Court Opinion

ID: 3175254
Source: CourtListenerOpinion
Date Created: 2016-02-05 20:03:26.032774+00
Date Added: 2024-06-11T12:05:23.128218
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 18, 2015          Decided February 5, 2016

                        No. 11-1267

                    ALDEN LEEDS, INC.,
                       PETITIONER

                             v.

           NATIONAL LABOR RELATIONS BOARD,
                     RESPONDENT

  UNITED FOOD AND COMMERCIAL WORKERS LOCAL 1245,
                    INTERVENOR

                 Consolidated with 11-1296

       On Petition for Review and Cross-Application
              for Enforcement of an Order of
           the National Labor Relations Board

     Joseph B. Fiorenzo argued the cause and filed the briefs
for petitioner.

     Jeffrey W. Burritt, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the
brief were John H. Ferguson, Associate General Counsel,
Linda Dreeben, Deputy Associate General Counsel, and
Robert J. Englehart, Supervisory Attorney.
                              2

     Patricia McConnell and Jessica D. Ochs were on the
brief for intervenor United Food and Commercial Workers
Local 1245 in support of respondent.

    Before: TATEL, Circuit Judge, and EDWARDS and
GINSBURG, Senior Circuit Judges.

   Opinion for the Court filed by Senior Circuit Judge
EDWARDS.

     EDWARDS, Senior Circuit Judge: Petitioner Alden Leeds,
Inc. (“Alden Leeds” or “the Company”), seeks review of a
Decision and Order issued by the National Labor Relations
Board (“NLRB” or “the Board”) on July 19, 2011. The Board
has filed a cross-application for enforcement. The United
Food and Commercial Workers Union Local 1245 (“the
Union”), the charging party before the Board, has intervened
in support of the Board.

     The Board found that Alden Leeds had violated Sections
8(a)(1) and (3) of the National Labor Relations Act (“NLRA”
or “the Act”), 29 U.S.C. § 158(a)(1), (3), by locking out its
employees on November 3, 2009, without providing the
employees with a timely, clear, and complete offer setting
forth the conditions necessary to avoid the lockout. Alden
Leeds, Inc., 357 N.L.R.B. No. 20 (July 19, 2011). Alden
Leeds claims that substantial evidence in the record does not
support the Board’s finding that the Company committed the
cited unfair labor practices. Alden Leeds also argues that,
even if the lockout was unlawful, the Board erred in declining
to allow the Company to attempt to establish in a separate
compliance proceeding that its backpay liability ended on
November 9, 2009.
                                3
     We hold that, on the record before us, there is substantial
evidence to support the Board’s finding that Alden Leeds
violated the Act by locking out its employees on November 3,
2009. Therefore, we deny the Company’s petition for review
on this issue and grant the Board’s cross-application for
enforcement.

     We have no jurisdiction to consider the Company’s claim
that the Board erred in precluding it from litigating its
backpay liability in a compliance proceeding. Alden Leeds
failed to raise this issue before the Board in the first instance,
as required by Section 10(e) of the Act. See 29 U.S.C. §
160(e) (“No objection that has not been urged before the
Board, its member, agent, or agency, shall be considered by
the court, unless the failure or neglect to urge such objection
shall be excused because of extraordinary circumstances.”).
There are no “extraordinary circumstances” here which give
the court jurisdiction to address this matter.

                      I.   BACKGROUND

    Petitioner Alden Leeds manufactures and packages
swimming pool cleaning supplies and chemicals at two
locations in New Jersey. The Company employs
approximately fifty production and delivery employees, who
have been represented by the Union since 2001. In September
2009, Alden Leeds and the Union commenced negotiations on
a new contract to succeed their 2005 collective bargaining
agreement, which was set to expire on October 3, 2009. The
Union sought increases in wages, sick days, and vacation
days; changes in seniority; and a three-year agreement. The
main sticking point between the parties was health care.
Premiums were set to increase under the existing health care
plan, and the Company and Union disagreed over how to
apportion the increases.
                              4

    The parties’ first bargaining session was on September
30, 2009. At that meeting, Tom Cunningham, the Union’s
business agent, went through the Union’s proposals and
explained that the Union was seeking to keep its existing
health care plan, which would necessitate increased
contributions from the Company. Mark Epstein, the
Company’s president and chief executive officer, informed
Cunningham that the Company was not going to agree to the
health care contribution increases the Union was seeking.
Nonetheless, Epstein told Cunningham that he was going to
explore alternative health care plans with the Company’s
insurance broker.

