15‐1451; 15‐1760 EDRO Corp. d/b/a Dynawash v. National Labor Relations Board

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 31st day of May, two thousand and sixteen.

PRESENT: ROBERT D. SACK, RICHARD C. WESLEY, GERARD E. LYNCH, Circuit Judges. ______________________

EDRO CORPORATION d/b/a DYNAWASH,

Petitioner/Cross‐Respondent,

‐v.‐ No. 15‐1451; 15‐1760

NATIONAL LABOR RELATIONS BOARD,

Respondent/Cross‐Petitioner. ______________________

FOR PETITIONER/CROSS‐RESPONDENT: STEPHANIE P. ANTONE, Anderson, Reynolds & Lynch, LLP.

FOR RESPONDENT/CROSS‐PETITIONER: MICHAEL HICKSON (Julie Broido, on the brief), for Richard F. Griffin, Jr., General Counsel, National Labor Relations Board, Washington, D.C.

Petition for review of a decision of the National Labor Relations Board.

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED AND DECREED that the petition for review of the March 31, 2015

Decision and Order of the National Labor Relations Board is DENIED, and the

cross‐petition for enforcement is GRANTED.

This case comes to the Court on the petition of EDRO Corporation d/b/a

Dynawash (“EDRO” or the “Company”) to review a final Decision and Order of

the National Labor Relations Board (the “Board”) issued with respect to the

Company on March 31, 2015, and the cross‐petition of the National Labor

Relations Board (“NLRB”)1 to enforce that Order. The Decision affirmed the

1 References to “NLRB” are to the National Labor Relations Board as Petitioner/Cross‐ Respondent; references to the “Board” are to the National Labor Relations Board that issued the Decision and Order on March 31, 2015 that is the subject of the petition for review.

2 rulings and findings of an Administrative Law Judge (“ALJ”) who concluded

that the Company had violated Section 8(a)(3) and (1) of the National Labor

Relations Act (the “Act”),

(a)(3) & (1), by discharging employee

Vincent Davis (“Davis”) on October 29, 2013 for his union activity. The Order

amended the ALJ’s remedy and adopted his recommended Order requiring the

Company to reinstate Davis as an employee and awarding him full backpay.

EDRO does not dispute that it unlawfully terminated Davis, but it raises

two challenges to the Board’s remedy. First, the Company argues that

reinstatement is improper because Davis was a “temporary employee” at the

time of his termination. Second, the Company contends that reinstatement is

improper, and full backpay excessive, because it would have lawfully fired Davis

in any event on November 5, 2013, when it discovered his criminal record. In its

cross‐petition, the Board asks us to reject EDRO’s arguments and summarily

affirm the uncontested portions of the Decision and Order, including the

underlying finding that Davis was unlawfully terminated.

We review the Board’s factual findings, legal conclusions, and remedial

decisions under deferential standards. “Factual findings of the Board will not be

disturbed if they are supported by substantial evidence in light of the record as a

3 whole.” N.L.R.B. v. Starbucks Corp.,

(2d Cir. 2012) (quoting

N.L.R.B. v. Caval Tool Div.,

(2d Cir. 2001)). “Substantial

evidence means such relevant evidence as a reasonable mind might accept as

adequate to support a conclusion.”

(internal quotation marks omitted).

The Board’s legal conclusions, in turn, must stand if they have “a

reasonable basis in law.” Caval Tool,

. “Legal conclusions based

upon the Board’s expertise should receive, pursuant to longstanding Supreme

Court precedent, considerable deference.” Starbucks Corp.,

(internal quotation marks omitted).

Further, the Board “has ‘broad discretion’ in fashioning remedial orders.”

Mohave Elec. Co‐op., Inc. v. N.L.R.B.,

(D.C. Cir. 2000) (quoting

ABF Freight System, Inc. v. N.L.R.B.,

(1994)). “[T]he remedy

selected ‘should stand unless it can be shown that the order is a patent attempt to

achieve ends other than those which can fairly be said to effectuate the policies of

the Act.’” Morrison‐Knudsen Co. v. N.L.R.B.,

, 917 (2d Cir. 1960)

(quoting Virginia Elec. & Power Co. v. N.L.R.B.,

(1943)).

Applying those deferential standards here, we order the enforcement of

the Board’s Decision and Order in its entirety. We assume the parties’ familiarity

4 with the facts and record below, which we recount only as necessary to explain

our decision.

I. Davis’s “Temporary” Status

EDRO hired Davis through a staffing company named Westaff on the

following terms:

Westaff was to be Davis’ nominal employer and . . . [EDRO] would pay his wage plus a premium to Westaff for Davis’ services. At the end of 520 hours, (13 weeks), [EDRO] had the option of hiring Davis as its own employee without paying an additional fee to Westaff. If [EDRO] decided to directly hire Davis before the 520 hours, it would incur a fee.

J.A. 254. At the time of Davis’s termination, his initial 13‐week period of

employment was not yet complete and the Company had not opted to hire him

directly.

