MCPc Inc. v. National Labor Relations Board ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 14-1379 and 14-1731
_____________
MCPC INC.,
Petitioner in No. 14-1379
v.
NATIONAL LABOR RELATIONS BOARD,
Petitioner in No. 14-1731
_______________
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
(No. 6-CA-063690)
_______________
Argued: December 11, 2014
Before: FUENTES, FISHER, and KRAUSE, Circuit Judges.
(Filed: February 12, 2016)
_______________
Dean F. Falavolito, Esq. [ARGUED]
Margolis Edelstein
525 William Penn Place
Suite 3300
Pittsburgh, PA 15219
Counsel for MCPc, Inc.
Julie B. Broido, Esq.
Linda Dreeben, Esq.
Gregory P. Lauro, Esq. [ARGUED]
National Labor Relations Board
1015 Half Street SE
Washington, DC 20570
Counsel for the National Labor Relations Board
_______________
OPINION OF THE COURT
_______________
KRAUSE, Circuit Judge.
The National Labor Relations Act prohibits employers
from discharging union or non-union employees for
exercising their organization and collective bargaining rights,
including their right to engage in concerted activities for the
purpose of mutual aid and protection. MCPc, Inc. appeals the
decision and order of the National Labor Relations Board
holding that MCPc violated the Act by discharging Jason
Galanter for concerted activity, and the Board cross-appeals
for enforcement of its order. Our resolution of these issues
provides us occasion to clarify both the definition of
2
“concerted activity” and the test for determining whether that
activity formed the basis for an employee’s allegedly
discriminatory discharge. For the reasons set forth below, we
will affirm and enforce in part, vacate in part, and remand to
the Board for further consideration in light of this opinion.
I. Background
A. Factual History
MCPc provides computer consulting, technology, and
organizational services from offices in several states. Among
MCPc’s specialties is the creation of complex telephony
systems that allow companies to receive and appropriately
route inbound customer calls. MCPc generally employs
solution architects to design these technology solutions for
client companies, and delivery engineers to implement the
solutions. However, because of a company-wide shortage of
engineers, Galanter, a senior solutions architect based in
MCPc’s Pittsburgh office, was tasked with not only designing
but also implementing a call center at one of the company’s
locations in Buffalo.
Domenic Del Balso, MCPc’s director of engineering,
visited the Pittsburgh office from Cleveland once or twice a
month and often took available employees out to lunch on
these occasions for “team building” purposes. MCPc, Inc.,
360 N.L.R.B. No. 39, 2014 WL 495815, at *1 (Feb. 6, 2014).
One such lunch took place on February 24, 2011 and included
Galanter; Jeremy Farmer, who was another solutions
architect; and Dan Tamburino and Brian Sawyers, both of
whom were engineers. At the lunch, the attendees discussed
how busy everyone was because of the engineer shortage.
During this discussion, Galanter told Del Balso that he was
3
working many hours a week, urged him to hire additional
engineers to alleviate the employees’ unduly heavy
workloads, and—most pertinent to this case—stated that
MCPc could have hired several additional engineers with the
$400,000 salary MCPc was paying Peter DeMarco, a recently
hired executive. Tamburino and Sawyers expressed
agreement with Galanter.
After the February 24th lunch, Mike Trebilcock, the
company’s Chief Executive Officer, was informed of
Galanter’s comments regarding executive compensation.
Because DeMarco had indeed been recently hired by MCPc
for what was at the time an unprecedented company salary of
$400,000, and because not many people within the company
had access to the information in the company’s computer
systems about executive compensation, Trebilcock became
concerned about a possible breach of confidential files. He
directed Beth Stec, vice president of human resources and
communication, to review Galanter’s access to MCPc’s
computer records, and he was subsequently informed that, in
connection with Galanter’s implementation of the Buffalo call
center project, Galanter indeed had obtained global access
privileges and thus had the ability to view on MCPc’s
computer systems confidential files normally restricted to
human resources and information technology personnel.
On March 4, 2011, eight days after the Del Balso
lunch, Galanter was asked to travel to the Cleveland office for
what turned out to be a face-to-face meeting with Trebilcock
and Stec. During the meeting, Trebilcock asked Galanter
where he had obtained the salary information that he had
mentioned at the February 24th lunch. Galanter provided a
number of explanations in quick succession. First Galanter
asserted that no one had supplied him the information and
4
attributed his knowledge to what he had found on the
Internet1—though at the subsequent hearing before the
Administrative Law Judge (ALJ), Trebilcock testified that he
“never heard that.” Id.; J.A. 113a. Galanter also told
Trebilcock that the salary information was a topic of “water
cooler” conversation among many employees. MCPc, Inc.,
360 N.L.R.B. No. 39, at *8. Galanter then switched gears and
advised that he might have heard the salary information from
Nancy Damin and Greg Jurkowski, two sales representatives
from the Buffalo office.
To verify this last explanation, Trebilcock left the
room and called Damin and Jurkowski, both of whom were
longtime, trusted MCPc employees. Trebilcock was able to
reach Damin, who had no knowledge of the salary at issue
and denied giving Galanter any such information.2 In light of
Damin’s disavowal, Galanter’s shifting explanations, and
Galanter’s access to MCPc’s confidential human resources
files, Trebilcock concluded that Galanter was lying about how
he had obtained the salary information and accused him of
disclosing Peter DeMarco’s confidential compensation.
1
At the hearing before the Administrative Law Judge
(ALJ), Galanter more specifically explained that he
conducted an Internet search for the salary that a particular
MCPc executive received during the executive’s prior tenure
at another company. Galanter stated that he used this number
to “ballpark[]” what a similarly positioned MCPc executive
would make. J.A. 89a.
2
Trebilcock was able to speak later with Jurkowski,
who also denied providing Galanter any information about
executive compensation.
5
Galanter admitted to mentioning a compensation amount of
$400,000 at the lunch but contended that he had been
referring to a different executive, Andy Jones,3 and that his
access to the company’s computer system was appropriate to
his assigned project. Trebilcock stated that MCPc and
Galanter needed to “divorce” and left the room. MCPc, Inc.,
360 N.L.R.B. No. 39, at *8. Jeff Kaiser, MCPc’s information
technology manager, conducted an audit of Galanter’s
personal computer “to make sure that he wasn’t taking with
him any MCPc proprietary information or files,” and Galanter
was escorted from the building.4 J.A. 116a.
