Windsor Redding Care Center, LLC v. NLRB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 15, 2019 Decided December 10, 2019
No. 18-1299
WINDSOR REDDING CARE CENTER, LLC,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
SERVICE EMPLOYEES INTERNATIONAL UNION LOCAL 2015, AS
SUCCESSOR TO SEIU UNITED HEALTHCARE WORKERS-WEST,
CTW, CLC,
INTERVENOR
Consolidated with 19-1010
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
John J. Manier argued the cause for petitioner. With him
on the briefs was John B. Golper.
Michael R. Hickson, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
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were Peter B. Robb, General Counsel, David Habenstreit,
Acting Deputy Associate General Counsel, and Elizabeth
Heaney, Supervisory Attorney.
David A. Rosenfeld was on the brief for intervenor Service
Employees International Union Local 2015 in support of
respondent.
Before: HENDERSON and ROGERS, Circuit Judges, and
EDWARDS, Senior Circuit Judge.
Opinion for the Court by Circuit Judge Rogers.
ROGERS, Circuit Judge: The National Labor Relations
Board found that Windsor Redding Care Center (“the
Company”) violated Sections 8(a)(1) and 8(a)(3) of the
National Labor Relations Act by suspending and discharging
one of its employees, Angelia Rowland. The Company
petitions for review of that finding, and the Board has applied
for enforcement of its Order, which includes matters not
contested by the Company. The issue before the court is
whether the Board’s finding that the Company suspended and
discharged Rowland because she engaged in protected activity
is unsupported by substantial evidence on the record, which
includes contrary findings of the administrative law judge
(“ALJ”) and the evidence relied on by the dissenting Member
of the Board. Although the Board is not obliged to agree with
either the judge or its dissenting Member, the Board is
obligated to confront evidence detracting from its conclusions,
particularly where the dissenting Member has offered a non-
frivolous analysis. For the following reasons, we grant the
Company’s petition and deny the Board’s application for
enforcement of its Order as it relates to Rowland.
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I.
In view of our conclusion that the Board’s decision
relating to the Company’s suspension and discharge of Angelia
Rowland was unsupported by substantial evidence, we set forth
the record evidence in some detail. First, certain evidence is
undisputed. The Company is a skilled nursing home in
Redding, California. Its nurse employees, among others, are
unionized and represented by the Service Employees
International Union United Service Workers-West (“the
Union”). Rowland was a nurse employed by the Company for
approximately eleven and a half years, and was well-regarded.
She was also visibly involved in the Union’s activities,
campaigning for the Union before the election, demonstrating
pro-Union signs in her car in the Company parking lot, and
participating in collective bargaining as a member of the
Union’s bargaining committee.
Further, on May 24, 2012, Rowland accompanied
“Resident B,” a patient of the Company, to an off-site doctor’s
appointment. Rowland and Resident B were transported to the
doctor’s office in a van driven by Lewis Johnson, who was
employed by a third-party company. Resident B was known to
be a difficult patient; she regularly yells and curses at her
caregivers. According to Rowland’s testimony, which was
corroborated by other Company employees, Resident B often
says “knock it off” and “I’ll beat your ass” and sometimes says
those two phrases in combination. Tr. 318:20–25 (Aug. 21,
2012). The ALJ found that Resident B is “prone to frequent,
sometimes near constant, outbursts of yelling, screaming, and
threatening, accompanied by the use of profanity. Sometimes
those outbursts also include threats of bodily harm.” ALJ Dec.
at 10. Rowland and the Company also agreed that Resident B
often varies the sound and volume of her voice.
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Second, the relevant disputed facts relate to what happened
when Rowland and Resident B were entering the doctor’s
office and Resident B was shouting and cursing. Terra
Pagnano, a doctor’s office employee at the front desk when
Rowland and Resident B were entering, testified that she heard
— but did not see — Rowland tell Resident B in response, “If
you don’t knock that off, I’m going to beat your ass.” Tr.
797:4–5 (Aug. 23, 2012). Two other doctor’s office employees
at the front desk testified that they heard the same thing. The
doctor’s office employees were shocked, and Pagnano called
Jane Thimmesch, the Company’s Director of Nursing, to report
what they had heard. Thimmesch passed along that information
to Anne Gilles, an administrator at the Company and
Rowland’s supervisor. Gilles immediately went to the doctor’s
office and interviewed two of the three employees who claimed
to have heard Rowland threaten Resident B. She impressed
upon them the gravity of their accusation and asked them to
repeat their story multiple times. Gilles also spoke with
Johnson, the van driver; at the time, he was preoccupied with
an electronic device and was terse. Johnson testified that he
told Gilles that he “didn’t see anything” happen between
Rowland and Resident B. Tr. 457:14–24 (Aug. 22, 2012).