     The next meeting between the parties took place on
October 5. Epstein provided Cunningham with descriptions of
several alternative health care plans that had been prepared by
the Company’s broker. Cunningham stated that the plans
would not work for the Union employees, as the deductibles
and out-of-pocket costs were very high. Epstein responded
that the Company’s broker would look into other health care
plans that might be more affordable for the employees.
Cunningham then attempted to discuss the Union’s other
contract proposals, but Epstein interjected that he “couldn’t
do anything” with the other proposals, and that all the
Company wanted was “a freeze for one year.” Alden Leeds,
Inc., 357 N.L.R.B. No. 20, at 3. Cunningham responded that
the Union would not agree to such a deal because the
Company’s current health care contributions would not
sustain medical coverage for the year. Epstein repeated that he
would furnish Union officials with additional health care
plans for their consideration.

     On October 8, the Company and the Union met again. At
this meeting, Epstein stated that he was still trying to obtain
                              5
some additional health care plan proposals to provide the
Union. Epstein also repeated that the Company wanted to
extend the current contract for one year with a one-year
“freeze.” Id. at 4. However, Epstein informed the Union that
he expected to have information on some additional health
care plans by the next week. The parties signed an agreement
at their October 8 meeting extending the 2005 collective
bargaining agreement until November 2.

     On October 21, Epstein emailed Cunningham an
additional health care plan for the Union to review. Epstein
also indicated that he “hoped to have something even better”
and that he would advise the Union if anything came through.
Id. at 5. The next day, on October 22, Epstein emailed
Cunningham an analysis of the health care plan that the
Company had provided to the Union the day before. Epstein
explained that the cost of the plan would be more expensive
than the existing plan, but less expensive than the Union’s
proposed renewal. Alternatively, Epstein suggested that if the
Company provided employee-only coverage and eliminated
family coverage, the cost would drop below the existing plan
and the company could pay $400 towards each employee’s
deductible. Epstein ended his email by reiterating that he
hoped to have something better later that day and, if so, he
would forward it to the Union.

     Later on October 22, Epstein emailed Cunningham yet
another health care plan. He explained that, although the cost
was similar to the plan that he had provided the day before
and the deductible was higher, employees would not be
required to provide their medical histories in order to secure
coverage. Cunningham showed these plans to the Union’s
secretary treasurer, John Troccoli. Cunningham told Troccoli
that he was not really sure what the Company was proposing
                              6
on health care and that the Company had made no proposal
dealing with the Union’s other issues.

     On October 30, Troccoli telephoned Epstein and
informed him that the Union did not think any of the
Company’s proposed health care plans would work because
the deductibles were too high, medical reviews were required,
and the cost to employees would be too high. As a
concession, the Union offered the Company a continuation of
the existing health care plan for one year at the same
contribution levels. Troccoli requested that the parties go
forward and discuss the other outstanding issues. Epstein
replied, “You don’t understand. I just want to keep everything
the same. I don’t want to pay anything more. . . . I want to
keep everything the same for one year.” Id. at 6 (ellipsis in
original). Troccoli responded that the Union was willing to do
that with health care, but wanted to discuss the other
outstanding issues. Epstein repeated that he wanted to keep
everything the same for one year, and that the Union
employees were supposed to vote on the Company’s offer.
Troccoli responded, “Vote on what? I have no idea what
we’re voting on.” Id. Epstein stated that if the employees did
not vote and agree to the Company’s offer, the employees
would be locked out. Troccoli repeated that he did not know
what the Union employees were supposed to be voting on.
Epstein replied that the Union would have something by the
end of the day.

