United States Court of Appeals, District of Columbia Circuit
September 16, 2016
Petition for Review and Cross-Application for Enforcement of
an Order of the National Labor Relations Board
Raymond C. Haley III argued the cause for petitioner. With
him on the briefs was Andrew M. Swafford.
Ginn, Attorney, National Labor Relations Board, argued the
cause for respondent. With her on the brief were Richard F.
Griffin, Jr., General Counsel, John H. Ferguson, Associate
General Counsel, Linda Dreeben, Deputy Associate General
Counsel, and Usha Dheenan, Supervisory Attorney.
Before: Tatel and Kavanaugh, Circuit Judges, and Ginsburg,
Senior Circuit Judge.
GINSBURG, SENIOR CIRCUIT JUDGE
National Labor Relations Board held that Arc Bridges, Inc.
violated §§ 8(a)(3) and (1) of the National Labor
Relations Act by failing to give a wage increase to
represented employees, with whom it was then bargaining, when
it increased the wages of its nonunion employees. The
Employer petitioned this court for review. Because we hold
that substantial evidence did not support the Board's
findings, we grant the Employer's petition for review,
vacate the Board's decision and order, and deny the
Board's cross-application for enforcement.
Employer is a nonprofit corporation that provides
"assisted living programs, employment counseling, and
related support services for individuals with developmental
disabilities." Arc Bridges, Inc. v.
NLRB, 662 F.3d 1235, 1236 (D.C. Cir. 2011). In November
2006 and February 2007, the Board certified the American
Federation of Professionals (the Union) to represent Arc
Bridges' employees in two separate bargaining units,
consisting respectively of a Day Services employee unit and
Residential and Supported Living employee unit. Arc
Bridges, Inc., 355 NLRB 1222, 1222 (2010).
Board found the sequence of relevant events thereafter was as
follows. In May 2007, supervisor Raymond Teso told a future
employee, Teresa Pendleton, during her interview that
"the Union would be gone in November." Although he
did not say so, November was the end of the one-year period
following the Union's certification, during which the
Employer could "not withdraw recognition from the union
and the Board [would] not entertain a petition contesting the
union's majority status, " Arc Bridges,
Inc., 362 NLRB No. 56, slip op. at 2 & n.9 (Mar. 31,
June, the Employer's board of directors authorized
management to give a three percent increase in wages to all
employees. 355 NLRB at 1228 (ALJ Op.). In July, however,
before any raise had been announced, the Union demanded
changes in health insurance and retirement benefits and a 50%
increase in wages over three years. Id. at 1227.
Shortly thereafter the Employer provided the Union with its
financial data indicating it had only $53, 497 available to
meet the Union's demands. Id. at 1227-28.
or August, area manager Bonnie Gronendyke told an employee,
Shirley Bullock, that Executive Director Kris Prohl "was
going to give us a raise until we voted the Union in."
Id. at 1230. In August, Teso told Pendleton that the
$56, 000 the Employer had available to increase the
employees' wages was instead being used to pay
(presumably labor) lawyers. Id. Also in August, the
employees in both units "voted to authorize the Union to
call a strike." Id. at 1228.
September, the Employer offered the Union a one-time bonus
for all represented employees to be paid from "certain
grant money" to come from an outside source.
Id. The Union did not accept that offer and the
grant eventually expired. Id. In October, the
Employer gave a three percent wage increase to its nonunion
employees, retroactive to July. Id. In the course of
their bargaining at some time thereafter, the Employer
offered the Union a one and half percent and later a two
percent wage increase for represented employees. Id.
March 2008, no collective bargaining agreement having been
[t]he union filed a charge with the Board claiming that Arc
Bridges had violated § 8(a)(1), (3), and (5) of the Act
by granting the [retroactive] wage increase only to non-union
employees. The Regional Director issued a … complaint
focusing exclusively on the theory that Arc Bridges had
violated § 8(a)(3).
662 F.3d at 1237.
Administrative Law Judge dismissed the complaint after
analyzing, under the burden-shifting framework of Wright
Line & Lamoureux, 251 NLRB 1083 (1980), the
Employer's failure unilaterally to increase the wages of
the represented employees at the same time it gave the others
a raise. 355 NLRB at 1231-32 (ALJ Op.). The ALJ first
concluded "the General Counsel has not sustained her
burden of proof under Wright Line by proving by a
preponderance of the evidence that the employees'
protected activity was a motivating factor for [the
Employer's] withholding of the wage increase."
Id. at 1232. Second, the ALJ held that, even if the
General Counsel had carried her burden, "the [Employer]
has met its Wright Line burden of proof by
demonstrating it would have taken the identical action for
legitimate, nondiscriminatory reasons." Id. In
doing so, the ALJ determined that both the General
Counsel's and the Employer's asserted rationales for
the discriminatory wage increase were plausible: The employer
could have "withheld the wage increase in order to
punish and retaliate against the employees for bringing in
the Union, " or it could have withheld the increase as a
"legitimate bargaining strategy." Id. The
Board reversed the ALJ's decision on the ground that
annual wage increases, "if sufficient funds existed,
" had become "an established condition of
employment" for all employees, the denial of which was a
violation of the Act. 662 F.3d at 1238 (quoting 355 NLRB at
Employer sought review of the Board's decision and this
court reversed, finding the Board had ignored "evidence
contradicting the practice" of yearly wage increases and
holding the sporadic history of the increases had not made
them a "condition of employment." Id. at
remand, applying the Wright Line burden-shifting
framework, a panel of the Board held the Employer's
decision not to increase the wages of the represented
employees was a violation of §§ 8(a)(1) and (3) of
the Act because it was motivated by antiunion animus. 362
NLRB at 1. Member Miscimarra dissented. Id. at 6.
The Employer again petitioned for review and the Board
cross-applied for enforcement.
court "must uphold an order of the Board unless it rests
upon a finding not supported by 'substantial
evidence'" on the record taken as a whole. S
& F Mkt. St. Healthcare LLC v. NLRB, 570 F.3d 354,
358 (D.C. Cir. 2009). We give
substantial deference to the Board's factual inferences
from the record before it, and [w]hen the Board concludes
that a violation of the Act has occurred, [the Court] must
uphold that finding unless it has no rational basis or is
unsupported by substantial evidence. It is not necessary that
we agree that the Board reached the best outcome in order to
sustain its decisions.
HealthBridge Mgmt., LLC v. NLRB, 798 F.3d 1059, 1067
(D.C. Cir. 2015) (citations and internal quotation marks