Spurlino Materials of Indianapolis, LLC v. NLRB

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 11, 2015 Decided November 13, 2015
No. 12-1034
SPURLINO MATERIALS, LLC AND
SPURLINO MATERIALS OF INDIANAPOLIS, LLC,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
COAL, ICE, BUILDING MATERIAL, SUPPLY DRIVERS, RIGGERS,
HEAVY HAULERS, WAREHOUSEMEN AND HELPERS, LOCAL
UNION NO. 716,
INTERVENOR
Consolidated with 12-1123
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board
A. Jack Finklea argued the cause for petitioner. With him
on the briefs was James H. Hanson. Timothy W. Wiseman
entered an appearance.
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Greg P. Lauro, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
John H. Ferguson, Associate General Counsel, Linda Dreeben,
Deputy Associate General Counsel, and Julie B. Broido,
Supervisory Attorney.
Neil E. Gath was on the brief for intervenor Coal, Ice,
Building Material, Supply Drivers, Riggers, Heavy Haulers,
Warehousemen and Helpers, Local Union No. 716 in support of
respondent. William R. Groth entered an appearance.
Before: GARLAND, Chief Judge, and WILLIAMS and
RANDOLPH, Senior Circuit Judges.
Opinion for the Court filed by Chief Judge GARLAND.
GARLAND, Chief Judge: The petitioner’s employees
conducted a strike that they said was intended to protest the
company’s unlawful termination of and failure to reinstate a
prominent union supporter. At the same time, they honored a
clause in an agreement they had with the company not to strike
-- for any reason -- on one particular construction project. The
National Labor Relations Board (NLRB) found that the strike
was indeed aimed at unfair labor practices, and that the
employees were entitled to reinstatement when they offered to
return to work. It further found that the employees’ decision to
respect the specific no-strike clause did not convert the strike
into an unprotected partial strike.
In light of these findings, the NLRB concluded that the
company’s refusal to reinstate the striking workers was itself an
unfair labor practice, and it ordered the company to reinstate the
employees and to make them whole. The company has filed a
petition for review of the Board’s decision and order, and the
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Board has filed a cross-application for enforcement. We deny
the company’s petition and grant the Board’s cross-application.
I
Spurlino Materials (SM) and Spurlino Materials of
Indianapolis (SMI), collectively “Spurlino,” supply and deliver
concrete to construction sites. James Spurlino is the majority
owner, president, and designated manager of both SM and SMI.
Each has a principal office in Ohio. SM’s operating facility is
located in Middletown, Ohio. SMI operates in Indianapolis,
Indiana -- about two hours away.
In January 2006, Coal, Ice, Building Material, Supply
Drivers, Riggers, Heavy Haulers, Warehousemen and Helpers,
Local Union No. 716, was certified as the exclusive bargaining
representative of SMI’s drivers and plant operators. Over the
following years, the union and SMI met a number of times in an
unsuccessful effort to negotiate a collective bargaining
agreement. Their last negotiating session, at which they again
failed to reach agreement, took place in August 2009.
During the relevant period, the only contract that covered
terms and conditions of employment for the unit employees was
a Project Labor Agreement (PLA) for a convention center
expansion project in downtown Indianapolis. Both SMI and the
union (among other employers and unions) were signatories.
The PLA applied only to work performed on that project.
Article 12 of the agreement contained a no-strike clause with
respect to work on the convention center project.
