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Case number 15-1010L, CARE 1 at Madison Avenue LLC, doing business as CARE 1 at Madison Avenue Petitioner, versus National Labor Relations Board.

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Ms.

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Murphy for the petitioner, Ms.

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Rajapasky for the respondent, and Ms.

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Hanson for intervener for respondent.

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Good morning.

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Good morning, Your Honor, and may it please the Court.

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Erin Murphy on behalf of Petitioner CARE 1 at Madison Avenue.

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This case is a classic illustration of how the board's ever-changing precedents leave employers in an untenable position during a union election campaign.

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The board repeatedly found here that petitioner violated the law by doing things that the board's own cases expressly tell employers that they may do, and indeed in some circumstances even encourage employers to do.

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Those findings cannot be reconciled with basic principles of reasoned decision making, and they find no support in the scant evidence on which the board chose to rest its case here.

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If I could start by talking about the benefits issue.

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Under the Supreme Court's decision to exchange parts and the decisions of this and other courts interpreting it, the basic question in any case involving the granting or withholding of benefits during a union election is whether the employer acted with the intent to impact the election.

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Have we held that in the case in this circuit?

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Yes, that's what the court said in the Pedro's case, one of the first cases where the court dealt with this issue.

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And in the cases since then, the court has always looked at them and determined whether there was evidence in the record to substantiate a motive finding.

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It is true, is it not, that the board has, for the last 50 years, identified certain conduct that it views to be necessarily

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prejudicial in these circumstances.

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Your brief acknowledges that.

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Well, the board has tried to, but in many of those instances, courts have refused to enforce its orders.

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That's a different question, isn't it?

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You're before this court.

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Sure, but I think it's fair to employers that when they're looking at board decisions and then a court reviews them and says, no, you can't proceed that way because it's inconsistent with the act, that it is fair for an employer to look at decisions that are telling the board, stop applying per se or presumptive rules in these circumstances.

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So is that what you tell your corporate clients, too, that it doesn't matter what circuit you're in?

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You know, the problem here is that the board doesn't have a clear rule that tells people, it tells employers what they can and can't do.

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Because at the same time that it is sometimes said that it's a per se violation, say for instance to grant to some employees while withholding from others,

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There are cases where it's said it's not.

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And I would point you, for instance, to the NOAA's New York bagels case.

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That's a case where some employees got benefits and some didn't.

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But in that case, I thought it turned on whether or not the employer had a business justification.

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And there are categories of conduct where the board has closed off that as a potential.

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That's actually not.

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In the Noah's New York bagels case, the only thing that was said was the employer, in a circumstance where it was granting a new benefit, which is what was going on here, the board said it was the right thing to do to not grant that benefit as to voting employees.

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And the board's words were, that's the prudent thing to do and the thing that is less likely to result in an unfair labor practice because we won't presume.

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that you did something wrong if what you're doing is preserving the status quo, not granting a new discretionary benefit.

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So this is where the employees had a benefit, the employer reduced them, the employees objected, and then the employer decided it was going to restore some.

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Is that not correct?

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That's right.

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But the reduction occurred before the union ever came on the scene.

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So there's no allegation here that the reduction had anything to do with the election.

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I'm not suggesting that.

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I'm just talking about the experience of the employees for your client.

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Sure.

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They had a benefit.

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It was reduced.

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They complained.

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And the employer decided to restore part of it.

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That's right, but what the employer was doing was making a unilateral discretionary change.

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This isn't a case where, say... No, I'm not suggesting that.

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I'm just suggesting I'm working for the company and here's my experience.

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I had a benefit, it was reduced, now the employer is going to give some of it back to me.

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Isn't that the fact here?

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Yes, that is what was going on here.

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And what's the business reason for the timing and for the decision to withhold it from some and give it to others?

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The business reason is because the board has told employers that if they go ahead with an increase during an election, it will be treated as presumptively unlawful.

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So the board can't say it's presumptively unlawful, but then turn around and say it's per se unlawful if you don't go ahead with the increase.

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It's presumptively unlawful in certain circumstances absent of business reason.

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And my question was about the business reason for the timing and for the decision to grant.

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The decision to grant?

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You know, the stipulated record is that the reason that they granted was in response to the employee complaints.

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And the timing?

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And there's nothing, I mean, there was no evidence that the board put on one way or another about the reason for the timing of it.

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It was all within, you know, it was a January 1st decision to decrease the benefits, and then it was about two months, three months later when the decision was made.

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You say there's no evidence the board put on, but wasn't that the employer's burden to put on evidence?

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It's not.

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I mean, it's ultimately here we didn't grant the benefits.

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And the presumption should be applying, as courts have said, when you are either granting benefits or changing the status quo.

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And we weren't doing either of those things.

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The benefits weren't granted.

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And there wasn't a change in the status quo, because they would have been new benefits, not something that was done every year on the same date.

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So under those circumstances, courts have repeatedly told the board, you have to put substantial evidence in the record that demonstrates that the employer acted with improper motive.

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You can't just assume that everything the employer does is motivated by intent to influence the election.

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What about the stipulation here, where the employer told the board why it didn't provide this increase to eligible voting employees?

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Well, the stipulation is simply that they didn't provide the increase because an election was pending.

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That doesn't say anything about motivation.

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Because that is perfectly consistent with trying to comply with the law.

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When the board is saying, don't go ahead with a discretionary benefits increase while an election is going on.

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Well, let me just ask you.

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You know what the board council is going to say.

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It's in the brief.

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Board's position is it's been very clear.

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Despite your brief that the board says the employer has several options, but the relevant option here is you tell your employees that

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You don't want to be viewed as trying to influence the election.

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But the employees should be certain that once the election matter is resolved, their benefits will be restored the same way the benefits have been restored for the other employees.

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Now, why is that Janice-like?

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Why is that unclear?

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The board's been saying it for decades.

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Well, for one thing, I mean, I think there's a big problem with the fact that courts have repeatedly refused to enforce the very orders the board's relying on here.

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But even setting that aside... In this circuit on that issue?

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On that particular issue, this circuit hasn't dealt with the case dealing with the safe harbor.

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The Third Circuit did, just this past year, say the board can't treat that safe harbor as a sword rather than a shield.

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And it was on identical facts.

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I'm curious why they didn't bring this case in the Third Circuit, given that precedent.

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Well, that precedent didn't exist yet when we brought this case.

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But I think that there's no great reason to depart from the reasoning that the Third Circuit applied there.

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I mean, what the Third Circuit said there

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The board could never find a violation on these facts.

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It just said, you have to prove motive.

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But even under the Noah's New York Bagels case, it seemed that there the board was very careful to talk about the timing of when the decision was made by the employer.

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And they said that if the timing of the decision was before the employer knew that there was going to be a union election,

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then presumptively you should just go ahead and give the benefit to everyone, including the union employees.

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But if the employer makes the decision after it knows about the election, the presumption should be to withhold the benefit as you did here.

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But it also says, as we said in Purdue Farms and as the board has said on Teen Times, if you want to withhold, then explain why you're withholding.

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Why didn't you explain here?

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So there's several problems, I think, with this safe harbor.

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I mean, for one thing, it forces employers to give a promise that they may not be able to keep.

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Because if the union wins the election, they have an obligation to bargain with the union at that point.

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They can't unilaterally change benefits.

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You mean people can explain, you know, the exceptions, you know,

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When you're explaining, you can say, if we'll give you the benefit after the election, but if the election's contested, we have to wait until after those contests are over.

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Or if the union elect is successful, then we'll bargain with the union and we'll deal with it then.

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I mean, you can explain all of those things.

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Sure, and I think all of that becomes quite problematic for an employer in the context of when they are exercising their rights to try to discourage voting for the union, they have to tell employees that as to all other benefits, they're not allowed to talk about them and they're not allowed to change them.

