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Case number 14-1189 at Elm, Mattson Terminals, Inc.

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Petitioner vs. National Labor Relations Board.

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Mr. Marr for the petitioner, Mr. Joseph for the respondent.

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Good morning, Your Honors.

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My name is Jerry Maher and I represent Mass Internals.

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The issue in this case is whether superintendents and senior superintendents are supervisors.

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The hierarchy on a shift is to have one general superintendent, two to three senior superintendents, and seven to ten superintendents.

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This group of 10 oversees as many as 100 laborers.

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And if the senior superintendents and the superintendents are not supervisors under the act, there would be one supervisor for over 100 laborers.

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The general is not even present on two of the 14 shifts each week.

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And for those shifts, the senior assumes complete control.

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In 2000, the NLRB determined that these employees were supervisors.

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In 2014, they determined that they were not supervisors.

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There were two intervening factors that the board relied upon.

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One was the fact that Matson went from a straddle truck operation to a wheeled operation, and the second factor was the use of software to plan the operation.

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With respect to the change in the operation, previously Matson used a large tractor

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to move the containers within the yard.

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When they went to a wheeled operation, the container is placed on a trailer by the crane and it then has to be secured to the trailer by workers.

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So this actually increased the complexity of the operation because now there's a group of wharf workers working under the crane

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So there's more people and there's more people in an area of vulnerability because they're operating under the crane and they're also operating in an area where there's increased container traffic.

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With respect to the use of the software, in the board's view, the software replaced the need to exercise discretion because the flow plan, the work plan is generated by a computer.

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However, the fact that someone is sitting at a computer in Salt Lake City where this work is done, they cannot possibly exercise discretion on the ground for the people who are delegated to carry out the changes in the plan.

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So it is really the work of the planners in Salt Lake City that is routine.

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They plug the new factor into a computer and the computer generates the change in the flow plan.

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It's the superintendents and the senior superintendents who are on the ground that have to exercise

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their discretion to determine how to change the operation to affect this change in the flow plan.

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The record established that independent judgment continues to be exercised by the people who are actually on the ground affecting the work plan.

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As one superintendent testified, a whole lot of things can happen, and they do happen in this very complex operation.

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Can you tell us about the concrete evidence of exercises of independent judgment?

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Because my understanding is that a description at a general level is not sufficient.

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We actually have to have more empirical evidence that these people, as they actually perform their jobs, are exercising independent judgment.

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Yes, there were a number of examples that are in the record.

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For example, supervisors, I'm sorry, senior superintendents supervise the superintendents.

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This occurs, for example, when the general is not present, the superintendents have to be assigned to a variety of different functions.

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And the record established that the senior who's

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on duty is the one who assigns the superintendents to these various functions.

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I thought both the senior and the superintendents are both supervisors.

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They are.

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Well then if you're supervising a supervisor then neither one is an employee in your view.

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That's correct.

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So then that degree of supervision isn't

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terribly relevant to your argument, doesn't it?

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Well, there's two levels of supervision.

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There's a senior superintendent.

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There's typically two to three of them on a shift.

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They exercise overall supervisory authority.

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They're responsible for the operation of the superintendents.

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And it's the superintendents who directly interact with the hourly employees.

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So there's really two levels of supervision that are at issue in this case.

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Additional?

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Is there, it's your position that the two, the superintendents and the supervisors rise and fall together.

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We couldn't differentiate between them for purposes of the supervisor analysis.

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No.

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Actually, you could differentiate between the two.

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Did you make that argument below?

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Excuse me?

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Did you make that argument in the NLRB that even if both aren't together, employee supervisors, the seniors are?

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Our position before the NLRB were that both the seniors and the superintendents were both supervisory.

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Returning to Judge Blart's question about discrete examples, there's also evidence in the record that the superintendents change assignments and give directions based on the needs of the operation.

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This occurs when there's problems with the discharge or load.

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It also occurs when there's safety issues that arise.

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It's really the people on the ground that have to make these decisions.

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There's also evidence that the superintendents take corrective action.

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They do this in a number of instances.

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One example is where they require workers to continue to work beyond their scheduled shift in order to complete an operation.

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The superintendents are also held accountable for their performance.

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There's evidence in the record that a superintendent was disciplined.

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He was given a two-week suspension because he failed to address a crane situation on board ship.

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There's also evidence in the record that the superintendents adjust grievances.

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The collective bargaining agreement is in evidence at

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Exhibit six is in the appendix of page 607, but section 2401 of that collective bargaining agreement gives to the on-the-job superintendent the authority to resolve a grievance or he's the first step in the grievance procedure and there's documentary evidence of the resolution of a grievance by a superintendent.

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And that's exhibit 90 at appendix 922.

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There's also evidence that the senior superintendents have the authority.

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What's your response to the government's argument that you forfeited any argument that they exercised independent judgment and adjusting grievances, that you just didn't raise that before the board and therefore can't raise that now?

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I believe that issue was raised before the board.

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I think what they contend we did not raise before the board was their credibility resolutions.

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And that issue really goes to whether there's substantial evidence in the record to support the board's decision.

