Avery Heights

DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 350 NLRB No. 21 214 Church Homes, Inc. d/b/a Avery Heights and New England Health Care Employees Union, District 1199, Service Employees International Union.1 Case 34–CA–9168 June 29, 2007 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN BATTISTA AND MEMBERS SCHAUMBER AND WALSH On December 16, 2004, the National Labor Relations Board issued its Decision and Order in this proceeding finding, among other things, that the Respondent did not unlawfully fail to reinstate permanently replaced eco- nomic strikers upon their unconditional offer to return to work, because there was no showing that the Respondent had an independent unlawful motive in hiring the perma- nent replacements.2 The Union3 filed with the United States Court of Appeals for the Second Circuit a petition for review of the Board’s Order insofar as it dismissed that allegation. On April 19, 2006, the court granted the Union’s peti- tion for review, vacated the Board’s decision, and re- manded the case to the Board for further proceedings consistent with the court’s opinion.4 By letter dated September 19, 2006, the Board notified the parties that it had decided to accept the court’s re- mand and invited them to file statements of position with respect to the issues raised by the court’s opinion. The Respondent, the General Counsel, and the Union each filed a statement of position. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. We have reviewed the entire record in light of the court’s remand, which constitutes the law of the case. We find, based on that remand, that the Respondent vio- lated Section 8(a)(3) and (1) of the Act by failing to rein- state the permanently replaced economic strikers upon their unconditional offer to return to work. Background The pertinent facts are as follows. During negotiations for a successor contract, the Union commenced an eco- 1 We have amended the caption to reflect the disaffiliation of the Service Employees International Union from the AFL–CIO effective July 25, 2005. 2 343 NLRB 1301 (2004). Member Walsh, dissenting in part, found that the General Counsel had proved unlawful motive, and thus that the Respondent violated Sec. 8(a)(3) and (1) of the Act by failing to rein- state the permanently replaced strikers upon their unconditional offer to return to work. 3 New England Health Care Employees Union, District 1199, Ser- vice Employees International Union. 4 New England Health Care Employees Union, District 1199, SEIU v. NLRB, 448 F.3d 189 (2d Cir. 2006). nomic strike on November 17, 1999. Virtually all of the approximately 180 unit employees participated in the strike. On about December 15, 1999, the Respondent began hiring permanent replacements for the striking employ- ees. As found by the court, the Respondent “made a conscious decision to tell the Union nothing about the hiring of permanent replacements” and “took active measures to keep the replacement campaign a secret while hiring as many permanent workers as it could be- fore the Union caught on.” New England Health Care Employees Union, District 1199, SEIU v. NLRB, supra at 190. The Union learned about the Respondent’s hiring of permanent replacements in late December. The Union then arranged for a meeting with the Respondent on January 3, 2000, during which the Respondent admitted having hired “over 100” permanent replacements for striking employees. Id. On January 20, 2000, the Union made an uncondi- tional offer to return to work on behalf of the strikers. In response, the Respondent began recalling strikers to the positions that it had not yet filled with permanent re- placements, ultimately reinstating about 78 employees. The Union filed an unfair labor practice charge. The General Counsel issued a complaint, alleging that the Respondent had violated Section 8(a)(3) and (1) of the Act by refusing to reinstate the economic strikers as of January 20. The administrative law judge found the violation, con- cluding that the secret hiring of the permanent replace- ments was motivated by the desire to punish the strikers and break the Union’s solidarity. The Board reversed the judge, finding that the General Counsel had failed to demonstrate that the Respondent acted with an independ- ent unlawful purpose in hiring the permanent replace- ments. In particular, the Board found that the Respon- dent’s failure to disclose the hiring of permanent re- placements was not evidence of an illicit motive, inas- much as the Respondent had no legal obligation to make that disclosure. Avery Heights, supra at 1306–1307. The Decision of the Second Circuit Court of Appeals On review, the court acknowledged the settled princi- ple that an employer may hire permanent replacements for economic strikers and need not discharge those re- placements if the strikers make an unconditional offer to return to work. Supra at 192. The court further held, however, that the Act is violated where “‘an independent unlawful purpose’ motivated the hiring of permanent replacements.” Id., citing Hot Shoppes, Inc., 146 NLRB 802, 805 (1964). AVERY HEIGHTS 215 The court found it unnecessary to determine whether there was such an unlawful purpose in this case. Instead, the court held that the Board erred in concluding that because an employer is not obligated to notify strikers before hiring permanent replacements, the Respondent’s secrecy in hiring such replacements was not probative of an independent unlawful purpose. Supra at 