B. Procedural History
On December 30, 2011, the Board’s General Counsel
issued a complaint alleging that MCPc had violated § 8(a)(1)
of the National Labor Relations Act, 29 U.S.C. § 158(a)(1),
by discharging Galanter for complaining about working
conditions, which the General Counsel described as protected
concerted activity under § 7 of the Act, id. § 157, as well as
3
Galanter also testified at the hearing that he named
Jones, not DeMarco, during the lunch, but the ALJ
determined that Galanter had named DeMarco based on what
the ALJ determined to be the more credible testimony of
another lunch attendee, Farmer.
4
The ALJ determined that the “clear inference from
Kaiser’s audit” was that no confidential information had been
stored on Galanter’s personal computer. MCPc, Inc., 360
N.L.R.B. No. 39, at *8 n.24.
6
for maintaining an overbroad confidentiality policy.5
Following a hearing, the ALJ applied the test approved by
NLRB v. Burnup & Sims, Inc., 379 U.S. 21 (1964), which
provides that Ҥ 8(a)(1) is violated if an employee is
discharged for misconduct arising out of a protected activity,
despite the employer’s good faith, when it is shown that the
misconduct never occurred.” MCPc, Inc., 360 N.L.R.B. No.
39, at *16 (quoting Burnup & Sims, Inc., 379 U.S. at 23).
Because the ALJ determined that Galanter was discharged for
accessing MCPc’s confidential files after engaging in
protected activity at the February 24th lunch and found that
Galanter did not in fact access the files, the ALJ concluded
that his discharge constituted an unfair labor practice and
recommended that MCPc be ordered to cease and desist and
to take affirmative remedial action, including offering
Galanter full reinstatement and back pay.
MCPc filed exceptions to the ALJ’s findings and a
supporting brief, in which MCPc emphasized that Galanter
was discharged not only for improperly accessing confidential
salary information and sharing that information with other
employees but also for his dishonesty to Trebilcock. The
General Counsel filed an answering brief defending the ALJ’s
findings and recommendations.
In a decision issued on February 6, 2014, the Board
concluded that MCPc’s policy barring discussion of
confidential information was overbroad in violation of the
Act and could not constitute a valid ground for termination.
As to whether MCPc had in fact lawfully discharged Galanter
5
MCPc and the Board reached an agreement regarding
the language of the confidentiality policy prior to this appeal.
7
for improperly obtaining confidential company information,
the Board held that the Burnup & Sims test was inapplicable
because Galanter had allegedly accessed the files prior to,
rather than in the course of, his protected activity, and thus
was not terminated for committing misconduct “arising out
of” a protected activity. The Board concluded, however, that
even assuming the Burnup & Sims test applied, and further
assuming that MCPc discharged Galanter because it honestly
believed he had accessed confidential files, MCPc had
violated the statute because, as the ALJ found, Galanter had
not committed this misconduct. On this basis, and without
reaching MCPc’s purported primary rationale for terminating
Galanter—his alleged dishonesty about where he had
obtained the salary information—the Board affirmed the
ALJ’s holding that MCPc had discharged Galanter for his
protected concerted activity in violation of § 8(a)(1) and
ordered, among other things, that MCPc reinstate Galanter
and award back pay. MCPc timely filed a petition for review
and the Board cross-applied for enforcement of its order.
II. Jurisdiction and Standard of Review
The Board had jurisdiction to hear and issue a final
order in this matter under 29 U.S.C. § 160(a)-(c). We have
jurisdiction over MCPc’s petition for review and the Board’s
cross-petition for enforcement pursuant to 29 U.S.C. § 160(e)
and (f).
We must accept the Board’s factual findings and the
reasonable inferences derived from those findings if they are
“supported by substantial evidence on the record considered
as a whole.” 29 U.S.C. § 160(f); see Stardyne, Inc. v. NLRB,
41 F.3d 141, 151 (3d Cir. 1994). “Substantial evidence is
more than a scintilla. It means such relevant evidence as a
8
reasonable mind might accept as adequate to support a
conclusion.” Tri-State Truck Serv., Inc. v. NLRB, 616 F.2d
65, 69 (3d Cir. 1980) (quoting Consol. Edison Co. of N.Y. v.
NLRB, 305 U.S. 197, 229 (1938)) (internal quotation marks
omitted). The substantiality of the evidence, however, must
“take into account whatever in the record fairly detracts from
its weight,” id. (quoting Universal Camera Corp. v. NLRB,
340 U.S. 474, 488 (1951)) (internal quotation marks omitted),
and “where there is a lack of substantial evidence in the
record to support the Board’s order, we will deny
enforcement,” NLRB v. N.Y.-Keansburg-Long Branch Bus
Co., 578 F.2d 472, 476 (3d Cir. 1978).
The Board’s legal determinations are subject to
plenary review, but we will uphold the Board’s interpretations
of the Act if they are reasonable. Mars Home for Youth v.
NLRB, 666 F.3d 850, 853 (3d Cir. 2011) (citation omitted).
We conduct this analysis using the ALJ’s findings of fact
where, as here, the Board adopts those findings.6 Trafford
Distrib. Ctr. v. NLRB, 478 F.3d 172, 179 (3d Cir. 2007)
(citation omitted).
III. Discussion
Section 7 of the Act affords employees a number of
organization and collective bargaining rights, including the
right “to engage in [] concerted activities for the purpose of . .
. mutual aid or protection.” 29 U.S.C. § 157. Section 8(a)(1)
enforces this guarantee by deeming it “an unfair labor
6
Because the Board made no independent findings, we
hereafter refer to the ALJ’s factual findings.
9
practice for an employer to interfere with, restrain, or coerce
employees in the exercise” of their § 7 rights. Id. § 158(a)(1).
MCPc argues that there is no substantial evidence on
the record as a whole to support the Board’s determination
that Galanter engaged in activity protected under the Act.
MCPc further contends that even if Galanter engaged in such
activity, it was not the basis for Galanter’s discharge.
