NLRB v. Albertson's Inc ( 2002 )

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH  (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS 81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB $/%(57621j6 ,1& ; 3HWLWLRQHU  &URVV5HVSRQGHQW   1RV   Y !   1$7,21$/ /$%25 5(/$7,216  %2$5'  5HVSRQGHQW  &URVV3HWLWLRQHU    81,7(' )22' $1'  &200(5&,$/ :25.(56  81,21 /2&$/   ,QWHUYHQRU  1 2Q3HWLWLRQIRU5HYLHZDQG&URVV$SSOLFDWLRQ IRU(QIRUFHPHQWRIDQ2UGHURIWKH 1DWLRQDO/DERU5HODWLRQV%RDUG 1RV&$&$&$ $UJXHGsXQH 'HFLGHGDQG)LOHG$XJXVW   $OEHUWVRQjV,QFY1/5% 1RV %HIRUH&/$ :@H KROG WKDW WKH WHUP µGLVFULPLQDWLRQj DV XVHG LQ HQIRUFHPHQWRILWVRUGHU  %DEFRFN PHDQV IDYRULQJ RQH XQLRQ RYHU DQRWKHU RU DOORZLQJ HPSOR\HU UHODWHG LQIRUPDWLRQ ZKLOH EDUULQJ VLPLODU XQLRQUHODWHG LQIRUPDWLRQl HPSKDVLV DGGHG  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  :H RI FRXUVH DOVR DUH ERXQG E\ WKLV &RXUWjV KROGLQJ LQ )DFWV 0HLMHUEXWDVZHKDYHH[SODLQHGWKDWFDVHGRHVQRWUHTXLUH WKDWZHUHMHFWWKHGHILQLWLRQRIGLVFULPLQDWLRQDVVHWIRUWKLQ 7KHIDFWVDUHHVVHQWLDOO\XQGLVSXWHGLQDVPXFKDVWKHSDUWLHV 6DQGXVN\DQG&5(37KLV&RXUWKDVUHFRJQL]HGWKDWWKHUHLV VWLSXODWHGWRWKHPEHORZ$OEHUWVRQjVKDVDIRUPDOZULWWHQ DQKLHUDUFK\RIULJKWVXQGHU6HFWLRQRIWKH1/5$1/5%Y SROLF\RQDFFHVVDQGVROLFLWDWLRQVZKLFKDSSOLHVWRDOOVWRUHV *UHDW6FRW,QF)GWK&LU:KLOH DQGZKLFKEDQVDQ\DQGDOOVROLFLWDWLRQV WKH FRUH DFWLYLW\ SURWHFWHG E\ 6HFWLRQ  LV WKH ULJKW RI HPSOR\HHV WR VHOIRUJDQL]H DV SUHYLRXVO\ VWDWHG mQRQ /RFDO HPSOR\HHV KDYH D µGHULYDWLYH ULJKWj WR HQJDJH LQ RUJDQL]DWLRQDO DFWLYLWLHVl  ,G  )DUWKHVW UHPRYHG IURP %HWZHHQ1RYHPEHUDQGsDQXDU\/RFDO SURWHFWLRQ XQGHU 6HFWLRQ  RI WKH 1/5$ LV WKH DFWLYLW\ HQJDJHGLQDQHFRQRPLFVWULNHDJDLQVW%URDGYLHZ'DLU\ HQJDJHGLQE\WKHQRQHPSOR\HHVLQ&5(3DQG6DQGXVN\ ORFDWHG LQ 6SRNDQH :DVKLQJWRQ  /RFDO  DWWHPSWHG WR SLFNHWLQJDFWLYLW\6HH*UHDW6FRW)GDWH[SODLQLQJ GLVWULEXWHKDQGELOOVDWVL[RI$OEHUWVRQjVUHWDLODQGJURFHU\ WKDW QRQHPSOR\HH SLFNHWLQJ ZDUUDQWV HYHQ OHVV SURWHFWLRQ VWRUHVLQWKH6SRNDQHDUHD7KHKDQGELOOVXUJHGFXVWRPHUVWR WKDQ QRQHPSOR\HH RUJDQL]DWLRQDO DFWLYLW\  :KLOH QRQ UHIUDLQ IURP EX\LQJ %URDGYLHZ 'DLU\ SURGXFWV ZKLFK HPSOR\HHRUJDQL]HUVPD\ZDUUDQWJUHDWHUSURWHFWLRQXQGHUWKH $OEHUWVRQjVVROGLQDVPXFKDV%URDGYLHZRIIHUHGmZDJHVDQG 1/5$WKDQQRQHPSOR\HHVZKRHQJDJHLQQRQRUJDQL]DWLRQDO EHQHILWVIDUEHORZWKHLQGXVWU\VWDQGDUGVl7KHKDQGELOOVDOVR DFWLYLW\ERWKVLWXDWLRQVVWLOOLPSOLFDWHWUHVSDVVDFWLYLW\$V PDGHFOHDUWKDWWKHXQLRQjVGLVSXWHZDVQRWZLWK$OEHUWVRQjV WKLV&RXUWLQ0HLMHUQRWHGmWUHVSDVVFDVHVFUHDWHDVLWXDWLRQ EXW RQO\ ZLWK %URDGYLHZ  1RQH RI WKH LQGLYLGXDOV ZKR ZKHUHWKHLQWHUHVWVRIWKHWUHVSDVVHUDUHDWWKHLUZHDNHVWDQG VRXJKW WR GLVVHPLQDWH WKH KDQGELOOV ZHUH HPSOR\HHV RI WKHUHIRUH WKH SURSHUW\ RZQHU KDV D SUHVXPSWLYH ULJKW WR $OEHUWVRQjV$OEHUWVRQjVUHTXHVWHGSROLFHDVVLVWDQFHLQRUGHU H[FOXGHQRQHPSOR\HHVIURPLWVSURSHUW\l)GDW WR UHPRYH KDQGELOOHUV IURP LWV SURSHUW\ DW VHYHUDO RI WKH HPSKDVLVDGGHG7KXVZKLOHmµDQHPSOR\HUPD\QRWDOZD\V VWRUHV EDUQRQHPSOR\HHXQLRQRUJDQL]HUVIURPKLVSURSHUW\jlWKH EXUGHQWKHXQLRQEHDUVLQVKRZLQJWKDWWKHHPSOR\HUPD\QRW 2Q YDULRXV RFFDVLRQV ZKLOH WKH KDQGELOOHUV DWWHPSWHG WR GR VR LV D mµKHDY\ RQH    HYLGHQFHG E\ WKH IDFW WKDW WKH SDVVRXWWKHLUKDQGELOOV$OEHUWVRQjVDOORZHGRWKHUJURXSVRQ EDODQFHVWUXFNE\WKH%RDUGDQGWKHFRXUWVXQGHUWKH%DEFRFN LWVSURSHUW\WRVROLFLWGRQDWLRQV7KHVHLQFOXGHGWKH&DPS DFFRPPRGDWLRQSULQFLSOHKDVUDUHO\EHHQLQIDYRURIWUHVSDVV )LUH *LUOV DQG %R\V %R\ 6FRXWV *LUO 6FRXWV DQG DUHD RUJDQL]DWLRQDODFWLYLW\jl/HFKPHUH86DWTXRWLQJ VFKRROV  )XUWKHU WKH 6DOYDWLRQ $UP\ ZDV DOORZHG WR ULQJ 6HDUV5RHEXFN &RY&DUSHQWHUV86 EHOOVGXULQJ7KDQNVJLYLQJDQG&KULVWPDVDWWKHVWRUHVHDFK ,QFRQWUDVWZKHUHHPSOR\HHVULJKWVDUHDWLVVXHmQRUHVWULFWLRQ \HDU RQHPSOR\HHVULJKWVWRVHOIRUJDQL]DWLRQLVSHUPLVVLEOHXQOHVV /RFDO WKH HPSOR\HU VKRZV WKDW VXFK UHVWULFWLRQ LV QHFHVVDU\ WR PDLQWDLQRUGHUDQGGLVFLSOLQHl/HFKPHUH86DW 'XULQJ 0D\  WR )HEUXDU\  $OEHUWVRQjV DOVR %HFDXVHDPRQJRWKHUWKLQJVWKH&RXUWLQ0HLMHUDGGUHVVHG GHQLHGQRQHPSOR\HHEXVLQHVVUHSUHVHQWDWLYHVRI/RFDO FRQFHUQV UHJDUGLQJ VHOIRUJDQL]DWLRQDO ULJKWV RI HPSOR\HHV WR WKH LQWHULRU DQG LPPHGLDWH H[WHULRU RI ILYH RI LWV VWRUHV WKHPVHOYHV DQG WKH ULJKWV WKDW WKH\ DUH JUDQWHG XQGHU WKH ORFDWHGLQ&ODUN&RXQW\:DVKLQJWRQVWRUHVDQG 1/5$WKH&RXUWKHOGWKDWLWZDVQRWERXQGE\&5(3DQG %HQG2UHJRQVWRUHVDQGDQG5HGPRQG2UHJRQ 6DQGXVN\  %HFDXVH