Third, what happened thereafter is also largely undisputed.
When Rowland returned to the Company facility, Thimmesch
asked her to meet with Gilles. Rowland brought a Union
representative with her to the meeting, at which Gilles
informed her of the accusations against her and notified her that
she would be suspended pending an investigation, pursuant to
the Company’s elder-abuse policies. Rowland denied yelling
anything at Resident B in the doctor’s office.
The following day, May 25, Gilles returned to the doctor’s
office and spoke with the three employees who had accused
Rowland of threatening Resident B. Gilles again impressed
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upon them the gravity of their accusations. In light of Resident
B’s known habit of speaking in different voices, Gilles also
asked them if they were sure that it wasn’t Resident B that they
had heard make the threat. The employees confirmed their
stories and provided written statements to Gilles.
Also on May 25, Rowland came to the Company facility
to have Gilles officially approve her absence, as a result of her
suspension. Another Company employee, Alice Martinez,
accompanied Rowland. At some point during the meeting, talk
turned to the Union — specifically, to the signs that Union
members displayed in their vehicles, which referenced an
ongoing bargaining dispute. Rowland was surprised that the
conversation, which she expected to be about her suspension
and the investigation, had veered into Union matters, and
eventually Martinez interrupted to remind Gilles that the
meeting was about Rowland’s job. Martinez testified that
Gilles responded: “Oh no. This is about the Union. This is all
about the Union.” Tr. 483:9–10 (Aug. 22, 2012).
Later on May 25, Gilles had a conference call with two
human resources employees and her supervisor, Ken Cess.
They collectively decided to terminate Rowland’s
employment. On May 29, Rowland, accompanied by a Union
representative, met with Gilles and Thimmesch and was
informed that her employment was being terminated. At the
meeting, Rowland provided a written statement denying the
allegations against her and stating that she believed the
suspension and termination were motivated by her Union
support and involvement. Toward the end of the meeting,
Gilles asked Rowland what the van driver had been doing
during the May 25 incident. Rowland replied that she had
covered that in the May 25 meeting and Rowland added a
handwritten note to the notice of termination objecting to
Gilles’s failure to interview the driver.
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The day after Rowland’s employment was terminated,
Gilles continued her investigation into the incident by calling
Johnson’s dispatcher. The dispatcher told Gilles that Johnson
had told her that Resident B was yelling the entire time but that
he did not hear Rowland say anything. Cess also investigated
the incident following the discharge; he testified his concern
was that an unfair labor practice charge might result, given that
the discharge occurred in the midst of the Company’s
bargaining efforts with the Union. He attempted to speak with
Johnson and also drove to the doctor’s office and interviewed
two of the three employees who accused Rowland of
threatening Resident B. Neither party’s investigations gave
them reason to second-guess the decision to fire Rowland.
II.
Section 7 of the National Labor Relations Act guarantees
employees “the right to self-organization, to form, join, or
assist labor organizations, to bargain collectively . . . , and to
engage in other concerted activities.” 29 U.S.C. § 157. Section
8(a)(1) of the Act declares it an unfair labor practice for an
employer “to interfere with, restrain, or coerce employees in
the exercise” of those Section 7 rights. Id. § 158(a)(1). Section
8(a)(3) of the Act declares it an unfair labor practice for an
employer “to encourage or discourage membership in any labor
organization” “by discrimination in regard to hire or tenure of
employment or any term or condition of employment.” Id.
§ 158(a)(3). When an employer claims to have discharged an
employee for legitimate reasons and not because she engaged
in activities protected by Section 7, the Board applies the two-
step inquiry of Wright Line. See NLRB v. Transp. Mgmt. Corp.,
462 U.S. 393, 400–04 (1983). At step one, the General Counsel
for the Board must make out a prima facie case that the
employee’s protected activity was a motivating factor in the
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employer’s decision to fire her. See Inova Health Sys. v. NLRB,
795 F.3d 68, 80 (D.C. Cir. 2015). If the General Counsel
carries that burden, the analysis proceeds to step two, at which
“the burden of persuasion shifts to the employer ‘to show that
it would have taken the same action in the absence of the
unlawful motive.’” Id. (quoting Bally’s Park Place, Inc. v.