     Later that day, Epstein sent an email to the Union, which
stated:

    During the 30 days since the Agreement between the
    parties expired we at the Company have tried our best to
    come up with an alternative medical plan that would cost
    the same or less than the proposed increase for the Union
                               7
    plan. Our best efforts resulted in a plan that 1) requires
    medical interview for coverage 2) does not include dental
    3) does not include optical 4) did not cost less than the
    expiring plan. However if we were to eliminate the
    family coverage and go to single coverage for all Union
    members then this plan would cost less than the expiring
    Union plan. There would be enough of a savings that the
    Company would provide $400 to each member to go
    toward their deductibles. . . . If we have no Agreement
    between the parties by the close of business on Monday
    then the Company will lock out the Union members on
    Tuesday morning Nov 3, 2009.

Id. Union officials made no effort to contact Epstein regarding
his email. At 4 p.m. on November 2, Epstein informed the
Union that, effective immediately, the employees were locked
out. On November 3, the Union employees attempted to
punch in at work but were prevented from doing so by the
Company.

    The parties met on November 3, 4, and 9. At the meeting
on November 9, the Company presented the Union with a
document entitled “Final Offer.” Id. at 8. In its “Final Offer,”
the Company specified the health care plan that would be
provided to employees and the contribution rates for both
employees and the Company. The “Final Offer” further stated
that all other terms of the 2005 collective bargaining
agreement would remain in full force and effect. On
November 12, the Union rejected the Company’s “Final
Offer.”
                                 8
        II. THE PROCEEDINGS BEFORE THE BOARD

     The Union filed unfair labor practice charges against the
Company. Thereafter, the Board’s Regional Director issued a
complaint and notice of hearing, alleging, inter alia, that
Alden Leeds violated Sections 8(a)(1), (3), and (5) of the Act
by unlawfully locking out its employees. On August 30, 2010,
following a hearing, an Administrative Law Judge (“ALJ”)
concluded that Alden Leeds had violated Sections 8(a)(1) and
(3) of the Act by locking out its employees on November 3,
2009, without providing its employees with a timely, clear,
and complete offer setting forth the conditions necessary to
avoid the lockout. Alden Leeds, Inc., 357 N.L.R.B. No. 20, at
10-13. The ALJ noted that the Company’s October 30 email
purporting to detail the terms of its offer was confusing,
incomplete, and internally inconsistent, and that both
Cunningham and Troccoli were confused about which health
care plan, if any, the Company was proposing. Id. at 11. The
ALJ found that the Company first submitted a complete
proposal to the Union on November 9, 2009. Id. at 12. The
ALJ found, however, that this proposal did not cure the
Company’s failure to provide a complete proposal prior to the
lockout, and that the lockout, unlawful at its inception,
retained its initial taint of illegality until it was terminated and
the affected employees were made whole. Id. The ALJ
recommended that the Company should cease and desist from
illegally locking out its employees, reinstate the unlawfully
locked out employees, and provide the unlawfully locked out
employees full backpay. Id. at 13.

    On July 19, 2011, the Board substantially adopted the
ALJ’s findings and his recommended order. Id. at 1. The
Board added the following explanation to its judgment:
                               9
         We agree with the [ALJ], for the reasons he states,
    that the lockout’s initial illegality was not cured when the
    Respondent provided the Union with a complete contract
    proposal on November 9, 2009, almost 1 week after the
    lockout began. The [ALJ] specifically so found and the
    [Company] has not argued in its exceptions or brief in
    support that the judge erred in so finding. Moreover, it is
    well established that “a lockout unlawful at its inception
    retains its initial taint of illegality until it is terminated
    and the affected employees are made whole.” Movers and
    Warehousemen’s Assn. of Washington DC, 224 NLRB
    356, 357 (1976), enfd. 550 F.2d 962 (4th Cir. 1977), cert.
    denied 434 U.S. 826 (1977). The Board further held in its
    decision on the merits in Movers, “the burden must be on
    Respondent to show that its failure to restore the status
    quo ante had no adverse impact on the subsequent
    collective bargaining,” and that “no such showing has
    been made.” Id. at 358. Here, the [ALJ] did not find that
    the [Company] has carried its burden in this regard and
    the [Company] did not except to the absence of such a
    finding. In these circumstances, further litigation of this
    matter at compliance is unwarranted.