During this period, the union also filed a series of unfair
labor practice charges. Relevant here is the union’s charge that
SM violated section 8(a)(3) of the National Labor Relations Act
(NLRA), 29 U.S.C. § 158(a)(3), by discharging one of the
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union’s most prominent supporters, Gary Stevenson, in February
2007. In December 2007, an Administrative Law Judge (ALJ)
found that SM did unlawfully discharge Stevenson. In March
2009, a two-member National Labor Relations Board affirmed
that finding and ordered SM to reinstate Stevenson with
backpay. SM and the NLRB subsequently filed cross-
applications for review and enforcement of the Board’s decision
and order in the United States Court of Appeals for the Seventh
Circuit. In September 2009, at the direction of that court, the
parties entered into settlement discussions. Those discussions
failed and, in late March 2010, the parties began filing their
appellate briefs.1
Around that time, employees began to call the union’s
president, Jim Cahill, asking about the status of both the
Stevenson unfair labor practices litigation and the contract
negotiations with SMI. In response, Cahill called a meeting to
update the employees and take a vote on whether to engage in
an unfair labor practice strike. At the May 13, 2010 meeting,
the union’s attorney, Geoffrey Lohman, gave an update on the
status of the Seventh Circuit litigation, informed the employees
of the recent unsuccessful attempt to settle the case, and
predicted that it might be years before the litigation concluded.
1
In June 2010, the Supreme Court held, in New Process Steel,
L.P. v. NLRB, 130 S. Ct. 2635 (2010), that a two-member Board
lacked authority to issue decisions. In July 2010, the Seventh Circuit
remanded the Stevenson case back to the Board in light of New
Process Steel. The following month, a newly constituted
three-member NLRB panel reaffirmed the two-member Board’s
decision and order. The case then went back to the Seventh Circuit,
which upheld both the Board’s determination that Stevenson had been
unlawfully terminated and its order of reinstatement. Spurlino
Materials, LLC v. NLRB, 645 F.3d 870, 882-83 (7th Cir. 2011).
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Lohman also took questions. Some employees asked about
the Stevenson litigation and said that they should do something
to get the company to comply with the Board’s reinstatement
order. At least one employee asked a question related to the
status of the contract negotiations, prompting Lohman to
provide an update about those negotiations as well. When the
conversation turned to a strike, Lohman explained the difference
between an unfair labor practice strike and an economic strike,
advising the employees that SMI would be required to reinstate
them upon request if they engaged in the former, but not
necessarily if they engaged in the latter. Accordingly, he said,
the union recommended that, if there were to be a strike, it
should be over the company’s unfair labor practices. Following
Lohman’s presentation, the employees voted unanimously to
engage in an unfair labor practice strike.
Wishing to make the strike as effective as possible, the
union did not immediately call for the employees to strike. Ten
weeks later, however, after learning that SMI would start a “big
job” on August 3, Cahill decided that it was an opportune
moment. Spurlino Materials, LLC, 357 NLRB No. 126, at 4
(Dec. 6, 2011) (ALJ Op.). On the morning of August 3, he had
a strike letter delivered to SMI’s operations
supervisor/dispatcher. The letter stated that the employees
would be engaging in an unfair labor practice strike that would
continue “until Spurlino Materials remedie[d] the unfair labor
practice it committed in discharging Gary Stevenson,” including
giving Stevenson “an offer of reinstatement . . . [and] lost
wages.” J.A. 599.
The letter further stated that the strike would “cover all
work performed by the bargaining unit which is not subject to a
labor agreement with a binding no strike clause.” Id. In that
regard, it said that the union would “continue to honor Article 12
of the Project Labor Agreement” for the convention center
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project, id., which stated that the signatory unions would not
engage in any “economic or unfair labor practice strike” on that
project, PLA ¶ 12.1 (J.A. 567). Accordingly, the letter declared
that unit employees assigned to that project would “fully
perform all work covered by the PLA in accordance with that no
strike provision” and would not picket at that jobsite. J.A. 599.
SMI was able to continue its operations throughout the
course of the nine-day strike, using SM employees from Ohio
and hiring approximately sixteen replacement workers to cover
the striking employees’ work. Despite the striking employees’
willingness to perform PLA-related work, SMI did not assign
them any such work. Throughout the strike, the employees
picketed with signs stating that they were on an “unfair labor
practice strike for the illegal termination of Gary Stevenson.”
Spurlino Materials, 357 NLRB No. 126, at 5.
On August 11, Cahill gave SMI’s operations manager a
letter notifying the company that the employees were prepared
to end the strike and unconditionally return to work the next day.