ZH GR QRW KDYH VXFK FRQVLGHUDWLRQV VWRUH/RFDOUHSUHVHQWDWLYHVVRXJKWDFFHVVWRWKHVH  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  VWRUHVLQRUGHUWRVROLFLWWKHFRPSDQ\jVHPSOR\HHVWREHFRPH LQVWDQWFDVH7KLVFDVHLPSOLFDWHVWKHSUHVXPSWLYHULJKWRI PHPEHUVRIDQGRUWRUHTXHVWUHSUHVHQWDWLRQE\/RFDO $OEHUWVRQjVWRH[FOXGHGLVWULEXWLRQRIXQLRQOLWHUDWXUHRQLWV SURSHUW\  )XUWKHU WKLV FDVH LQYROYHV QRQ$OEHUWVRQjV ,QHDUO\sXO\DQGRQ2FWREHUVXSHUYLVRUVDW HPSOR\HHVVHHNLQJDFFHVVWRWKHFRPSDQ\j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jVQRWLILHG/RFDOE\OHWWHUWKDWLWVFRQGXFW UHDVRQHGEDVLVWRMXVWLI\RXUGRLQJVR,QUHDFKLQJLWVKROGLQJ YLRODWHG WKH VWRUHjV QRVROLFLWDWLRQ SROLF\  /RFDO  DVWRWKHPHDQLQJRIWKHWHUPmGLVFULPLQDWLRQlWKH&RXUWLQ UHSUHVHQWDWLYHVDJDLQDWWHPSWHGWRGLVWULEXWHPDWHULDOVLQsXO\ &5(3 ZDV LQWHUSUHWLQJ WKDW WHUP DV XVHG LQ %DEFRFN  DQG ZHUH WROG WR OHDYH  ,Q D sXO\   OHWWHU :LOFR[DQG%DEFRFN :LOFR[ZDVDQRUJDQL]DWLRQDOFDVH $OEHUWVRQjVDJDLQDGYLVHGWKHXQLRQWKDWLWVFRQGXFWYLRODWHG 6HH%DEFRFN :LOFR[86DWH[SODLQLQJWKDWWKH WKHVWRUHjVQRVROLFLWDWLRQSROLF\6LPLODUOHWWHUVZHUHVHQWWR HPSOR\HU KDG UHIXVHG WR DOORZ QRQHPSOR\HH XQLRQ WKHXQLRQLQ1RYHPEHUDQG)HEUXDU\DIWHU/RFDO RUJDQL]HUV RQ FRPSDQ\ SURSHUW\ WR GLVWULEXWH XQLRQ  UHSUHVHQWDWLYHV KDG DJDLQ DWWHPSWHG WR GLVWULEXWH LWV LQIRUPDWLRQWDUJHWHGDWFRPSDQ\HPSOR\HHV7KXVWKHRQO\ PDWHULDOV DQG VROLFLW PHPEHUV DW VRPH RI WKH FRPSDQ\jV EDVLV RQ ZKLFK WR GLVWLQJXLVK WKLV FDVH IURP &5(3 RU VWRUHV 6DQGXVN\ LV WKDW WKRVH FDVHV LQYROYHG QRQRUJDQL]DWLRQDO DFWLYLW\\HWLQUHDFKLQJWKHKROGLQJUHJDUGLQJGLVFULPLQDWLRQ /RFDODOUHDG\KDVD&%$ZLWKDSSUR[LPDWHO\RIWKH WKH\ ZHUH LQWHUSUHWLQJ DQ RUJDQL]DWLRQDO FDVH  :H EHOLHYH FRPSDQ\jVVWRUHVLQ2UHJRQDQGLQWZRVWRUHVLQ:DVKLQJWRQ XQGHUWKHVHFLUFXPVWDQFHVWKRVHFDVHVFDQQRWPHDQLQJIXOO\ $WYDULRXVWLPHVLQWKHSDVW$OEHUWVRQjVDSSDUHQWO\DOORZHG EHGLVWLQJXLVKHGIURPWKHLQVWDQWFDVHDQGZHDUHWKHUHIRUH /RFDOUHSUHVHQWDWLYHVRUUHSUHVHQWDWLYHVRISUHGHFHVVRU ERXQGE\WKHLUKROGLQJV6HH8QLWHG6WDWHVY+XPSKUH\ XQLRQVDFFHVVWRWKHLQWHULRURUH[WHULRURILWVQHZVWRUHVLQ )GWK&LUH[SODLQLQJWKDWDSDQHOLV RUGHUWRLQIRUPHPSOR\HHVDERXWWKHXQLRQ$FFRUGLQJWRWKH ERXQGWRIROORZSUHFHGHQWLDODXWKRULW\IURPDQRWKHUSDQHORI &%$ FRYHULQJ VWRUHV   DQG  /RFDO  ZDV WKLVFRXUWXQOHVVVXFKDXWKRULW\FDQEHGLVWLQJXLVKHGHYHQLI DOORZHG VWRUH DFFHVV WR LQYHVWLJDWH WKH XQLRQ VWDQGLQJ RI FXUUHQW SDQHO LV LQFOLQHG WR GLVDJUHH ZLWK SULRU GHFLVLRQ UHSUHVHQWHGPHDWGHSDUWPHQWHPSOR\HHV$FFRUGLQJWR/RFDO 6DQGXVN\)GDWH[SODLQLQJWKDWmILUPIL[HGUXOHl WKHFODXVHVLQWKH&%$DOVRSURYLGHGWKDW$OEHUWVRQjV LQWKLVFLUFXLWLVWKDWRQHSDQHOFDQQRWRYHUUXOHDSULRUSDQHOjV DJUHHGWRUHFRJQL]H/RFDODVWKHUHSUHVHQWDWLYHRILWVQRQ KROGLQJ,QWjO,QV&RY6WRQHZDOO,QV&R)G H[HPSWJURFHU\HPSOR\HHVLQVWRUHVDQGEDVHG WK&LUKROGLQJWKDWDOWKRXJKRQWKHLUIDFHWZR XSRQ D PDMRULW\ RI WKH HPSOR\HHV DXWKRUL]LQJ VXFK SULRU FDVHV IURP GLIIHUHQW SDQHOV DSSHDU WR FRQWUDGLFW WKH UHSUHVHQWDWLRQZLWKRXWKDYLQJDQ1/5%HOHFWLRQ LVVXHLQYROYHGZDVKHDYLO\IDFWGULYHQDQGFRXUWZRXOGDSSO\ WKHKROGLQJRIWKHRQHSULRUFDVHZLWKIDFWVPRVWDQDORJRXVWR WKHLVVXHEHIRUHWKHFRXUW  'XULQJ RUDO DUJXPHQW WKH %RDUG H[SUHVVO\ VWDWHG WKDW /RFDO  GRHV QRW FODLP WKDW $OEHUWVRQjV VKRXOG KDYH DOORZHG WKH XQLRQ DFFHVV WR LWV VWRUHV XQGHU DQ\ ULJKWV JUDQWHG E\ WKH &%$ 5DWKHU RQ DSSHDO WKH  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  GLVWLQJXLVKHG&5(3DQGH[SODLQHGWKDWWKHSDQHOLQWKDWFDVH 7KH %RDUG SRLQWV RXW WKDW $OEHUWVRQjV KDV DOORZHG DGRSWHGDQDUURZGHILQLWLRQRImGLVFULPLQDWLRQlDVDUHVXOWRI FKDULWDEOH DQGRU FLYLFHGXFDWLRQDO JURXSV WR VROLFLW LWV WKHJHQHUDOUXOHWKDWDQRZQHURISULYDWHSURSHUW\LVXQGHU FXVWRPHUVLQWKHDUHDVLPPHGLDWHO\VXUURXQGLQJWKHHQWUDQFH QRREOLJDWLRQWRSHUPLWWKHGLVWULEXWLRQRIXQLRQOLWHUDWXUHRQ WRWKHVWRUHV)RULQVWDQFHGXULQJWKH&KULVWPDVVHDVRQDOO LWVSURSHUW\WKHVXEVWDQWLDOGLIIHUHQFHEHWZHHQWKHULJKWV ILYH VWRUHV DOORZ 6DOYDWLRQ $UP\ EHOOULQJHUV WR VROLFLW WKH RI HPSOR\HHV DQG QRQHPSOR\HHV ZLWK UHVSHFW WR WKH FRPSDQ\jVFXVWRPHUV6WRUHVDQGKDYHDOORZHGWKH GLVWULEXWLRQRIXQLRQOLWHUDWXUHRQSULYDWHO\RZQHGSURSHUW\ *LUO 6FRXWV %R\ 6FRXWV %URZQLHV DQG \RXWK DQG VFKRRO DQG  WKH IDFW WKDW &5(3 LQYROYHG QRQHPSOR\HH XQLRQ JURXSVWRVROLFLWLWVFXVWRPHUV6WRUHVDQGDOVR UHSUHVHQWDWLYHVHQJDJLQJLQQRQRUJDQL]DWLRQDODFWLYLW\,GDW KDYHDOORZHGWKH*LUO6FRXWV&DPSILUH*URXSVWKH9HWHUDQV ,QDGGLWLRQWKH&RXUWLQ0HLMHUDOVRQRWHGWKDW&5(3jV