195. The court concluded that the Board’s failure to con- sider the purpose behind the Respondent’s secrecy was problematic because, in the court’s view, the “natural and logical” implication of the facts the Board credited was that the Respondent’s secrecy was illicitly motivated: [L]ogic suggests that an employer seeking to en- hance its bargaining leverage by hiring permanent replacements would have every incentive to publi- cize the effort, and that an employer seeking only to prolong its ability to withstand the strike would be indifferent to whether the strikers and the union knew what it was doing. Conversely, it would appear that employers with an illicit motive to break a union have a strong in- centive to keep the ongoing hiring of permanent re- placements secret . . . [to gain] enough time to estab- lish an employment relationship with a large number of permanent replacements before the union can re- act by offering to return to work[.] [Supra at 195– 196 (emphasis in original).] Given what the court determined were the logical implica- tions of the Respondent’s secrecy, and the Board’s failure to consider the purpose of that secrecy, the court concluded that there was “no apparent basis for the Board’s conclusion that ‘the nondisclosure did not have an illicit motive.’” Su- pra at 196 (quoting 343 NLRB at 1307). The court accord- ingly granted the Union’s petition for review and remanded the case to the Board. In its remand, the court was careful to explain that it was not deciding whether the Respondent had an unlaw- ful independent purpose for hiring permanent replace- ments. Thus, in remanding the case, the court observed that the Board might: decline to accept the ALJ’s negative credibility finding with respect to the evidence that [the Respondent] submitted suggesting that fear of picket line violence motivated its decision to keep secret the hiring of per- manent replacements (provided the record supports such a reversal . . .). Supra at 196 fn. 7.5 The court also cited additional evidence that the Respondent argued “might suggest that it did not possess an independent unlawful motive” in hiring the per- manent replacements, including that the Respondent: (1) demonstrated an ongoing willingness to negotiate a contract with the Union; (2) agreed to a request by the mayor of Hartford that it stop hiring additional permanent replace- ments while his strike mediation efforts were ongoing (de- spite having unprocessed job applications); and (3) solicited the Union’s input on how best to recall strikers who had not been permanently replaced to available positions, and then followed the Union’s suggestions. Supra at 196 fn. 7. Discussion We have accepted the court’s remand, and recognize— as the law of the case—the court’s finding that the logi- cal implication of the Respondent’s secrecy was an illicit motive.6 Having reviewed the record, including the facts 5 The court stated that a fear of picket line violence, if proven, could constitute a legitimate explanation for the Respondent’s secrecy. Supra at 195. 6 The court did not explicitly place the burden of proof on the Re- spondent to establish a lawful motive for secrecy in the hiring of the replacements. However, the court did say that the “natural and logical” implication of the facts is that the secrecy was unlawfully motivated. The court also said that employers with an unlawful motive would do what the Respondent did here, i.e., keep secret the hiring of replace- ments. In view of these pronouncements, it would appear that the court placed on the Respondent the burden of establishing a lawful motive for maintaining secrecy in the hiring of replacements. Chairman Battista and Member Schaumber respectfully disagree with the Second Circuit in this respect. The General Counsel bears the burden of proving by a preponderance of the evidence that an unfair labor practice has occurred, including proving unlawful motive. Wright Line, 251 NLRB 1083, 1088 fn. 11 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), approved in NLRB v. Trans- portation Management Corp., 462 U.S. 393 (1983). See Sec. 10(c) of the Act (violations may be found only “upon the preponderance of the testimony taken”). Although the court agreed with the Board that an employer has no duty to disclose to a union its intention to hire perma- nent replacements, supra at 195, the court’s decision suggests that unlawful motive may be inferred solely from an employer’s secrecy in hiring permanent replacements. In the view of Chairman Battista and Member Schaumber, that inference effectively relieves the General Counsel of the burden of establishing unlawful motive and improperly shifts the burden of proof to the employer to establish that it acted with a lawful motive. Chairman Battista and Member Schaumber believe that there can be a number of valid reasons for secrecy. They agree that the employer is in the best position to present any such reasons, and thus they believe that the employer has the duty to go forward with any such reasons. However, they do not agree that the burden of persuasion shifts away from the General Counsel. Nevertheless, Chairman Battista and Mem- ber Schaumber recognize that they are bound by the court’s opinion as the law of the case. Contrary to his colleagues, Member Walsh fully agrees with the Second Circuit. As he stated in his original dissent, although the Re- spondent may not have had a duty to notify the Union before hiring permanent replacements, “the fact that [the