The letter demanded that the company immediately recall the
employees to work. SMI, however, refused to reinstate the
strikers. It told the union that it had no duty to do so, both
because the strike was an economic strike (and SMI had hired
permanent replacements for all positions), and because the strike
was an unprotected partial strike since it had excluded the
convention center site.
Thereafter, the union filed an unfair labor practice charge
alleging that SMI, SM, or both as a single employer had violated
sections 8(a)(3) and (1) of the NLRA, 29 U.S.C. §§ 158(a)(3) &
(1), by refusing to reinstate the striking employees. Following
a hearing, an ALJ concluded that SMI and SM constituted a
single employer that had violated the Act as alleged. The ALJ
ordered the companies to reinstate the employees and make
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them whole for any loss of earnings and benefits suffered as a
result of the unlawful refusal to reinstate them. The Board
adopted the ALJ’s findings and recommendations in all relevant
respects.
Spurlino now petitions for review and the Board
cross-applies for enforcement of its order. Spurlino defends its
refusal to reinstate the striking employees on two grounds,
which we take up in Part II. In Part III, we address Spurlino’s
further contention that the Board erred in finding that SMI and
SM constituted a single employer. “We must uphold the
judgment of the Board unless, upon reviewing the record as a
whole, we conclude that the Board’s findings are not supported
by substantial evidence, or that the Board acted arbitrarily or
otherwise erred in applying established law to the facts of the
case.” Mohave Elec. Coop., Inc. v. NLRB, 206 F.3d 1183, 1188
(D.C. Cir. 2000) (internal quotation marks omitted); see 29
U.S.C. § 160(e), (f).
II
Spurlino maintains that the Board erred in finding that its
refusal to reinstate the striking employees was unlawful. It
argues that the striking employees were not entitled to
reinstatement because they engaged in: (a) an economic strike
rather than an unfair labor practice strike; and (b) a partial strike.
We consider these arguments below.
A
Strikes may be categorized as either economic or unfair
labor practice strikes. See Gen. Indus. Emps. Union, Local 42
v. NLRB, 951 F.2d 1308, 1311 (D.C. Cir. 1991). That
categorization carries significant consequences. Economic
strikers run the risk of replacement if, during the strike, the
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employer takes on permanent new hires. NLRB v. Int’l Van
Lines, 409 U.S. 48, 50 (1972); Gen. Indus. Emps. Union, 951
F.2d at 1311. By contrast, employees who engage in an unfair
labor practice strike are entitled to reinstatement to their former
positions if they wish to return to work at the conclusion of the
strike, even if the employer has hired replacements. See Int’l
Van Lines, 409 U.S. at 50-51; Mastro Plastics Corp. v. NLRB,
350 U.S. 270, 278 (1956); Gen. Indus. Emps. Union, 951 F.2d
at 1311. Accordingly, an employer violates the NLRA if it fails
to reinstate unfair labor practice strikers once they have made an
unconditional offer to return to work. See Alwin Mfg. Co. v.
NLRB, 192 F.3d 133, 141-42 (D.C. Cir. 1999).
To determine into which category a strike falls, the Board
looks to the employees’ motivations for striking, considering
both objective and subjective evidence. See Gen. Indus. Emps.
Union, 951 F.2d at 1312; Exec. Mgmt. Servs., Inc., 355 N.L.R.B.
185, 194-96 (2010); Chi. Beef Co., 298 N.L.R.B. 1039, 1039
(1990). A strike wholly driven by the desire of employees to
obtain favorable employment terms is an economic strike.
When employees strike in protest of their employer’s unfair
labor practices, the strike is -- as the label suggests -- an unfair
labor practice strike. See Int’l Van Lines, 409 U.S. at 50-51;
Gen. Indus. Emps. Union, 951 F.2d at 1311.
In some cases, a strike will have more than one cause:
employees will be spurred to action both by their desire to
improve their negotiating position and by their desire to protest
their employer’s unfair labor practices. In such cases, the Board
has employed a simple rule of categorization: so long as an
unfair labor practice has “anything to do with causing” a strike,
the strike is an unfair labor practice strike. Gen. Drivers &
Helpers Union, Local 662 v. NLRB, 302 F.2d 908, 911 (D.C.
