Equinox Holdings, Inc. v. Nat'l Labor Relations Bd. , 883 F.3d 935 ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 5, 2018 Decided March 6, 2018
No. 16-1427
EQUINOX HOLDINGS, INC.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 87,
INTERVENOR
Consolidated with 17-1013
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Kenneth F. Sparks argued the cause for petitioner. With
him on the briefs was Mark L. Stolzenburg.
David Casserly, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
Richard F. Griffin, Jr., General Counsel, John H. Ferguson,
2
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, and Elizabeth A. Heaney, Supervisory
Attorney.
Hunter Pyle argued the cause and filed the brief for
intervenor.
Before: WILKINS, Circuit Judge, and EDWARDS and
SILBERMAN, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
SILBERMAN.
SILBERMAN, Senior Circuit Judge: Petitioner seeks review
of a National Labor Relations Board determination that it
violated Sections 8(a)(5) and (1) of the National Labor Relations
Act by refusing to bargain with Service Employees International
Union Local 87. Its defense is that the Board unreasonably
discounted two threats that tainted the election, which the union
won. The company claims union adherents told employees they
risked deportation if they voted against the union and the union
used an observer at one voting location who had recently been
discharged for possession of a gun. We conclude, given our
limited scope of review of Board representation determinations,
that we cannot challenge the Board’s resolution of either issue.
I.
The union filed an election petition in May 2015 covering
employees working at three gyms in San Francisco. The
election was held, by consent, shortly thereafter. The union won
41 to 33. Equinox objected, which led to a hearing conducted,
under the auspices of the Regional Director, by a Hearing
Officer.
3
Although the company produced testimony that one of the
employees had threatened to call ICE if the union lost, the
Hearing Officer declined to credit the testimony. Indeed, there
was no credited evidence presented that anyone representing the
union had made an ICE-related threat. The Hearing Officer
concluded that, at most, there were rumors amongst the
employees concerning the possibility of ICE’s involvement.
The employer’s second objection is based on a gun incident.
Four days prior to the election, a Regional Maintenance
Manager in the Market Street gym was informed by an
employee that one Jared Quarles had brought a gun to work. He
checked Quarles’ bag, and upon finding what he believed to be
a gun, reported to the manager. Equinox’s Regional Vice
President for the West Coast, Jack Gannon, was present at the
facility. On advice from Equinox’s general counsel, Gannon
verified the presence of the gun and then called 9-1-1 to alert the
authorities.
When the police arrived, they restrained Quarles with
handcuffs and led him through the facility, passing other
employees who worked there. Quarles responded by yelling
profanities about Equinox. Upon closer inspection, the police
realized that the weapon they discovered was a replica airsoft
gun that merely resembled a firearm; the orange-colored tip
required by federal and California law had been removed.1 They
1
See 15 U.S.C. § 5001(b)(1); CAL. PENAL CODE § 16700
(b)(4)(A) (West 2017); id. § 20165 (West 2012). An “airsoft” gun is
a toy weapon that uses air to propel plastic pellets at a nonlethal
velocity. These weapons can nevertheless inflict pain and injury, and
often closely resemble bona fide firearms – as, we note, did the gun
possessed by Quarles.
4
then released Quarles from handcuffs and escorted him out of
the building. Several employees who had not witnessed this
incident later testified that they had heard about it from their
peers. Quarles was subsequently terminated.
Three days after the arrest, and the day before the election,
the union hired Quarles. He was paid to work in a phone bank,
making calls on behalf of the union in the final days of the
campaign. The union also chose him to serve as its election
observer at the Pine Street gym. Each voter was required to
self-identify to him before receiving a ballot.
Beyond these agreed-upon facts, the parties dispute the
details of the gun incident. In its initial objections, Equinox
claimed that Quarles had shown the firearm to other employees,
threatening that he carried it for anyone who “f---ed with him.”
A manager at the Market Street gym testified that an employee
had complained to him that Quarles “carries [the gun]
sometimes in his pants. He’s always waving it around.” The
manager testified that the same employee later mentioned a
different occasion in which Quarles brandished the gun in the
lunch room, declaring that he carried it “in case any f---ers want
to get crazy.”