Addressing these issues in turn, we will affirm the Board’s
determination that Galanter engaged in protected concerted
activity during the February 24th lunch, but we will remand
for further proceedings because the Board failed to apply the
correct legal test in determining whether Galanter was
discharged for that protected activity or whether he was
discharged for his alleged misconduct, irrespective of any
protected activity.
A.
Determining whether Galanter’s conduct was protected
under the Act requires addressing the threshold question of
whether it was “concerted.” See NLRB v. City Disposal Sys.
Inc., 465 U.S. 822, 840 (1984). Although the term “clearly
enough embraces the activities of employees who have joined
together in order to achieve common goals,” the Act does not
detail, and the courts have not been entirely clear or
consistent in articulating, “the precise manner in which
particular actions of an individual employee must be linked to
the actions of fellow employees in order to permit it to be said
that the individual is engaged in concerted activity.” Id. at
830-31. In order to determine whether Galanter’s conduct
falls under the protections of the Act, we must therefore first
distill from the relevant case law the defining characteristics
of “concerted” conduct.
10
1.
The Board has the authority to broadly construe
“concerted activity” and has interpreted the term to cover not
only the union and pre-union efforts of groups of employees
seeking to protect their rights but also certain actions
undertaken by individuals in the unionized and non-unionized
workplace. See, e.g., D & D Distrib. Co. v. NLRB, 801 F.2d
636, 640 (3d Cir. 1986); Hugh H. Wilson Corp., 414 F.2d at
1347-48. As the Board stated in Meyers Industries, Inc.
(Meyers II), 281 N.L.R.B. 882 (1986), it recognizes
individual conduct as “concerted” both where “individual
employees seek to initiate or to induce or to prepare for group
action” and where “individual employees bring[] truly group
complaints to the attention of management.” Id. at 887. That
these two forms of individual conduct may rise to the level of
concerted activity is well accepted among the Courts of
Appeals. Thus, in City Disposal Systems, the Supreme Court
observed that while some Courts of Appeals had incorrectly
rejected the proposition that an individual’s assertion of a
right contained in a collective bargaining agreement may
constitute “concerted” conduct, even those courts had
recognized that individual conduct qualifies as concerted
where an employee intends to induce group activity or serves
as a representative of at least one fellow employee. City
Disposal Sys., 465 U.S. at 831.
Our Court has had occasion to consider both categories
of individual conduct when elucidating the kinds of employee
action protected under the Act. For example, in Mushroom
Transportation Co. v. NLRB, 330 F.2d 683 (3d Cir. 1964), we
recognized that activity may be concerted “although it
involves only a speaker and a listener” if the individual
engages in it “with the object of initiating or inducing or
11
preparing for group action or [] it ha[s] some relation to group
action in the interest of the employees.” We held that the
employee in that case, however, engaged in “mere griping”
and not concerted activity when he privately dispensed advice
to employees “without involving fellow workers or union
representation to protect or improve his own status or
working position.” Id. at 683, 685 (internal quotation marks
omitted). And although we have recognized that an
individual employee may engage in concerted activity when
he complains to management, we have done so specifically
where the action was taken with the apparent imprimatur of
coworkers. See Frank Briscoe, Inc. v. NLRB, 637 F.2d 946,
949 (3d Cir. 1981) (concluding activity was concerted where
five complainants individually filed similar charges of racial
discrimination within days of being collectively laid off and
in their complaints referred to the same mistreatment of other
employees).
Galanter’s conduct does not fit neatly into the
paradigm of either Mushroom Transportation or Frank
Briscoe. Instead, Galanter appears to have complained to
management to improve his working position without the
imprimatur of other employees but arguably also to induce
group action in the interest of those employees. MCPc posits
that without evidence of prior coordination with his
coworkers, Galanter’s statements about the engineer shortage
should be deemed “mere griping,” unprotected under
Mushroom Transportation. MCPc’s Br. at 15-17 (quoting
Mushroom Transp. Co., 330 F.2d at 684-85) (internal
quotation marks omitted). MCPc, in other words, would have
us treat the varieties of “concerted activity” at issue in
Mushroom Transportation and Frank Briscoe as the exclusive
categories of activity protected in this Circuit. This we
12
decline to do, as the touchstone for an individual’s concerted
activity under Meyers and our Court’s precedent remains
whether the employee intends to induce group activity or
whether the employee’s action bears some relation to group
action in the interest of the employees. Our applications of
this test to the particular fact patterns presented in Mushroom
Transportation and Frank Briscoe were not intended either to
alter the test itself or to foreclose a determination that an
individual engages in concerted activity when he expresses
grievances to management about a matter of general
employee interest in a group meeting context such as this one.
Indeed, a long line of decisions by the Board and other
Circuits indicates that such conduct may satisfy the test for
concerted activity. For instance, in Whittaker Corp., 289
N.L.R.B. 933 (1988), the Board ruled that a lone employee
had engaged in concerted activity when, without conferring in
advance with his fellow employees, he contested the
suspension of the customary annual wage increase during a
group meeting called by management to discuss the policy
change. Id. at 934; see also NLRB v. Caval Tool Div., 262
F.3d 184, 190 (2d Cir. 2001) (affirming the Board’s holding
that an employee engaged in concerted activity when he made
statements about the company’s new break policy at an
employee meeting called by the employer to address the
policy); NLRB v. Talsol Corp., 155 F.3d 785, 797 (6th Cir.
1998) (holding that an employee’s comments about safety at a
group meeting attended by employees and management
constituted concerted activity because the meeting was
conducted to address plant safety concerns, the employee’s
questions were on the topic of safety, and the context
indicated that the employee’s statements were “[c]learly . . .
not purely personal gripes”); Rockwell Int’l Corp. v. NLRB,
13
814 F.2d 1530, 1535 (11th Cir. 1987) (upholding the Board’s
conclusion that an employee engaged in concerted activity
when she objected to the employer’s noise lecture during an
employee meeting arranged to discuss the issue).
Notably for purposes of the case before us, the Board
and other Courts of Appeals have extended this line of
reasoning to the lone employee who complains to
management in a less organized group context and who, in so
doing, successfully attracts the impromptu support of at least
one fellow employee. In Worldmark by Wyndham, 356
N.L.R.B. No. 104, 2011 WL 757874 (Mar. 2, 2011), for
example, the Board held that an employee engaged in
concerted activity when he protested a change in the
company’s dress code on the sales floor in front of other sales
representatives, finding that “any doubt about the concerted
nature of [the employee’s] action is removed by [a second
employee] joining that action.” Id. at *3; see also Kiewit
Power Constructors Co. v. NLRB, 652 F.3d 22, 24-26 (D.C.