Cir. 1962). “The employer’s unfair labor practice need not be
the sole or even the major cause or aggravating factor of the
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strike; it need only be a contributing factor.” Teamsters Local
Union No. 515 v. NLRB, 906 F.2d 719, 723 (D.C. Cir. 1990)
(internal quotation marks omitted); see Alwin Mfg. Co., 192 F.3d
at 141; Gen. Indus. Emps. Union, 951 F.2d at 1311.
Spurlino argues that its striking employees were not entitled
to reinstatement because they engaged in an economic rather
than unfair labor practice strike. Under the case law just
described, Spurlino cannot win that argument as long as the
employees struck at least in part to protest its unfair labor
practices. Because the question of what motivated a strike is
one of fact, we must uphold the Board’s findings in this regard
as long as they are supported by substantial evidence. Gen.
Indus. Emps. Union, 951 F.2d at 1312; see 29 U.S.C.
§ 160(e), (f); Monmouth Care Ctr. v. NLRB, 672 F.3d 1085,
1089 (D.C. Cir. 2012).
We conclude that the Board’s categorization of the strike as
an unfair labor practice strike is supported by substantial
evidence showing that at least part of the employees’ motive to
strike was Spurlino’s unlawful refusal to reinstate Stevenson,
who had been unlawfully discharged. The union called the
strike-vote meeting for the specific purpose of taking a vote on
whether to engage in an unfair labor practice strike. Following
an explanation of the differences between an unfair labor
practice strike and an economic strike, the employees
unanimously voted to engage in an unfair labor practice strike.
Consistent with that vote, the union’s strike letter and the
employees’ picket signs specifically stated that the employees
were striking to protest Spurlino’s refusal to remedy Stevenson’s
unlawful discharge. Two striking employees who testified
before the ALJ cited Spurlino’s unwillingness to reinstate
Stevenson as a reason they voted to strike. And at no time
during the strike did the union make any economic demands.
See Spurlino Materials, 357 NLRB No. 126, at 10.
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Spurlino correctly notes that there was evidence that
employees also had economic motivations for striking. In the
spring of 2010, some employees voiced concerns and asked
questions about the failed contract negotiations -- at the May 13
strike meeting, as well as at a mandatory employees meeting
that the company called thereafter. But as this court has held,
“[t]he employer’s unfair labor practice need not be the sole or
even the major cause or aggravating factor of the strike; it need
only be a contributing factor.” Teamsters Local Union No. 515,
906 F.2d at 723 (internal quotation marks omitted).
Spurlino mounts two principal challenges to the Board’s
determination that the strike was motivated by unfair labor
practices. We find neither persuasive.