NLRB, 646 F.3d 929, 935 (D.C. Cir. 2011)).
In 2012, following Rowland’s discharge, the Union filed
an unfair labor practice charge with the Board, and the
Regional Director issued a complaint alleging, among other
things, that the Company had violated Section 8(a)(1) and
8(a)(3) of the Act by terminating Rowland. An ALJ held an
evidentiary hearing and determined that the Company had not
violated the Act. Relying heavily on Gilles’s “it’s all about the
Union” comment, the ALJ decided that the Board’s General
Counsel had satisfied his burden under Wright Line of making
out a prima facie case that anti-Union animus was a motivating
factor in Rowland’s discharge. The ALJ then determined that
the Company had carried its burden under the second step of
Wright Line by showing that it would have discharged
Rowland notwithstanding her Union activities. In so doing, the
ALJ found that the Company’s “investigation reasonably
concluded that [Rowland] had committed the offense of which
she was accused,” ALJ Dec. at 21, that the misconduct of which
Rowland was accused had in fact occurred, and that that
incident gave the Company good reason to fire her, in light of
the company’s well-established zero-tolerance policy
regarding “willful abuse” of residents. Indeed, Rowland
herself acknowledged in her testimony before the ALJ that if
she had made the threat of which she was accused, it would
have been appropriate for the Company to terminate her
employment. Tr. 392:8–12 (Aug. 22, 2012). The ALJ further
found that the Company’s investigation had not been
superficial and that the Company had not engaged in disparate
8
treatment of employees based on their involvement with the
Union. The General Counsel filed objections to the ALJ’s
findings and a brief in support of those objections. The
Company did not file any objections but did file a brief
responding to the General Counsel’s.
Two Members of the Board concluded that the Company
had not carried its Wright Line step-two burden of showing that
it would have fired Rowland even if she had not engaged in
protected Section 7 activity. The Board majority (hereinafter
“the Board”) rested that conclusion on two subsidiary
determinations. First, it found that comparator evidence
showed that employees who had committed similar offenses
had not been disciplined as harshly as Rowland. Specifically,
the Board found that Nancy Antonson was similarly situated to
Rowland and yet had not been disciplined following an
allegation of elder abuse. Antonson was accused by a patient
she was caring for of repeatedly handling her roughly, despite
requests to be gentler. The Company investigated the
allegation but ultimately gave her only a warning. The Board
found that this more lenient treatment, in the face of an
allegation of misconduct that was arguably as serious as that
against Rowland, indicated that the incident with Resident B
was not the Company’s actual motivation for discharging
Rowland. Second, the Board determined that the continuation
of Cess’s and Gilles’s investigations after Rowland’s firing
indicated that the Company harbored doubts that Rowland
committed the misconduct of which she was accused even as it
discharged her, suggesting that the alleged misconduct was not
the real reason for the discharge.
The dissenting Member would have affirmed the findings
of the ALJ, “see[ing] no reason to reject the [ALJ’s] thorough,
painstaking analysis.” Windsor Redding Care Center, LLC,
366 NLRB No. 127, at 9 (July 17, 2018) (“Dec.”) (Emanuel,
9
M., dissenting in part). He responded to each of the grounds
on which the Board relied for its determination that the
Company would not have fired Rowland absent her Union
activities. First, Antonson was not, in his opinion, an
appropriate comparator because in Rowland’s case, unlike in
Antonson’s, there were multiple neutral witnesses to the
incident. Second, the Company’s post-discharge investigation
was, he concluded, “unremarkable” given that Rowland was a
good and well-liked employee and that the Company would
therefore have naturally “continue[d] to investigate in hopes of
uncovering information that would exonerate her.” Id. at 10.
The post-discharge investigation was appropriate, in his view,
in light of “reasonably anticipated litigation over the discharge”
about which Cess had testified. Id.
The Company petitions for review, and the Board cross-
applies for enforcement of the Order accompanying its
decision.
III.
The legal principles that the court must apply are well-
settled. The court reviews the Board’s decision deferentially
and will overturn it “only if the Board’s factual findings are not
supported by substantial evidence, or the Board acted
arbitrarily or otherwise erred in applying established law to the
facts of the case.” Fred Meyer Stores, Inc. v. NLRB, 865 F.3d
630, 638 (D.C. Cir. 2017) (quoting Pirlott v. NLRB, 522 F.3d
423, 432 (D.C. Cir. 2008)). A Board decision is arbitrary and
capricious if it “entirely fail[s] to consider an important aspect
of the problem” or “offer[s] an explanation for its decision that
runs counter to the evidence before [it].” Motor Vehicle Mfrs.