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And then to tell them that even though they've told their employees, we're not allowed to do anything about your benefits, they should turn around and say, oh, except for this one benefit that we're telling you right now,

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We're going to grant you retroactive to today as soon as this election is over.

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It's putting employers in a really, really difficult position.

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It doesn't put them in any difficult position if they just issue a statement that says, we've given this to every other single employee in the company.

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You're not going to be discriminated against because you are voting for the union.

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You'll get it too as long as we can legally give it to you after this election is over.

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What's so complicated about that?

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Because it does put employers in a position of basically saying, this looks like we're bribing you, but don't worry, we aren't.

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And employers are trying to show the board has said that you can do it.

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And if that's what it says in these cases, you may you may think that that's confusing or sending mixed messages.

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But what's important is, are you going to be held to account by the board afterwards?

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Well, I think part of it is, has the board said you can do it or has the board said you must do it and that's the only way you'll comply with the law?

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And I don't think they've said the latter.

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And the other thing that I think is quite important here is even before this court, in their brief, they go out of their way to say that even if you comply with the safe harbor, you may still be held to have violated the law.

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And they cite a case in their own brief where they hold

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that an employer, even though it complied with the safe harbor, still violated the law because they decided that there was other evidence there that suggested that even what they were doing and even compliance with the safe harbor didn't overcome a presumption of impermissible motives.

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So when you have a safe harbor that the board itself says is not even really safe, I don't think employers are really left with an option where they can act and know that what they're doing is consistent with the law.

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What case supports you saying nothing as you did here?

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The Noah's New York Bagels case.

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That's a case where the employer said nothing.

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They granted to one, to the group that was not voting.

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They didn't grant to the other group.

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There's no discussion anywhere in the opinion of anything about a safe harbor.

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And the board said that was the right thing to do, the more prudent thing to do.

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the thing that was least likely to result in an unfair labor practice charge.

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That's a decision from the board telling employers this is okay.

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So even if they have in other cases said, it's also okay if you have the safe harbor.

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At that point, I don't think they can tell employers if you don't use this safe harbor that's not even 100% safe, you will be held to have per se violated the law.

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Just so we're clear here, does the board have

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a procedure akin to the SEC where you can get a no-action letter from the SEC.

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Does the board have any procedure there where you can seek guidance ahead of time or kind of as this is unfolding?

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I don't know the answer to that question, perhaps the board might.

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I thought that's what Washington lawyers did.

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You know, I mean, I think some of this has to be put in the context, though.

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You have here a record where if you look at the record of the objections, the union objected to anything that happened during the election period that looked even remotely like granting a benefit.

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They objected to a new ice machine being put in.

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So the idea that there wasn't going to be an objection if we'd gone ahead with it, even if we'd complied with the safe harbor, there was still going to be an objection.

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And we would have, no matter what we did,

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been taking that risk.

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Why isn't there anything in the record though about why nothing was expressed?

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Why no statement at all or explanation was given to the employees?

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Well, again, in our view, it is the board's obligation, and this court said in Pedro's, that it's the board's obligation to put in evidence and substantiate its burden of proving improper motive.

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And when they haven't put in anything, I thought in Pedro's, the employer had met its burden of pointing out a reason for the timing of the new benefit.

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They had found an insurance broker, and it has nothing to do with the pending election.

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So that was an employer burden, and that's what I'm curious about here.

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You haven't proffered any reason for the timing of this benefit change, and as I understand it under Great Dane, there's not a need to show motive if there's a formal distinction between the treatment of

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uh, voting eligible, union eligible employees and others that that is a facial distinction.

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And that is the distinction that has been rejected by five courts in a row going back to the Second Circuit in J. J. Newbury, the Marshall Durbin case from the Fifth Circuit, the Sixth Circuit in Bowling Green, the Seventh Circuit in Kerrwood and the Third Circuit just last year.

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They all said

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You can't apply a presumption.

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They said basically, as long as it is presumptively unlawful to grant benefits, you can't also apply a presumption that it's unlawful not to grant benefits.

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So you can't put the burden on the employer in every case.

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This is a great day in situation where there's a distinction between the treatment given to employees and the treatment given to the employer.

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All five of those were cases with a distinction.

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That's precisely what the issue was.

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In each of those cases, the board said we don't have to prove our burden because there was a distinction between voting and non voting employees.

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And in that particular circumstance, every one of those courts said no, even there when you're having a differentiation,

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between voting and non-voting employees, you still have to make your case.

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And the reason they said that is because in this particular area, we're operating against a backdrop where both granting and withholding could violate the law.

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And if you're in an area where anything you do could violate the law,

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It can't be our obligation to prove that we didn't violate.

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I think we're acting against a backdrop in which the Supreme Court and the board has said employers have to act the way they would act even if there were no prospect of union elections and if they do take some action, they have to have a reason that's unrelated to union activity or suppressing union activity and I don't see that.

[00:17:06] Speaker 02:
I mean, the Supreme Court certainly never adopted this rule of, kind of, ignore the union.

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What they said is what's impermissible is acting with intent to impact the election.

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Well, and in Great Dane, they said, I mean, it's, you know, it's like facial or motivated in there.

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They said if it's a facial distinction, that's enough.

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And again, I mean, I think there's a reason that every court that's considered that issue, there's not a court that's accepted the board's position on that.

[00:17:33] Speaker 04:
You keep saying that and yet every time we talk about these cases, including the Doha's case,

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You know, in that case, there was a business justification that was given here.

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All right, you don't think it's a business justification, but the board thought it was about the insurance, et cetera.

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The Third Circuit didn't say, no, you can't ever do this.

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I think, you know, in fairness, you're over-reading what some of the circuits have done, and we haven't yet spoken.

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But I just want to be clear here.

[00:18:02] Speaker 04:
The ALJ, in dealing with your case and what your client did,

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spelled out very clearly the distinction with Noah Bay area bagels, all right, and had discussed the inherent danger concept that the Supreme Court acknowledged in exchange parts

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and then talked about what the board's precedents squarely said.

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And here we have stipulated facts as to why the employer didn't do this.

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We have this timing question.

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We have what I have described as a factual situation of the employees had a benefit, it was reduced, and it was restored in part to some employees who were not eligible to vote

[00:19:03] Speaker 04:
in the union election.

[00:19:05] Speaker 04:
And in that, your client chose to stipulate the facts and not to address some of these questions.

[00:19:12] Speaker 04:
In that circumstance, I'm not clear why we would say that the board either acted impermissibly in finding a violation or failed to adhere to its own precedent.

[00:19:33] Speaker 02:
Well, I think that right from the start in this case, we have been making the argument that even if that's what the board's precedent has said, it's not permissible.

[00:19:43] Speaker 02:
It's not consistent with the act.

[00:19:44] Speaker 04:
It's not permissible because the board is not authorized under the National Labor Relations Act to come up with rules for conduct

[00:19:57] Speaker 04:
when the sensitive management relations questions are being raised?

[00:20:04] Speaker 02:
What the board is not allowed to do is come up with arbitrary or irrational rules.

[00:20:08] Speaker 04:
But that's the conclusion, counsel, and that's what we're trying to get at as to why is this irrational in the sense that it's a difficult situation.

[00:20:17] Speaker 04:
Everybody understands that from management's point of view, from the employee's point of view.

[00:20:22] Speaker 04:
And so the board, which Congress has identified as the expert here, has come up with a solution.

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It may not be the best solution.

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It may not be one that the employees like.

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It may not be one that management likes.

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But the board says, we balance these interests.

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And here's what we think is the best way to proceed.

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And I just want to understand how we get in the mix of that and second guess the board.

[00:20:53] Speaker 02:
I don't mean to frustrate you by referring to other cases again, but this isn't something out of the ordinary that we're asking here.