First, Spurlino argues that the Board’s decision rests on
“self-serving” evidence -- which, according to Spurlino, is
evidence that supports the proponent’s own interests and that is
not verifiable because it goes to the proponent’s subjective
motivations. See Oral Arg. Recording 3:58-4:07. We do not
know what to make of the first descriptor: it would be an act of
unusual altruism for a proponent to put on evidence that did not
support its interests. Surely Spurlino did not limit its witnesses
to those who supported the union’s case. Nor is the fact that
some of the evidence went to the employees’ subjective
motivations surprising or disqualifying. After all, the core
question is what the motivation was for the strike, and Board
precedent clearly supports taking account of subjective evidence
in making that determination. See Gen. Indus. Emps. Union,
951 F.2d at 1312; Chi. Beef Co., 298 N.L.R.B. at 1039.
To be sure, Spurlino is correct that the credibility of “self-
serving” evidence must be carefully assessed. But the Board
and ALJ did that here. As Spurlino notes, there are indeed cases
in which courts have rejected Board findings that strikes were
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motivated by unfair labor practices -- findings supported by
evidence that could be described as self-serving. But those
courts neither excluded such evidence as irrelevant nor
discounted its value to zero. Rather, they simply found that the
evidence in those cases -- evidence that was less substantial or
significantly less credible than the evidence upon which the
Board relied here -- was insufficient to satisfy the substantial
evidence test.2
Spurlino focuses particularly on the fact that the union’s
attorney explained to the employees the differences between an
unfair labor practice strike and an economic strike before the
employees voted to limit the strike to protesting Spurlino’s
treatment of Stevenson. But there is no legal requirement that,
to be credited, a strike vote must be taken in ignorance of its
consequences. See Dorsey Trailers, Inc., 327 N.L.R.B. 835, 856
(1999) (affirming an ALJ’s holding that a union could not “be
blamed for having had sufficient foresight . . . to advise its
members against walking out to protest something other than
unfair labor practices”). The Board took into account the
attorney’s statements, as well as the other evidence described
above -- including the fact that the strike letter and picket signs
were limited to protesting Stevenson’s termination, and the fact
that the union never made any economic demands during the
strike. These, together with the two employees’ testimony about
their own motivations, constitute substantial evidence to support
2
See, e.g., Pirelli Cable Corp. v. NLRB, 141 F.3d 503, 518-19
(4th Cir. 1998) (reversing the Board’s determination where it relied
exclusively on testimony about union officials’ -- not union members’
-- motivations); Winn-Dixie Stores, Inc. v. NLRB, 448 F.2d 8, 9-11, 10
n.4 (4th Cir. 1971) (finding the evidence insufficient where employee
testimony that a strike was motivated by unfair labor practices was
contradicted by picket signs and handbills that “reflected only
economic grievances”).
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the Board’s determination that Spurlino’s unfair labor practices
were a motive for the strike.
Second, Spurlino points to the three-year gap between the
February 2007 discharge of Stevenson and the August 2010
strike as proof that the discharge could not have been a motive
for the strike. Had the discharge actually been a motive, the
company insists, the employees would have struck closer to the
date of the discharge.
But this ignores the fact that the gap in time was a
consequence of the employees’ decision to first put their faith in
the legal system -- rather than rely on self-help -- to rectify the
unfair labor practice. In 2009, the NLRB did in fact order
reinstatement, an order that the Seventh Circuit ultimately
enforced. See supra note 1. But when the employees struck in
August 2010, Stevenson still had not been reinstated. Spurlino
was appealing the Board’s determination to the Seventh Circuit,
and the employees were told that settlement negotiations had
recently failed. At that point, it was not simply Stevenson’s
discharge, but also Spurlino’s ongoing failure to reinstate
Stevenson, that the employees protested. See Spurlino
Materials, 357 NLRB No. 126, at 14 (ALJ Op.) (“I conclude
that the employees struck at least in part over the Respondent’s
unlawful discharge and failure to reinstate Stevenson.”
(emphasis added)); see also J.A. 599 (strike letter stating that the
employees would strike “until Spurlino Materials remedie[d] the
unfair labor practice it committed in discharging Gary
Stevenson” and gave Stevenson “an offer of reinstatement” and
“lost wages”); J.A. 116 (testimony by an employee that the “first
goal of th[e] strike” was to “get Gary Stevenson his job back”);
J.A. 126 (testimony by another employee that he voted to strike
because “it was unfair that [Spurlino] w[as] not allowing
[Stevenson] to come to work”). There was, therefore, no gap at
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all between the continuing unfair labor practice and the day the
employees began their strike.3
In sum, we conclude that substantial evidence supports the
Board’s determination that the strike by Spurlino’s employees
was an unfair labor practice strike.
B
Spurlino’s second contention is that, even if the strike was
an unfair labor practice strike, it was nonetheless outside the
protection of the NLRA because the employees engaged in only
a partial strike. As noted in Part I, the Project Labor Agreement
contained a clause barring the employees from conducting any
kind of strike -- including an unfair labor practice strike -- with
respect to work on the convention center project. The union’s
strike letter informed Spurlino that the employees would
“continue to honor” that clause, and so would cease all work
except work on that project. Spurlino Materials, 357 NLRB No.
