Court Opinion

ID: 9404639
Source: CourtListenerOpinion
Date Created: 2023-06-23 18:00:44.440805+00
Date Added: 2024-06-11T17:20:15.917564
License: Public Domain

United States Court of Appeals
                            FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 22-1264                                                  September Term, 2022
                                                             FILED ON: JUNE 23, 2023

XCEL PROTECTIVE SERVICES, INC.,
                   PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,
                  RESPONDENT

Consolidated with 22-1295

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

       Before: KATSAS, RAO, and PAN, Circuit Judges.

                                       JUDGMENT

        This case was considered on the record from the National Labor Relations Board and on
the briefs and arguments of the parties. The Court has accorded the issues full consideration and
determined that they do not warrant a published opinion. See D.C. Cir. R. 36(d). For the reasons
stated below, it is:

       ORDERED that the petition for review filed by Xcel Protective Services, Inc., is DENIED
and that the National Labor Relations Board’s Cross-Application for Enforcement is GRANTED.

                                           *    *   *

        Xcel Protective Services, Inc. (“Xcel”) had a contract with the U.S. Navy to provide
security services at the Navy’s facility on Indian Island, located near Seattle, Washington. Mark
Salopek, an Xcel employee who worked as a security guard at Indian Island, reported safety
concerns to the Navy. Xcel fired him. An administrative law judge (“ALJ”) concluded that Xcel
violated § 8(a)(1) of the National Labor Relations Act by terminating Salopek for engaging in
protected conduct, and the National Labor Relations Board (the “Board”) affirmed. Xcel petitions
for review of the Board’s decision, and the Board cross-petitions for enforcement of its order. We
lack jurisdiction to review many of Xcel’s claims because the company did not raise them before
the Board. As for the exceptions that Xcel did not forfeit, the Board’s conclusions are amply
supported by substantial evidence. Accordingly, we deny Xcel’s petition and grant the Board’s
cross-petition.

                                               I.

        Naval Magazine Indian Island is a deep-water ammunitions port near Seattle, Washington.
The Navy hired Xcel to “staff key checkpoints” and “conduct roving patrols” to maintain security
at Indian Island. ALJ Op. 3. The Navy required Xcel’s guards to pass shooting tests every six
months, “at specific shooting ranges approved by the Navy, using only [targets,] government-
owned weapons, and ammunition provided by the Navy.” ALJ Op. 5; see also Hr’g Tr. 53–54,
104–05, 893. Xcel’s guards had two opportunities to pass their shooting qualification tests. See
ALJ Op. 6; Hr’g Tr. 657–58. If a guard failed both tests, “the guard was supposed to be removed
from the contract.” ALJ Op. 6; see also Hr’g Tr. 657–58. Although the Navy set the qualification
standards, Xcel employees administered the shooting tests. See ALJ Op. 6; Hr’g Tr. 121.

        Beginning in 2016, Salopek learned that Xcel was violating Navy protocols by “using
alternative sites, not authorized by the Navy, for weapon qualifications,” and by allowing Xcel
guards to use firearms for the qualifications that were not issued by the Navy. ALJ Op. 9; Hr’g
Tr. 105–09. For example, Salopek learned that one Xcel employee had tried to qualify two guards
at an unauthorized location — a “gravel pit/rock slab” — using a privately-owned AR-15 rifle,
rather than a Navy-provided M-4 rifle. ALJ Op. 11; see also Hr’g Tr. 108–09, 126–27; Xcel Ex.
1 at 2. Salopek also witnessed three guards fail their rifle qualification tests before another Xcel
employee “dr[ew] a large black cross on each target with a marker” to help the guards see their
targets. ALJ Op. 9; see also Hr’g Tr. 110–11.

        Salopek raised concerns about the unauthorized qualification sites, private weapons, and
altered targets to Xcel’s then-CEO, John Morgan. See ALJ Op. 13–14; Gen. Counsel Ex. 3.
Among other concerns, Salopek told Morgan that “someone could get hurt and the company could
potentially be liable” and that “guards might be unable to handle their weapons properly, or fire
them accurately, if there was a critical incident on the base.” ALJ Op. 13; see also Gen. Counsel
Ex. 3 at 5.