[00:21:01] Speaker 04:
So what should the board have done that it didn't do?

[00:21:04] Speaker 02:
It should have put on evidence of motive.

[00:21:06] Speaker 04:
Absolutely.

[00:21:09] Speaker 04:
But the board has identified citing the Supreme Court decision that there is certain types of conduct, all right,

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where the danger is inherent.

[00:21:23] Speaker 04:
That's the Supreme Court language.

[00:21:24] Speaker 02:
But the Supreme Court wasn't referring to this conduct.

[00:21:27] Speaker 04:
No, but it was talking about where the employer took action for the purpose

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of influencing the outcome of the election.

[00:21:38] Speaker 02:
That's right.

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And this conduct does not inherently amount to taking action for the purpose of influencing the election.

[00:21:45] Speaker 02:
Exchange parts couldn't have been clearer that it was a motivation case.

[00:21:49] Speaker 03:
Well, I'm just not clear, Ms.

[00:21:51] Speaker 03:
Murphy, why the timing.

[00:21:55] Speaker 03:
The employer had decided, we're going to give these benefits retroactive to January.

[00:22:00] Speaker 03:
And we're going to give them to all the employees.

[00:22:03] Speaker 03:
They've been thinking about that for some months.

[00:22:05] Speaker 03:
They learned that there's an election scheduled for March 23rd.

[00:22:08] Speaker 03:
And lo and behold, they give the benefits

[00:22:13] Speaker 03:
to the non-bargaining unit eligible employees, what is it, 10 days, two weeks before the election, and not to the others, and they post things where all the employees can see that there's been an increase in benefits, and the union eligible employees know they haven't received it.

[00:22:32] Speaker 03:
No explanation, no explanation whatsoever.

[00:22:36] Speaker 03:
Why isn't that just an 883 violation under Great Dane?

[00:22:39] Speaker 02:
Well, I think what's interesting about the question you just asked is it underscores why the argument that the board's making here really can't be right.

[00:22:47] Speaker 02:
Because what they say is what we should have done is granted the benefits to everyone because that would have been so clearly permissible.

[00:22:54] Speaker 02:
And as you were suggesting... I think the first line would be why not wait another 10 days?

[00:22:58] Speaker 02:
The first line is why not wait until after?

[00:23:00] Speaker 02:
But the reason here, I think, is that you have to put it in the broader context.

[00:23:02] Speaker 02:
There's 20 facilities here.

[00:23:04] Speaker 02:
the majority of them don't have any union activity going on, so you would have been asking them.

[00:23:08] Speaker 03:
So wouldn't it be easy to have explained the timing?

[00:23:11] Speaker 03:
That's what I'm saying.

[00:23:11] Speaker 03:
It would have been easy to say, well, we needed to do it at this time because blah, blah, blah, blah, blah, operational criteria.

[00:23:17] Speaker 03:
Look at our opinion in Pendrose.

[00:23:20] Speaker 03:
Sure.

[00:23:20] Speaker 03:
It's just not that hard to come up with a legitimate reason, a business reason for the timing, but we don't have anything to work with in the record.

[00:23:27] Speaker 02:
And to be clear.

[00:23:28] Speaker 03:
You would give it a reason for the timing.

[00:23:30] Speaker 02:
I mean, if you take a look at the board's brief on pages 38 and 39, they say it's irrelevant what our motive was.

[00:23:36] Speaker 02:
They say it doesn't matter what we would have put on about timing, about any of it.

[00:23:41] Speaker 02:
It's irrelevant what our motive was.

[00:23:43] Speaker 02:
So long as we were granting to some and withholding from others, we automatically violated the law.

[00:23:48] Speaker 02:
And I don't think that can be right in a context where forces said we can't.

[00:23:52] Speaker 03:
I think the Supreme Court says you automatically have a burden then.

[00:23:54] Speaker 03:
And my question is, how did you meet that burden?

[00:23:57] Speaker 02:
We, again, I mean, our position is that as long as the court is also saying that we have a burden if we had gone ahead and granted, we can't always have the burden.

[00:24:08] Speaker 02:
It's the board's ultimate burden.

[00:24:10] Speaker 02:
And it can't be that no matter what we did, we had to come in and prove that it was lawful.

[00:24:15] Speaker 02:
And they're saying there's not a single thing we could have done in which we wouldn't have had the burden to come forward and prove that what we were doing was permissible.

[00:24:23] Speaker 04:
If we granted, we would have had to explain too.

[00:24:26] Speaker 04:
Let's hear from the board, and we'll give you some time later.

[00:24:29] Speaker 00:
Thank you.

[00:24:37] Speaker 07:
May it please the court?

[00:24:38] Speaker 07:
My name is Neelakshmi Rajapaksa.

[00:24:40] Speaker 07:
I'm counsel for the National Labor Relations Board.

[00:24:43] Speaker 04:
Well, you've heard the argument.

[00:24:44] Speaker 04:
You've read the briefs.

[00:24:45] Speaker 04:
It's all very confusing.

[00:24:47] Speaker 04:
The employer was trying to do his best, and now the board has come and found violations.

[00:24:55] Speaker 07:
We obviously disagree, as we've said in the brief, about the allegedly confusing situation the company found itself in.

[00:25:04] Speaker 07:
To begin, I'd just like to say that the company cites exchange parts and cases applying exchange parts.

[00:25:14] Speaker 07:
And really, what is happening in this case is the inverse of the exchange parts situation.

[00:25:19] Speaker 07:
So in exchange parts, the scenario you had is

[00:25:23] Speaker 07:
there was a grant, a targeted grant of benefits to employees in a voting unit.

[00:25:28] Speaker 07:
In this case, you have

[00:25:29] Speaker 07:
a withholding of benefits from employees in the voting unit.

[00:25:34] Speaker 07:
And so the upshot is everyone but the employees in the unit are getting a benefit.

[00:25:39] Speaker 07:
And the question is, in that scenario, what is the governing law?

[00:25:43] Speaker 01:
And the- But why should it be any different?

[00:25:46] Speaker 01:
If the ultimate issue under either 8A1 or 8A3 is whether you're improperly trying to influence the election, why shouldn't you have to prove intent or motive

[00:25:56] Speaker 01:
whether you're buying votes or potentially coercing by withholding benefits.

[00:26:05] Speaker 01:
What's the difference?

[00:26:07] Speaker 07:
The difference, Your Honor, is in the withholding context and particularly when you have the facts that we have in this case where it's a company-wide benefit and only one group of employees is being singled out because of their protected activity.

[00:26:21] Speaker 07:
That, in the board's view,

[00:26:22] Speaker 07:
is, first of all, discriminatory on its face.

[00:26:25] Speaker 07:
It is the essence and it's almost the definition of discrimination.

[00:26:30] Speaker 01:
But you said and the board said in NOAA's New York bagels, not NOAA's Bay Area bagels, NOAA's New York bagels, that if you in New York bagels, I guess, are better than the Bay Area bagels,

[00:26:45] Speaker 01:
You said that if you're going to make a decision and it's after you know about the union election, then you should withhold it.

[00:26:53] Speaker 01:
The more prudent thing is to withhold the benefits from the employees.

[00:26:59] Speaker 01:
Well, I hear that what the board said.

[00:27:02] Speaker 07:
Well, that I don't know if that statement can be attributed to the board, to be quite honest, because I believe in that case, the board didn't adopt

[00:27:10] Speaker 07:
the portion of the decision that the company is relying on, but leaving that aside.

[00:27:15] Speaker 01:
I don't think that's right.

[00:27:16] Speaker 01:
I think that the only part that they didn't adopt had something to do with some speech that the supervisor made, that they adopted everything else.