126, at 4. That exception, Spurlino maintains, rendered the
strike an unprotected “partial strike.”
A strike is protected under the NLRA only if it is a
“complete” strike. See Audubon Health Care Ctr., 268 N.L.R.B.
135, 137 (1983). Striking employees lose the protection of the
Act if they engage in a “partial strike.” Inova Health Sys. v.
NLRB, 795 F.3d 68, 87 (D.C. Cir. 2015); see First Nat’l Bank,
3
Spurlino further maintains that the union never requested that
Stevenson be reinstated until its August 3 strike letter. That
contention is baffling: the union filed a charge challenging
Stevenson’s termination in 2007, and it spent the intervening years
litigating the lawfulness of that discharge and urging the remedy of
reinstatement before both the NLRB and the Seventh Circuit. See
Spurlino Materials, 357 NLRB No. 126, at 2-3.
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171 N.L.R.B. 1145, 1151 (1968). As the Board has explained,
when employees “pick and choose the work they will do or
when they will do it,” their conduct “constitutes an attempt . . .
to set their own terms and conditions of employment in defiance
of their employer’s authority to determine those matters.”
Audubon, 268 N.L.R.B. at 137. Accordingly, employees who
engage in a partial strike are not protected by the NLRA and
may lawfully be discharged. Id.
Spurlino argues that the employees’ offer to perform work
on the convention center project during the strike rendered the
strike a partial strike. It “makes no difference,” Spurlino
maintains, that the employees’ willingness to continue working
on that project arose out of the no-strike clause in the Project
Labor Agreement. Spurlino Br. 24. Whatever the motivation,
they stopped doing some -- but not all -- work and therefore
were not entitled to reinstatement. In reaching the contrary
conclusion, Spurlino insists, the Board erred in applying
established law to the facts of the case.
We disagree. Like the Board, we find that the partial-strike
precedents are a poor fit for the case before us. See Pacific
Coast Supply, LLC v. NLRB, 801 F.3d 321, 333 (D.C. Cir. 2015)
(“We . . . must give deference to [an agency’s] interpretations
of its own precedents.” (internal quotation marks omitted)).
Spurlino correctly notes that the “purpose of prohibiting partial
strikes is to avoid employees dictating the terms of their own
employment.” Reply Br. 6; see Highlands Hosp. Corp., 278
N.L.R.B. 1097, 1097 (1986) (declaring that to tolerate partial
strikes “would be to allow employees to do what [the Board]
would not allow any employer to do, that is to unilaterally
determine conditions of employment” (internal quotation marks
omitted)). But Spurlino’s employees were not attempting to
dictate the terms of their employment or “to usurp [the
employer’s] prerogative to assign work,” Audubon, 268 NLRB
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at 137. “On the contrary,” as the ALJ explained, they “were
acting in accordance and compliance with the terms and
conditions contained in the PLA, to which both the Company
and the Union were signatory.” Spurlino Materials, 357 NLRB
No. 126, at 14.
Nor can it be said that the employees left Spurlino in doubt
as to whether they were striking -- another concern that animates
the partial-strike ban. See Vencare Ancillary Servs., Inc. v.
NLRB, 352 F.3d 318, 324 (6th Cir. 2003) (“The underlying
rationale of the prohibition on partial strikes is that the employer
has a right to know whether or not his employees are striking.”).
The union’s strike letter unambiguously declared that the
employees were striking with respect to all work except work on
the convention center project. Spurlino has never suggested any
confusion about the employees’ intentions in that regard.
The Board was also reasonable in buttressing its rejection
of Spurlino’s partial-strike argument by taking note of the
“Catch-22” that Spurlino’s position would create for the
employees. Spurlino Materials, 357 NLRB No. 126, at 14. In
Spurlino’s view, if the employees honored the no-strike clause
and agreed to perform PLA work, they would be engaging in a
partial strike, thus forfeiting the NLRA’s protection. Yet, if they
refused to perform the PLA work, they would be violating the
no-strike clause, which would again strip the strike of its
protected status. See NLRB v. City Disposal Sys. Inc., 465 U.S.