Id. at 1 n.3. One member of the Board indicated that he would
have allowed the Company to litigate its backpay liability at a
compliance proceeding even though Alden Leeds had failed
to raise a specific exception to the ALJ’s decision on this
point. Id.

    Alden Leeds now petitions for review of the Board’s
Decision and Order. Specifically, Alden Leeds raises two
challenges. First, Alden Leeds argues that the Board erred in
adopting the ALJ’s finding that the Company violated the Act
by failing to provide the Union with a timely, clear, and
complete offer setting forth the conditions necessary to avoid
                               10
the lockout. Second, Alden Leeds contends that the Board
erred in concluding that further litigation of the Company’s
backpay liability in a compliance proceeding was
unwarranted.

      III. DEFERENCE DUE TO THE BOARD’S FINDINGS

     It is well established that this court “accords a very high
degree of deference to administrative adjudications by the
NLRB.” Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929, 935
(D.C. Cir. 2011) (citation omitted). We review the Board’s
findings of fact for substantial evidence, which “gives the
agency the benefit of the doubt, since it requires not the
degree of evidence which satisfies the court that the requisite
fact exists, but merely the degree which could satisfy a
reasonable factfinder.” Allentown Mack Sales & Serv., Inc. v.
NLRB, 522 U.S. 359, 377 (1998). Credibility determinations
made by the ALJ, as adopted by the Board, are accepted
unless they are patently insupportable. NLRB v. Creative
Food Design Ltd., 852 F.2d 1295, 1297 (D.C. Cir. 1988).
Furthermore, “[w]hen the Board concludes that a violation of
the NLRA has occurred, we must uphold that finding unless it
has no rational basis or is unsupported by substantial
evidence.” Bally’s, 646 F.3d at 935 (citation omitted).
“Indeed, the Board is to be reversed only when the record is
so compelling that no reasonable factfinder could fail to find
to the contrary.” Id. (citation omitted).

     Section 8(a)(3) of the NLRA makes it an unfair labor
practice for an employer “by discrimination in regard to hire
or tenure of employment or any term or condition of
employment to encourage or discourage membership in any
labor organization.” 29 U.S.C. § 158(a)(3). Such conduct also
violates Section 8(a)(1) of the Act, id. § 158(a)(1), which
makes it an unfair labor practice “to interfere with, restrain, or
                             11
coerce employees in the exercise of rights guaranteed” in the
Act. Laro Maint. Corp. v. NLRB, 56 F.3d 224, 227 n.3 (D.C.
Cir. 1995). An employer may, however, lawfully lock out its
employees for “the sole purpose of bringing economic
pressure to bear in support of [its] legitimate bargaining
position.” Am. Ship Bldg. Co. v. NLRB, 380 U.S. 300, 318
(1965). In order for such a lockout to be lawful, the employer
must inform the union in a clear and timely manner of its
demands so that the union has a fair opportunity to evaluate
whether to accept the employer’s proposal and avoid a
lockout. Dayton Newspapers, Inc., 339 N.L.R.B. 650, 656
(2003), enforced in relevant part 402 F.3d 651 (6th Cir.
2005); see also Dietrich Indus., Inc., 353 N.L.R.B. 57, 60
(2008).

     Alden Leeds argues that its October 30, 2009, email was
clear, and that the record is replete with evidence that the
Company’s negotiating position remained unchanged
throughout the entire period leading up to, and including, the
lockout. According to Alden Leeds, the record demonstrates
that the Union knew and understood that the Company was
offering a one-year freeze on all terms of the existing
agreement, including the cost of employee health care. On
this view of the record, the Company argues that the Board
had no grounds to support its determination that Alden Leeds
violated the Act. We disagree.

     Reviewing the record as a whole, it is clear that the
Board’s judgment in this case is supported by substantial
evidence. In considering the Company’s October 30, 2009,
email to the Union – the last communication sent from the
Company to the Union before the lockout – a reasonable
factfinder could conclude that the Company’s proposal to the
Union regarding health care was unclear. See Allentown Mack
Sales, 522 U.S. at 377. The email fails to illuminate whether
                               12
the Company was proposing any or all of its various
alternative health care plans, which differed from the existing
health care plan under the 2005 collective bargaining
agreement. Furthermore, the ALJ credited the testimony of
both Cunningham and Troccoli that the Union was confused
about which health care plan, if any, the Company was
proposing in its October 30 email. We must accept these
credibility determinations, as nothing in the record suggests
that they are “patently insupportable.” See Creative Food
Design, 852 F.2d at 1297.

