Cadbury Beverages v. NLRB
Opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 20, 1998 Decided November 17, 1998
No. 98-1054
Cadbury Beverages, Inc., Petitioner v.
National Labor Relations Board, Respondents
On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board Richard N. Chapman argued the cause and filed the briefs for petitioner.
David Habenstreit, Supervisory Attorney, National Labor Relations Board, argued the cause for respondent. With him on the brief were Linda Sher, Associate General Counsel, John D. Burgoyne, Acting Deputy Associate General Counsel, and Deborah E. Shrager, Attorney.
Before: Silberman, Williams, and Ginsburg, Circuit Judges.
Opinion for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: Petitioner Cadbury Beverages, Inc. seeks review of the NLRB's decision and accompanying order that Cadbury violated sections 8(a)(1) and 8(a)(3) of the National Labor Relations Act when it suspended and termi- nated Eugene Matzan. The Board filed a cross-application for enforcement of its order. Since--although it is close--we find substantial evidence supporting the Board's determina- tion, we deny the petition for review and grant the cross- application for enforcement.
I.
Eugene Matzan is an electrician in Cadbury's food process- ing plant in Williamson, New York. In the early months of 1995, Matzan, who had become discontented with the perfor- mance of the incumbent union (Retail, Wholesale and Depart- ment Store Union, Local 220, AFL-CIO) and its fiscal man- agement, made several requests to union officials to review the union's financial records and its by-laws. After distribut- ing copies of one such document to fellow employees, union officials called a meeting (which James Fischette, Matzan's supervisor, ordered Matzan to attend) at which union officials put pressure on Matzan to cease his anti-incumbent activities.
After Matzan circulated a petition calling for a meeting to consider changes to the union's by-laws and to review an audit, Fischette informed Matzan that union business was not permitted on company time (despite Matzan's insistence that his union activity occurred during breaks).
Matzan's suspension arose out of a conversation in mid- March 1995 between Matzan and his co-worker Lisa Dennis, who had recently returned from maternity leave. According to Matzan, Dennis told Matzan that she had not received an expected bonus and was planning to ask Larry Graffius, the union's then-vice president, for assistance. Matzan then ad- vised Dennis against informing Graffius because two months earlier Matzan had overheard Graffius tell Jane DeGroote, Cadbury's human resources coordinator, that the company should have fired Dennis (whom Graffius identified with an unflattering expletive) when it had the chance to do so. At a meeting later in March, union president Blackmon told Mea- dor, Cadbury's human resources manager, that Matzan had been spreading a false rumor that Blackmon, Graffius, and Meador wanted to fire Dennis because she had taken mater- nity leave. Meador decided to investigate the matter immedi- ately and called Dennis, Matzan, and DeGroote into the meeting for questioning. Recollections differ as to who said what at the meeting about the story that Matzan told Dennis.
The crux of the dispute is whether Graffius said anything at all to DeGroote about firing Dennis, and whether Matzan's story implicated Meador or DeGroote, along with Graffius, in making the negative comments about Dennis. Meador ulti- mately concluded, based primarily on DeGroote's shocked reaction when confronted with Matzan's story, that Matzan's story was most likely false and that the potential damage to DeGroote, Meador, and the human resources department was sufficiently serious to warrant suspension without prior warn- ing. After Matzan walked out of a meeting on April 10 to discuss the situation before the company imposed discipline, Matzan was suspended for three days.1 Matzan's termination arose out of his attempt to attend an arbitration hearing of a co-worker, Bill Gowan, on Monday, September 11, 1995. Although Matzan had conducted an unofficial investigation of Gowan's case at the request of a union steward, Matzan had no official role to play at Gowan's arbitration hearing and planned to attend solely because he had given Gowan his word that he would try to do so (Gowan, according to Matzan, did not trust the union representative.).
On September 6 or 7, Matzan asked Fischette if he could work an earlier shift on Monday, September 11, explaining that he needed the schedule change for "personal" reasons.