822, 837 (1984). Hence, if Spurlino’s position were accepted,
the employees could be fired for engaging in any kind of strike.
As the ALJ put it, “the employees would be forced to choose
between forfeiting their right to strike or forfeiting their jobs.”
Spurlino Materials, 357 NLRB No. 126, at 14. Attributing such
broad consequences to a no-strike clause limited to a single
project would contravene not only the requirement that any
waiver of the right to strike must be “clear and unmistakable,”
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Metro. Edison Co. v. NLRB, 460 U.S. 693, 708 (1983), but also
“the strong interest of federal labor policy in the legitimate use
of the strike,” NLRB v. Erie Resistor Corp., 373 U.S. 221, 235
(1963).
In sum, the Board was reasonable in concluding that the
employees’ respect for a prior contractual agreement did not
convert their otherwise lawful strike into an unprotected partial
strike.
III
Finally, Spurlino challenges the Board’s determination that,
although the unit employees were formally employed only by
SMI, SMI and SM constituted a single employer. When the
Board finds that two entities constitute a “single employer,” the
two entities may be held jointly and severally liable for any
unfair labor practice committed by either one. See Emsing’s
Supermarket, Inc., 284 N.L.R.B. 302, 302 (1987). The bottom-line
question in considering whether two entities are a single
employer is “whether they have failed to maintain the kind of
arm’s-length relationship that would normally characterize
separate and independent companies.” Spurlino Materials, 357
NLRB No. 126, at 6; see Emsing’s Supermarket, 284 N.L.R.B. at
302.
To answer that question, the Board examines four factors:
(1) common ownership or financial control, (2) common
management, (3) interrelation of operations, and (4) centralized
control of labor relations. See S. Prairie Const. Co. v. Local No.
627, Int’l Union of Operating Eng’rs, 425 U.S. 800, 802 n.3
(1976); RC Aluminum Indus., Inc. v. NLRB, 326 F.3d 235, 239
(D.C. Cir. 2003). The Board has explained that “no single
aspect is controlling, and all four factors need not be present to
find single-employer status.” Bolivar-Tees, Inc., 349 NLRB
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720, 720 (2007); see RC Aluminum Indus., 326 F.3d at 239. As
the question of single-employer status is “primarily factual,” we
again must uphold the Board’s determination if it is supported
by substantial evidence. NLRB v. Al Bryant, Inc., 711 F.2d 543,
551 (3d Cir. 1983); see Asher Candy, Inc. v. NLRB, 258 F.
App’x 334, 334 (D.C. Cir. 2007). We find no basis for
disturbing the Board’s well-supported determination that SMI
and SM constituted a single employer.4
First, with respect to common ownership or financial
control, the ALJ noted that James Spurlino was at all times the
majority owner of both SMI and SM. Although Spurlino points
out that there were no other common owners and that neither
company had a board of directors, common ownership does not
demand multiple common owners or a particular type of
corporate structure. At the time of the ALJ’s decision, James
Spurlino owned 100% of SM and 52% of SMI, with the
remaining 48% of the latter equally divided between his father
and another company owned by a longtime friend. On these
facts, the ALJ appropriately determined that there was
“substantially common ownership and financial control.”
Spurlino Materials, 357 NLRB No. 126, at 6.
Second, as to common management, the ALJ noted that
James Spurlino was the president and manager of both SMI and
SM. He further found -- based on a detailed factual analysis --
that James Spurlino “makes the major decisions for both
companies.” Id. at 7 (discussing James Spurlino’s role in, inter
4
Spurlino contends that the Board’s single-employer analysis is
inapplicable to this case because there was no “precipitating event” or
“overt act” by SM that would subject it to such analysis. Spurlino Br.
41. There is no precedent, however, that imposes such a triggering
requirement for application of single-employer analysis.
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alia, strategic direction and operations, property management,
financial decisions, and major projects).