[00:27:27] Speaker 07:
I would have to look back at that, but even accepting that that is the opinion of the board,

[00:27:33] Speaker 07:
The board has been very clear that the employer has essentially two courses of action.

[00:27:37] Speaker 07:
It cannot withhold benefits that are being given company-wide.

[00:27:41] Speaker 07:
What it can do is it can postpone and give certain assurances to the employees.

[00:27:47] Speaker 07:
And that is very clear from a very long-running line of cases that begins

[00:27:52] Speaker 07:
around the time of Great Dane, actually, with Great Atlantic and Pacific T, which actually issued just two weeks after Great Dane.

[00:28:01] Speaker 07:
And in that decision, which I urge your honors to look at, the board said quite clearly that it considers this kind of conduct to be inherently destructive.

[00:28:12] Speaker 07:
And for that reason, there's no need to put

[00:28:16] Speaker 07:
the general counsel to proving motivation.

[00:28:18] Speaker 07:
It's apparent from the conduct on its face.

[00:28:22] Speaker 07:
And so as I believe Judges Pollard and Rodgers have mentioned, the question then is really, what is the business justification?

[00:28:30] Speaker 07:
And there are board cases where the question has immediately become, okay, employer, explain yourself.

[00:28:38] Speaker 07:
And so you do have

[00:28:39] Speaker 07:
comments about that seem like motivation-type comments.

[00:28:43] Speaker 01:
But isn't the motivation here clear?

[00:28:45] Speaker 01:
I don't really understand that argument.

[00:28:48] Speaker 01:
I mean, employees weren't happy.

[00:28:50] Speaker 01:
They had to pay more for their insurance, so the company decided to do something about it.

[00:28:55] Speaker 01:
That's pretty elementary.

[00:28:57] Speaker 07:
Well, the question is, what was the reason for withholding?

[00:29:01] Speaker 07:
The decision about the grant of benefits, I agree with you.

[00:29:05] Speaker 03:
Or for the timing.

[00:29:06] Speaker 07:
And the timing, right?

[00:29:07] Speaker 07:
There's no explanation for the timing.

[00:29:09] Speaker 07:
But the question for the court is really, is there a business justification for this withholding?

[00:29:18] Speaker 07:
I mean, that is the board's view based on Great Atlantic and Pacific T. And in this case, the stipulated record provides nothing in terms of an explanation.

[00:29:27] Speaker 03:
Is it Roger Paxe?

[00:29:28] Speaker 03:
Roger Paxe.

[00:29:29] Speaker 03:
Roger Paxe.

[00:29:30] Speaker 03:
Ms.

[00:29:30] Speaker 03:
Roger Paxe.

[00:29:31] Speaker 03:
really have to say I have some trouble with the so-called safe harbor and I'd like to hear from you about that.

[00:29:37] Speaker 03:
It seems to me

[00:29:39] Speaker 03:
it quite as bad to say we are gonna not give you benefits, say, oh, we'll give them to you after the election.

[00:29:50] Speaker 03:
I mean, it just, how is that really better from the perspective of employees who need to exercise an unfettered right to choose their representatives to be told, well, there's this, you know,

[00:30:03] Speaker 03:
Other people are getting this, and when everything's smoothed out later, you'll get yours.

[00:30:08] Speaker 03:
And you know, for some of the reasons Ms.

[00:30:09] Speaker 03:
Murphy was saying, well maybe things will change, the power dynamic will change, there'll be other issues of priority to the bargaining unit.

[00:30:16] Speaker 03:
Safe harbor seems dysfunctional, potentially.

[00:30:20] Speaker 03:
If we were looking at this on a clean slate, which I know we're not.

[00:30:23] Speaker 07:
Right, the safe harbor is really the board's way of acknowledging the legitimate concerns of employers that if they, because of exchange parts, if they give benefits in the context of a pending election, they may be facing an unfair labor practice finding.

[00:30:42] Speaker 07:
And so to sort of

[00:30:44] Speaker 07:
balance the interests of employers and employees.

[00:30:47] Speaker 07:
The board, I think very fairly, has said, okay employers, you can postpone the granting of this benefit, but just tell employees why you're doing that.

[00:30:58] Speaker 03:
The whole benefit or just the benefit for the bargaining unit employees?

[00:31:02] Speaker 07:
Just for the bargaining unit employees.

[00:31:05] Speaker 07:
And again, it's motivated by the idea that it is acknowledged and understood that when an election is pending, the employer is facing a delicate situation where it cannot appear to be influencing employee votes.

[00:31:19] Speaker 01:
And so with that in mind, the board has said- So you're telling me if Walmart that has 4,000 stores in the US

[00:31:27] Speaker 01:
but it's facing a union election of 100 employees in one store, that if they're going to implement a wage increase as to all of their million plus employees in the US, they can't do it because there's an election that's about to happen of 100 employees involving 100 employees at one store.

[00:31:53] Speaker 07:
No, they certainly can.

[00:31:55] Speaker 07:
If it's a company-wide benefit, these are the two choices that the employer has.

[00:32:00] Speaker 07:
They can grant, and I know that Ms.

[00:32:02] Speaker 01:
Murphy has said... Then why did Noah's New York Bagels say the opposite?

[00:32:07] Speaker 01:
That the presumption would be that they shouldn't do it?

[00:32:10] Speaker 01:
Well, they... If they're making the decision during the time of the, you know, after they know that the union election is coming up.

[00:32:22] Speaker 07:
But I think Noah's New York is just acknowledging that the employer may not want to do it because, again, it may be imprudent for the employer if there's any question about the even handedness.

[00:32:35] Speaker 01:
It didn't say that the employer may not want to do it.

[00:32:37] Speaker 07:
It said the more prudent course.

[00:32:38] Speaker 01:
It said the more prudent course.

[00:32:40] Speaker 07:
Right.

[00:32:40] Speaker 07:
Right.

[00:32:41] Speaker 07:
Granting that language is there.

[00:32:43] Speaker 07:
I think the issue is the employer has these two choices.

[00:32:49] Speaker 07:
It may be more prudent for the employer to

[00:32:51] Speaker 07:
postpone, but an employer does not have to fear in a situation like this, like we have in this case, where it's extremely clear that the benefit was a company-wide benefit.

[00:33:03] Speaker 07:
The employer only withheld it from these employees because of their involvement with a union election.

[00:33:09] Speaker 07:
In that context, an employer can just grant without fear.

[00:33:13] Speaker 07:
So in the Walmart situation, if the employer is implementing something on a company-wide basis,

[00:33:22] Speaker 07:
That is evidence that it was a neutral decision, first of all, under board cases.

[00:33:28] Speaker 07:
And so the employer can, without fear of unfair labor practice liability, just go ahead and grant the benefit.

[00:33:39] Speaker 03:
And I'm just wondering in the record, is there evidence that you can point us to that supports the finding that the memorandum urging the employees after the election to treat each other with dignity and respect would reasonably be interpreted to refer to disruptive pro-union activity?

[00:34:04] Speaker 07:
Yeah, so if you look at the memo, and I'm looking at the memo as reproduced in the decision and order, the first paragraph is sort of reflecting on what happened during the election and the lack of dignity and respect.

[00:34:17] Speaker 03:
Other than the face of the memo, because as I read the face of the memo in isolation, it does not speak one way or the other to pro-union or anti-union activity.

[00:34:27] Speaker 03:
So if you didn't know anything about the context, just reading that announcement, it says, look, we've had a divisive

[00:34:32] Speaker 03:
election, it's over, let's let bygones be bygones, let's treat each other with dignity and respect.

[00:34:38] Speaker 03:
And I would say that a reader might press you with the view that coming in from outer space and reading that memo, they wouldn't know which kind of trouble was being referred to there.

[00:34:52] Speaker 03:
And so I wonder if you have other evidence that you rely on.