    Although Alden Leeds argues that the record contains
evidence that is contrary to the Board’s findings and supports
its position, “[t]he question before us is not whether
substantial evidence supports the [Company’s] view, but
whether it supports the Board’s.” Wayneview Care Ctr. v.
NLRB, 664 F.3d 341, 352 (D.C. Cir. 2011). The Board’s
judgment in this case easily commands the deference of this
court under the controlling standards of review.

                IV. THE SECTION 10(E) ISSUE

      “[A] lockout unlawful at its inception retains its initial
taint of illegality until it is terminated and the affected
employees are made whole.” Movers & Warehousemen’s
Ass’n of Metro. Wash., D.C., Inc., 224 N.L.R.B. 356, 357
(1976), enforced 550 F.2d 962 (4th Cir. 1977). In other
words, to cure a lockout, the employer must restore the status
quo ante as well as end the lockout. See Greensburg Coca-
Cola Bottling Co., 311 N.L.R.B. 1022, 1029 (1993),
enforcement denied on other grounds, 40 F.3d 669 (3d Cir.
1994). Nevertheless, “an employer can avoid further liability
if it is able to show affirmatively that a failure to restore the
status quo ante did not adversely affect subsequent
bargaining.” Id.
                               13

     Alden Leeds contends that the Board erred in refusing to
permit the Company to litigate the scope of its backpay
liability in a compliance proceeding. In particular, the
Company argues that it should be afforded an opportunity to
establish in a compliance proceeding that its backpay liability
ended on November 9. We lack jurisdiction to consider this
challenge, however, because Alden Leeds failed to raise this
claim with the Board, as required by the Act.

     Section 10(e) of the NLRA provides that “[n]o objection
that has not been urged before the Board, its member, agent,
or agency, shall be considered by the court, unless the failure
or neglect to urge such objection shall be excused because of
extraordinary circumstances.” 29 U.S.C. § 160(e). The
Board’s regulation interpreting this provision requires parties
to “set forth specifically the questions of procedure, fact, law,
or policy to which exception is taken” and “concisely state the
grounds for the exception.” 29 C.F.R. § 102.46(b)(1); see also
id. § 102.46(b)(2) (“Any exception to a ruling, finding,
conclusion, or recommendation which is not specifically
urged shall be deemed to have been waived.”). “And it is long
established that where a petitioner objects to a finding on an
issue first raised in the Board’s decision, a petitioner must file
for reconsideration to afford the Board an opportunity to
correct the error, if any.” Nova Se. Univ. v. NLRB, 807 F.3d
308, 313 (D.C. Cir. 2015) (citing Woelke & Romero Framing,
Inc. v. NLRB, 456 U.S. 645, 666 (1982)).

     It is undisputed that Alden Leeds failed to raise its claim
with the Board as required by Section 10(e) of the Act. Once
the ALJ found that the Company’s November 9, 2009, offer
did not cure the lockout, and instead found that the lockout
retained its initial taint of illegality until the Company
terminated the lockout and made its employees whole, Alden
                               14
Leeds was obligated to challenge that finding in its exceptions
to the Board in order to preserve the issue for judicial review.
See Nova Se. Univ., 807 F.3d at 313 (dismissing challenge
under Section 10(e) where petitioner failed to file proper
exception); Spectrum Health-Kent Cmty. Campus v. NLRB,
647 F.3d 341, 348-50 (D.C. Cir. 2011) (same). But as the
Board found and the Company concedes, Alden Leeds failed
to raise and preserve its objection. See Alden Leeds, Inc., 357
N.L.R.B. No. 20, at 1 n.3; Br. of Petitioner at 50 (“The
question of the scope of the Company’s backpay liability . . .
was not the subject of a specific exception made to the NLRB
below.”). Accordingly, we lack jurisdiction under Section
10(e) to consider the Company’s challenge.