        Dissatisfied with Morgan’s response, Salopek and two other guards — Daniel Lein and
Steve Mullen — decided to alert the Navy. They “went to see the base commander” at Indian
Island and “ask[ed] if they could speak with him about a safety concern.” ALJ Op. 14–15; see
also Hr’g Tr. 160–63. The commander “asked if they had reported the issue up [Xcel’s] chain of
command, and they said yes.” ALJ Op. 15; see also Hr’g Tr. 687. Upon hearing about the alleged
safety problems, the commander instructed Salopek and the other two guards to send an email
detailing the issues to the Navy’s Installation Security Officer for Indian Island, which they did.
See ALJ Op. 15; Hr’g Tr. 463–65. After receiving the email, the Installation Security Officer
notified Xcel that he was removing from duty the five guards identified as having participated in
unauthorized or improper qualification shoots. See ALJ Op. 16–17; J.A. 160 (Installation Security
Officer’s email to Xcel).

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       A few hours after the Installation Security Officer contacted Xcel, Mullen overheard
Morgan say that Mullen and Salopek “are a cancer” and that Lein, who was a probationary
employee, would be “easy to get rid of.” ALJ Op. 18; Hr’g Tr. 467. On the following day, Lein
“received a telephone call from [Michael] Terry,” the head of Xcel’s operations at Indian Island,
who said “that he was pulling [Lein] off his post and off the contract” and that Lein “had made a
big mistake.” ALJ Op. 17; see also Hr’g Tr. 725.

        The Navy undertook an investigation of Salopek’s allegations, which was led by civilian
employee Richard Rake. See ALJ Op. 23; Hr’g Tr. 589. Rake recommended that the Navy
prohibit Xcel’s guards from standing post “until 100% weapons qualifications are completed.”
ALJ Op. 31–33; Xcel Ex. 2 at 5. He did not recommend any other action against Xcel for the
alleged safety violations, characterizing the allegations as “he said, she said, I heard, no names.”
ALJ Op. 31; Xcel Ex. 2 at 2. Rake recommended, however, that Xcel remove Salopek from the
Indian Island contract for relying on “hearsay comments” in his complaint, showing a “disregard
for Navy policy,” and lacking “integrity, ability, and good character.” ALJ Op. 34; Xcel Ex. 2 at
11. Neither Rake nor his superior “made any recommendation whatsoever as to whether Xcel
should terminate Salopek.” ALJ Op. 37; see also Hr’g Tr. 558–59. Nevertheless, shortly after
Rake and his superior met with the new CEO of Xcel, Michael Filibeck, the company fired
Salopek. See ALJ Op. 38–39; Hr’g Tr. 202.

        Following Salopek’s dismissal, the Board’s General Counsel charged Xcel with violating
§ 8(a)(1), (3), and (5) of the National Labor Relations Act (“NLRA”). Among other allegations,
the Board’s General Counsel asserted that Xcel had unlawfully fired Salopek for engaging in
protected concerted activity. See ALJ Op. 1; Gen. Counsel Ex. 1(bbb) at 5; Gen. Counsel Ex. 1(d).
ALJ John Giannopoulos conducted a six-day trial and issued a thorough opinion concluding,
among other things, that Xcel unlawfully terminated Salopek. See ALJ Op. 50–55, 60. A three-
member Board panel affirmed, with one member dissenting in part. See Xcel Protective Servs.,
Inc., 371 N.L.R.B. No. 134 (Sept. 8, 2022) (“Board Op.”). Xcel timely petitioned for review of
the Board’s decision. The Board filed a cross-application for enforcement. 1
                                               II.
       We must uphold “[t]he findings of the Board with respect to questions of fact if supported
by substantial evidence.” 29 U.S.C. § 160(e). “Substantial evidence ‘means such relevant
evidence as a reasonable mind might accept as adequate to support a conclusion.’” NLRB v.
Ingredion Inc., 930 F.3d 509, 514 (D.C. Cir. 2019) (citation omitted). “The substantiality of

1
         The Board also affirmed the ALJ’s conclusions that Xcel violated § 8(a)(1) “[b]y telling
employees they will no longer be allowed to go home early” in violation of a collective bargaining
agreement; and violated § 8(a)(5) by refusing to give the Union information in a timely manner.
ALJ Op. 60; Board Op. 1 n.1. Xcel does not challenge those aspects of the Board’s order in its
briefing before us, so we summarily enforce those parts of the Board’s decision. See Camelot
Terrace, Inc. v. NLRB, 824 F.3d 1085, 1088–89 (D.C. Cir. 2016) (“Because the Board is entitled
to enforcement of all unchallenged portions of its order, we summarily enforce all such provisions
of the Board’s decision.” (cleaned up)).