When this employee was asked to give a written statement,
however, he refused. Gannon testified that the employee did so
“out of fear and actually threatened to quit his job.” And the
employee’s manager testified that the employee explained, when
declining to cooperate, that “I have kids. These people know
where I live. . . . I don’t want to . . . deal with the Union at all.”
Although Equinox subpoenaed the employee to testify before
the Hearing Officer, the employee refused to enter the room –
even once it had been cleared. The Hearing Officer, however,
declined to enforce the subpoena and force the witness to testify.
5
Thus, there exists no direct testimony or evidence establishing
that the alleged brandishing and threats took place.
The Hearing Officer found that the evidence of the gun
incident was insufficient to warrant overturning the election. He
stated that the manager’s testimony about the employee’s
account of the lunch-room encounter constituted
“uncorroborated hearsay,” which he found especially troubling
because two other witnesses to the alleged brandishing were not
even called by Equinox to testify.2 He emphasized the lack of
any evidence establishing Quarles as an agent of the union at the
time of the incident or tying his possession of the gun to the
union’s organizing campaign. Given this lack of a connection,
the Hearing Officer found that “the harm caused by the delay in
seeking enforcement [of the subpoena] would override the
benefit, if any, of seeking to compel the witness to testify.”
The Regional Director affirmed the recommendations of the
Hearing Officer in full. He found that the Hearing Officer had
reasonably discredited certain testimony with respect to the
immigration-related objection, and that as a result there was not
sufficient evidence to support the allegations made by Equinox.
The Regional Director also agreed with the Hearing Officer that
because the gun incident “cannot reasonably be linked to the
election” on the evidence proffered, the decision not to delay the
2
We note parenthetically that while the unnamed employee’s
account of Quarles’ actions was offered to prove the truth of the
matter asserted and thus constitutes hearsay, other parts of his account
consisted of facts that Gannon and the Regional Maintenance Manager
observed directly. These include, for example, the employee’s stated
fear of the union and his report to his superiors that he felt
“intimidated” by Quarles.
6
proceedings in order to enforce the subpoena was harmless at
worst. Therefore, he determined that the union did not
compromise the election by using Quarles as its observer under
the circumstances. The Regional Director certified the union’s
victory.
The Board denied Equinox’s request for review of the
Regional Director’s determinations. While one dissenting
Member believed that the use of Quarles as an observer so soon
after his workplace arrest and the alleged brandishing incident
was sufficiently egregious to set aside the election, the majority
disagreed. It found the Hearing Officer’s adverse inference
against Equinox for failing to call any other witnesses to be
reasonable, and emphasized that “there is no evidence linking
[Quarles’] possession of the airsoft gun to the Union or the
organizing campaign.” Equinox Holdings, Inc., 364 N.L.R.B.
No. 103 (2016). The union subsequently demanded bargaining;
Equinox declined in order to test the certification. As noted, the
Board held that this refusal violated Sections 8(a)(5) and (1) of
the National Labor Relations Act,3 and ordered Equinox to
bargain with the union. This petition followed.
II.
The company reiterates the three objections that it raised to
the Hearing Officer, the Regional Director, and the Board. We
think the Petitioner’s claim regarding the prospect of ICE’s
involvement is rather weak. Although the Board has been
3
29 U.S.C. §§ 158(a)(1), (5).
7
sensitive to threats of deportation in an election campaign,4 there
was really no evidence presented to the Hearing Officer that the
union was responsible for any threats that could potentially
coerce employees to vote for the union. Although even a third
party’s threats could taint an election, see Pac. Micronesia Corp.
v. NLRB, 219 F.3d 661, 665-66 (D.C. Cir. 2000), the Hearing
Officer’s determination of the lack of credibility of the
employer’s witness, who claimed union adherents raised the
prospect of reporting to ICE if the union lost, is really not
subject to challenge.