[00:34:55] Speaker 07:
No, the memo is the, I think the board is just looking at the text of this memo.

[00:35:00] Speaker 07:
and considering, first of all, how it would reasonably be read, and second, whether it was promulgated in response to union activity.

[00:35:07] Speaker 03:
So it's not just looking at the text, it's looking at the context of the prior union activity and what had actually happened and what this employer stood for.

[00:35:16] Speaker 03:
I mean, be careful with your position because I think it's plausible to say that on the four corners of this memo, there's nothing anti-union about it.

[00:35:26] Speaker 07:
You're right, Your Honor, in the sense that

[00:35:29] Speaker 07:
To the extent that this memo refers to a union election and prior activity, it is relevant what the surrounding circumstances were.

[00:35:38] Speaker 07:
But really, the memo speaks for itself.

[00:35:40] Speaker 07:
The memo says in the first paragraph, now that the NLRB election is behind us, then it goes on.

[00:35:47] Speaker 07:
And it refers at various points to a few employees who had differences of opinion.

[00:35:53] Speaker 07:
And it identifies those.

[00:35:56] Speaker 07:
It's very clear from this memo in the board's view

[00:35:58] Speaker 07:
those few employees are the union supporters.

[00:36:01] Speaker 03:
Not necessarily.

[00:36:01] Speaker 03:
There could have been very vociferous anti-union advocates, and they could have been very rude to the people who were voting for union.

[00:36:12] Speaker 03:
And a good employer after that could say, look, don't be bad sports in your victory.

[00:36:19] Speaker 03:
Bring people together or don't be good bad sports in your loss.

[00:36:24] Speaker 03:
Bring people together.

[00:36:24] Speaker 03:
So it's just not clear which way that cuts.

[00:36:30] Speaker 04:
And certainly this court has spoken very strongly on this issue.

[00:36:34] Speaker 04:
And what is an employer supposed to do in these circumstances?

[00:36:41] Speaker 04:
I mean, it's what, 58 to 57 and one vote challenged?

[00:36:47] Speaker 04:
And everybody acknowledges this is not a tea party.

[00:36:51] Speaker 04:
So now let's come together and work together as one family.

[00:36:53] Speaker 04:
I mean, what else?

[00:36:55] Speaker 04:
What would a good manager do?

[00:36:56] Speaker 07:
Well, I would like to answer both of those questions.

[00:37:01] Speaker 07:
The first, as to Judge Pollard's questions, the paragraph that begins, while I recognize that employees have a right to make up their own minds, I think that is the paragraph where really it becomes clear that we're talking about pro-union people.

[00:37:15] Speaker 07:
because it doesn't talk about both sides.

[00:37:18] Speaker 07:
It talks about employees have a right to be for a union.

[00:37:21] Speaker 07:
They have a right to support the union.

[00:37:23] Speaker 03:
It does talk about both sides.

[00:37:24] Speaker 03:
It does.

[00:37:25] Speaker 03:
You have a right to be on either side.

[00:37:27] Speaker 03:
You can believe what you want.

[00:37:30] Speaker 03:
There have been some people who have been rude and violent, but it doesn't say which

[00:37:35] Speaker 03:
Which ones they are?

[00:37:36] Speaker 03:
Are they union goons or employer goons?

[00:37:39] Speaker 03:
It does not say.

[00:37:40] Speaker 03:
And reading it, you just aren't sure.

[00:37:43] Speaker 03:
Unless you have some other evidence about, oh yeah, everyone who works there knows that the few people are, you know, Jane, Joe, and Janice.

[00:37:51] Speaker 03:
And so that's why I'm asking you about other background or context.

[00:37:55] Speaker 07:
Well, I mean, I see that your honor is probably referring to a case like Boulder City, which is a case cited in the decision in order, in which the surrounding circumstances were relevant, because the memo in that case did not even expressly refer to union activity.

[00:38:14] Speaker 07:
And this case.

[00:38:15] Speaker 03:
I grant you that it refers to union activity, but it's unclear whether it's saying, now, except your brothers and sisters who supported the union,

[00:38:25] Speaker 03:
or whether it's saying, accept your brothers and sisters who opposed it.

[00:38:29] Speaker 07:
Well, I would go back to the idea that Section 7 protects both.

[00:38:33] Speaker 07:
So whether they're talking about Vcifer's pro-union activity or anti, both of those types of activity are equally protected under the Act.

[00:38:41] Speaker 07:
Exactly.

[00:38:42] Speaker 07:
And so it doesn't really matter.

[00:38:44] Speaker 07:
It's still impinging on Section 7 activity.

[00:38:47] Speaker 04:
And I apologize for confusion.

[00:38:48] Speaker 04:
So the employer, what could the employer have said?

[00:38:53] Speaker 07:
Well, the employer in a situation like this where there's been a tense election, it can, you know, employers have to tread carefully.

[00:39:04] Speaker 07:
It can remind employees about a lawful policy.

[00:39:09] Speaker 07:
It would just be a circumstantial determination for the board.

[00:39:12] Speaker 07:
in terms of whether, in context, what their reminder is coercive.

[00:39:17] Speaker 07:
In this case, there's no question that I think that it was coercive because of the language that surrounds this reiteration of the policy.

[00:39:27] Speaker 04:
So it says, we have this policy, and the board finds there's no problem with the policy.

[00:39:33] Speaker 04:
That's simply not an issue.

[00:39:35] Speaker 04:
And so there's this memo that focuses on where we are now

[00:39:42] Speaker 04:
as a unit.

[00:39:44] Speaker 04:
And it's very difficult to see how the board finds some implication there that respect and dignity are now going to become grounds for disciplinary action, where they weren't before.

[00:40:00] Speaker 04:
And they will only become grounds because of some employees' activity and connection with the election.

[00:40:10] Speaker 04:
I mean, there's so many leaps there.

[00:40:12] Speaker 07:
Are there?

[00:40:13] Speaker 07:
Well, I don't think so, Your Honor.

[00:40:15] Speaker 07:
The board is not really pinning everything on respect and dignity.

[00:40:20] Speaker 07:
It's looking at this whole memo and saying, well, an employee who reads this will reasonably think that, first of all, there were a few employees who were persisting in, whether it's pro-union or anti-union activity after the election, and those few employees perhaps have done things that the company thinks are threatening.

[00:40:39] Speaker 07:
and let us just remind you what our policy is on threats.

[00:40:43] Speaker 07:
So what it's doing really is creating a link, a specific link that didn't exist before between this neutral lawful policy and protected concerted activity.

[00:40:54] Speaker 01:
How has threats, intimidation, or harassment protected activity?

[00:41:01] Speaker 07:
Those are not, well,

[00:41:04] Speaker 01:
The board grants that employer can bar certain kinds of extreme conduct, but then... The memo says, doesn't say, you know, let's all sing kumbaya and not talk about the union pro or con anymore.

[00:41:21] Speaker 01:
It says let's not have any more threats, harassment, or intimidation anymore.

[00:41:26] Speaker 07:
Right, and it leaves, the problem is that it leaves.

[00:41:29] Speaker 01:
If none of those things are protected activity, then how do we make the leap then that the memo is suppressing protected activity?

[00:41:37] Speaker 07:
The problem is in large part, Your Honor, that this memo refers to employees who have been threatened, and then it builds on that idea that there have been threats that would be subject to discipline.

[00:41:48] Speaker 03:
There is no record evidence of threats other than, I mean, I think the closest is actually there is more examples of

[00:41:57] Speaker 03:
disrespectful, undignified anti-union activity in this record than pro-union activity.

[00:42:03] Speaker 03:
One of the problems that the board points out is this is a memo that's issued referring to sort of thuggishness and there wasn't any on the part of union supporters.