Cir. 2011) (affirming the Board’s holding of protected
concerted activity where, first, one union member and then
another objected to management’s attempt to issue
individualized warnings about a new break policy in front of
other employees while the protesting employees were on the
job). Although merely complaining in a group setting would
surely not be sufficient in itself to transform an individual
grievance into concerted activity, we rely on Worldmark by
Wyndham for the narrow proposition that in such
circumstances a lack of prior planning does not foreclose a
finding of concerted activity, where the individual’s
statements further a common interest or by their terms seek to
induce group action in the common interest.
14
Against the backdrop of these cases, we conclude
Galanter engaged in concerted activity when he
communicated his dissatisfaction about shared working
conditions to a member of MCPc’s management during the
February 24th lunch. Although the lunch was not organized
for the express purpose of discussing any particular company
policy, it nonetheless was a “team building” lunch that
provided a group forum within which Galantar could relay to
management complaints shared by other employees about
workplace conditions they wished to see improved. See
MCPc, Inc., 360 N.L.R.B. No. 39, at *1; J.A. 108a. And
much as the Board reasoned in Worldmark by Wyndham, 356
N.L.R.B. No. 104, at *3, any doubt as to whether Galanter’s
statements qualify as concerted activity is dispelled by the
fact that two other employees expressed their agreement
when Galanter urged MCPc to hire more engineers and
contended that the company had the financial ability to do so.
MCPc marshals a number of arguments to support its
position that Galanter’s statements did not constitute
concerted activity, but we find them unpersuasive. First,
contrary to MCPc’s assertions, prior group action is not
required to support the conclusion that Galanter engaged in
concerted activity. Consistently, “[t]he Board has found
concerted activity when a second employee joins an
individual employee’s protest without requiring evidence of a
previous plan to act in concert.” Id. at *4 (citations omitted).
On a related note, the appointment of a spokesperson may be
helpful insofar as it tends to support an inference of group
action or preparation for group action, but MCPc is incorrect
in characterizing it as a requirement. Rather, the Board has
found concerted activity “where an individual, not a
15
designated spokesman, [has] brought a group complaint to the
attention of management.” Meyers II, 281 N.L.R.B. at 886.
Second, although MCPc draws on certain language in
Mushroom Transportation to argue that Galanter was
required to contemplate group action after the team building
lunch, the issue in that case was whether private advice
dispensed by one employee to another exhibited any of the
purpose required for concerted activity. See Mushroom
Transp. Co., 330 F.2d at 685. Here, in contrast, Galanter’s
purpose is apparent from not only the content but also the
circumstances of his complaint, which was directed at
management in a manner and setting indicating an intent to
garner employee support. That Galanter lacked plans to
pursue the issue after the lunch does not alter the concerted
character of his activity at the lunch.
Third, that an employee expresses grievances that are
well known or widely held does not undermine the concerted
nature of his activity. MCPc argues that, when considered in
conjunction with his failure to organize other employees
before or after the lunch, the fact that the engineer shortage
was a problem already acknowledged and in the process of
being addressed by management is fatal to Galanter’s
contention that his complaints constituted concerted activity.
We disagree. That the engineer shortage was a subject of
general concern within the company, if anything, supports
rather than undercuts the ALJ’s conclusion that Galanter
voiced his grievances for the benefit of others as well as
himself. See Hugh H. Wilson Corp., 414 F.2d at 1350 (“Even
though the employees had not communicated that a ‘group’
had existed, and management may have inferred that it was
dealing with individual gripes, the consensus of the affected,
unhappy employees was sufficient to support a finding that
16
the activity was in concert and, therefore, protected.”
(describing NLRB v. Guernsey-Muskingum Elec. Co-op., Inc.,
285 F.2d 8 (6th Cir. 1960)).
In short, MCPc’s arguments fail because they espouse
an unduly cramped interpretation of concerted activity under
§ 7—one that assesses concerted activity in terms of isolated
points of conduct rather than the totality of the circumstances.
See id. at 1354 (rejecting the employer’s evaluation of the
character of each employee statement and act in isolation and
instead finding that “[i]t is the totality of [the employees’]
conduct” that supports a finding of concerted activity); cf.
City Disposal Sys., 465 U.S. at 831 (observing that the
language of § 7 is not narrowly confined to two or more
employees working toward a common goal and holding that
the Board reasonably concluded that a lone employee’s
invocation of a right grounded in his collective-bargaining
agreement is a concerted activity).
When synthesized, the relevant precedent from our
Court and the Board reflects that the benchmark for
determining whether an employee’s conduct falls within the
broad scope of concerted activity is the intent to induce or
effect group action in furtherance of group interests. Where
the ALJ and the Board found that Galanter’s complaints about
excessive workloads at the February 24th team building lunch
related to improving working conditions for not only himself
but also his coworkers and evinced an intent to galvanize his
fellow employees into action, the complaints cannot be
dismissed as “mere griping” about a condition of
employment, except in the absence of substantial supporting
evidence. Mushroom Transp. Co., 330 F.2d at 685 (internal
quotation marks omitted). We therefore agree with the Board
17
that those complaints constituted concerted activity under §
7.7
2.
Having concluded that Galanter’s statements were
concerted, we have little difficulty determining that these
statements were also protected. Concerted activity is
protected under § 7 as long as it is undertaken “for the
purpose of collective bargaining or other mutual aid or
protection,” 29 U.S.C. § 157 (1976), and actions taken for
mutual aid or protection include those intended to improve
conditions of employment, see Asplundh Tree Expert Co. v.
NLRB, 365 F.3d 168, 172 n.3 (3d Cir. 2004). Galanter’s
complaints to Del Balso about the effect of the engineer
shortage on the employees’ quality of life clearly related to
improving employee work conditions and were not
“unlawful, violent, or in breach of contract” and thus did not
“fall outside the shelter of [§] 7.” Wheeling-Pittsburgh Steel
Corp. v. NLRB, 618 F.2d 1009, 1018 (3d Cir. 1980) (quoting
NLRB v. Wash. Aluminum Co., 370 U.S. 9, 17 (1962)).