     In an attempt to escape this conclusion, Alden Leeds
presses several arguments, none of which is persuasive. First,
the Company contends that under Greensburg Coca-Cola
Bottling Co., 311 N.L.R.B. 1022 (1993), cited by the
dissenting Board member, the scope of the Company’s
backpay liability should be reserved for the compliance stage
of the Board’s proceedings, despite the fact that Alden Leeds
did not raise this issue before the Board during the unfair
labor practice proceedings. See Br. of Petitioner at 47-52. But
as the majority of the Board correctly pointed out,
Greensburg Coca-Cola does not support the Company’s
position. In Greensburg Coca-Cola, the ALJ explicitly
deferred the backpay issue of whether the lockout was cured
or retained its initial taint of illegality to a future compliance
proceeding, 311 N.L.R.B. at 1028-29, and neither party filed
an exception to that portion of the ALJ’s decision. Thus, the
jurisdictional bar of Section 10(e) was not at issue. In the
present case, in contrast, the ALJ explicitly ruled that the
lockout was not cured and retained its initial taint of illegality
until the Union’s employees were made whole, but Alden
Leeds never objected to this finding. Greensburg Coca-Cola
                               15
thus presents no justification to disturb the application of
Section 10(e)’s jurisdictional bar in the present case.

     Second, relying on Trump Plaza Associates v. NLRB, 679
F.3d 822 (D.C. Cir. 2012), Alden Leeds argues that the
jurisdictional bar of Section 10(e) does not apply in this case
because the Board was “sufficiently appraised” of the issue
that Alden Leeds now seeks to raise. Therefore, according to
the Company, it would have been an “empty formality” to
raise the matter with the Board in the first instance. Reply Br.
of Petitioner at 22-24. We reject this argument.

     In Trump Plaza, the court found that the substance of the
petitioner’s challenge was encompassed in its other
exceptions filed with the Board. Therefore, the court
determined that Section 10(e) was not a bar to the petitioner’s
challenge, despite the petitioner’s failure to specifically object
before the Board. Trump Plaza, 679 F.3d at 830. Unlike in
Trump Plaza, Alden Leeds never put before the Board, in any
manner, the argument that it now advances – that Alden
Leeds should be able to contest the scope of its backpay
liability at a compliance proceeding. Not only did Alden
Leeds fail to make this argument in a specific exception filed
before the Board, but none of the other exceptions filed by
Alden Leeds encompassed the substance of this challenge.
Indeed, Alden Leeds has never even argued that its other
exceptions encompassed its backpay challenge. Trump Plaza
therefore provides the Company with no relief. See id.; see
also Parsippany Hotel Mgmt. Co. v. NLRB, 99 F.3d 413, 417-
18 (D.C. Cir. 1996) (finding vague exception insufficient to
provide Board with required notice of ground for petitioner’s
challenge).

    Finally, Alden Leeds argues that Section 10(e) should not
apply in this case because the Board discussed the backpay
                              16
issue on its own initiative, the issue has been briefed by the
parties, and the issue involves an undecided question of law.
See Br. of Petitioner at 51-52. These points cannot carry the
day. The Company attempts to frame these circumstances as
“extraordinary,” sufficient to confer jurisdiction on the court
to address the issue. See Reply Br. at 24-28. The Company’s
position, however, finds no support in the law. “[S]ection
10(e) bars review of any issue not presented to the Board,
even where the Board has discussed and decided the issue.”
HealthBridge Mgmt., LLC v. NLRB, 798 F.3d 1059, 1069
(D.C. Cir. 2015) (quoting Alwin Mfg. Co. v. NLRB, 192 F.3d
133, 143 (D.C. Cir. 1999)). Furthermore, Section 10(e)
applies “regardless of whether the questions raised be
considered questions of law, questions of fact, or mixed
questions of fact and law.” P.R. Drydock & Marine
Terminals, Inc. v. NLRB, 284 F.2d 212, 215-16 (D.C. Cir.
1960).

                     V.    CONCLUSION

     For the reasons set forth above, we hereby deny the
petition for review and grant the cross-petition for
enforcement.

                                                 So ordered.