Ass’n of U.S. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,
43 (1983). Likewise, this court has made clear that the Board
may not “totally ignore[] facts in the record,” Fred Meyer
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Stores, 865 F.3d at 638, and must “take into account whatever
in the record fairly detracts from its [conclusion’s] weight,”
David Saxe Productions, LLC v. NLRB, 888 F.3d 1305, 1312
(D.C. Cir. 2018) (alteration in original) (quoting Universal
Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951)).
“The findings and decision of the [ALJ] form an important
part of the ‘record.’” Int’l Bhd. of Teamsters, Local No. 310 v.
NLRB, 587 F.2d 1176, 1180 (D.C. Cir. 1978). Just as the board
may not “totally ignore[] facts in the record,” Fred Meyer
Stores, 865 F.3d at 638, the Board is obligated to give
“attentive consideration” to the ALJ’s decision, Greater
Boston Television Corp. v. FCC, 444 F.2d 841, 853 (D.C. Cir.
1970). Although the Board is “free to substitute its judgment
for the [ALJ]’s,” “when it disagrees with the ALJ, [it] must
make clear the basis of its disagreement.” Bally’s Park Place,
646 F.3d at 935 n.4 (first alteration in original) (quoting Local
702, Int’l Bhd. of Elec. Workers v. NLRB, 215 F.3d 11, 15 (D.C.
Cir. 2000)).
The Board’s obligation to engage with record evidence,
including the ALJ’s decision, is particularly acute when the
opinion of a dissenting Member draws attention to such
evidence. To ensure that the Board’s action “was the product
of reasoned decisionmaking,” the court will inquire whether it
“‘engage[d] the arguments before it,’ including those of a
dissenting Member,” Hawaiian Dredging Constr. Co. v.
NLRB, 857 F.3d 877, 881–82 (D.C. Cir. 2017) (alteration in
original) (first quoting State Farm, 463 U.S. at 52; then quoting
Del. Dep’t of Nat. Res. & Envtl. Control v. EPA, 785 F.3d 1,
11 (D.C. Cir. 2015)), so long as those arguments are not so
frivolous as to be “unworthy of consideration,” Chamber of
Commerce of the U.S. v. SEC, 412 F.3d 133, 144 (D.C. Cir.
2005).
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The Company contends that the Board failed to engage
with record evidence that was favorable to the Company and
that undercut the Board’s decision, rendering that decision
unsupported by substantial evidence. We agree, as follows.
First, the Board failed to engage with or even acknowledge the
evidence of the Company’s zero-tolerance elder-abuse policy,
which compelled it to fire any employee found to have
committed “willful abuse” of a resident. The ALJ alluded to
this policy and the seriousness with which the Company treated
allegations of elder abuse, and specifically found that the
Company “has successfully demonstrated that it is very serious
about preventing elder abuse and reporting any suspected
abuse.” ALJ Dec. at 19. As the ALJ found, the Company was
confronted with significant evidence from three “impartial”
witnesses with “no reason to be biased or prejudiced,” id., “that
Rowland had screamed a threat of physical violence towards
Resident B,” id. at 21. Rowland’s conduct “constituted
obvious elder abuse” and as such, and in light of the zero-
tolerance policy, “it was incumbent upon the [Company] to
take some disciplinary action against the employee who had
committed the offense.” Id. The ALJ’s analysis demonstrated
that the existence of the zero-tolerance policy was evidence
that Rowland’s willful misconduct was sufficient grounds for
her discharge, as she herself acknowledged, which, in turn,
supported the conclusion that the Company would have
discharged Rowland absent her Union activities. The Board
nevertheless failed to discuss the zero-tolerance abuse policy,
the seriousness with which the Company treated allegations of
willful abuse of residents, and the ALJ’s analysis. Yet the
Board was obligated to engage with evidence that showed that
the Company’s conduct was lawful, see David Saxe
Productions, 888 F.3d at 1312, particularly given that the
dissenting Member highlighted the significance of the zero-
tolerance policy to the Wright Line inquiry, see Hawaiian
Dredging, 857 F.3d at 881–82.