RI)RUHLJQ:DUV'LVDEOHG9HWHUDQVRI$PHULFDDQG\RXWK KROGLQJUHOLHGRQDSROLF\FRQVLGHUDWLRQQRWSUHVHQWLQ0HLMHU DQGVFKRROJURXSVWRVROLFLW m>7@KH &RXUW ZDV    LQIOXHQFHG E\ WKH IDFW WKDW µ>Q@R UHOHYDQWODERUSROLFLHVDUHDGYDQFHGE\UHTXLULQJHPSOR\HUV *HQHUDOO\WKHVHJURXSVDUHDOORZHGWRVHWXSLQWKHDUHD WRSURKLELWFKDULWDEOHVROLFLWDWLRQVLQRUGHUWRSUHVHUYHWKH DGMDFHQW WR WKH VWRUH HQWUDQFHV DQG H[LWV  +RZHYHU ULJKWWRH[FOXGHQRQHPSOR\HHGLVWULEXWLRQRIXQLRQOLWHUDWXUH $OEHUWVRQjV DGPLWV WKDW GXULQJ LQFOHPHQW ZHDWKHU LW KDV ZKHQDFFHVVWRWKHWDUJHWDXGLHQFHLVRWKHUZLVHDYDLODEOHjl SHUPLWWHG WKH *LUO 6FRXWV DQG 6DOYDWLRQ $UP\ EHOOULQJHUV ,GHPSKDVLVDGGHGTXRWLQJ&5(3)GDW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jV HPSOR\HHV  6HH HJ WKHLUFRRNLHVRQFHD\HDUIRUVL[WHHQFRQWLQXRXVGD\V7KH 0HLMHU  )G DW  m7KH PDMRULW\ EHOLHYHV WKDW WKH &ODUN&RXQW\%R\6FRXWVDUHJUDQWHGDFFHVVWRVWRUHSURSHUW\ >&5(3@GHILQLWLRQRIGLVFULPLQDWLRQVKRXOGEHQRWEHDSSOLHG WRVHOOSURGXFWVWZLFHD\HDUGXULQJRQHPRQWKLQWKHIDOODQG LQ WKH LQVWDQW FDVH VLQFH >WKH IRUPHU FDVH@ LQYROYHG QRQ DQRWKHUPRQWKLQWKHVSULQJ7KHRWKHUJURXSVDUHJUDQWHG HPSOR\HH VROLFLWRUV DQG WKLV FDVH LQYROYHV HPSOR\HHVl DFFHVVWRSURSHUW\RQHWRWKUHHGD\VGXULQJWKHFRXUVHRIWKH 1RUULVsGLVVHQWLQJ$VWKHPDMRULW\LQ0HLMHUSRLQWHGRXW \HDU  $W HDFK RI WKH ILYH VWRUHV $OEHUWVRQjV KDV QHYHU WKLVGLVWLQFWLRQLVRQHRIVXEVWDQFH,GDWQRWLQJWKDW DOORZHGDQRWKHUODERURUJDQL]DWLRQWRGLVWULEXWHOLWHUDWXUHWR m>H@PSOR\HHVDUHDFFRUGHGJUHDWHUSURWHFWLRQXQGHUWKH$FW KDQGELOORUWRVROLFLWFXVWRPHUVRQWKHLQWHULRURUH[WHULRURI WKDQQRQHPSOR\HHVEXWWKH\>HPSOR\HHV@DUHDFFRUGHGHYHQ WKHSUHPLVHV JUHDWHU SURWHFWLRQXQGHUWKH$FWZKHQWKH\DUHHQJDJHGLQ RUJDQL]DWLRQDODFWLYLW\lVHHDOVR%DEFRFN86DW $OEHUWVRQjV KDV UHMHFWHG UHTXHVWV WR VROLFLW GRQDWLRQV E\ H[SODLQLQJWKDWWKHGLVWLQFWLRQEHWZHHQHPSOR\HHjVULJKWWR RWKHU RUJDQL]DWLRQV DVLGH IURP WKH FKDULWDEOH JURXSV GLVFXVV VHOIRUJDQL]LQJ DQG WKH ULJKW RI QRQHPSOR\HH PHQWLRQHG DERYH VXFK DV SROLWLFDO JURXSV FKDULWDEOH RUJDQL]HUV LV RQH RI mVXEVWDQFHl &5(3  )G DW  VDPH (YHU\IDFWRUH[FHSWRQHWKDWWKH&RXUWLQ0HLMHUSRLQWHGWR %RDUG FRQWHQGV WKDW $OEHUWVRQjV VKRXOG KDYH SHUPLWWHG /RFDO  DFFHVV LQRUGHUWRGLVWLQJXLVKWKDWFDVHIURP&5(3LVUHOHYDQWWRWKH WR LWV VWRUHV GHVSLWH $OEHUWVRQjV QRVROLFLWDWLRQ SROLF\ EHFDXVH $OEHUWVRQjV DOORZHG VXFK DFFHVV WR FKDULWLHV  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  RUJDQL]DWLRQV XQIDPLOLDU WR WKH FRPPXQLW\ DQG DOO QRQ 6DQGXVN\DVWKH%RDUGjVGHFLVLRQGLGQRWH[SUHVVO\UHO\RQ FKDULWLHV DQ\VXFKGLVWLQFWLRQVLQUHDFKLQJLWVGHFLVLRQ$mUHYLHZLQJ FRXUW    PXVW MXGJH WKH SURSULHW\ RI >WKH DFWLRQV RI DQ ',6&866,21 DGPLQLVWUDWLYHDJHQF\@VROHO\RQWKHJURXQGVLQYRNHGE\WKH DJHQF\l1/5%Y8QLWHG6WDWHV3RVWDO6HUY)G ,  WK &LU  TXRWLQJ 6(& Y &KHQHU\ &RUS  86     m$ FRXUW ZLOO QRW DIILUP WKH $OEHUWVRQjV VHHNV UHYLHZ RI WKH %RDUGjV GHFLVLRQ DQG DGPLQLVWUDWLYH DFWLRQ E\ VXEVWLWXWLQJ D PRUH DGHTXDWH RU FRQWHQGV WKDW $OEHUWVRQjV KDV D ULJKW WR H[FOXGH IURP LWV SURSHUEDVLV>DQG@>W@KLV&RXUWZLOOQRWDIILUPWKH%RDUGjV SURSHUW\QRQHPSOR\HHXQLRQUHSUHVHQWDWLYHVZKRHQJDJHLQ DFWLRQVEDVHGRQUHDVRQVQRWUHOLHGXSRQE\WKH%RDUGLWVHOIl HLWKHUQRQRUJDQL]LQJRURUJDQL]LQJDFWLYLWLHV$FFRUGLQJWR ,G UHMHFWLQJ %RDUGjV DUJXPHQW EHIRUH WKLV &RXUW WKDW WKH $OEHUWVRQjV WKH %RDUG HUUHG LQ ILQGLQJ WKDW $OEHUWVRQjV %RDUGjV UHDGLQJ RI WKH 3RVWDO 5HRUJDQL]DWLRQ $FW ZDV GLVFULPLQDWHGDJDLQVWWKHXQLRQE\DOORZLQJFHUWDLQFKDULWDEOH VXSSRUWHGE\DWKHQUHFHQW6XSUHPH&RXUWFDVHZKHQFDVHGLG JURXSVWRVROLFLWRQLWVSURSHUW\EXWGHQ\LQJWKHXQLRQVXFK QRWOHQGVXFKVXSSRUWDQG%RDUGIDLOHGWRUHO\RQWKDWFDVHWR ULJKWV$OEHUWVRQjVIXUWKHUFRQWHQGVWKDWWKLVILQGLQJE\WKH MXVWLI\LWVUHDGLQJRIWKH$FWLQLWVGHFLVLRQEHORZVHHDOVR %RDUGFRQIOLFWVZLWKWZRRSLQLRQVIURPWKLV&RXUW6DQGXVN\ 1/5%Y.HQWXFN\5LYHU&PW\&DUH&R86 0DOO &R Y 1/5%  )G  WK &LU  DQG Q  m:H GR QRW     VXEVWLWXWH FRXQVHOjV SRVW KRF &OHYHODQG5HDO(VWDWH3DUWQHUV>m&5(3l@Y1/5%)G UDWLRQDOH IRU WKH UHDVRQLQJ VXSSOLHG E\ WKH %RDUG LWVHOIl WK&LU TXRWLQJ 1/5% Y WKDW@GHQLHVDXQLRQDFFHVVWRLWVSURSHUW\ZKLOH IDLOVWRGLVWLQJXLVKEHWZHHQWKHDFWLYLW\HQJDJHGLQE\/RFDO UHJXODUO\ DOORZLQJ RWKHU LQGLYLGXDOV JURXSV DQG DQG/RFDO,QGHHGWKH%RDUGDQDO\]HGWKHFODLPV RUJDQL]DWLRQV WR XVH LWV SUHPLVHV IRU YDULRXV DFWLYLWLHV UHJDUGLQJ/RFDOLQYROYLQJQRQRUJDQL]DWLRQDOER\FRWWLQJ XQODZIXOO\GLVFULPLQDWHVDJDLQVWWKHXQLRQVROLFLWDWLRQl7KH DFWLYLWLHVDQG/RFDOLQYROYLQJRUJDQL]DWLRQDODFWLYLW\ %RDUGH[SODLQHGWKDWLWZRXOGQRWDOORZDQHPSOR\HUWRMXVWLI\ WRJHWKHU7KH%RDUGjVGHFLVLRQJHQHUDOO\KHOGWKDWDQ\DQGDOO WKH UHVWULFWLRQ RI XQLRQ VROLFLWDWLRQ RQ WKH JURXQGV WKDW LW H[FOXVLRQ RI WKH XQLRQ IURP DQ HPSOR\HUjV SUHPLVHV LV SHUPLWVRQO\FKDULWDEOHVROLFLWDWLRQ,G7KH%RDUGH[SODLQHG GLVFULPLQDWRU\ ZKHUH WKH HPSOR\HU DOORZV RWKHUV VXFK DV WKDW mZKHUH RWKHU QRQHPSOR\HH VROLFLWDWLRQ LV IUHTXHQWO\ FKDULWLHVWKHULJKWWRVROLFLWRQLWVSUHPLVHV7KXVWKH%RDUG DOORZHGWKHIDFWWKDWPXFKRIWKDWVROLFLWDWLRQLVFKDULWDEOHRU GHWHUPLQHG WKDW LW GLG QRW PDWWHU ZKHWKHU WKH DFWLYLWLHV RWKHUZLVH QRQFRQWURYHUVLDO GRHV QRW SUHFOXGH D ILQGLQJ RI HQJDJHGLQEHWZHHQ/RFDODQG/RFDODQGWKHFKDULWLHV GLVFULPLQDWLRQ DJDLQVW XQLRQ VROLFLWDWLRQl  ,G  7KH %RDUG ZHUHVLPLODURUZKHWKHUFKDULWLHVDQGXQLRQVDUHFRPSDUDEOH IRXQGWKDWWKHVROLFLWDWLRQSHUPLWWHGE\$OEHUWVRQjVH[FHHGHG JURXSV%XWVHH6DQGXVN\)GDWKROGLQJWKDWWKH WKHVPDOOQXPEHURILVRODWHGEHQHILFHQWDFWVWKDWWKH%RDUG DOOHJHGGLVFULPLQDWRU\FRQGXFWLQDOORZLQJVROLFLWDWLRQE\RQH KDVLQWKHSDVWUHJDUGHGDVDSHUPLVVLEOHQDUURZH[FHSWLRQWR JURXSZKLOHEDUULQJVXFKVROLFLWDWLRQE\DQRWKHUUHTXLUHVWKDW DQHPSOR\HUjV JHQHUDOQRVROLFLWDWLRQUXOHVXFKDVWKHRQH WKHGLVFULPLQDWLRQEHDPRQJFRPSDUDEOHJURXSVRUDFWLYLWLHV HPSOR\HG E\ $OEHUWVRQjV LQ WKH LQVWDQW FDVH  7KH %RDUG ,WLVRQO\RQDSSHDOWKDWWKH%RDUGDUJXHVWKDWFKDULWLHVDQG H[SODLQHGWKDWLWVSRVLWLRQZDVFRQVLVWHQWZLWKWKH6XSUHPH XQLRQVDUHLQGLVWLQJXLVKDEOHIRUSXUSRVHVRIDGLVFULPLQDWLRQ &RXUWjVGHFLVLRQLQ1/5%Y%DEFRFN :LOFR[&R DQDO\VLVDQGWKDWXQLRQVHQJDJLQJLQRUJDQL]DWLRQDODFWLYLW\ 86   LQ ZKLFK WKH &RXUW ILUVW GLVFXVVHG WKH VSHFLILFDOO\DQGFKDULW\VROLFLWDWLRQVDUHFRPSDUDEOHDFWLYLWLHV mGLVFULPLQDWLRQH[FHSWLRQlWRWKHJHQHUDOUXOHWKDWHPSOR\HUV 7KH DUJXPHQWV WKH %RDUG QRZ VHHNV WR UDLVH DUH FOHDUO\ DUH QRW ERXQG WR SHUPLW XQLRQV RQ WKHLU SURSHUW\ WR VROLFLW FUDIWHG IRU DSSHDO EHFDXVH RI RXU KROGLQJV LQ &5(3 DQG PHPEHUV  2QHPHPEHURIWKH%RDUGSDQHOGLVVHQWHG7KHGLVVHQWLQJ PHPEHUVWDWHGWKDWWKH1/5$SURKLELWVGLVFULPLQDWLRQDJDLQVW WR FRPPXQLFDWH ZLWK $OEHUWVRQjV HPSOR\HHV  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  XQLRQVROLFLWDWLRQEXWWKDWDQHPSOR\HUPD\DOORZRQHW\SHRI &RXUWLQ&5(3DQGUHDIILUPHGLQ6DQGXVN\QRGLVFULPLQDWLRQ VROLFLWDWLRQRQLWVSURSHUW\ZKLOHQRWSHUPLWWLQJRWKHUW\SHVRI RFFXUUHGLQWKLVFDVH VROLFLWDWLRQ)RULQVWDQFHWKHGLVVHQWLQJPHPEHUVWDWHGWKDW DQHPSOR\HUPD\SHUPLWVROLFLWDWLRQVE\FKDULWLHVIRUFDQFHU ZKLOHGHQ\LQJWKRVHE\RUJDQL]DWLRQVWKDWFRPEDW$,'67KH  7KH SDUWLHV SUHVHQW QXPHURXV DUJXPHQWV SHUWDLQLQJ WR ZKHWKHU GLVVHQWLQJ PHPEHU FKDUDFWHUL]HG WKH FRPSDQ\j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m>Q@R UHOHYDQW ODERU SROLFLHV DUH DGYDQFHG E\ UHTXLULQJ GLVVHQWLQJ PHPEHU VDZ QR SUREOHP ZLWK VXFK D SROLF\ HPSOR\HUV WR SURKLELW FKDULWDEOH VROLFLWDWLRQV LQ RUGHU WR SUHVHUYH WKH ULJKW LQDVPXFK DV WKH OLQH $OEHUWVRQjV GUHZ UHJDUGLQJ WKH WR H[FOXGH QRQHPSOR\HH GLVWULEXWLRQ ZKHQ DFFHVV WR WKH WDUJHW DXGLHQFH RUJDQL]DWLRQVWKDWFRXOGDQGFRXOGQRWVROLFLWZDVQRWDQDQWL LV RWKHUZLVH DYDLODEOHl  )G DW  7KH %RDUG FRQWHQGV KRZHYHU XQLRQOLQH7KHGLVVHQWLQJPHPEHUUHDVRQHGWKDWWKHXQLRQV WKDW GHVSLWH WKH KROGLQJV LQ&5(3 6DQGXVN\ DQG  WKH 6XSUHPH &RXUWjV LQWKLVFDVHZHUHQRWVROLFLWLQJFKDULWDEOHFRQWULEXWLRQVEXW KROGLQJ LQ 1/5% Y 6WRZH 6SLQQLQJ &R   86   VXSSRUWV UDWKHUZHUHDWWHPSWLQJDPRQJRWKHUWKLQJVWRSHUVXDGHWKH WKH %RDUGjV YLHZ WKDW GLVFULPLQDWLRQ RFFXUV XQGHU %DEFRFN :LOFR[ ZKHUH DQ HPSOR\HU DOORZV DFFHVV WR LWV SURSHUW\ WR FKDULWLHV EXW GHQLHV FRPSDQ\jVHPSOR\HHVWRmEX\lLWVUHSUHVHQWDWLRQDOVHUYLFHV VLPLODU DFFHVV WR XQLRQV $V D SUHOLPLQDU\ PDWWHU 6WRZH 6SLQQLQJ ZDV QRW ZKLFK WKH VWRUHjV QRVROLFLWDWLRQ SROLF\ SURKLELWHG  7KH LQWHUSUHWLQJ WKH mGLVFULPLQDWLRQ H[FHSWLRQl DQQRXQFHG LQ %DEFRFN GLVVHQWLQJPHPEHUSRLQWHGRXWWKDWLIRQHRIWKHFKDULWLHVWKDW :LOFR[ DV 6WRZH 6SLQQLQJ ZDV GHFLGHG VHYHUDO \HDUV SULRU WR WKDW FDVH ZDV SHUPLWWHG WR VROLFLW RQ WKH FRPSDQ\jV SURSHUW\ VRXJKW )XUWKHU 6WRZH 6SLQQLQJ LV GLVWLQJXLVKDEOH RQ LWV IDFWV ,Q WKDW FDVH WKH GRQDWLRQVIRUDSROLWLFDOFDPSDLJQVXFKVROLFLWDWLRQZRXOGEH %RDUG IRXQG WKDW IRXU HPSOR\HUV LQ D VPDOO WRZQ KDG FRPPLWWHG DQ XQIDLU ODERU SUDFWLFH ZKHUH WKH HPSOR\HUV KDG UHIXVHG WR DOORZ D XQLRQ WR PHHW SURKLELWHG XQGHU WKH FRPSDQ\jV QRVROLFLWDWLRQ SROLF\ LQ WKH RQO\ PHHWLQJ KDOO LQ WKH WRZQ DOWKRXJK WKH HPSOR\HUV KDG DOORZHG +RZHYHULIDXQLRQVRXJKWWRUDLVHPRQH\IRUWKH$PHULFDQ RWKHU JURXSV LQFOXGLQJ VRPH RI D FKDULWDEOH QDWXUH WR GR VR 6WRZH &DQFHU)RXQGDWLRQLWZRXOGEHSHUPLWWHGWRGRVRXQGHUWKH 6SLQQLQJ  86 DW  VHH DOVR 1/5% Y 6WRZH 6SLQQLQJ &R  SROLF\7KHGLVVHQWLQJPHPEHUH[SODLQHGWKDWVXFKDSROLF\ )G   WK &LU  QRWLQJ WKDW PHHWLQJ KDOO KDG EHHQ XVHG IRU ZDVSHUPLWWHGXQGHUWKH1/5$EHFDXVHLWZDVQRWEDVHGRQ VXFK SXUSRVHV DV FKXUFK EDQTXHWV /DGLHV $LG 6RFLHW\ PHHWLQJV DQG D &KULVWPDV SDUW\ IRU VFKRRO FKLOGUHQ +RZHYHU LQ UHIXVLQJ WR XSVHW WKH XQLRQ FRQVLGHUDWLRQV  7KH GLVVHQWLQJ PHPEHU IXUWKHU %RDUGjV ILQGLQJ WKDW WKH HPSOR\HUVj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mFRPSDQ\ GRPLQDWHGl WRZQ ZLWK mWKH YDVW PHWURSROLWDQ FHQWHUV ZKHUH D QXPEHU RI KDOOV DUH DYDLODEOH ZLWKLQ HDV\ UHDFK RI SURVSHFWLYH XQLRQ PHPEHUVl ,G 7KXV LQ DGGLWLRQ WR DQWLXQLRQ ELDV WKHUH ZDV HYLGHQFH WKDW WKHUH ZDV QR  ,Q DGGLWLRQ WR WKH SDUWLHV VHYHUDO DPLFL DOVR KDYH VXEPLWWHG EULHIV RWKHU UHDVRQDEO\ DYDLODEOH IRUXP IRU WKH XQLRQ PHHWLQJ LQ WKH WRZQ &I LQ WKLV DSSHDO 7KH DPLFL DUH WKH 6DOYDWLRQ $UP\ %L0DUW D ORFDO UHWDLOHU &5(3  )G DW  m:KHUH UHDVRQDEOH DOWHUQDWLYH PHDQV RI DFFHVV DQG WKH &DPSILUH %R\V DQG *LUOV :KLOH WKH %RDUG PDMRULW\ VWDWHG WKDW H[LVW †  V JXDUDQWHHV GR QRW DXWKRUL]H WUHVSDVV E\ QRQHPSOR\HH WKHUH LV QR HYLGHQFH WKDW HPSOR\HUV KDG FORVHG WKHLU GRRUV RQ FKDULWDEOH RUJDQL]HUV HYHQ    µXQGHU    UHDVRQDEOH UHJXODWLRQVj HVWDEOLVKHG E\ WKH VROLFLWDWLRQV VHYHUDO RI WKH DPLFL FRQWHQG RQ DSSHDO WKDW WKLV VLWXDWLRQ KDV %RDUGl TXRWLQJ /HFKPHUH   86 DW  ,Q WKH LQVWDQW FDVH RFFXUUHG WKHUH LV QR FODLP WKDW /RFDO  ODFNHG RWKHU UHDVRQDEOH PHDQV E\ ZKLFK  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  7KH XQLRQ ILOHG DQ XQIDLU ODERU SUDFWLFH FKDUJH DJDLQVW $VH[SODLQHGEHORZZHEHOLHYHWKDW6DQGXVN\DQG&5(3 6DQGXVN\DQGWKH%RDUGIRXQGWKDW6DQGXVN\KDGYLRODWHG FRQWURO WKH GLVSRVLWLRQ RI WKLV FDVH  7KRVH FDVHV QDUURZO\ WKH1/5$,G GHILQHGWKHWHUPmGLVFULPLQDWLRQlDVWKH6XSUHPH&RXUWXVHG WKDWWHUPLQ%DEFRFN :LOFR[DQGSUHFOXGHDILQGLQJRID 2Q DSSHDO WKH &RXUW DGGUHVVHG WKH VSHFLILF LVVXH RI GLVFULPLQDWLRQ LQ WKH LQVWDQW FDVH RQ WKH FRPSDQ\jV SDUW ZKHWKHUm6DQGXVN\PD\EHFRPSHOOHGWRSHUPLWQRQXQLRQ $OWKRXJKDVWKH%RDUGQRWHV6DQGXVN\DQG&5(3GHDOWZLWK HPSOR\HHXQLRQPHPEHUVWRWUHVSDVVRQWKHPDOOjVSURSHUW\ ER\FRWWLQJ DFWLYLW\ ZKHQ LQWHUSUHWLQJ WKH WHUP IRU WKH SXUSRVH RI GLVWULEXWLQJ KDQGELOOV XUJLQJ PDOO mGLVFULPLQDWLRQlWKLV&RXUWORRNHGWR%DEFRFN :LOFR[IRU FXVWRPHUV QRW WR SDWURQL]H QRQXQLRQ HPSOR\HUVl  ,G JXLGDQFHZKLFKLWVHOIZDVDFDVHWKDWGHDOWZLWKRUJDQL]LQJ 5HO\LQJ RQ &5(3 WKH &RXUW LQ 6DQGXVN\ DQVZHUHG WKH DFWLYLW\  7KXV WKH %RDUG KDV IDLOHG WR SUHVHQW D UHDVRQHG TXHVWLRQLQWKHDIILUPDWLYH$FFRUG5LHVEHFN)RRG0DUNHWV EDVLVWRGLVWLQJXLVK6DQGXVN\DQG&5(3IURPWKHLQVWDQWFDVH ,QFY1/5%1R:/DW  WK &LU sXO\   KROGLQJ WKDW HPSOR\HU GLG QRW ,, GLVFULPLQDWHDJDLQVWXQLRQZKHQLWDOORZHGFKDULWLHVRQLWV SURSHUW\WRVROLFLWFRQWULEXWLRQVEXWZRXOGQRWDOORZQRQ 7KHSDUWLHVFRQWHVWWKHDSSOLFDEOHVWDQGDUGRIUHYLHZ7KH HPSOR\HHXQLRQUHSUHVHQWDWLYHVWRHQJDJHLQmGRQRWSDWURQL]H %RDUG DUJXHV DW OHQJWK WKDW WKLV &RXUW PXVW GHIHU WR LWV VROLFLWDWLRQl WDUJHWHG DW WKH HPSOR\HU 1/5% Y 3D\ /HVV GHILQLWLRQRIWKHWHUPmGLVFULPLQDWLRQlEHFDXVHLQRUGHUWR 'UXJ 6WRUHV 1RUWKZHVW ,QF 1R   :/ UHDFK WKDW GHILQLWLRQ WKH %RDUG KDG WR FRQVWUXH FHUWDLQ WK&LU0D\KROGLQJWKDWPDOOGLGQRW VWDWXWRU\SURYLVLRQVXQGHUWKH1/5$6HH+ROO\)DUPV&RUS GLVFULPLQDWHDJDLQVWXQLRQZKHQLWDOORZHG*LUO6FRXWVDQG Y1DWjO/DERU5HODWLRQV%G86 EORRGPRELOHRQPDOOSURSHUW\ZKLOHQRWDOORZLQJSLFNHWLQJ KROGLQJWKDWZKHUHVWDWXWHjVPHDQLQJLVREYLRXVFRXUWVDQG QRQHPSOR\HHUHSUHVHQWDWLYHV %RDUG PXVW GHIHU WR &RQJUHVVjV XQDPELJXRXV LQWHQW EXW ZKHUH DPELJXLW\ H[LVWV FRXUWV PXVW GHIHU WR DQ DJHQF\jV 7KHKROGLQJVLQ&5(3DQG6DQGXVN\WKDWDQHPSOR\HUGRHV UHDVRQDEOH LQWHUSUHWDWLRQ RI WKH VWDWXWH FLWLQJ &KHYURQ Y QRWGLVFULPLQDWHDJDLQVWDXQLRQZKHUHWKHHPSOR\HUDOORZV 86$,QFY1DWXUDO5HV'HIHQVH&RXQFLO,QF86 FKDULWLHV WR GLVVHPLQDWH LQIRUPDWLRQ RQ WKH HPSOR\HUjV $FFRUGLQJWRWKH%RDUGWKH 1/5$VWDWHVLQ SURSHUW\ZKLOHLWEDUVXQLRQVIURPGRLQJWKHVDPHZLWKRXW JHQHUDO WHUPV WKDW DQ HPSOR\HU FRPPLWV DQ XQIDLU ODERU PRUH DSSHDUV WR IRUHFORVH WKH %RDUGjV DUJXPHQW WKDW SUDFWLFHE\DPRQJRWKHUWKLQJVUHVWUDLQLQJRULQWHUIHULQJZLWK GLVFULPLQDWLRQRFFXUUHGLQWKLVFDVH,WLVXQFRQWHVWHGWKDW