Indeed, the ALJ explicitly found that Galanter’s statements
lacked “any malicious dimension” and that this was “crucial”
in establishing that his particular communications fell under
the auspices of the Act. MCPc, Inc., 360 N.L.R.B. No. 39, at
*14. Galanter’s concerted activity was therefore protected
under the Act.
7
We need not address whether Galanter’s mention of
DeMarco’s salary information constituted protected activity
as his complaints about the engineer shortage were protected
even without this reference to a particular executive
compensation figure.
18
B.
We turn next to whether substantial evidence supports
the Board’s conclusion that Galanter’s protected statements at
the February 24th lunch formed the basis for his discharge.8
MCPc challenges this conclusion on the ground that it
terminated Galanter for (1) improperly obtaining confidential
salary information; (2) disseminating that information; and
(3) lying to the CEO about where he had obtained the
information.9 MCPc’s Br. at 33, 49; see also J.A. 79a; Oral
Arg. at 13:53, available at
http://www2.ca3.uscourts.gov/oralargument/audio/14-
1379MCPCIncv.NLRB.mp3.
As an initial matter, we conclude that the Board
reasonably dismissed the second of these rationales because
8
Because MCPc does not contend that it lacked
“knowledge, or reason to know, that the employee activities
have coalesced into group action for mutual aid or protection”
as required to violate § 8(a)(1), the knowledge requirement is
not a point of dispute in this case. Tri-State Truck Serv., Inc.,
616 F.2d at 71. In any event, as Galanter complained to
management and multiple employees agreed with his
complaints in the presence of management, implicit in our
conclusion that Galanter engaged in concerted activity is that
MCPc had the requisite knowledge of the concerted nature of
the activity.
9
Though MCPc emphasizes Galanter’s alleged
dishonesty, we address the first two of these rationales for
Galanter’s discharge because MCPc characterizes them as at
least contributing factors in his termination.
19
MCPc’s policy of barring employees from disseminating
confidential information was overbroad in violation of the
Act. To defend a discharge based on a rule that even “has the
tendency to inhibit [protected] activity,” an employer must
show “legitimate and substantial business justifications” for
the rule. Jeanette Corp. v. N.L.R.B., 532 F.2d 916, 918 (3d
Cir. 1976) (quoting N.L.R.B. v. Fleetwood Trailer Co., 389
U.S. 375, 378 (1967)). Not surprisingly, MCPc failed to
make such a showing here as to its confidentiality policy, as
rational employees could interpret that policy not merely to
inhibit but to prohibit certain protected activities, including
wage discussions, rendering it “prima facie violative of [§]
8(a)(1)” and incapable of sustaining a discharge. Id.
The other explanations offered by MCPc—that
Galanter was discharged for improperly obtaining
confidential salary information and for lying about where he
obtained the information—could constitute legitimate
business justifications for MCPc’s decision, but the ALJ and
Board applied the wrong legal test in analyzing the first
rationale and did not apply any test to the second. Because
the ALJ and Board’s rejection of these rationales may have
stemmed from confusion as to the appropriate analytical
framework, we address the choice of test before turning to its
application in this case.
1.
Where an employer argues that it discharged the
employee for reasons unrelated to his protected activity, such
as tardiness or poor work performance, we rely on the so-
called “mixed motive” or “dual motive” discharge test set
forth by the Board in Wright Line, 251 N.L.R.B. 1083 (1980),
enforced on other grounds, 662 F.2d 899 (1st Cir. 1981), and
20
approved by the Supreme Court in NLRB v. Transportation
Management Corp., 462 U.S. 393, 397-404 (1983), abrogated
by Dir., Office of Workers’ Comp. Programs v. Greenwich
Collieries, 512 U.S. 267 (1994). “Under this test, if the
General Counsel makes a prima facie showing that protected
conduct was a motivating factor in the employer’s decision,
the burden shifts to the employer to demonstrate that the
‘same action would have taken place even in the absence of
the protected conduct.’” NLRB v. Alan Motor Lines Inc., 937
F.2d 887, 889 (3d Cir. 1991) (quoting Wright Line, 251
N.L.R.B. at 20-21); accord D & D Distrib. Co. v. NLRB, 801
F.2d 636, 642 (3d Cir. 1986) (citing Transp. Mgmt. Corp.,
462 U.S. at 401-02). Wright Line is designed to preserve
what has long been recognized as the employer’s general
freedom to discharge an employee “for a good reason, a poor
reason, or no reason at all, so long as the terms of the [Act]
are not violated.” See Meyers Indus. (Meyers I), 268
N.L.R.B. 493, 497 n.23 (1984) (quoting NLRB v. Condenser
Corp. of America, 128 F.2d 67, 75 (3d Cir. 1942)).
We take a different approach in those “special
circumstances” where the employee is discharged for
allegedly engaging in misconduct during his protected
activities, id., providing employees heightened protection
against meritless suspicions of misconduct allegedly
committed in the course of these activities to prevent the
activities from “acquir[ing] a precarious status,” Burnup &
Sims, Inc., 379 U.S. 23. In such cases, an employer’s good
faith that an employee committed misconduct is not the last
word on the lawfulness of its adverse employment action:
“[§] 8(a)(1) is violated if it is shown that the discharged
employee was at the time engaged in a protected activity, that
the employer knew it was such, that the basis of the discharge
21
was an alleged act of misconduct in the course of that
activity, and that the employee was not, in fact, guilty of that
misconduct.” Tri-State Truck Serv., Inc., 616 F.2d at 69(quoting Burnup & Sims, 379 U.S. at 23). Under this test,
after the employer carries its burden of showing that it held an
honest belief that the employee engaged in misconduct, the
burden then shifts to the General Counsel to “affirmatively
show that the misconduct did not in fact occur.” Pepsi-Cola
Co., 330 N.L.R.B. 474 (2000).