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Well, on the credibility question aside, did you raise before the board the assertion that seniors and superintendents exercise independent judgment in adjusting grievances, disciplining employees, and participating in hiring?

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We did.

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That evidence.

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that the senior superintendents exercise authority.

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The evidence of that was when a superintendent was sent home, and that appears that the citations to that appear in our reply brief at page 19.

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That seniors also hire is really an

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their authority to hire is twofold.

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One is it was stipulated that the senior superintendents of Pier 2 do hire and they were stipulated to be supervisors.

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That stipulation

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in our view, applies to all of the senior superintendents because they have the same job position, the same job description, they function in the same manner.

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Do they actually hire or do they refer for hire?

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The superintendents refer for hire, the peer to senior superintendents actually hire, and they were stipulated to be supervisors.

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You're talking about at the other location?

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Yes, yes.

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The stipulation doesn't agree that both are the same.

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It just agrees that those at that location were supervisors, right?

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That's correct.

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Can I ask a question about the not making credibility determinations?

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I have to say I'm very confused about this.

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I understand the waiver argument on both sides.

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What does it mean to say that the NLIB representative won't make a credibility determination?

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That is the board's policy.

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What does it mean?

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What do you think it means?

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So here's an obvious hypothetical.

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You have the burden of showing that these people are supervisors, correct?

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That's correct.

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All right.

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You put on a witness who says these people are supervisors and they do the following things.

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The other side puts on a witness who says these people are not supervisors and they do not do those things.

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Now, if credibility can't be determined,

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How is a decision to be made?

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And if credibility isn't to be determined, don't you automatically lose because you have the burden.

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We do have the burden, that's correct.

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What occurred here is that we did put on evidence that they had the authority.

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And then the actual petition for employees, the superintendents, said they didn't.

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But then we put on evidence where they had said in documents that they submitted to Matson that they did have the authority.

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And this information was in their job evaluations.

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So is that a question of credibility?

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Aren't you asking for a decision that the other side's witnesses weren't credible because their statements were inconsistent with the documents?

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Isn't that what you're arguing?

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I think the fact that their statements were inconsistent means that the evidence should not have been weighed by the acting regional director.

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If you could just give me an example, just a plain old credibility question.

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Your witness says X. The other witness says Y.

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What does it mean to say that credibility can't be weighed?

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If there's nothing beyond the two versions, then I think you're right, then the person with the burden would not prevail.

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Even if the witness against you is not credible?

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What would happen here?

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I understand, but I'm just wondering whether you and maybe the NLRB are misreading what the meaning of credibility is under those circumstances.

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It just seems hard to believe that it's possible to have witnesses that are proceeding and not have in some circumstances to decide credibility.

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It would seem that in some circumstances you would favor the credibility determination.

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Let me just take another stab at the same question.

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read it, it is the hearing officer that is not supposed to make credibility determinations.

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The hearing officer is basically supposed to compile a record and then the regional director uses that record to make the decision.

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So the hearing officer is in effect like the investigator pulling in all the evidence with all its conflicts and then the regional director looks at that and my understanding is that the regional director

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would have to make credibility determinations in order to rule one way or the other, so long as there is some conflict between what the two parties are saying.

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Is that not a correct understanding of that more dual against credibility determinations that really applies to the function of the hearing officer?

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I agree that the hearing officer functions as an investigative official.

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My understanding of the board's policy is that the regional director likewise does not make the credibility determination.

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At least that's my understanding.

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But it is tough when there's competing evidence, but I think what differentiates this case is that we had documentary evidence from the very witnesses which conflicted with their testimony.

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Which is you could say a violation of the rule against population relations, or as I understood you to be arguing before the agency, it's just you think that was clearly erroneous determination.

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Yes.

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And in here, the board needs substantial evidence to support its decision.

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And I think that evidence doesn't exist because of the discrepancy in the witnesses for the union.

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So there are two separate grounds that in your view that support the same point.

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One is there just isn't substantial evidence and I would take that to be under NLRB rules and regulations.

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what's described as the regional director's decision on a substantial factual issue is clearly erroneous on the record and such error prejudicially affects the rights of a party.

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I think you raised that, you haven't forfeit that.

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The one that I think your appellate brief before us seems to further articulate is something that I'd like to hear your response to whether you forfeited it.

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The separate ground that the regional directors decision on a substantial factual issue is clearly erroneous on the record.

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So it's more of a procedural, I'm sorry, I've just read the same one, the conduct of the hearing

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or a ruling made in connection with the proceeding.

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And that would be the credibility.

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So that's a separate ground that you did not raise below, as I understand it.

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We did not raise the issue of substantial evidence below.

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That is correct.

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But I think that that's properly an issue to raise on appeal after the board has made its determination, because their decision has to be supported.

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But you didn't raise the issue below of the

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putative disability of the regional director to make credibility determinations.

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That's the one you differentiate.

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That is correct.

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You are correct.

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Any questions?

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All right.

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We'll hear from the LRB.

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Thank you.

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Thank you.

[00:16:38] Speaker 04:
May it please the court?