Fischette told Matzan that the schedule change would proba- bly not be a problem and that he would see what he could do.
On Friday, after Fischette learned that Monday was the beginning of the "fall pack season," the busiest day of the year for the whole plant, Fischette told Matzan that he could not work the earlier shift. When Matzan insisted that he needed the time for personal business, Fischette told Matzan to see if he could reschedule his business and that if he could not, to tell Fischette how much time he needed.
On Saturday, Fischette again told Matzan that he could not switch his schedule. But when Matzan informed Fischette that his still unidentified "personal business" would only take a couple of hours and that he could probably take care of it on his lunch hour, Fischette again indicated some flexibility, telling Matzan that they would have to wait until Monday to decide. Later that Saturday, however, Fischette learned from Tony Peluso, another electrician, that Matzan wanted the time to attend Gowan's arbitration. On Monday morning, after Matzan reiterated that he needed the time for "personal business," Fischette asked Matzan directly whether he was planning to attend Gowan's arbitration. Matzan indicated that he could go where he liked on his lunch hour, and Fischette then instructed Matzan not to attend the arbitration and that he would be subject to discipline if he did. Later that morning, each tried to page the other to no avail: Fischette needed Matzan to fix a malfunctioning conveyor, and Matzan wanted to tell Fischette that he was taking an early lunch and that Peluso would cover for him (even though company policy permitted such lunch substitutions without supervisory approval). A security guard, pursuant to Fis- chette's instruction, informed Matzan on his way out that he was needed on the floor, but Matzan told the guard that he was going to lunch and proceeded to the conference room for the arbitration. After Cadbury's attorney insisted that Mat- zan leave Gowan's arbitration, Matzan returned to work, whereupon Fischette, following Meador's instructions, imme- diately suspended Matzan. Meador and Fischette deliberat- ed further and Cadbury terminated Matzan by letter on September 15.
The general counsel filed charges alleging that the compa- ny violated section 8(a)(1) of the NLRA when it suspended Matzan, and that it violated sections 8(a)(1) and 8(a)(3) when it terminated him. On the suspension charge, the ALJ found that Matzan's discussion with Dennis was protected activity, that the company knew it was protected, that Matzan was suspended for misconduct in the course of that protected activity (defaming Cadbury's human resource department), and that Matzan was not in fact guilty of the misconduct (since Matzan only implicated union member Graffius in the story he told Dennis). The ALJ also considered the compa- ny's motive in suspending Matzan and concluded that the real reason for the suspension was Matzan's protected activity.
Turning to the unlawful termination charge, the ALJ conclud- ed that the general counsel satisfied its burden of proving that anti-union sentiment was a substantial factor in Matzan's termination, and that the company did not carry its burden to prove that Matzan's alleged insubordination would have re- sulted in his termination even in the absence of his protected activity. The ALJ ordered Cadbury, among other things, to rescind Matzan's suspensions and to reinstate him to his former position with back pay.
The Board, with one member dissenting, affirmed all of the ALJ's findings and conclusions and adopted the ALJ's recom- mended order. The Board ratified the ALJ's decision on the suspension charge in a footnote without discussion, pausing only to note that the dissenting board member agreed with the ALJ on this issue. The Board elaborated its reasons for adopting the ALJ's conclusions on the termination charge, highlighting Fischette's denial of Matzan's request outright only after he learned the purpose of Matzan's request, and noting that "[s]uch an abrupt reversal of position clearly evidences Respondent's animus toward Matzan's protected activities and its retaliatory intent." The Board found that Cadbury did not terminate Matzan for insubordination since Matzan fully complied with company policy when he attended the arbitration. Board member Higgins dissented on grounds that Fischette consistently denied Matzan's request and that Matzan was insubordinate.