FHUWDLQULJKWVJXDUDQWHHGE\WKH1/5$VXFKDVWKHULJKWRI $OEHUWVRQjVRQO\DOORZHGFHUWDLQFKDULWLHVWRVROLFLWGRQDWLRQV HPSOR\HHVWRVHOIRUJDQL]HRUWRMRLQDXQLRQ6HH86& DURXQG WKH H[WHULRU RI LWV SURSHUW\ H[FHSW LQ LQFOHPHQW ††  D  7KH %RDUG HVVHQWLDOO\ FRQWHQGV WKDW ZHDWKHUZKHQLWDOORZHGWKH*LUO6FRXWVDQG6DOYDWLRQ$UP\ EHFDXVH&RQJUHVVKDVQRWVSRNHQWRWKHSUHFLVHLVVXHRIZKHQ EHOOULQJHUVDFFHVVWRWKHLQVLGHRIVRPHLWVVWRUHV7KHUHLVQR DQHPSOR\HUmGLVFULPLQDWHVlDJDLQVWDXQLRQE\UHIXVLQJWR HYLGHQFHLQWKLVFDVHWKDWGXULQJWKHWLPH$OEHUWVRQjVUHIXVHG DOORZ QRQHPSOR\HH XQLRQ RUJDQL]HUV WR GLVWULEXWH XQLRQ WR DOORZ /RFDO  QRQHPSOR\HH RUJDQL]HUV WR GLVWULEXWH OLWHUDWXUHRQLWVSURSHUW\DOWKRXJKLWDOORZVRWKHUJURXSVWRGR OLWHUDWXUHRQLWVSURSHUW\$OEHUWVRQjVDOORZHGGLVWULEXWLRQE\ VRWKHQWKLV&RXUWPXVWDFFHSWWKHPHDQLQJWKDWWKH%RDUG DQRWKHU XQLRQ RU WKDW $OEHUWVRQjV LWVHOI GLVVHPLQDWHG DWWULEXWHVWRWKHWHUPGLVFULPLQDWLRQ:HGLVDJUHH LQIRUPDWLRQ VLPLODU WR WKDW LW EDQQHG /RFDO  IURP GLVVHPLQDWLQJ&5(3)GDW7KHUHIRUHXQGHUWKH 7KLV&RXUWKDVDGGUHVVHGDQGUHMHFWHGDVLPLODUDUJXPHQW GHILQLWLRQ RI WKH WHUP mGLVFULPLQDWLRQl DV VHW IRUWK E\ WKLV E\WKH%RDUGLQ6DQGXVN\ZKHUHZHUHDIILUPHGWKHVWDQGDUG  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  RIUHYLHZDSSOLFDEOHWR%RDUGGHFLVLRQVDVHDUOLHUVHWIRUWKE\ JHQHUDOO\VKRXOGEHUHVSHFWIXORIWKH%RDUGjVLQWHUSUHWDWLRQRI WKLV&RXUWLQ&5(3:HSRLQWHGRXWLQ6DQGXVN\WKDWmZH WKHWHUPmGLVFULPLQDWLRQlWKLV&RXUWDOVRH[SODLQHGWKDWWKH UHYLHZ WKH %RDUGjV IDFWXDO DSSOLFDWLRQ DQG VWDWXWRU\ %RDUGjV GHFLVLRQ LV RZHG QR GHIHUHQFH ZKHUH LW mUHVWV RQ FRQVWUXFWLRQ XQGHU D VXEVWDQWLDO HYLGHQFH VWDQGDUG D HUURQHRXVOHJDOIRXQGDWLRQVl,G,QWKDWYHLQWKLV&RXUWKHOG GHIHUHQFH WKDW LV ZDUUDQWHG LI WKH %RDUGjV FRQFOXVLRQV DUH WKDWm>Q@RUHOHYDQWODERUSROLFLHVDUHDGYDQFHGE\UHTXLULQJ EDVHGXSRQDUHDVRQDEO\GHIHQVLEOHFRQVWUXFWLRQRIWKH$FWl HPSOR\HUV WR SURKLELW FKDULWDEOH VROLFLWDWLRQV LQ RUGHU WR )GDWTXRWLQJ&5(3)GDW6XEVWDQWLDO SUHVHUYH WKH ULJKW WR H[FOXGH QRQHPSOR\HH GLVWULEXWLRQ RI HYLGHQFHPHDQVmVXFKUHOHYDQWHYLGHQFHDVDUHDVRQDEOHPLQG XQLRQ OLWHUDWXUH ZKHQ DFFHVV WR WKH WDUJHW DXGLHQFH LV PLJKWDFFHSWDVDGHTXDWHWRVXSSRUWDFRQFOXVLRQl'XSRQW RWKHUZLVHDYDLODEOHl,G7KH&RXUWQRWHGWKDWWKHSXUSRVHRI 'RZ(ODVWRPHUV//&Y1/5%)G1RV 6HFWLRQDRIWKH1/5$LVWRSUHYHQWHPSOR\HUVIURP :/DW WK&LUsXO\ LQWHUIHULQJ ZLWK HPSOR\HHVj 6HFWLRQ  ULJKWV ,G  %HDULQJ VXFKFRQVLGHUDWLRQVLQPLQGWKH&RXUWUHDVRQHGWKDW +RZHYHUWKLV&RXUWJLYHVQRGHIHUHQFHWRWKH%RDUGZKHUH WKH%RDUGjVGHFLVLRQmUHVW>V@RQHUURQHRXVOHJDOIRXQGDWLRQVl $QRZQHURIDSULYDWHFRPPHUFLDOSURSHUW\ZKRSHUPLWV /HFKPHUH,QFY1/5%86KROGLQJ D FKDULWDEOH RUJDQL]DWLRQ WR GLVWULEXWH LQIRUPDWLRQ RU WKDW%RDUGHUUHGLQILQGLQJWKDWHPSOR\HUVKRXOGKDYHDOORZHG FRQGXFW VROLFLWDWLRQV RQ LWV SURSHUW\ VLPSO\ GRHV QRW XQLRQRQLWVSUHPLVHVEHFDXVHLWKDGQRRWKHUZD\WRUHDFKLWV LPSOLFDWHWKHSROLFLHVRIWKH1/5$DQGGRHVQRWZLWKRXW WDUJHW DXGLHQFH LQDVPXFK DV LQ UHDFKLQJ LWV GHFLVLRQ WKH PRUH UHQGHU DQ HPSOR\HU JXLOW\ RI DQ XQIDLU ODERU %RDUGPLVFRQVWUXHGSULRU6XSUHPH&RXUWSUHFHGHQW)XUWKHU SUDFWLFHZKHQODWHULWFKRRVHVWRIROORZWKHJHQHUDOUXOH ZKHUH WKH %RDUGjV FRQFOXVLRQV RI ODZ GR QRW LQWHUSUHW WKH RImYDOLGO\SRVW>LQJ LWV@SURSHUW\DJDLQVWQRQHPSOR\HH 1/5$ZHUHYLHZWKRVHFRQFOXVLRQVGHQRYR0HLMHU,QFY GLVWULEXWLRQRIXQLRQOLWHUDWXUHl 1/5%)GWK&LU,QWKDWYHLQZHUHYLHZ GH QRYR WKH %RDUGjV LQWHUSUHWDWLRQ RI 6XSUHPH &RXUW DQG ,GFLWLQJ%DEFRFN86DW 6L[WK &LUFXLW GHFLVLRQV DQG JLYH WKH %RDUG QR GHIHUHQFH mZLWK UHVSHFW WR WKH LQWHUSUHWDWLRQ RI MXGLFLDO SUHFHGHQWl 6XFK FRQVLGHUDWLRQV OHG WKLV &RXUW WR KROG WKDW WKH WHUP 6DQGXVN\  )G DW  VHH DOVR 1/5% Y :HEFRU GLVFULPLQDWLRQ DV XVHG LQ %DEFRFN  :LOFR[ PHDQV 3DFNDJLQJ ,QF  )G   Q WK &LU  mIDYRULQJ RQH XQLRQ RYHU DQRWKHU RU DOORZLQJ HPSOR\HU GHIHUULQJWRWKH%RDUGjVGHILQLWLRQRImODERURUJDQL]DWLRQl UHODWHG LQIRUPDWLRQ ZKLOH EDUULQJ VLPLODU XQLRQUHODWHG EXWQRWLQJGLIIHUHQFHLQGHIHUHQFHJLYHQWR%RDUGjVUHDVRQDEOH LQIRUPDWLRQl,G LQWHUSUHWDWLRQRIWKH1/5$DVRSSRVHGWRLWVLQWHUSUHWDWLRQRI 6XSUHPH&RXUWSUHFHGHQWFRQVWUXLQJWKH$FW ,Q6DQGXVN\WKLV&RXUWDJDLQDGGUHVVHGWKHGLVFULPLQDWLRQ H[FHSWLRQ LQ %DEFRFN  :LOFR[  7KH XQLRQ LQ 6DQGXVN\ ,Q WKH LQVWDQW FDVH WKH %RDUGjV GHFLVLRQ WXUQHG RQ LWV EHJDQDSLFNHWLQJFDPSDLJQDIWHUDVWRUHLQDPDOOKLUHGDQRQ ILQGLQJWKDW$OEHUWVRQjVGLVFULPLQDWHGDJDLQVW/RFDODQG XQLRQ FRQVWUXFWLRQ FRQWUDFWRU DQG WKUHDWHQHG WR KDQGELOO /RFDOE\UHIXVLQJWRDOORZWKHVHWZRXQLRQVWRGLVWULEXWH