[00:42:13] Speaker 03:
But that also means the context makes it again perhaps more likely that the employer is taking a deep breath and saying no more anti-union thuggishness people

[00:42:29] Speaker 07:
Well the board respectfully thinks that this memo reasonably read and again that the standard is Has the board given this a reasonable one among many possible reasonable readings?

[00:42:43] Speaker 07:
Which is why I'm asking you for more context right the board's the board's view is that this memo is

[00:42:50] Speaker 07:
reasonably read, conveys to employees there have been threats, unspecified threats.

[00:42:57] Speaker 07:
The employees don't know what they consist of.

[00:42:59] Speaker 07:
And so employees could think that something that is just aggressive, lawful, pro or anti-union activity is a threat, and now it should be reported because the company has asked for employees to report such conduct.

[00:43:14] Speaker 07:
But we don't know what the underlying threats they're referring to are.

[00:43:18] Speaker 07:
And so the vagueness of this memo is really a large part of the problem.

[00:43:24] Speaker 01:
So if an employer puts out a memo that says, we've been told that employees have been threatening other employees with respect to this campaign on both sides,

[00:43:39] Speaker 01:
We don't want any more threats and here's our policy against threats.

[00:43:44] Speaker 01:
That would be improper because the memo didn't explain what kind of threats and what kind of specific threats were made.

[00:43:53] Speaker 07:
Yes, Your Honor, because when an employer is bringing in protected activity and essentially saying some subset of that activity is actually not protected and subject to discipline, it has to be specific.

[00:44:08] Speaker 01:
What if your policy defines threats as threats of physical violence?

[00:44:14] Speaker 01:
And so if you refer to the policy and you say, you know, we don't want any threats, then how can you think that they're saying anything, referring to anything other than threats of physical violence?

[00:44:25] Speaker 07:
But this policy is broader.

[00:44:27] Speaker 07:
And it could, together with this memo, it could sweep in protected activity that is actually not threatening, harassing, or intimidating with violence.

[00:44:38] Speaker 07:
And so that, I think, is the problem, is the specific policy that you have

[00:44:42] Speaker 01:
in conjunction with these very nonspecific comments.

[00:44:53] Speaker 01:
The employer didn't put forth any evidence that there really were any threats or that they had investigated any threats or that they had disciplined anybody for any threats.

[00:45:01] Speaker 01:
So the board seemed to act like they thought that this memo was a sham.

[00:45:07] Speaker 01:
And for that reason, it wasn't really going to give the employer the benefit of their doubt.

[00:45:12] Speaker 01:
At least that's what I read in the decision.

[00:45:14] Speaker 07:
Well, the decision at page three of the slip opinion, it says,

[00:45:21] Speaker 07:
Part of the problem is the lack of specificity and the nonspecific plea for dignity and respect.

[00:45:28] Speaker 07:
The board also says the memorandum served as an authoritative indication to employees that the respondent would construe the policy to include protected campaigning activity and that they should do so as well.

[00:45:41] Speaker 07:
I think that's really the crux of the board's finding which we've been discussing.

[00:45:48] Speaker 07:
I see that my time is way

[00:45:50] Speaker 07:
expired.

[00:45:52] Speaker 07:
I thank you very much for your time.

[00:45:53] Speaker 07:
Thank you.

[00:45:54] Speaker 07:
Council for Intervener.

[00:46:05] Speaker 06:
May it please the court, Katherine Hanson representing Intervener 1199, SEIU United Healthcare Workers East.

[00:46:12] Speaker 06:
The first thing I'd like to say is that the New York bagels case is a red herring.

[00:46:17] Speaker 06:
It does not involve system-wide benefits.

[00:46:20] Speaker 06:
The board has for decades decided cases specifically about

[00:46:26] Speaker 06:
system-wide benefits, meaning benefits granted at more than one facility made on a corporate level, exactly the facts we have at issue here.

[00:46:34] Speaker 06:
In New York bagels, the board was considering a decision at one shop whether to grant benefits during the critical period.

[00:46:43] Speaker 06:
And what the board held there was, in a case where

[00:46:47] Speaker 06:
It's unclear whether the employer would be able to justify its decision to grant the benefits during the critical period.

[00:46:54] Speaker 06:
The employer is in a precarious spot and in that case it may be more prudent to withhold the benefits.

[00:47:01] Speaker 06:
from everyone, because then it puts the burden on the general counsel to establish that the benefits would have been granted in the absence of the union.

[00:47:11] Speaker 06:
It is entirely different than a targeted withholding case that we have here, where a decision is made corporate-wide here, 20 stores across the state of New Jersey, to grant a benefit, and that decision is withheld only because

[00:47:26] Speaker 06:
from employees only because they seek union representation.

[00:47:29] Speaker 06:
And what the board has held consistently for decades with court approval is that the employer cannot lawfully withhold benefits that are granted system-wide unless they have some really good reason for it.

[00:47:43] Speaker 06:
And at the very least, it puts a burden on the employer.

[00:47:47] Speaker 06:
And Ms.

[00:47:48] Speaker 06:
Mervine correctly states that those decisions have not been enforced.

[00:47:52] Speaker 06:
Great Atlantic and Pacific Tea, the foundational case of the board's area was enforced by the Fifth Circuit, Great Florida enforced by the Eleventh Circuit, Pennsylvania Gas enforced by the Third Circuit, and on and on.

[00:48:05] Speaker 06:
In cases where you have a targeted withholding, it is a subset of cases where you have facially discriminatory conduct based only on employees' protected activities.

[00:48:16] Speaker 06:
The board has consistently held that without more, that is unlawful.

[00:48:20] Speaker 04:
So in your reading of the board's cases that spell out this rationale, which do you think or which are the most persuasive on that?

[00:48:30] Speaker 04:
Because one of the things about the Third Circuit case suggests is that the board needs to provide a little more explanation.

[00:48:38] Speaker 04:
Not that it can't reach the same result necessarily, but these sort of sketchy summary statements are not enough given the

[00:48:51] Speaker 04:
different circumstances in virtually every situation.

[00:48:55] Speaker 06:
I think the other bagels case, Noah's Bay Area Bagels, goes through a detailed analysis of what the employers' choices are.

[00:49:01] Speaker 06:
That case came out three years after the other bagel case that the employers were relying on.

[00:49:06] Speaker 06:
I think Pennsylvania Gas, Associated Milk.

[00:49:11] Speaker 04:
There's one from our Russell Stover.

[00:49:13] Speaker 04:
I'm looking at the ALJ's opinion.

[00:49:17] Speaker 04:
And it cites Noah's Bay Area.

[00:49:22] Speaker 04:
And basically that's it.

[00:49:25] Speaker 04:
And there's nothing wrong with that, but I'm just saying that we have to read what I see as this one paragraph of four findings within that framework in order to parse out exactly what the reasoning is.

[00:49:45] Speaker 06:
Well, the ALJ's decision in this case also cites Associated Milk producers, and it also cites Great Atlantic and Pacific Tea, which is the board's first case.

[00:49:54] Speaker 04:
What page are you on?

[00:49:55] Speaker 06:
I'm on Joint Appendix 188.

[00:49:57] Speaker 04:
Right, so am I. I see Atlantic and Pacific, but that's before the board gets into its discussion.

[00:50:07] Speaker 06:
Well, it says it again halfway down in the second column.

[00:50:11] Speaker 06:
It again cites to Great Atlantic and the coercive effect of withholding and associated milk in the column before specifically why targeted withholding is particularly problematic.

[00:50:25] Speaker 06:
And the reason is exactly, I think as your honors have recognized, that employees are left to draw the most foreseeable conclusion, which is that they are being punished because they are seeking union representation.