Petitioner claims that the Board's finding of a section 8(a)(1) violation for the company's suspension of Matzan was not supported by substantial evidence. Petitioner also as- serts that the Board ignored its own precedent governing employees' right to attend arbitration hearings when it con- cluded that petitioner's termination of Matzan violated sec- tions 8(a)(1) and 8(a)(3). In what appears to be an argument in the alternative on this second point, petitioner claims that substantial evidence does not support the Board's determina- tion that the company's termination of Matzan was motivated by anti-union animus.
II.
Petitioner argues that the suspension could not constitute a section 8(a)(1) violation "as a matter of law" because Matzan's conversation with Dennis was not protected, concerted activi- ty. In support of this argument, the company relies on Board precedent establishing the well-settled proposition that mere talk between co-workers is not concerted activity pro- tected by the NLRA. See, e.g., Daly Park Nursing Home, 287 N.L.R.B. 710 (1987). What petitioner overlooks, howev- er, is that the ALJ's opinion, adopted by the Board, specifical- ly distinguished the Daly Park line of cases from those Board cases establishing the rule that discussion among employees about subjects affecting their employment is, when directed toward future action, protected, concerted activity. See, e.g., Express Messenger Sys., 301 N.L.R.B. 651 (1991); Jhirmack Enter., 283 N.L.R.B. 609 (1987).
Matzan's conversation with Dennis about not turning to Graffius for assistance in obtaining a bonus clearly falls within this latter line of cases. Nor are we impressed with petitioner's argument that substantial evidence does not sup- port the Board's finding that Dennis and Matzan were talking about Dennis' bonus. Although Dennis could not remember the context of the conversation, she did not contradict Mat- zan's account. This is an issue of credibility on which the ALJ was entitled to credit Matzan's testimony (petitioner's assertion that Matzan's testimony was self-contradictory is the product of selective transcript snipping and borders on the frivolous). Petitioner should be aware that we do not reverse the Board's adoption of an ALJ's credibility determi- nations unless, unlike here, those determinations are "hope- lessly incredible," "self-contradictory," or "patently unsup- portable." Capital Cleaning Contractors, Inc. v. NLRB, 147 F.3d 999, 1004 (D.C. Cir. 1998); Elastic Stop Nut Div. of Harvard Indus., Inc. v. NLRB, 921 F.2d 1275, 1281 (D.C. Cir. 1990).
Petitioner alternatively asserts that the conversation was not protected activity because Matzan's reckless disregard of whether the story he told Dennis was true or false rendered his remarks so defamatory as to lose the protection of the Act. See HCA Health Servs. v. New Hampshire, Inc., 316 N.L.R.B. 919 (1995). Petitioner claims that Matzan "serious- ly impugned" the reputation of the human resources depart- ment by implicating Meador or DeGroote in making negative remarks about Dennis. But the ALJ was entitled to credit the testimony, including testimony from Dennis, indicating that Matzan accused Graffius alone.
We think very little of petitioner's contention that an employee is under some obligation to verify the truth of what the employee himself overhears, when the sole reason for the employee's allegedly defamatory statement is to communicate the fact that the conversation he overheard occurred. Unlike the situation in which an employee repeats a rumor told to him by another without verifying the facts underlying the rumor, see HCA Health Servs., there was nothing for Matzan to verify when he told Dennis what he heard Graffius say to DeGroote. Any duty to avoid reckless rumor-mongering does not impose an obligation to verify the competence of one's auditory faculties. In any event, the ALJ credited Matzan's testimony that the conversation between Graffius and De- Groote in fact occurred, based in part on an adverse inference from Graffius' failure to testify,2 and in part on the ALJ's discounting of DeGroote's impassioned denial given the vari-
1434, 1437 (D.C. Cir. 1993). Even if the general counsel sustains this burden, the employer can successfully defend by proving as an affirmative defense that the challenged termi- nation would have occurred even in the absence of the protected conduct. See Wright Line, 251 N.L.R.B. at 1089; NLRB v. Transportation Management. Corp., 462 U.S. at 399-400; see generally Southwest Merchandising, 53 F.3d at 1339-40.