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evidence must take into account whatever in the record fairly detracts from its weight.” Universal
Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).

                                                III.

                                                A.

        We begin with our own jurisdiction. Section 10(e) of the NLRA provides that “[n]o
objection that has not been urged before the Board . . . 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). This provision limits our jurisdiction to those “objections made before the
Board [that] were adequate to put the Board on notice that the issue might be pursued on appeal.”
United Food and Commercial Workers Union, Local 400 v. NLRB, 989 F.3d 1034, 1037 (D.C.
Cir. 2021) (quoting Consol. Freightways v. NLRB, 669 F.2d 790, 794 (D.C. Cir. 1981)).

        Xcel raises three arguments in its petition for review that it did not urge before the Board.
Specifically, Xcel argues that Salopek’s conduct was not protected under the Act because:
(1) Salopek’s actions were not for “mutual aid or protection” of Xcel’s employees, see Pet’r’s Br.
25–28; (2) Salopek did not put the Navy on notice of “an ongoing labor dispute” between the
employees and Xcel, see id. at 28–31; Am. Golf Corp., 330 N.L.R.B. 1238, 1240 (2000) (Mountain
Shadows); and (3) Salopek’s allegations were “sufficiently disloyal” as to “lose the protection of
the Act,” see Mountain Shadows, 330 N.L.R.B. at 1240; Pet’r’s Br. 33.

        Xcel does not contest that it failed to specifically raise those issues in its exceptions or
briefing before the Board. Instead, Xcel asserts that it raised the mutual-aid and labor-dispute
arguments “generally in the [e]xceptions it filed” to the ALJ’s decision. Pet’r’s Br. 25. But
exceptions must be specific enough to put the Board “on notice that the issue might be pursued on
appeal.” United Food, 989 F.3d at 1037 (citation omitted). General objections do not clear that
bar. See Spectrum Health-Kent Cmty. Campus v. NLRB, 647 F.3d 341, 348–50 (D.C. Cir. 2011).
To the extent that Xcel makes an independent argument that Salopek was “flagrantly disloyal,”
see Pet’r’s Br. 33; Pet’r’s Reply Br. 9–10, Xcel also failed to specifically raise that issue before
the Board, see Pet’r’s Reply Br. 10 (asserting only that Xcel’s disloyalty “argument was generally
raised before the Board” (emphasis added)). Xcel’s exceptions to the ALJ’s decision never
mention the word “disloyal” or any variation of it, and the company’s brief before the Board uses
the word only in a passing quotation of the ALJ’s decision. See Xcel Exceptions 1–7; Br. in Supp.
of Exceptions 44.

        Xcel also suggests that its mutual-aid and labor-dispute arguments are properly before the
court because a dissenting Board member raised those issues. See Pet’r’s Br. 25. But “[a]
dissenting member’s discussion of an issue is not enough” to satisfy § 10(e). United Food, 989
F.3d at 1037; accord HTH Corp. v. NLRB, 823 F.3d 668, 673 (D.C. Cir. 2016) (“[A] party may
not rely on arguments raised in a dissent [from the Board’s decision] or on a discussion of the
relevant issues by the majority to overcome the § 10(e) bar; the Act requires the party to raise its
challenges itself.”). Thus, we lack jurisdiction to consider the arguments that Xcel neglected to
put before the Board.

                                                  4
                                                 B.

         Xcel argues that the Board erroneously rejected its contention that Salopek’s “maliciously
untrue” statements about the company justified his termination. The NLRA protects “efforts by
employees ‘to improve terms and conditions of employment’ through appeals to third parties
standing ‘outside the immediate employee-employer relationship.’” DirecTV, Inc. v. NLRB, 837
F.3d 25, 33 (D.C. Cir. 2016) (quoting Eastex, Inc. v. NLRB, 437 U.S. 556, 565 (1978)). An
employer may nevertheless discharge an employee if the employee’s communication to a third
party: (i) fails to “indicate[] it is related to an ongoing dispute between the employees and the
employers”; or (ii) is “so disloyal, reckless[,] or maliciously untrue as to lose the Act’s protection.”
Id. at 34 (quoting Mountain Shadows, 330 N.L.R.B. at 1240); see also NLRB v. Local Union No.
1229, IBEW, 346 U.S. 464 (1953) (Jefferson Standard). “The mere fact that statements are false,
misleading[,] or inaccurate is insufficient to demonstrate that they are maliciously untrue.” Valley
Hosp. Med. Ctr., Inc., 351 N.L.R.B. 1250, 1252 (2007). “Such statements may be ‘untrue,’ but
they would not be ‘maliciously untrue.’” DirecTV, 837 F.3d at 41. Rather, maliciously untrue
statements “must be made with knowledge of their falsity or with reckless disregard for their truth
or falsity.” Id. (cleaned up).