[00:50:37] Speaker 06:
And all of the circuit cases that Council for the Employer cites to, first of all, don't involve targeted withholding, but involve some discussion of the employer's motive, and many cases, in fact, where the employer did explain to employees, look, this is what we're doing.

[00:50:52] Speaker 06:
The claim here that the employer withheld these benefits

[00:50:55] Speaker 06:
because the law was confusing.

[00:50:57] Speaker 06:
First of all, it's simply not in the record in the burden, according to Great Dane, as this circuit has adopted.

[00:51:02] Speaker 06:
In many cases, the burden is on the employer.

[00:51:05] Speaker 06:
One's discriminatory conduct is established to prove a legitimate business motivation.

[00:51:10] Speaker 06:
Not only is it not in the record, but the employer did not bother to tell employees why they were doing it.

[00:51:14] Speaker 06:
And what Great Dane says, and actually what the Supreme Court said many times before Great Dane, was that

[00:51:24] Speaker 06:
that the natural foreseeable consequences of an act are sufficient to, that an inference should be drawn from the natural foreseeable consequences of an act.

[00:51:33] Speaker 06:
And that's exactly the foundation of Great Dane.

[00:51:35] Speaker 01:
Can I, I meant to ask your sister counsel this and I forgot.

[00:51:39] Speaker 04:
Could I just follow up on one point on this?

[00:51:42] Speaker 04:
That is, what is your response to the argument that if we were to say to the eligible employees that we're just withholding

[00:51:54] Speaker 04:
this benefit temporarily that the employer might end up violating the law?

[00:52:01] Speaker 06:
Well, I think that it is incorrect that granting the benefit after the election would be unlawful, and that is because the rules are the same before and after the critical period, whether the union wins or loses.

[00:52:12] Speaker 06:
The employer must continue to maintain the status quo, and that means that benefits that would have been granted in the absence of the election

[00:52:22] Speaker 06:
regular benefits granted in the normal course still have to be given.

[00:52:25] Speaker 06:
So I don't think it's accurate that it puts the employer in a position where they might not be able to keep their promise.

[00:52:30] Speaker 03:
But I don't love the great- But here it's not regular in the course.

[00:52:33] Speaker 03:
It's not like an annual- It's a decision to, a one-time decision to back down from,

[00:52:42] Speaker 03:
a belt tightening that they imposed in January.

[00:52:44] Speaker 03:
And so the question is, given that, how does the employer both act and show that it is acting in a way that is free of considerations about unions, employees protected rights?

[00:53:00] Speaker 06:
Well, what the what the board has said repeatedly for decades in Pennsylvania gas associated malgresso Stover's nose bagels network ambulance is that system wide benefits are treated like benefits given in the normal course because

[00:53:15] Speaker 06:
They are made, like your Walmart example is a perfect one.

[00:53:19] Speaker 06:
The board is not going to infer motive if you can show that somebody's sitting in another part of the country where you have lots of stores, made a decision to increase benefits, and then you have this one group of employees who's involved in a union campaign.

[00:53:32] Speaker 06:
The board is going to treat that as if it is given in the normal course.

[00:53:36] Speaker 06:
And the board articulates that very clearly in these decisions.

[00:53:40] Speaker 06:
And that's exactly why the board says, you don't need to worry, employer.

[00:53:44] Speaker 06:
about giving benefits in this context, that the employer need not worry during a critical period about granting benefits as long as they can establish that it was system-wide and made for reasons unrelated to the union activity.

[00:53:58] Speaker 06:
And do they not have to justify the timing?

[00:54:01] Speaker 06:
Yes, I think that's a really good question.

[00:54:03] Speaker 06:
And the way I would answer it is that it's exactly the burden shifting framework that the board uses.

[00:54:11] Speaker 06:
A grant of benefits creates presumption.

[00:54:15] Speaker 06:
The employer rebuts it by saying, we would have granted these benefits anyway.

[00:54:19] Speaker 06:
It was made in a corporate office.

[00:54:21] Speaker 06:
And then the burden would be on the general counsel to say, sure, but why did you do it now?

[00:54:26] Speaker 06:
Did you speed things up?

[00:54:28] Speaker 06:
You couldn't wait?

[00:54:29] Speaker 06:
Was there some reason you had to give it now?

[00:54:31] Speaker 06:
So it doesn't save the employer.

[00:54:33] Speaker 06:
That's not enough.

[00:54:34] Speaker 06:
But it certainly then puts the burden on the general counsel and the union to say,

[00:54:38] Speaker 06:
I don't believe them.

[00:54:39] Speaker 06:
I don't believe that that really is the reason.

[00:54:43] Speaker 06:
But in the first instance... So just back up and walk us through this.

[00:54:46] Speaker 03:
So here they have a system-wide change and they're thinking, do we do it two weeks before or the week after?

[00:54:53] Speaker 03:
the election and we're worried because as you say both of those are in jeopardy of being seen as in response to election but then they read some cases and say oh actually this is system wide and just this little one election so we're going to go ahead and do it and let's do it before and let's do it

[00:55:13] Speaker 03:
for everybody, including the collective bargaining eligible employees.

[00:55:17] Speaker 03:
And they do it.

[00:55:18] Speaker 03:
And then the board comes after them.

[00:55:21] Speaker 03:
And there's no, in that case, there's no Great Dane facial distinction between election eligible and non.

[00:55:29] Speaker 03:
And you say, oh, you did this just before the election.

[00:55:32] Speaker 03:
And they say, no, no, no, system wide.

[00:55:34] Speaker 03:
And you say, do you have to justify the timing?

[00:55:37] Speaker 03:
Or you say, we think there's evidence of intent to interfere with union activity.

[00:55:42] Speaker 03:
Look at the timing.

[00:55:44] Speaker 03:
Is that how it goes?

[00:55:44] Speaker 03:
And then they say, no, no, no, timing was just convenient for us.

[00:55:50] Speaker 03:
Has that shifted the burden to them?

[00:55:52] Speaker 03:
And what can they say in response?

[00:55:53] Speaker 06:
So the board has never spelled that out in a case.

[00:55:56] Speaker 06:
So what I'm arguing is based just on the general first principles at issue in the granting and the folding of benefits.

[00:56:02] Speaker 06:
The first thing I'd say is, you know,

[00:56:04] Speaker 06:
It's a very interesting question and one I've thought about and I can go over my answer, but the court does not have to resolve that question here because the employer didn't do that.

[00:56:11] Speaker 06:
This is facially discriminatory conduct.

[00:56:14] Speaker 06:
They withheld a benefit granted to everybody else and had no justification for it.

[00:56:17] Speaker 06:
My position would be, however, and Noah's area bagels and all of the cases that we cite in our brief and the union's brief where the board says, you do not need to worry about granting this benefit before the election provided it's granted system-wide.

[00:56:30] Speaker 06:
my my belief based on board law is that then once the employer establishes that

[00:56:36] Speaker 06:
The GC would have the burden to show the timing is problematic, that you did it.

[00:56:42] Speaker 06:
You really didn't make it someone sitting in a different office without any knowledge of the union activity.

[00:56:47] Speaker 06:
We believe that you did make this decision because of the union.

[00:56:50] Speaker 06:
And the burden would shift to the GC to prove that.

[00:56:53] Speaker 06:
What this court has held over and over again.

[00:56:56] Speaker 01:
Would that be the test, that if they had knowledge that there was going to be union activity, then it's impermissible?

[00:57:03] Speaker 01:
I thought it was that they were trying to influence the union activity as opposed to just that they had knowledge of it.

[00:57:11] Speaker 06:
Well, the cases say that an employer is to proceed as if the union were not on the scene.

[00:57:16] Speaker 06:
And what I think that is a shorthand way of saying is that certain kinds of conduct create an inference of unlawful motive.