Petitioner's case is considerably helped because both the ALJ and the Board included in their opinions factual findings that can in no way be thought supported by substantial evidence. For example, in explaining that Cadbury was aware of Matzan's protected union activities, both the Board and the ALJ seemed to suggest that Cadbury was aware of Matzan's participation in the investigation and preparation of Gowan's arbitration case. But as petitioner effectively points out, nothing in the record indicates that the company knew of Matzan's pre-arbitration assistance before September 15 (the day on which Matzan was fired). The ALJ, moreover, reject- ed as "almost pretextual" petitioner's asserted reason for discharging Matzan partly on the ground that there was no evidence in the record of major electrical problems when Fischette claimed to have needed Matzan on the line (be- tween 9:00 and 10:00 a.m.). Yet, Fischette specifically testi- fied that there was a broken conveyor on Line A around 9:25 a.m. and that the other electricians were busy. Last, the Board rejected Cadbury's claim that Matzan was insubordi- nate when he left the plant despite Fischette's explicit order forbidding it in part because of Cadbury's supposed policy that electricians were not required to respond to pages when they are en route to lunch. But Fischette explicitly denied that such a policy existed and pointed to special time cards that employees carry for the very purpose of enabling them to respond to pages while at lunch. The only evidence supporting Cadbury's supposed policy, besides Matzan's rath- er self-serving account, was testimony from the security guard that about 5% of employees do not respond to pages when they are on their way home (rather unconvincing proof of any company policy, let alone one governing pages at lunchtime).
Still, the Board focused its finding of anti-union animus directed at Matzan's protected activity6 on Fischette's abrupt change in position after learning that Matzan wanted time off to attend Gowan's arbitration hearing--a factual finding which is supported by uncontroverted evidence and which we think is sufficient on its own to support the Board's finding of anti-union animus. See United Steelworkers Local Union 14534 v. NLRB, 983 F.2d 240, 244 (D.C. Cir. 1993) (holding that factual findings may be reversed only when the record is so compelling that no reasonable fact-finder could fail to find the contrary). It is true that, as dissenting Board member Higgins and petitioner contend, Fischette consistently denied Matzan permission to take time off or to switch his shifts.
But that truth is also plainly beside the point, since the ALJ and the Board majority focused on Fischette's change in position from a tentative denial on September 9, to an out- right rejection on September 11, with the sole intervening fact Fischette's discovery of Matzan's plan to attend the hearing. And petitioner's theory that Fischette was intuitive- pretextual--that is, "wholly without merit"--although such a showing would have served as a conclusive rejection of Cad- bury's affirmative defense. Wright Line, 251 N.L.R.B. at 1084 & n.5; Southwest Merchandising, 53 F.3d at 1339 n.7 (distinguishing "dual motive" and "pretext" cases). The ques- tion for us is whether substantial evidence supports the ALJ's finding, adopted by the Board, that Cadbury failed to prove an actual, lawful motivation for Matzan's termination.7 The ALJ explicitly found, given the illicit motive evident from the circumstances of Fischette's change in position, that Cadbury would not have fired Matzan were it not for its anti- union animus. See Southwire Co. v. NLRB, 820 F.2d 453, 463 (D.C. Cir. 1987) (affirming Board's finding that employer failed its affirmative defense because of the evidence of illicit motive and because the ALJ concluded that the real reason for the discharge was the employee's union activities and not his admitted rule violation). All of petitioner's evidence de- signed to undermine this conclusion relates to its formal policy against unauthorized leaving, which completely ignores the uncontroverted evidence that electricians were permitted by company policy to switch their lunch breaks without authorization if they arranged for a replacement (which Mat- zan did). Petitioner's notion, adopted by dissenting Board member Higgins, that Fischette gave an advance refusal of Matzan's ordinary ability to switch his lunch would be persua- sive were it not for the crucial finding that the advance refusal was tainted by an illicit motive. Petitioner cannot overcome its burden at Wright Line step two by pointing to an employee's unwillingness to comply with an order that the Board determined (and which we affirm) to be unlawful at
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