witnesses
did not present a consistent or plausible explanation for why
it was necessary to subcontract out the work of the entire RC
department in order to obtain better managers. The ALJ found
that St. Vincent’s business justification “seem[ed] to lack
plausibility,” and noted the “seeming lack of a clear rationale
for the way in which [the subcontracting decision] was carried
out.” He further found the justification was “almost too much
to believe” and that “[o]n its surface it appear[ed] to be a fab-
            HEALTHCARE EMPLOYEES UNION v. NLRB             2771
rication, and not a very good one at that.” These findings rein-
force the inference that the true motive for the subcontracting
decision was anti-union animus. See Nevis Indus., Inc., 647
F.2d at 910; Shattuck Denn Mining Corp., 362 F.2d at 470.

   [15] In light of the record as a whole, we “cannot conscien-
tiously find that the evidence supporting [the Board’s] deci-
sion is substantial, when viewed in the light that the record in
its entirety furnishes.” Universal Camera Corp., 340 U.S. at
488.

                       CONCLUSION

   Because we conclude that the Board’s conclusions are not
supported by substantial evidence on the record as a whole,
we grant the Union’s petition for review and remand this case
to the Board for further proceedings.

  PETITION FOR REVIEW GRANTED.

BEEZER, Circuit Judge, dissenting:

   I am unable to join the opinion of the court. Our precedents
provide a consistent standard for the review of decisions by
the NLRB. Although the correct standards appear in the
Court’s opinion, a different standard is applied in the evalua-
tion of the record made by the ALJ and NLRB.

  I respectfully dissent.

                               I

   The administrative law judge found that the General Coun-
sel failed to meet his burden under Wright Line, Inc., 251
NLRB 1083 (1980). Wright Line requires the General Coun-
sel prove that anti-union animus was a substantial or motivat-
2772        HEALTHCARE EMPLOYEES UNION v. NLRB
ing factor in the decision to subcontract the Respiratory Care
Department. The ALJ’s finding was affirmed by the National
Labor Relations Board. We review the NLRB determination
for substantial evidence and accord great deference to the ALJ
and NLRB’s motive and credibility determinations, as well as
any inferences they drew from the evidence. See New Breed
Leasing Corp. v. NLRB, 111 F.3d 1460, 1464-65 (9th Cir.
1997) (“[T]he [NLRB] is particularly capable of drawing
inferences from the facts of a labor dispute” and “the Board
is to be accorded special deference in drawing derivative
inferences from the evidence”) (internal citations omitted);
Retlaw Broadcasting Co. v. NLRB, 53 F.3d 1002, 1006 (9th
Cir. 1995) (“Credibility determination by the ALJ are given
great deference, and are upheld unless they are inherently
incredible or patently unreasonable.”) (internal citations omit-
ted); Lippincott Ind., Inc. v. NLRB, 661 F.2d 112, 116 (9th
Cir. 1981) (“[W]e must be mindful that the determination of
motive is particularly within the purview of the NLRB.”).

                               II

   St. Vincent presented ample evidence that the Respiratory
Care Department was experiencing significant management
and performance problems. Likewise, St. Vincent presented
testimony and evidence that the decision to subcontract the
medical services performed by the Department was based on
these performance issues and unrelated to an increase in union
activity. The ALJ noted that there were no prior charges filed
against St. Vincent, no independent violations of Section
8(a)(1) of the Act, and no evidence that St. Vincent treated
employees interested in union organizing differently than
other employees. Analyzing the evidence as a whole and
weighing the asserted justification for subcontracting against
its suspicious timing, and in light of the lack of history of
anti-union activity, the ALJ found St. Vincent’s justification
credible. The ALJ observed that altering management is “a
time honored and frequently used solution to management
problems.”
                HEALTHCARE EMPLOYEES UNION v. NLRB                      2773
   The ALJ concluded that he could not infer that St. Vin-
cent’s “asserted reason for the subcontracting, occurring when
and how it did, bespeaks falsity, and leads to the further infer-
ence that it constitutes a showing of animus.” This “deriva-
tive” inference is to be accorded “special deference,” and
cannot be overturned without a finding that the ALJ’s credi-
bility determinations were “inherently incredible or patently
unreasonable.” New Breed, 111 F.3d at 1464-65. The evi-
dence of the Respiratory Care Department’s quality problems
was undisputed as was the testimony that St. Vincent had
prior positive experience subcontracting other departments.
This undisputed testimony constitutes sufficient evidence to
support the ALJ’s decision.

   The opinion of the court rests in part upon inferences of
anti-union animus drawn from two anti-union statements
allegedly made by members of St. Vincent’s management.
These inferences are not discussed by either the ALJ or
NLRB in the record before us.

   There is disagreement amongst the circuits with regard to
the propriety of considering lawful protected anti-union
speech as evidence of anti-union animus. The opinion of the
court accepts the Sixth Circuit’s reasoning in NLRB v. Vemco,
989 F.2d 1468, 1474 (6th Cir. 1993) that such speech may be
considered as “background in a determination of animus,” but
does not comment on the conflicting cases from other circuits
or reference the controlling statutory language. See 29 U.S.C.
§ 158(c).1
  1
   Section 8(c) of the Act provides that:
      The expressing of any views, argument, or opinion, or the dis-
      semination thereof, whether in written printed, graphic, or visual
      form, shall not constitute or be evidence of an unfair labor prac-
      tice under any of the provisions of this subchapter, if such expres-
      sion contains no threat of reprisal or force of promise of benefit.
29 U.S.C. § 158(c).
2774        HEALTHCARE EMPLOYEES UNION v. NLRB
   Contrary to the Sixth Circuit, the Seventh and Second Cir-
cuits hold that protected speech may not be used as evidence
of anti-union animus. See Lebow v. American Trans Air, 86
F.3d 661, 666-67 (7th Cir. 1996) (“We have stated that under
the NLRA, noncoercive expressions of opinion are not to be
used as evidence of an unfair labor practice.”); Holo-Krome
Co. v. NLRB, 907 F.2d 1343, 1346 (2d Cir. 1990) (protected
speech may not be considered in evaluating a claim of anti-
union animus). The use of protected speech as evidence,
background or otherwise, of unlawful activity violates the
clear statutory command that noncoercive expressions of
views, argument, or opinion shall not be “evidence of an
unfair labor practice.” 29 U.S.C. § 158(c).

  Reasonable minds may disagree about whether the concur-
rent timing of the subcontracting decision and the increased
union activity is sufficient evidence that anti-union animus
was a substantial factor in the subcontracting decision. I do
not agree that ignoring the agency’s view of the facts and evi-
dence is an adequate basis for us to reverse the ALJ and
NLRB’s decision. “A reviewing court may not displace the
NLRB’s choice between two fairly conflicting views, even
though the court would justifiably have made a different
choice had the matter been before it de novo.” Retlaw Broad-
casting Co., 53 F.3d at 1005.