DQRWKHUPDOOWHQDQWIRUWKHVDPHUHDVRQ)GDW WKHLU OLWHUDWXUH RU RWKHUZLVH VROLFLW RQ WKH SUHPLVHV RI WKH 6DQGXVN\ZKLFKRZQHGDQGRSHUDWHGWKHPDOOQRWLILHGWKH FRPSDQ\jVVWRUHVZKLOHDOORZLQJFHUWDLQFKDULWLHVWRGRVR XQLRQWKDWKDQGELOOHUVZRXOGEHFRQVLGHUHGWUHVSDVVHUVDQG 7KHLVVXHRIZKHWKHUDQHPSOR\HUmGLVFULPLQDWHVlDJDLQVWD WKDW WKH\ ZRXOG EH DVNHG WR OHDYH  ,G  7KH KDQGELOOHUV XQLRQXQGHUVXFKFLUFXPVWDQFHVLVQRWRQHRIILUVWLPSUHVVLRQ GLVWULEXWHG KDQGELOOV LQ WKH PDOO RQ VHYHUDO RFFDVLRQV DQG LQ WKLV FLUFXLW DV ZH DGGUHVVHG WKLV LVVXH LQ 6DQGXVN\ DQG ZHUH DVNHG WR OHDYH HDFK WLPH  )LQDOO\ WKH PDOO PDQDJHU FDOOHGWKHSROLFHDQGKDGWKHKDQGELOOHUVDUUHVWHG,GDW  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  UHWDLOHU LQ WKH PDOO ZKLOH SHUPLWWLQJ QRQODERU UHODWHG &5(3)XUWKHULQUHDFKLQJLWVGHFLVLRQEHORZWKH%RDUG KDQGELOOLQJ DQG VROLFLWDWLRQV E\ RWKHUV LQ WKH PDOO ZLWKRXW ZDVLQWHUSUHWLQJmGLVFULPLQDWLRQlDVWKDWWHUPZDVXVHGLQWKH YLRODWLQJVHFWLRQDRIWKH1/5$l,GDW7KH 6XSUHPH&RXUWFDVH%DEFRFN :LOFR[&RQVHTXHQWO\RXU &RXUW DQVZHUHG WKH TXHVWLRQ LQ WKH DIILUPDWLYH  ,G  7KH VWDQGDUG RI UHYLHZ RI WKH %RDUGjV LQWHUSUHWDWLRQ RI WKDW &RXUW KHOG WKDW WKH RZQHU RI SULYDWH FRPPHUFLDO SUHPLVHV 6XSUHPH&RXUWDXWKRULW\LVGHQRYR6DQGXVN\)GDW PD\ IRUELG KDQGELOOLQJ E\ mQRQHPSOR\HH XQLRQ RUJDQL]HUV  HQJDJHGLQQRQRUJDQL]DWLRQDOLQIRUPDWLRQDODFWLYLW\GLUHFWHG DWWKHJHQHUDOSXEOLFl,GDW5HO\LQJRQ/HFKPHUH ,,, WKH&RXUWKHOGWKDWWKHRQO\H[FHSWLRQWRWKLVUXOHLVZKHUHWKH XQLRQ VKRZV WKDW mLW LV HQWLWOHG WR WUHVSDVV RQ WKH RZQHUjV 6HFWLRQDRIWKH1/5$SURYLGHVWKDWm>L@WVKDOOEHDQ SULYDWH SURSHUW\ EHFDXVH WKH LQDFFHVVLELOLW\ WR WKH JHQHUDO XQIDLU ODERU SUDFWLFH IRU DQ HPSOR\HUWR LQWHUIHUH ZLWK SXEOLFWRZKLFKWKHKDQGELOOLQJLVGLUHFWHGPDNHVLQHIIHFWLYH UHVWUDLQ RU FRHUFH HPSOR\HHV LQ WKH H[HUFLVH RI WKH ULJKWV WKHUHDVRQDEOHDWWHPSWVE\QRQHPSOR\HHVWRFRPPXQLFDWH JXDUDQWHHG LQ VHFWLRQ > RI WKH 1/5$@l   86& ZLWK >WKH SXEOLF@ WKURXJK WKH XVXDO FKDQQHOVl  ,G FLWLQJ †D6HFWLRQRIWKH1/5$SURYLGHVLQSHUWLQHQWSDUW /HFKPHUH86DW WKDWm>H@PSOR\HHVVKDOOKDYHWKHULJKWWRVHOIRUJDQL]DWLRQWR IRUP MRLQ RU DVVLVW ODERU RUJDQL]DWLRQV WR EDUJDLQ ,Q&5(3WKH%RDUGDUJXHGWKDW/HFKPHUHZDVQRWUHOHYDQW FROOHFWLYHO\WKURXJKUHSUHVHQWDWLYHVRIWKHLURZQFKRRVLQJ LQDVPXFKDV/HFKPHUHIDLOHGWRDQDO\]H%DEFRFN :LOFR[jV DQGWRHQJDJHLQRWKHUFRQFHUWHGDFWLYLWLHVIRUWKHSXUSRVHRI GLVFULPLQDWLRQ H[FHSWLRQ EHFDXVH &5(3 mGLVFULPLQDWHG FROOHFWLYHEDUJDLQLQJRURWKHUPXWXDODLGRUSURWHFWLRQl DJDLQVW WKH XQLRQ E\ SHUPLWWLQJ RWKHU VROLFLWDWLRQ E\  86& †   $Q HPSOR\HU PD\ WKHUHIRUH YLRODWH WKH FKDULWLHVl,GDW7KLV&RXUWGLVDJUHHGWKDW/HFKPHUH 1/5$DQGFRPPLWDQXQIDLUODERUSUDFWLFHZKHUHLWUHVWUDLQV GLGQRWDSSO\EXWPRUHLPSRUWDQWO\IRUSXUSRVHVRIWKHLQVWDQW RULQWHUIHUHVZLWKWKHULJKWRIHPSOR\HHVWRRUJDQL]HSXUVXDQW FDVHLWKHOGWKDWXQGHU%DEFRFN :LOFR[DQGLWVSURJHQ\ WR6HFWLRQ/HFKPHUH86DW VXFKDV/HFKPHUHmZKLFKZHLJKKHDYLO\LQIDYRURISULYDWH SURSHUW\ULJKWVlWKHZRUGmGLVFULPLQDWLRQlGRHVQRWFDUU\WKH m%\LWVSODLQWHUPVWKXVWKH1/5$FRQIHUVULJKWVRQO\RQ ZHLJKW WKH %RDUG DVFULEHV WR LW  ,G DW   7KH &RXUW HPSOR\HHVQRWRQXQLRQVRUWKHLUQRQHPSOR\HHRUJDQL]HUVl H[SODLQHGWKDWm>W@RGLVFULPLQDWHLQWKHHQIRUFHPHQWRI>DQ ,GDWm1RUHVWULFWLRQPD\EHSODFHGRQWKHHPSOR\HHVj HPSOR\HUjV@ QRVROLFLWDWLRQ SROLF\ FDQQRW PHDQ WKDW DQ ULJKWWRGLVFXVVVHOIRUJDQL]DWLRQDPRQJWKHPVHOYHVXQOHVV HPSOR\HUFRPPLWVDQXQIDLUODERUSUDFWLFHLILWDOORZVWKH*LUO WKHHPSOR\HUFDQGHPRQVWUDWHWKDWDUHVWULFWLRQLVQHFHVVDU\WR 6FRXWVWRVHOOFRRNLHVEXWLVVKLHOGHGIURPWKHHIIHFWRIWKH PDLQWDLQSURGXFWLRQRUGLVFLSOLQHEXWQRVXFKREOLJDWLRQLV $FW LI LW SURKLELWV WKHP IURP GRLQJ VRl  ,G  7KH &RXUW RZHGWRQRQHPSOR\HHRUJDQL]HUVl,GDWHPSKDVLVLQ UHFRJQL]HG WKDW VLQFH %DEFRFN  :LOFR[ ZDV GHFLGHG WKH WKHRULJLQDOTXRWLQJ1/5%Y6WRZH6SLQQLQJ&R86 6XSUHPH&RXUWKDGQHYHUmFODULILHGlWKHWHUPGLVFULPLQDWH 6HFWLRQ VRUJDQL]DWLRQULJKWVWKHUHIRUH ,G)XUWKHUZKLOHWKLV&RXUWLQ&5(3DFNQRZOHGJHGWKDWZH DSSO\RQO\mGHULYDWLYHO\lWRQRQHPSOR\HHXQLRQRUJDQL]HUV ,G DW  VHH DOVR 6HDUV 5RHEXFN  &R Y 6DQ 'LHJR &RXQW\'LVW&RXQFLORI&DUSHQWHUV86Q   H[SODLQLQJ WKDW mµQR    REOLJDWLRQ LV RZHG 7KH &RXUW LQ /HFKPHUH IRFXVHG RQO\ RQ WKH ILUVW H[FHSWLRQ WR WKH QRQHPSOR\HHRUJDQL]HUVjDQ\ULJKWWKH\PD\KDYHWRVROLFLW mJHQHUDO UXOHl WKDW DQ HPSOR\HU mFDQ EDU QRQHPSOR\HH XQLRQ RUJDQL]HUV IURP KLV SURSHUW\l EHFDXVH LQ WKDW FDVH LW ZDV XQGLVSXWHG WKDW WKH RQDQHPSOR\HU VSURSHUW\LVDGHULYDWLYHRIWKHULJKWRIWKDW