However, the union’s use of Quarles as an observer at one
location is more troublesome. Indeed, it caused one member of
the Board to dissent. The Board argued before us that Quarles’
behavior, which led to his discharge, was, as a matter of Board
law, irrelevant to his status as an observer. See Resp’t’s Br. 20-
21. We think that position is untenable. If Quarles had
explicitly stated, “I will use the gun on anyone who opposes the
union,” and then was hired by the union as an observer, we can’t
imagine that the Board would regard that as irrelevant.
But whether or not Quarles brandished the gun – which the
parties dispute – and regardless of exactly what he said, no one
asserts that he connected his possession of the gun with the
election or the union campaign. In the absence of such
evidence, the Board’s determination that the union’s use of
Quarles as an observer was not objectionable is within the scope
of its discretion. As we have often said, our review of Board
representation proceedings (called “R” cases by the cognoscenti)
4
See, e.g., Q.B. Rebuilders, 312 N.L.R.B. 1141 (1993); Local 300,
Cosmetic & Novelties Workers’ Union, 257 N.L.R.B. 1335 (1981);
Westside Hosp., 218 N.L.R.B. 96 (1975).
8
is extremely deferential. See Amalgamated Clothing & Textile
Workers v. NLRB, 736 F.2d 1559, 1564 (D.C. Cir. 1984). And
because no connection exists between Quarles’ conduct and the
election, we (like the Board) need not reach the question
whether to analyze that conduct under the agent or third-party
standard.5
That leads us to Petitioner’s third argument that the Hearing
Officer unreasonably refused to enforce the company’s
subpoena of an employee witness who could testify as to exactly
what Quarles had said. Equinox contends that this decision
violated the arbitrary and capricious standard, and prevented it
from proving its case. The Hearing Officer expressed some
doubt as to whether the Regional Director could enforce the
subpoena, but as the Board’s counsel acknowledges before us,
its guidance to hearing officers allows for enforcement. Resp’t’s
Br. 35 n.15. Still, the flaw in Petitioner’s argument that the
5
When considering whether the results of an election should be
overturned because of misconduct, the legal standard applied to the
conduct of a third party is more stringent than that applied to the
conduct of an agent of a union. If it is alleged that a union agent has
committed misconduct, the Board will overturn the election if it
determines that that conduct has “the tendency to interfere with
employees’ freedom of choice.” Cambridge Tool & Mfg. Co., Inc.,
316 N.L.R.B. 716, 716 (1995). However, when the alleged misconduct
is committed by a third party who is not an agent of the union, the
Board’s test is “whether the misconduct was so aggravated as to create
a general atmosphere of fear and reprisal rendering a free election
impossible.” Westwood Horizons Hotel, 270 N.L.R.B. 802, 803 (1984).
Here, we have no need to decide whether the union’s decision to hire
Quarles so soon after his misconduct confers a sort of “backdated”
agency upon him during the gun incident – thus requiring the agency
standard.
9
Hearing Officer unreasonably declined to delay the proceeding
while a subpoena enforcement proceeding ensued is that the
employer never asserted that the employee, if called, would
testify that Quarles had linked the gun to the union campaign or
the election. In other words, the company never made a proffer
of testimony that might have been crucial.6
***
We note that the Board has sought what it has described as
laboratory conditions for representation elections, but pursues
that ideal in a difficult world. Amalgamated Clothing & Textile
Workers, 736 F.2d at 1562. Given the lack of any evidence
connecting the gun incident to the election or to the union itself,
we hold that the Board did not abuse its substantial discretion in
certifying the election results. And since none of Equinox’s
additional objections is substantial enough to trigger our
“extremely limited” scope of review, id. at 1564, we deny
Equinox’s Petition and grant the Board’s Cross-Application for
Enforcement.
So ordered.
6
We do think it rather unfair for the Hearing Officer and
Regional Director, after declining to enforce the subpoena, to draw an
adverse inference against the employer because it didn’t produce any
testimony concerning Quarles’ statements. While it is true that two
other witnesses existed, it is also true that it is notoriously difficult to
persuade employees to testify against a union in settings like these.
We think a simple finding of insufficient evidence would have been
more appropriate than an adverse inference.