The ALJ applied the Burnup & Sims framework to
MCPc’s allegation that Galanter improperly accessed
confidential company information, reasoning that Galanter’s
alleged misconduct was not wholly unconnected to Galanter’s
February 24th statements so as to warrant the application of
Wright Line. The Board, in contrast, determined that Burnup
& Sims did not apply because Galanter allegedly accessed the
confidential records not in the course of the February 24th
lunch but prior to it. As for MCPc’s primary rationale for
discharging Galanter—his alleged dishonesty to Trebilcock—
neither the ALJ nor the Board acknowledged the need to
apply any test.10
10
The ALJ observed in a brief footnote that “[t]he
Company’s only contention that could qualify for Wright Line
analysis,” its allegation that Galanter had been discharged for
unrelated job performance, was pretextual and hence would
fail the Wright Line test. MCPc, Inc., 360 N.L.R.B. No. 39, at
*16. n.29. For the reasons set forth below, we conclude that
Wright Line is more broadly applicable than the ALJ
recognized, including to the contention that Galanter was
discharged for dishonesty. As to the question of job
performance, MCPc contends that it never argued that
22
We agree with the Board’s determination that, because
the misconduct did not take place during Galanter’s protected
discussion with management, Burnup & Sims is not the
correct test for analyzing his alleged improper access to
confidential company salary information. And although the
Board did not address MCPc’s charge that Galanter lied to
Trebilcock, we conclude that, for the same reason, Burnup &
Sims is not the appropriate framework for assessing
Galanter’s alleged dishonesty, which purportedly took place
after the protected activity. We recognize that in Burnup &
Sims the Supreme Court’s descriptions of the misconduct to
which the test applies alternated between misconduct “arising
out of” protected activity and misconduct occurring “in the
course of” protected activity, but close examination of the
Court’s reasoning reveals that both phrases refer narrowly to
misconduct that occurs during protected activity.
Specifically, in Burnup & Sims, to support the
observation that the Board has repeatedly ruled that an
employee should not be discharged for supposed misconduct
“arising out of a protected activity” if the misconduct did not
occur, the Supreme Court cited only Board cases involving
misconduct that allegedly took place while protected strike
activities were ongoing. See Burnup & Sims, 379 U.S. at 23
(citing Mid-Continent Petroleum Corp., 54 N.L.R.B. 912,
933-34 (1944) (where union members allegedly committed
unlawful seizure of company property and engaged in acts of
Galanter was discharged for the quality of his work and that it
introduced evidence of problems with Galanter’s work
performance at the hearing simply “in order to refute
counsel’s depiction of [Galanter] as a model employee.” J.A.
32a.
23
violence during a strike); Standard Oil Co. of Cal., 91
N.L.R.B. 783, 790-91 (1950) (where strikers were allegedly
discharged for acts such as throwing rocks during a strike);
Rubin Bros. Footwear, Inc., 99 N.L.R.B. 610, 610-12 (1952)
(where striker was allegedly violent toward another employee
attempting to return to work during the strike)). And in the
years since, the Board has consistently emphasized that
Burnup & Sims applies exclusively when the misconduct
occurs during protected activities, while Wright Line
generally does not apply. See, e.g., Yuker Constr. Co., 335
N.L.R.B. 1072, 1073 (2001) (finding that Burnup & Sims did
not apply where the alleged misconduct occurred during a
particular portion of the conversation that the Board deemed
unprotected); KSM Indus., Inc., 336 N.L.R.B. 133, 136 n.3
(2001) (observing that Wright Line does not apply where a
striker is discharged “for alleged misconduct during a
protected activity”).
The Board’s conclusion that Burnup & Sims does not
apply in this case also comports with its recent decision in
Fresenius USA Manufacturing, Inc., 362 N.L.R.B. No. 130,
2015 WL 3932160 (June 24, 2015). There, the Board applied
Wright Line to determine that, even assuming that the vulgar,
arguably threatening statements that a union supporter had
written on union newsletters in the employee break room
constituted protected activity, the employer had lawfully
discharged the employee for his dishonesty during the
legitimate company investigation that followed. Id. at *3. In
addition, we find instructive the D.C. Circuit’s approach in
Frazier Industrial Co. v. NLRB, 213 F.3d 750 (D.C. Cir.
2000). That court applied an analysis consistent with Burnup
& Sims to the employer’s first stated rationale for discharging
a union organizer—that the employee had allegedly harassed
24
workers while attempting to persuade them to sign union
cards; however, with respect to the employer’s second
rationale—that the employee was insubordinate and dishonest
to management about his protected activities—the D.C.
Circuit applied a Wright Line analysis because the alleged
dishonesty did not occur during the protected union
solicitation. Id. at 756-59; see also Shamrock Foods v.
NLRB, 346 F.3d 1130, 1136 (D.C. Cir. 2003) (explaining that
its Frazier analysis was consistent with the application of
Burnup & Sims for misconduct during protected activity and
Wright Line for misconduct that postdated the protected
activity).
Based on the foregoing, we hold that Wright Line is
the appropriate test for assessing whether, as MCPc contends,
it terminated Galanter for allegedly obtaining confidential
files in advance of the February 24th lunch and for his alleged
dishonesty to Trebilcock eight days after the lunch.11
11
This is not a case in which the employer’s motive
for questioning the employee was allegedly entirely unlawful,
such that the interrogation was itself a violation of the Act
and the employee’s alleged dishonesty therefore immaterial
for purposes of determining the lawfulness of the discharge.
Cf. 800 River Rd. Operating Co. LLC v. NLRB, 784 F.3d 902,
915 n.6 (3d Cir. 2015) (emphasizing that a legitimate internal
investigation does not necessarily constitute a violation of the
Act and that an employer’s justification for employee
interviews may overcome the coercive effect of an interview
on employees’ union activities). In such circumstances,
Wright Line is inapplicable, for an employee is under no
obligation to respond to unlawful questions about protected
activities, and even dishonesty in response to such questions
25
2.
Although it may be that in rejecting Burnup & Sims,
the Board meant to invoke Wright Line as the appropriate test
for analyzing the lawfulness of Galanter’s discharge, the
Board neither noted the applicability of Wright Line nor
applied it in this case. Instead, after acknowledging that the
ALJ had incorrectly applied Burnup & Sims to determine that
Galanter’s discharge was unlawful, the Board rested its
decision on the rationale that “even assuming the applicability
of Burnup & Sims,” MCPc would not prevail.12 MCPc, Inc.,
360 N.L.R.B. No. 39, at *2. Thus, whether or not we agreed
that substantial evidence in the record supported the Board’s
ultimate disposition, our disagreement with Board’s rationale
has been held an unlawful ground for discharging the
employee. See Spartan Plastics, 269 N.L.R.B. 546, 552
(1984).