HPSOR\HU KDG QRW SHUPLWWHG DQ\ RWKHU JURXS WR GLVWULEXWH OLWHUDWXUH RQ LWV SURSHUW\ /HFKPHUH   86 DW  Q  $OEHUWVRQjV,QFY1/5% 1RV 1RV $OEHUWVRQjV,QFY1/5%  HPSOR\HU V HPSOR\HHV WR H[HUFLVH WKHLU RUJDQL]DWLRQ ULJKWV $ &5(3 DQG 6DQGXVN\ DQG WKH GHILQLWLRQ RI HIIHFWLYHO\l GLVFULPLQDWLRQ 7KHJHQHUDOUXOHLVWKDWmDQHPSOR\HUFDQQRWEHFRPSHOOHG 7KLV&RXUWKDVGLVFXVVHGWKH%DEFRFN :LOFR[KROGLQJ WR DOORZ GLVWULEXWLRQ RI XQLRQ OLWHUDWXUH E\ QRQHPSOR\HH UHJDUGLQJGLVFULPLQDWLRQLQ6DQGXVN\DQG&5(3,Q&5(3 RUJDQL]HUV RQ KLV SURSHUW\l /HFKPHUH  86 DW   )G  WKH XQLRQ EHJDQ D KDQGELOO FDPSDLJQ DJDLQVW +RZHYHUWKH6XSUHPH&RXUWKDVUHFRJQL]HGWKDWmWKHULJKWRI 0DUFjVDUHWDLOVWRUHDQGRQHRIWKHWHQDQWVLQDVWULSPDOO VHOIRUJDQL]DWLRQGHSHQGVLQVRPHPHDVXUHRQ>DQHPSOR\HUjV PDQDJHGE\&5(3,GDW7KHKDQGELOOVFRQYH\HGWKDW HPSOR\HHVj@ DELOLW\     WR OHDUQ WKH DGYDQWDJHV RI VHOI 0DUFjVKDGYLRODWHGFKLOGODERUODZVDQGWKDWZRUPVZHUH RUJDQL]DWLRQIURPRWKHUVl,GDW7KHUHIRUH6HFWLRQ IRXQGLQER[HVRIUDLVLQVWKHVWRUHVROG,G7KHSXUSRVHRI  PLJKW mLQ FHUWDLQ OLPLWHG FLUFXPVWDQFHV UHVWULFW DQ WKHKDQGELOOVZDVWRLQIRUPWKHSXEOLFWKDW0DUFjVZDVDQRQ HPSOR\HUjVULJKWWRH[FOXGHQRQHPSOR\HHXQLRQRUJDQL]HUV XQLRQVWRUHDQGWRDVNWKHSXEOLFQRWWRVKRSWKHUH,GDW IURP KLV SURSHUW\l  ,G DW   /HFKPHUH UHDIILUPHG WKH $IWHU0DUFjVFRPSODLQHGWRWKHSURSHUW\PDQDJHUVWHSVZHUH 6XSUHPH&RXUWjVHDUOLHUKROGLQJWKDWDQHPSOR\HUPD\mSRVW WDNHQWRKDYHWKHKDQGELOOHUVFHDVHWKHLUER\FRWWLQJDFWLYLWLHV KLV SURSHUW\ DJDLQVW QRQHPSOR\HH GLVWULEXWLRQ RI XQLRQ (YHQWXDOO\WKHSURSHUW\PDQDJHUFDOOHGWKHSROLFHRQHGD\ OLWHUDWXUHLI>@UHDVRQDEOHHIIRUWVE\WKHXQLRQWKURXJKRWKHU ZKHQWKHKDQGELOOHUVKDGUHIXVHGWROHDYHEHFDXVHWKH\ZHUH DYDLODEOHFKDQQHOVRIFRPPXQLFDWLRQZLOOHQDEOHLWWRUHDFK LQYLRODWLRQRIWKHFLW\RUGLQDQFHDJDLQVWORLWHULQJ,GDW WKH HPSOR\HHV ZLWK LWV PHVVDJH DQG >@ LI WKH HPSOR\HUjV QRWLFH RU RUGHU GRHV QRW GLVFULPLQDWH DJDLQVW WKH XQLRQ E\ 7KH XQLRQ ILOHG DQ XQIDLU ODERU SUDFWLFHV FKDUJH DJDLQVW DOORZLQJRWKHUGLVWULEXWLRQ>WKHµGLVFULPLQDWLRQH[FHSWLRQj@l &5(3DQGDQ$/sIRXQGWKDWLQWKHSDVWWKH6DOYDWLRQ$UP\ %DEFRFN :LOFR[86DW3DUWLFXODUO\DVWRWKH KDGEHHQDOORZHGWRGLVWULEXWHOHDIOHWVRQZLQGVKLHOGVRIFDUV GLVFULPLQDWLRQH[FHSWLRQmWKHDOOHJHGGLVFULPLQDWRU\FRQGXFW SDUNHG DW WKH PDOO  7KH $/s IXUWKHU IRXQG WKDW SROLWLFDO LQ DOORZLQJ VROLFLWDWLRQ >RU@ KDQGELOOLQJ UHTXLUH>V@ WKDW WKH FDQGLGDWHVKDGEHHQDOORZHGWRVROLFLWVLJQDWXUHVDQGWKH*LUO GLVFULPLQDWLRQEHDPRQJFRPSDUDEOHJURXSVRUDFWLYLWLHVDQG 6FRXWV KDG VROG FRRNLHV  2WKHU JURXSV DOORZHG WR VROLFLW WKDW WKH DFWLYLWLHV WKHPVHOYHV XQGHU FRQVLGHUDWLRQ PXVW EH ZLWKRXW EHLQJ DVNHG WR OHDYH LQFOXGHG WKH .QLJKWV RI FRPSDUDEOHl6DQGXVN\)GDWFLWDWLRQVLQWHUQDO &ROXPEXV WKH %R\ 6FRXWV YHWHUDQV DQG VFKRRO FKLOGUHQ TXRWDWLRQPDUNVDQGDOWHUDWLRQVRPLWWHG VHOOLQJFDQG\IRUYDULRXVVFKRROSURMHFWV,G7KH$/sIRXQG WKDWWKHXQLRQRUJDQL]HUVZHUHHQJDJHGLQDSURWHFWHGDFWLYLW\ XQGHUWKH1/5$DQGIRXQGLWLUUHOHYDQWWKDWWKHKDQGELOOHUV  ZHUH QRW HPSOR\HG E\ 0DUFjV LQDVPXFK DV WKH\ ZHUH 7KH %RDUG KDV KHOG WKDW WKH GLVFULPLQDWLRQ H[FHSWLRQ JHQHUDOO\ LV HPSOR\HHVRIRWKHUXQLRQL]HGVWRUHVDWWKHPDOO,G VXEMHFW WR WZR H[FHSWLRQV RI LWV RZQ $Q HPSOR\HU GRHV QRW GLVFULPLQDWH  LI WKH HPSOR\HU DOORZV D IHZ LVRODWHG LQVWDQFHV RI FKDULWDEOH VROLFLWDWLRQ mEHQHILFHQW DFWV H[FHSWLRQl RU  LI WKH VROLFLWDWLRQV 7KLV &RXUW IUDPHG WKH LVVXH DV IROORZV m>:@KHWKHU WKH DSSURYHG E\ WKH HPSOR\HU UHODWH WR WKH HPSOR\HUjV EXVLQHVV IXQFWLRQV DQG RZQHU RI D SULYDWH UHWDLO VKRSSLQJ PDOO PD\ IRUELG XQLRQ SXUSRVHV 6HH/XFLOH 6DOWHU 3DFNDUG &KLOGUHQjV +RVS DW 6WDQIRUG Y UHSUHVHQWDWLYHV IURP GLVWULEXWLQJ KDQGELOOV GLUHFWHG DW 1/5%  )G   '& &LU  FLWDWLRQ RPLWWHG ,Q WKH VKRSSHUVWRGLVFRXUDJHWKHPIURPSDWURQL]LQJDQRQXQLRQ LQVWDQW FDVH WKH %RDUG KHOG WKDW WKH IUHTXHQF\ ZLWK ZKLFK $OEHUWVRQjV DOORZHG FKDULWLHV WR VROLFLW GRQDWLRQV RQ LWV VWRUHVj SUHPLVHV H[FHHGHG WKDW SHUPLWWHG XQGHU WKH EHQHILFHQWDFWV H[FHSWLRQ $OEHUWVRQjV GRHV QRW FRQWHVW WKLV ILQGLQJ RQ DSSHDO +RZHYHU $OEHUWVRQjV GRHV FRQWHQG WKDW DV D UHVXOW RI WKHLU JHQHURVLW\ WR FKDULWLHV $V IRU WKH VHFRQG H[FHSWLRQ WKH %RDUG RIIHUV QR UHDVRQDEOH MXVWLILFDWLRQ IRU LWV EHQHILFHQWDFWV $OEHUWVRQjV GRHV QRW FRQWHQG WKDW WKH FKDULWDEOH VROLFLWDWLRQV LW DOORZHG RQ H[FHSWLRQ DQG DV WR ZK\ HPSOR\HUVj SURSHUW\ ULJKWV VKRXOG EH GLPLQLVKHG LWV SUHPLVHV UHODWH WR LWV EXVLQHVV DV D UHWDLO JURFHU