The Board concluded that under those circumstances, EDRO qualified as

one of Davis’s employers at the time of his termination. The Company does not

dispute that finding. It argues, however, that reinstatement is nonetheless

improper because Davis was a “temporary employee” without a guarantee of

continued employment. Appellant’s Br. at 19. According to EDRO, two prior

decisions of the Board—Vemco, Inc.,

(1994), and Huck Store

5 Fixture Co.,

(2001), enforced,

(7th Cir. 2003)—

establish that reinstatement is an improper remedy where a temporary employee

is wrongfully terminated. In each of those decisions, the Board chose not to

order reinstatement after a user firm wrongfully terminated a temporary worker

hired through a staffing company. Instead, the Board ordered the user firm to

notify the staffing company “that it has no objection to [the temporary workers’]

employment” going forward. Vemco, 314 N.L.R.B. at 1242; see also Huck Store, 334

N.L.R.B. at 123.

The Board rejected EDRO’s argument. It concluded that Vemco and Huck

Store were inapposite because in each case, unlike here, there was no finding that

the user firm qualified as an employer of the temporary workers—a prerequisite

for reinstatement. See J.A. 279 n.3. The Board cited, to the contrary, two

decisions—Skill Staff of Colo.,

(2000), and D&F Indus.,

(2003)—in which user firms had been found to qualify as the

employers of temporary workers. See J.A. 278‐79; D&F Indus., 339 N.L.R.B. at

648; Skill Staff, 331 N.L.R.B. at 822. In those decisions, as here, the Board ordered

the user firms to reinstate the temporary workers as a remedy for their wrongful

6 termination. See D&F Indus., 339 N.L.R.B. at 649 & n.86; Skill Staff, 331 N.L.R.B. at

816, 822.

In our view, the Board’s distinction between the Vemco and Skill Staff lines

of authority, and its reliance on the latter, has “a reasonable basis in law.” Caval

Tool,

. We also conclude that the Board’s decision to reinstate

Davis despite his provisional status at the time of his wrongful termination “‘can

fairly be said to effectuate the policies of the Act.’” Morrison‐Knudsen, 275 F.2d at

917 (quoting Virginia Elec.,

). We therefore decline to reverse the

Board’s reinstatement order on the ground that Davis was a “temporary”

employee.2

II. EDRO’s Discovery of Davis’s Criminal Record

Separately, EDRO contends that the Board’s reinstatement order is

improper, and its backpay award excessive, because the Company would have

lawfully fired Davis for misconduct on November 5, 2013, when it discovered his

criminal record. An employer seeking to limit the remedy owed to an

unlawfully discharged employee based on after‐acquired evidence must prove

2 We express no opinion as to whether the contractual arrangement between EDRO and Westaff, which had not yet run its course when Davis was fired, should be accounted for in the terms of his reinstatement. That issue has not been raised on appeal and may be argued at a subsequent compliance hearing before the Board.

7 that the employee engaged in misconduct for which it “would have discharged

any employee.” Marshall Durbin Poultry Co.,

, 70 (1993) (emphasis

added); see also Berkshire Farm Ctr. and Servs. for Youth,

, 367

(2001) (“When an employee is unlawfully discharged, reinstatement and

backpay are appropriate remedies unless the employer can show subsequent

conduct, or discovery of conduct, that would have resulted in a lawful

discharge.”).

The Board’s reasonable finding that Davis’s October 22 comment was not

objectively threatening, in conjunction with the Company’s practice of

employing convicted felons from time to time, amply supports the Board’s

conclusion that the Company’s after‐acquired evidence of Davis’s criminal

record “[did] not reasonably transform the ‘you get what you give’ statement in

to grounds for which [it] would have discharged [him] absent his union

activity.” J.A. 279. The Company’s reliance on a discredited version of Davis’s

remark—which the Company never challenged in its exceptions before the Board

or in its opening brief on appeal—does not suffice.

8 We have considered all of the Companyʹs remaining arguments and find

them to be without merit. Accordingly, we DENY the petition for review of the

Board’s March 31, 2015 Decision and Order.

III. Enforcing the Decision and Order

Having rejected EDRO’s challenges to the Board’s remedy, we turn to the

Board’s request that we summarily affirm (and enforce) the uncontested portions

of the Decision and Order, including the underlying finding of unlawful

termination.

Section 10(e) of the Act provides in relevant part: “No objection that has

not been urged before the Board . . . shall be considered by the [reviewing] court,

unless the failure or neglect to urge such objection shall be excused because of

extraordinary circumstances.”

(e). We lack jurisdiction “to review

objections that were not urged before the Board.” Woelke & Romero Framing, Inc.

v. NLRB,

(1982); accord Elec. Contractors, Inc. v. NLRB,

(2d Cir. 2001). Accordingly, “[t]he Board is entitled to summary

affirmance of portions of its order identifying or remedying . . . uncontested

violations of the Act.” NLRB v. Consol. Bus Transit, Inc.,

, 474 n.2 (2d

Cir. 2009) (per curiam).

9 The Board expressly noted that the Company did not except to the ALJ’s

finding that it unlawfully discharged Davis. See J.A. 278 n.1. The Company does

not point to any circumstances, extraordinary or otherwise, counseling in favor

of finding that it has objected to the Board’s determination that it unlawfully

discharged Davis for his union activity. We thus summarily affirm that

determination, as well as all other uncontested Board findings, and GRANT the

Board’s cross‐petition for enforcement of the March 31, 2015 Decision and Order.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk

10