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Second, the Board’s conclusion regarding the significance
of Gilles’s and Cess’s post-discharge investigations is
unsupported by substantial evidence. At the hearing, Gilles
testified that she continued the investigation after Rowland’s
discharge to double check that she had properly heard and
understood Johnson’s version of events. Cess explained in his
testimony that the motivation for his investigation was to avoid
an unfair labor practice charge for discharging Rowland after
an inadequate investigation, given her high profile in the
Union. The dissenting Member drew the Board majority’s
attention to this evidence, stating that he would have found that
Cess and Gilles continued their investigations after Rowland’s
discharge “[o]ut of an abundance of caution.” Dec. at 9
(Emanuel, M., dissenting in part). The Board, in contrast,
decided that “it seems only logical that the [Company] would
have waited to terminate Rowland until it completed this
important investigation,” and that its failure to do so “suggests
that the [Company] would not have taken the same action based
on her purported comments alone.” Id. at 3. Inferring from a
post-discharge investigation that the employer did not believe
its stated reason for the discharge may well be reasonable when
that inference is supported by other record evidence or when
there is no other explanation for the post-discharge
investigations, but that is not the case here. To the contrary,
Gilles, Cess, and the dissenting Member all offered innocuous,
lawful explanations: the investigation was continued to ensure
its accuracy, to avoid later charges of an insufficient
investigation, or out of an abundance of caution. In light of
those explanations, the Company’s thorough investigation, and
the report of the three doctor’s office employees, the Board’s
conclusion that the post-discharge investigations indicated that
the Company did not believe the accusations against Rowland
was unreasonable.
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Finally, the Board concluded that the Company engaged
in disparate treatment in terminating Rowland because Nancy
Antonson was similarly situated to Rowland and had not been
disciplined following an allegation of elder abuse. This
conclusion is not supported by substantial evidence in the
record. The ALJ concluded that the General Counsel’s claim
that the Company was guilty of disparate treatment was
meritless. The ALJ found that “[t]here were other employees
accused of similar conduct, but the [Company’s] investigations
disclosed that no such conduct had occurred . . . [and] where
employees had actually been found to have engaged in
improper conduct, that conduct was not analogous to
Rowland’s conduct.” ALJ Dec. at 21. The Board implicitly
rejected the ALJ’s findings, at least as they applied to Antonson
and Rowland, stating that “the Company failed to explain why
it reacted differently to an arguable act of physical abuse than
it did to an arguable act of verbal abuse.” Dec. at 3.
To the extent the Board’s disparate treatment finding rests
on its view that Antonson and Rowland were accused of
“similar conduct,” its finding is contradicted by the record. The
Company records indicate that Antonson was not as gentle with
a resident as the resident preferred, and that Antonson
apparently rolled her eyes at the resident in response to
something that she said. The record supports the conclusion
that Antonson was guilty not of “willful abuse” of a resident
but only of misconduct. She was disciplined but not
terminated. Rowland, on the other hand, was found guilty of
willful abuse and terminated pursuant to the Company’s zero-
tolerance policy. So, Antonson’s case was not comparable to
Rowland’s.
The Board’s disparate treatment finding also appears to
rest on the view that Rowland and Antonson were similarly
situated because the Company did not believe either had
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committed “willful abuse” yet responded to these doubts
differently. This conclusion is undermined by the Board’s
unreasonable interpretation of the Company’s post-discharge
investigation. The Board’s characterization of Rowland’s
conduct as “an arguable act of verbal abuse” suggests that it
disagreed with the ALJ’s finding that the Company believed
that Rowland engaged in the misconduct of which she was
accused. The Board further stated that “[w]e additionally
disagree with our dissenting colleague’s suggestion that the
[Company] found the accusations against Antonson less
credible than those against Rowland,” citing the post-discharge
investigation as a reason. Id. at 3 n.10. Yet, as explained, the
Board majority’s conclusion, based on the post-discharge
investigation, that the Company disbelieved the accusations
against Rowland is not reasonable on this record. The Board,
consequently, could not rely on this reasoning to justify a
finding that Antonson and Rowland were similarly situated.
The Board therefore failed to adequately explain the basis
of its disagreement with the ALJ, see Bally’s Park Place, 646
F.3d at 935 n.4, and took action against the Company without
the support of substantial evidence in the record. See State
Farm, 463 U.S. at 43.
Accordingly, we grant the Company’s petition for review
and deny the Board’s cross-application for enforcement of the
portion of its Order related to the unfair labor practice finding
against the Company for its suspension and discharge of
Rowland. The Board’s cross-application for enforcement of
the remainder of its Order is granted.