12
The Board may have declined to apply Wright Line
on the grounds that MCPc “failed to except” to the ALJ’s
rejection of its Wright Line argument. See MCPc, Inc., 360
N.L.R.B. No. 39, at *2 n.8. But MCPc preserved its
argument that its stated rationales for Galanter’s discharge,
including Galanter’s dishonesty, were not pretextual, and, in
assessing any claim properly before it, the Board must apply
the correct legal standard to the relevant facts, Auciello Iron
Works, Inc., 317 N.L.R.B. 364, 366 (1995). In the same vein,
as the reviewing court, we “retain[] the independent power to
identify and apply the proper construction of governing law.”
Haybarger v. Lawrence Cnty. Adult Prob. & Parole, 667 F.3d
408, 413 n.3 (3d Cir. 2012) (alteration in original) (quoting
Kamen v. Kemper Fin. Servs., 500 U.S. 90, 99 (1991)).
26
would prevent us from affirming. See Konan v. Att’y Gen.,
432 F.3d 497, 501 (3d Cir. 2005) (“It is a bedrock principle of
administrative law that judicial review of an agency’s
decision is limited to the rationale that the agency provides.”).
Given the nature of the Board’s error, generally the
“proper course” would be to remand to the Board for
application of the correct legal test. Yusupov v. Att’y Gen.,
650 F.3d 968, 993 (3d Cir. 2011) (quoting Kang v. Att’y Gen.,
611 F.3d 157, 168 (3d Cir. 2010)). We deviate from this
practice, however, in “rare circumstances where application
of the correct legal principles to the record could lead only to
the same conclusion,” such that “there is no need to require
agency reconsideration.” Id. (internal quotation marks
omitted). We must consider whether this case presents that
rare circumstance, given the limited nature of the showing
MCPc must make to prevail under Wright Line and the
significant evidence in the record supporting MCPc’s
contention that it fired Galanter for improperly accessing
confidential information or, alternatively, for his dishonesty
to Trebilcock.
Under Wright Line, to credit MCPc’s contention that it
did not discharge Galanter for his statements at the February
24th lunch, the ALJ did not need to determine whether
Galanter actually improperly accessed confidential salary
information, or whether he was dishonest or simply misspoke
“under the heat of the CEO’s repeated questioning,”
N.L.R.B.’s Br. at 31. Once the General Counsel showed an
improper motivation for Galanter’s discharge, all that
remained was for the ALJ to determine whether Galanter
would have been fired on account of his alleged misconduct
regardless of any forbidden motivation. See Transp. Mgmt.
Corp., 462 U.S. at 401.
27
As for the evidence in the record supporting such a
determination, we take particular note of (1) the ALJ’s own
findings as to Galanter’s demeanor and statements while
being questioned by Trebilcock, which are consistent with the
testimony offered by both Galanter and Trebilcock, (2) the
ALJ’s finding that Galanter misled Trebilcock and, by
extension, the court, about the identity of the executive he
named during the February 24th lunch, and (3) physical
evidence tending to undermine Galanter’s assertion that he
obtained the salary information from the Internet.
First, and most significantly, the ALJ found that
Galanter was “purposely vague and evasive” when Trebilcock
questioned him about the source of the salary information and
that he gave “inconsisten[t]” statements to Trebilcock during
their meeting in Cleveland. MCPc, Inc., 360 N.L.R.B. No.
39, at *8 n.23. These findings align with Trebilcock’s
testimony about the factors that led him to conclude Galanter
was untrustworthy and should be discharged: Galanter
refused to provide a straight answer about where he had
obtained the salary information; Galanter had global access to
MCPc’s computer systems, including human resources data;
and, upon questioning, Galanter falsely implicated two
employees whom Trebilcock “trust[ed] . . . greatly” and who
had worked for MCPc for 15 years. J.A. 113a. Thus,
Trebilcock explained, because “everything . . . add[ed] up to a
lack of trust” and the heart of MCPc’s business was
maintaining the “integrity” of its customers’ data, Trebilcock
decided that he “could not move forward” with Galanter. J.A.
113a.
Moreover, Galanter’s equivocations are apparent from
his own testimony. Galanter acknowledged that he provided
Trebilcock shifting explanations for the source of the salary
28
information, including that no one had given him the
information, that it was available on the Internet, and that it
came from general “water cooler” talk among employees.
J.A. 90a. Upon further questioning by Trebilcock, Galanter
offered that the information may have come from Damin and
Jurkowski, and then, on cross examination, admitted that
neither employee had actually provided him the salary
information and expressed uncertainty as to whether he had
ever even discussed the topic of the executive’s salary with
them.
Second, the ALJ also determined that Galanter misled
Trebilcock about the identity of the executive Galanter had
named at the lunch. Concluding that, at the February 24th
lunch, Galanter had mentioned not Andy Jones but Peter
DeMarco, the executive recently hired at a salary of
$400,000, the ALJ decided that “it [was] more likely that
[Galanter] only invoked Jones’ [sic] name when confronted
by Trebilcock.” MCPc, Inc., 360 N.L.R.B. No. 39, at *8
nn.16, 22. In short, the ALJ found that Galanter provided
Trebilcock an untrue statement, a conclusion that should have
been deemed relevant in assessing MCPc’s assertion that
Galanter was fired for lying to Trebilcock. The ALJ’s finding
also bears on Galanter’s accuracy, if not honesty, under oath,
since Galanter also testified during the hearing that he never
mentioned DeMarco’s name.
Third, Galanter offered into evidence as Exhibit 6 a
printout of the website that he visited containing data that he
allegedly used to estimate the named MCPc executive’s
salary. As MCPc highlighted in its cross-examination of
Galanter, however, that printout bears a copyright date of
2012—thus on its face appearing to discredit Galanter’s
contention that he relied on this page over one year earlier at
29
the February 24, 2011 lunch. Although whether Galanter
actually gained improper access to the confidential company
files is not dispositive under Wright Line, which focuses on
the employer’s motivation for its adverse employment action,
the possibility that Galanter was fabricating evidence post-
hoc or giving false testimony seems highly relevant to the
ALJ’s credibility findings.