[00:57:22] Speaker 06:
And if the record establishes that an employer changed their course of conduct because of the presence of the union, particularly in a case like this where animus is well established,

[00:57:31] Speaker 06:
and given the facts of this case, that they made no efforts to not communicate to bargaining union employees, eligible employees, that the benefit was being withheld from them, that it creates an inference.

[00:57:46] Speaker 06:
And then the burden is on the employer to say, yes, I knew about the union, but that wasn't

[00:57:51] Speaker 06:
I didn't do it for that reason.

[00:57:53] Speaker 06:
I did it because we were having trouble retaining employees in this classification, and we couldn't fill these positions, and that's why we gave a benefit during the critical period.

[00:58:03] Speaker 06:
Or because we had an insurance broker come in, and they said, you've got to fix your health insurance benefits.

[00:58:07] Speaker 06:
And that's why we did it.

[00:58:08] Speaker 06:
So it's not that the employer doesn't have knowledge of the union.

[00:58:11] Speaker 06:
It's that they didn't change their course of conduct because of the presence of the union.

[00:58:15] Speaker 06:
And the cases are very well established, and the employer concedes at this point

[00:58:20] Speaker 06:
An employer's obligation is to maintain the status quo.

[00:58:23] Speaker 06:
And the employer's argument is that that's what we did here.

[00:58:26] Speaker 06:
We didn't change anything for election eligible employees.

[00:58:29] Speaker 06:
The ALJ in this case specifically rejects that definition of the status quo.

[00:58:34] Speaker 06:
And the employer does not cite a single case to support the notion that increasing benefits for everybody else, 20 facilities in the state of New Jersey, every single employee had their benefits increased but these, that in that case,

[00:58:48] Speaker 06:
not changing the benefits for union eligible employees was maintaining the status quo because status quo means business as usual.

[00:58:55] Speaker 06:
What was business as usual?

[00:58:57] Speaker 06:
One health insurance plan.

[00:58:59] Speaker 06:
This company had one health insurance plan for everybody.

[00:59:02] Speaker 06:
When the benefits got worse, they got worse for everybody.

[00:59:05] Speaker 06:
These employees had an expectation that they were covered by a common health insurance plan and then all of a sudden,

[00:59:12] Speaker 06:
Two weeks before the election, they become second-class citizens with respect to that health insurance plan.

[00:59:17] Speaker 06:
They are treated differently.

[00:59:19] Speaker 06:
And that is not maintaining the status quo.

[00:59:21] Speaker 06:
And the ALJ finds exactly that in this case, that status quos do.

[00:59:25] Speaker 01:
Is there a mechanism for the employer to get some guidance through something that came to a no-action letter before taking action?

[00:59:33] Speaker 06:
Yes.

[00:59:34] Speaker 06:
The board issues advice.

[00:59:37] Speaker 06:
Employers can write to them and get advisory opinion.

[00:59:42] Speaker 06:
But I would say, so yes, the answer is yes.

[00:59:46] Speaker 06:
But in this case, the employer just needed to read board law.

[00:59:51] Speaker 06:
There is no confusion in board law for decades about this subset of cases targeted with holding.

[00:59:59] Speaker 04:
All right.

[01:00:00] Speaker 04:
Thank you.

[01:00:00] Speaker 04:
Did you have a question, Judge Wilkins?

[01:00:03] Speaker 06:
Thank you.

[01:00:06] Speaker 04:
All right.

[01:00:06] Speaker 04:
Counsel for petitioner?

[01:00:10] Speaker 02:
Thank you.

[01:00:11] Speaker 02:
Just a few points in rebuttal.

[01:00:13] Speaker 02:
One, Your Honor, it's correct that Noah's New York Bagels is a decision that was adopted by the board, all of the findings and conclusions.

[01:00:20] Speaker 02:
So that is a decision of the board.

[01:00:21] Speaker 02:
And it's not qualified in the way the council has suggested.

[01:00:24] Speaker 02:
It doesn't say it depends whether it's system-wide or not.

[01:00:26] Speaker 02:
The language is an employer should not put into effect any increase not already decided upon before the union came onto the scene.

[01:00:34] Speaker 02:
So that decision couldn't be clearer in what they are suggesting.

[01:00:38] Speaker 02:
Council has suggested that the cases that have held that what the board tried to do with respect to differentiation Have all have all gone the board's way that that's absolutely wrong all of the decisions that dealt with a per se or presumptive rule in the context of differentiation Bowling Green Marshall Durbin Kerwood 800 River Road these all these cases all said what the board did was impermissible and

[01:01:01] Speaker 02:
And the Great Atlantic case that union counsel refers to, when the Fifth Circuit affirmed that case, it especially reserved the question of whether the board could have found a violation without actual evidence of motive.

[01:01:15] Speaker 02:
So it affirmed by saying there was actual evidence of improper motive here.

[01:01:19] Speaker 02:
So we're not going to reach the question of whether the board, as it says, could just presume improper motive simply because there was differentiation against employers.

[01:01:28] Speaker 04:
So do you read?

[01:01:30] Speaker 04:
I don't.

[01:01:31] Speaker 04:
I can't say I'm that familiar with the Fifth Circuit, in case you're referring to, but do you read some of these other circuits as saying that it's not that the board could not reach the conclusion

[01:01:43] Speaker 04:
It reached but rather that it has to make additional findings.

[01:01:48] Speaker 04:
It has to spell out I mean that was sort of 800 River Road in part It's not a but for test.

[01:01:55] Speaker 04:
It's you the board actually has to make some findings that You're reading these cases to say the presumption itself doesn't shift any burden of coming forward and

[01:02:07] Speaker 04:
to the employer, but rather the burden is on the general counsel from the beginning.

[01:02:13] Speaker 02:
That's right.

[01:02:13] Speaker 02:
And I think in particular, I think it's the Fifth Circuit's case, but it could be the Sixth Circuit's Bowling Green.

[01:02:18] Speaker 02:
One of them says, and it kind of explains in detail, the real problem here is you have these unusual circumstances where you can kind of be damned if you do and damned if you don't.

[01:02:27] Speaker 02:
And in those circumstances, we think the better thing for the board to do is actually take evidence and look at everything that was going on

[01:02:35] Speaker 02:
instead of try to apply presumptions and per se rules, because this just isn't an area where you can look at something and know automatically whether the employer was trying to act in good faith versus whether they were trying to influence the election.

[01:02:48] Speaker 04:
So where you have a stipulation of facts and a waiver of a hearing, is the board entitled to draw

[01:03:01] Speaker 04:
reasonable inferences from those stipulated facts?

[01:03:05] Speaker 02:
I think the board's always entitled to draw reasonable inferences.

[01:03:08] Speaker 02:
The problem here is I don't think there's sufficient facts from which to draw a reasonable inference because you have to look at the stipulation against the backdrop of the law.

[01:03:18] Speaker 02:
And when the law is telling employers that they can do what the employer did here, what was done is every bit as consistent with an employer that was motivated by good faith effort to comply with the law.

[01:03:30] Speaker 02:
So in that circumstance, I think the obligation is on the board, as the Third Circuit said.

[01:03:34] Speaker 02:
The Third Circuit didn't say, this can't be problematic.

[01:03:38] Speaker 02:
It said,

[01:03:38] Speaker 02:
You've been told that you have a burden, and you declined to try to meet it.

[01:03:42] Speaker 02:
So we're going to remand and tell you that at a bare minimum, take some evidence and figure out what motive was instead of just proceeding on a per se rule.

[01:03:51] Speaker 02:
And that's all that we're asking the court do here is tell the board, you have to prove your case.

[01:03:55] Speaker 02:
You can't just have a per se or presumptive rule.

[01:03:58] Speaker 04:
All right.

[01:03:59] Speaker 04:
Thank you.

[01:03:59] Speaker 04:
We'll take the case under advisement.