        Here, substantial evidence supports the Board’s conclusion that “the core issues Salopek
raised with Navy leadership were true.” Board Op. 4 n.8. Take Salopek’s statements that
“qualifications at a gravel pit range had occurred on ‘several occasions’” and that Xcel employees
altered targets so that guards could qualify. Pet’r’s Br. 34. Terry testified before the ALJ that Xcel
“had a longstanding practice of using unauthorized locations to qualify guards,” and the Xcel
employee who allegedly altered the targets “admitted doing so” in a written statement. ALJ Op.
9, 46; see also Hr’g Tr. 962–63 (Terry’s testimony on unauthorized qualification shoots). To the
extent that there were inaccuracies in Salopek’s statements, they related to details that did not
affect the substance of his concerns — such as the date of an unauthorized qualification shoot. See
ALJ Op. 24. Such relatively minor discrepancies do not rise to the level of “malicious” untruths.

                                                 C.

        Xcel’s remaining arguments address the Board’s application of the Wright Line burden-
shifting analysis, which governs unlawful termination cases like this one. See Wright Line, 251
N.L.R.B. 1083, 1089 (1980). Under Wright Line, the General Counsel must first establish a prima
facie case “(1) that the employee engaged in protected activity; (2) that the employer knew about
that activity; and (3) that the protected activity was a motivating factor in the employer’s decision
to take adverse action.” DHSC, LLC v. NLRB, 944 F.3d 934, 938 (D.C. Cir. 2019) (cleaned up).
If the General Counsel makes her prima facie showing, “the employer can rebut this case by
showing that it would have taken the same action in the absence of the unlawful motive.” Id.
(cleaned up).

       Xcel first contends that the General Counsel did not make a prima facie case against Xcel
because the agency did not establish that the company acted “with significant animus against
Salopek’s protected concerted activity.” Pet’r’s Br. 35–36. But substantial evidence supports the
Board’s contrary conclusion. See Board Op. 3. For instance, Filibeck, Xcel’s CEO at the time of
Salopek’s firing, testified that the company fired Salopek for not raising his concerns “up through
                                                   5
the appropriate military chain of command” and instead “barg[ing] into the commanding officer’s
offices . . . [which] reflects very badly on the employees and on the company as a whole.” Hr’g
Tr. 1021–22. This is effectively a concession that Xcel fired Salopek for engaging in the protected
activity of meeting with the base commander to report safety concerns.

       Xcel next argues that it fired Salopek not because he raised safety concerns to the Navy,
but because he violated the Navy’s “chain of command.” Pet’r’s Br. 36. But no credible evidence
showed that the Navy required Xcel employees to submit such concerns in any particular manner;
indeed, the base commander “seemed to welcome their complaints.” ALJ Op. 50 n.38.

        Finally, at the second stage of the Wright Line analysis, Xcel contends that it “would have
terminated Mark Salopek, even absent his alleged protected concerted activities.” Pet’r’s Br. 38
(capitalization removed). The company claims it would have done so because of Salopek’s
asserted dishonesty and on the basis of Rake’s report. See id. at 38–41. But Salopek’s asserted
dishonesty provides no legitimate basis for his removal because, as we have discussed, the Board
properly concluded that his core allegations were true. Nor can Xcel rely on Rake’s report to
justify Salopek’s termination, because Rake did not recommend that action. See ALJ Op. 37, 53;
Hr’g Tr. 558:22–25 (Rake: “[I]t’s drilled into us; we cannot . . . fire a contractor.”).

       For the foregoing reasons, we deny Xcel’s petition for review and grant the Board’s cross-
application for enforcement.

                                             *   *    *

        Pursuant to D.C. Circuit Rule 36, this disposition will not be published. The Clerk is
directed to withhold issuance of the mandate until seven days after resolution of any timely petition
for rehearing or petition for rehearing en banc. See Fed. R. App. P. 41(b); D.C. Cir. R. 41(a)(1).

                                           Per Curiam

                                                            FOR THE COURT:
                                                            Mark J. Langer, Clerk

                                                      BY: /s/
                                                          Daniel J. Reidy
                                                          Deputy Clerk

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