Spurlino attacks the relevance of the ALJ’s findings,
arguing that the common management inquiry should focus only
on shared control of day-to-day operations -- not top-level
decisionmaking. But the ALJ did not, as Spurlino maintains,
ignore the fact that SMI had its own operations managers. See
Spurlino Materials, 357 NLRB No. 126, at 6-7. Instead, the
ALJ noted that under Board precedent “the absence of such
common day-to-day management is not considered significant,
particularly where, as here, the facilities are geographically
separate.” Id. at 7. Rather, “the relevant inquiry is whether
there is ‘overall control of critical matters at the policy level.’”
Id. (quoting Bolivar-Tees, 349 NLRB at 721 n.4); see Sakrete of
N. Cal., Inc. v. NLRB, 332 F.2d 902, 907 (9th Cir. 1964).
Although common management of day-to-day decisions would
support a finding of common management, see Cimato Bros.,
Inc., 352 N.L.R.B. 797, 799 (2008), the ALJ’s rejection of the
inverse was well supported by the above-cited precedent. We
therefore affirm the Board’s determination that James Spurlino’s
managerial role at SMI and SM supported a single-employer
determination.
Third, the ALJ found that SMI and SM satisfied the
interrelation of operations factor. The two companies publicly
held themselves out as the same enterprise -- “Spurlino
Materials” -- on their common website, business cards,
stationery, and trucks. At times, they did so internally as well.
In addition, SM had admitted, in the Board proceeding involving
the unfair labor practice charge for terminating Stevenson, that
it was the employer of the unit employees. Spurlino Materials,
357 NLRB No. 126, at 7; see also id. at 1 n.1 (Board Op.)
(noting that this was a “relevant consideration in determining the
interrelation of operations between SM and SMI”). Further, the
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ALJ catalogued a laundry list of specific evidence of interrelated
operations: all invoices for SMI’s purchases were sent to SM’s
facility; SM’s controller did all of the accounting for SMI; there
was a significant history of employee exchange between the
companies; and employees for each company periodically did
work for the other company. Id. at 7-8 (ALJ Op.).
The ALJ also found powerful evidence that “the companies’
transactions between each other [were] not entirely at arm[’]s
length.” Spurlino Materials, 357 NLRB No. 126, at 8. The
companies did not invoice each other for shared costs of
common services; they did not charge each other for all such
services based on actual costs; SM frequently made large cash
advances to SMI without any loan agreement, repayment terms,
or interest; SM regularly paid SMI’s bills directly; and large
amounts of money frequently moved between the companies on
the last day of the month, without invoices or other explanatory
documentation. “Not entirely at arm’s length” is an
understatement.
Finally, with respect to common control of labor relations,
the ALJ found that, although the companies had separate
managers and dispatchers who exercised day-to-day control over
employees, James Spurlino “ha[d] the ultimate authority over
the labor relations of both” and “actually exercised that
authority” by “determin[ing] the initial wages and benefits for
the employees of both companies.” Spurlino Materials, 357
NLRB No. 126, at 9. The ALJ further found that, although an
SMI employee, Jeff Davidson, was the designated representative
during collective-bargaining negotiations, Spurlino “personally
met with the Union and its attorney and communicated directly
with employees regarding the collective-bargaining
negotiations.” Id. Moreover, Davidson “made clear to the
employees that Spurlino ha[d] the final say with respect to any
agreement.” Id. Ample evidence supported these findings and,
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thus, the Board’s conclusion that the labor relations of SM and
SMI were centrally controlled.
As we have noted, Board precedent provides that “no single
aspect is controlling, and all four factors need not be present to
find single-employer status.” Bolivar-Tees, 349 N.L.R.B. at 720.
In this case, substantial evidence supports the Board’s
determination that all four were present. A fortiori, substantial
evidence supports the Board’s ultimate determination that SM
and SMI were a single employer.
IV
For the foregoing reasons, we deny Spurlino’s petition for
review and grant the Board’s cross-application for enforcement
of its order.
So ordered.