All of this evidence together supports MCPc’s
contention that it would have discharged Galanter regardless
of his statements at the February 24th lunch for improperly
obtaining salary information and then being dishonest about
his behavior. The ALJ nonetheless rejected MCPc’s
explanations as pretextual, apparently crediting Galanter’s
testimony over Trebilcock’s, and the Board adopted this
finding. Although we give conclusive effect to such findings
where supported by substantial evidence, Trafford Distrib.
Ctr. v. NLRB, 478 F.3d at 179, whether evidence is
substantial turns in part on whether due consideration has
been given to those portions of the record supporting the
contrary result. Tri-State Truck Serv., Inc., 616 F.2d at 69.
Here, certain aspects of the ALJ’s findings raise concerns
under this standard, including internal inconsistencies in those
findings, potentially significant misstatements of the record,
and the ALJ’s failure to address Exhibit 6.
Most glaringly, the ALJ’s rejection of MCPc’s stated
reasons for terminating Galanter as “merely a pretext
designed to manufacture [his] termination for unlawful
motives,” MCPc, Inc., 360 N.L.R.B. No. 39, at *16 (alteration
in original) (internal quotation marks omitted), conflicts with
its own extensive findings as to Galanter’s “inconsisten[t],”
“purposely vague and evasive” responses to Trebilcock. Id.at *8 n.23.
30
In addition, the ALJ appears to have misapprehended
critical portions of the record. For instance, citing to pages
26-29 of the hearing transcript, the ALJ found that the audit
of MCPc’s systems “corroborated Galanter’s contention that
he did not engage in any unauthorized access of Company
files” and “undermine[d] the testimony of Company
witnesses who assumed that he did because of his access.”
Id. at *7 n.13. The testimony cited for this proposition,
however, is Galanter’s self-serving denial that he improperly
accessed the confidential information. Meanwhile, the
testimony of MCPc’s information technology manager, Jeff
Kaiser, actually was that the audit did show that Galanter had
access rights to confidential files to which he should not have
had access. Specifically, although MCPc could not determine
from the available data how Galanter had obtained the access
rights and whether Galanter had in fact exercised those rights,
Kaiser explained that Galanter had the technical capability to
grant access rights to himself using the administrative rights
that he was provided for purposes of implementing the call
center project.
In another instance, the ALJ appears to have placed
great weight on his belief that “[n]otwithstanding Galanter’s
inconsistencies as to his statements at the meeting, Trebilcock
conceded that he made the ‘gut feeling’ remark”—referring to
Galanter’s testimony that, just before firing him, Trebilcock
admitted to having a “gut feeling” that Galanter “didn’t do
anything wrong here.” Id. at *8 & n.23. Trebilcock’s
testimony, however, reflects no such concession. On the
contrary, Trebilcock testified that “my gut was telling me that
. . . everything was adding up to a lack of trust,” based on
“the fact that he had access to the [salary] information, and he
had already comprised [sic] two employees that have been
31
part of the organization for 15 years, you know, in effect lied
about that in my mind because I trust both of them greatly.”
J.A. 113a. Due consideration of the actual testimony
provided by these witnesses might have led the ALJ or the
Board to a different conclusion.
Lastly, neither the ALJ nor the Board addressed
Exhibit 6, the printout of the webpage that Galanter described
as the source of his information about the $400,000 salary
several weeks prior to the February 24, 2011 lunch but which
bore a 2012 copyright date. Although it is possible that the
date discrepancy on Exhibit 6 resulted from an automatic
update on the website in question, the ALJ made no such
finding and, indeed, no mention whatsoever of this evidence
in his decision.
In sum, the ALJ and Board’s determination that
Galanter was terminated for his protected statements at the
February 24th lunch does not appear to take into account
significant countervailing evidence in the record indicating
that MCPc would have discharged Galanter regardless of his
statements because it believed that he engaged in improper
data access, dishonesty, or both. See Tri-State Truck Serv.,
616 F.2d at 69 (citing Universal Camera Corp., 340 U.S. at
488).
That said, we are not persuaded that this is the
exceptional case where “there is no need to require agency
reconsideration.”13 Yusupov, 650 F.3d at 993. To prevail on
13
We do not suggest what conclusion the Board
should reach, in applying the correct test, as to whether
Galanter was discharged for engaging in protected activity.
Rather, we offer the observations above to illustrate why
32
a Wright Line defense, an employer must show that it has
applied its disciplinary rules regarding the conduct at issue
“consistently and evenly.” Septix Waste, Inc., 346 N.L.R.B.
494, 496 (2006). Thus the Board’s past decisions and our
own precedent suggest it also would be appropriate to remand
for the Board to take into account evidence of MCPc’s
expectations regarding employee integrity and honesty as set
forth in its policies, as well as its past practices in imposing
disciplinary measures for misconduct or dishonesty of the
kind alleged here. See Hanlon & Wilson Co. v. N.L.R.B, 738
F.2d 606, 616-18 (3rd Cir. 1984); D & D Distrib. Co., 801
F.2d at 642-43.
IV. Conclusion
For the foregoing reasons, while we agree with the
Board’s conclusion that Galanter engaged in protected
concerted activity during the February 24th lunch, we will
vacate and remand for the Board to consider under Wright
Line whether that activity or MCPc’s belief that Galanter
further agency consideration is appropriate. Among other
things, in reweighing the evidence under the proper legal
framework on remand, the Board may consider MCPc’s
original position statement, which asserted that MCPc
terminated Galanter for disclosing confidential salary
information, and which the Board’s General Counsel cites as
a clear admission as to the real reason for Galanter’s
discharge, N.L.R.B.’s Br. at 13. Although MCPc has argued
on appeal that it was improper for the ALJ to consider the
position statement, the Board’s case law is to the contrary.
See United Scrap Metal, Inc., 344 N.L.R.B. 467, 468-69 &
n.5 (2005).
33
engaged in misconduct or dishonesty formed the basis for his
discharge.
34