Respondent] was willing to go to great lengths to conceal its intentions” is probative of whether DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 216 highlighted by the court, we find that the record is insuf- ficient to refute the inferred unlawful motive. Accord- ingly, we find that the Respondent violated Section 8(a)(3) and (1) of the Act by failing to reinstate the per- manently replaced economic strikers upon their uncondi- tional offer to return to work. The Respondent’s Discredited Testimony Concerning Fear of Picket Line Violence At the hearing before the administrative law judge, the Respondent’s administrator, Dr. Miriam Parker, testified that she had heard of a number of incidents of strike- related violence. She testified that she kept secret the hiring of permanent replacements because she feared that the Union would engage in additional violence and other misconduct to impede the Respondent’s efforts to recruit replacement employees. None of the Respondent’s other management personnel so testified. The judge discredited Parker’s testimony based on his evaluation of her demeanor and the absence of evidence corroborating her claimed fear of violence. See supra at 1317, 1333. The judge explained: The only evidence in support of [Parker’s] claim was hearsay. Although there was a police presence throughout the strike and videotape evidence of sup- posedly inappropriate conduct on the picket line, the record here is devoid of police reports, tapes, or any other evidence to show that the Respondent had a good faith concern that it would not be able to hire perma- nent replacements in sufficient numbers to continue operations if the Union was aware of its plans. [Supra at 1333.] We affirmed this credibility determination in the underlying decision. On remand, we having carefully reviewed the record, and we reaffirm that finding as consistent with the record as a whole. As found by the judge, Parker was not credible and the record is devoid of evidence that would lend credence to Parker’s claim. Indeed, other record evi- dence undercuts her claim. Thus, in the December 31, 1999 confidential memorandum from the Respondent’s chief executive officer, Norman Harper, to the Respondent’s board of directors regarding the advantages of hiring per- manent replacements, and the Respondent’s plans to con- tinue to do so, there was no mention of the Respondent’s claimed fear of violence. Likewise, the owner of an agency that supplied replacement employees testified that when the Respondent instructed him that the hiring of replacements was to be kept “hush-hush,” no mention was made of a fear of violence as the reason for that secrecy. “the decision to replace the strikers was motivated by an independent unlawful purpose.” Supra at 1313 fn. 5. In sum, we reaffirm the judge’s discrediting of Parker’s testimony that the Respondent’s secrecy was motivated by a fear of violence. See Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951) (the Board does not overrule a judge’s credi- bility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incor- rect). The Additional Evidence Cited by the Second Circuit As noted above, the Respondent urged the court to consider the following evidence in support of its claim that it had no unlawful motive in hiring the permanent replacements: (1) that it continued bargaining in good faith with the Union; (2) that it agreed to the Mayor of Hartford’s request to stop hiring additional permanent replacements while he mediated the parties’ labor dis- pute; and (3) that it solicited and followed the Union’s advice on how best to recall strikers who had not been permanently replaced. See supra at 196 fn. 7. We find the Respondent’s proffered evidence insufficient to re- fute the court’s finding that the logical inference from the Respondent’s secrecy was an illicit motive. First, the Respondent’s lawful conduct at the bargain- ing table is insufficient to negate the court’s inference of an independent unlawful purpose behind the Respon- dent’s secret hiring of permanent replacements. The Respondent’s argument boils down to a suggestion that because it did not violate its duty to bargain under Sec- tion 8(a)(5), its unexplained secret hiring of permanent replacements could not have violated Section 8(a)(3). That argument fails as a matter of law and logic, and we reject it. Similarly, the Respondent’s agreement to a 10-day hir- ing moratorium while the Mayor of Hartford attempted to mediate the labor dispute is unavailing. The Respon- dent did not agree to the moratorium until almost 1 month after the Respondent commenced hiring perma- nent replacements and only after the Union had discov- ered that hiring and confronted the Respondent. By then, the Respondent had already permanently replaced more than half the bargaining unit.7 In these circumstances, the Respondent’s agreement to a brief moratorium can- not establish the absence of an improper motive with respect to its earlier hires. Finally, the Respondent relies on the fact that, once the Union learned of the hiring and the strikers uncondition- ally offered to return to work, it solicited the Union’s input on how best to recall strikers to available positions 7 The Respondent admitted to the Union at the January 3, 2000 meet- ing that it had hired over 100 permanent replacement employees; the bargaining unit comprised about 180 employees. AVERY HEIGHTS 217 and followed the Union’s suggestions. Again, although evidence of lawful behavior with respect to the recall, those discussions occurred well after the replacement hiring. That recall cooperation does not support, let alone establish, that the Respondent had a lawful motive for its earlier secret hiring of permanent replacements. Conclusion We have carefully reviewed the evidence, including that brought to our attention by the Second Circuit and the Respondent, and find that it fails to establish that the Respondent did not possess an unlawful motive for its secret hiring of permanent replacements. We accord- ingly conclude, under the terms of the court’s remand, that the Respondent violated Section 8(a)(3) and (1) of the Act by failing to reinstate the permanently replaced economic strikers upon their unconditional offer to return to work. ORDER The National Labor Relations Board orders that the Respondent, Church Homes, Inc. d/b/a Avery Heights, Hartford, Connecticut, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Failing and refusing to reinstate any employees en- gaged in a strike, upon their unconditional offer to return to work, where it is shown that the Respondent was mo- tivated by an independent unlawful purpose in hiring permanent replacements for the striking employees. (b) In any like or related manner interfering with, re- straining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Within 14 days from the date of this Order, offer the employees who went on strike on November 17, 1999, and who have not yet been reinstated, full rein- statement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, without prejudice to their seniority or any other rights or privi- leges previously enjoyed, dismissing, if necessary, any permanent replacements hired during the strike. (b) Make whole the employees who went on strike on November 17, 1999, and who have not yet been rein- stated, and the employees who may have been reinstated but whose reinstatement was delayed because a perma- nent replacement occupied their position on January 20, 2000, for any loss of earnings and other benefits suffered as a result of the discrimination against them. Backpay shall be computed in accordance with F. W. Woolworth Co., 90 NLRB 289 (1950), with interest as prescribed in New Horizons for the Retarded, 283 NLRB 1173 (1987). (c) Within 14 days from the date of this Order, remove from its files any reference to its unlawful failure to rein- state the striking employees, and within 3 days thereafter notify them in writing that this has been done and that the unlawful failure to reinstate them will not be used against them in any way. (d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel re- cords and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order. (e) Within 14 days after service by the Region, post at its facility in Hartford, Connecticut, copies of the at- tached notice marked “Appendix.”8 Copies of the notice, on forms provided by the Regional Director for Region 34, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Respondent to insure that the notices are not al- tered, defaced, or covered by any other material. In the event that, during the pendency of these proceedings, the Respondent has gone out of business or closed the facil- ity involved in these proceedings, it shall duplicate and mail, at its own expense, a copy of the notice to all cur- rent employees and former employees employed by the Respondent at any time since January 20, 2000. (f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a re- sponsible official on a form provided by the Region at- testing to the steps that the Respondent has taken to comply. APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we vio- lated Federal labor law and has ordered us to post and obey this notice. 8 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading “Posted by Order of the Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 218 FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activities. WE WILL NOT fail and refuse to reinstate any employees engaged in a strike, upon their unconditional offer to return to work, where it is shown that we were motivated by an independent unlawful purpose in hiring permanent replacements for the striking employees. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights set forth above. WE WILL, within 14 days from the date of the Board’s Order, offer the employees who went on strike on No- vember 17, 1999, and who have not yet been reinstated, full reinstatement to their former jobs or, if those jobs no longer exist, to substantially equivalent positions, with- out prejudice to their seniority or any other rights or privileges previously enjoyed, dismissing, if necessary any permanent replacements hired during the strike. WE WILL make whole the employees who went on strike on November 17, 1999, and who have not yet been reinstated, and the employees who may have been rein- stated but whose reinstatement was delayed because a permanent replacement occupied their position on Janu- ary 20, 2000, for any loss of earnings and other benefits suffered as a result of the discrimination against them, less any net interim earnings, plus interest. WE WILL, within 14 days from the date of the Board’s Order, remove from our files any reference to our unlaw- ful failure to reinstate the striking employees, and WE WILL, within 3 days thereafter, notify each of them in writing that this has been done and that the unlawful fail- ure to reinstate will not be used against them in any way. CHURCH HOMES, INC. D/B/A AVERY HEIGHTS