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My name is Micah Jost for the NLRB.

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I'd like to begin by addressing where the court left off with regard to the credibility question.

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First of all, it is our position that any argument regarding improper credibility resolutions absolutely was not presented to the board.

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in the representation proceeding, and accordingly under this court's well-established precedent in cases like Pace University, any such argument is belatedly raised in the ULP proceeding and cannot be argued before the court.

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In any event, there is no merit to this credibility argument.

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It is the case that a hearing officer is not to resolve questions of credibility based on things like demeanor.

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As the court recognized, the hearing officer's role is to build a record, to take in the evidence and compile it for a later resolution by the RD and review by the board.

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But this court emphasized in the VIP Health Services case that it is the role of the regional director to resolve contradictions in the testimony.

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Reading from that case,

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164 federal third, 648.

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The court explained that there was much evidence to support certain claims, but much directly contradicts them.

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The regional director resolved those contradictions in favor of the union, and the court upheld that resolution.

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So in this case, what we ultimately have is

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Like he said, she said, situation with regard to some of these issues.

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And it was proper for the regional director to rely, to place greater weight on the more concrete and the more tangible evidence and to disregard the more general and conclusory statements provided by the company.

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What the court has explained in cases like oil workers is that that is the board's job to look for tangible, concrete examples and that conclusory general statements do not suffice.

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to meet the company's burden in this regard.

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I'd like to turn briefly to a few other issues that were raised by Opposing Council.

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An argument was made at the outset that somehow because there are a number of

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longshoremen and occasionally the generals are not on duty, but that therefore transforms other individuals into statutory supervisors.

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The court has definitively rejected that position again in cases like VIP health services and the oil workers case.

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In any event,

[00:19:07] Speaker 01:
I'm sorry, let me just back up on one further question about the, whether it's the hearing officer or the regional director that is disabled by the board's regulation from making credibility.

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There's one case that we found the grace industries and LRB

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case where the board says the regional director acknowledged this testimony could not be reconciled with that testimony, but made no credibility resolutions in keeping with representation hearing proceedings.

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So what is the board's view?

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Does this no credibility determination will apply to the RDs?

[00:19:45] Speaker 01:
You're saying maybe credibility, yes, but conflux and evidence

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As we explained in our brief, the role of the regional director is ultimately to look for tangible concrete examples.

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And so where evidence is in conflict, the regional director has to go with essentially the weight of the evidence.

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The regional director has to look to what is more convincing, what is more compelling.

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That does not necessarily translate into a credibility determination per se.

[00:20:12] Speaker 01:
Because those witnesses are no longer even before.

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Right.

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The demeanor of the witnesses is not something that the regional director can evaluate.

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But the court has also recognized that where there is conflicting evidence or contradictory evidence, that means that the party that has the burden of proof loses in a supervisory representation case.

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It's not cited in our brief, but the Salem Hospital case from this court recently, Judge Henderson, I believe, recognized that that is a fundamental principle where the evidence is in conflict with the party with the burden of proof here at the company.

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cannot meet that burden.

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Turning back to the question of what these individuals do while the generals are not there, it's clear from the record that it's not simply two days out of any week, two ordinary days where the generals are off duty.

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The generals make their own schedules.

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And appendix 233 and 234, the testimony is that the generals try to schedule their days when there are no operations going on or fewer operations.

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At Appendix 599, it's also clear that managers can be reached at home if anything unusual arises while the seniors are acting as acting general superintendents.

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And furthermore, at Appendix 600, Senior Sape explained that when he did act as a general, he received an assignment sheet pre-made from the ordinary general.

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So there was no independent judgment for him to exercise in that regard.

[00:21:41] Speaker 00:
Can I ask you, because the board looked at these same positions in, I guess, 99.

[00:21:50] Speaker 00:
They made a decision in 2000.

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And it looks very much like the same operation in terms of its level of complexity and so forth.

[00:22:03] Speaker 00:
So what is it exactly that the board found different enough to reach a completely opposite decision here?

[00:22:13] Speaker 04:
There are a number of fundamental differences between what we had in the year 2000 and what we have now in 2015.

[00:22:22] Speaker 04:
One of the fundamental differences, essentially the fundamental difference, is the rise of this Sparks system, this highly sophisticated, automated, centralized computer system which allows the company to oversee and plan its operations remotely from Salt Lake City and to make real-time changes, engage in real-time monitoring of the operations on the ground.

[00:22:43] Speaker 04:
that system was not in place in its current form, at least in the year 2000.

[00:22:47] Speaker 04:
And if the court examines the regional director's decision from

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from the year 2000, I think it's at page 79 of that decision, that the regional director discusses how, at that time, ships would come in that had no flow plan, or a ship would come in that needed to be unloaded or loaded over the course of four shifts, and the flow plan would only cover the first shift and a half.

[00:23:12] Speaker 04:
So after that point, the role of the seniors and superintendents was to essentially

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Make up a flow plan to decide using independent judgment where things would go how they would be Distributed the company obviously has determined that that is not the most efficient way to carry out its operations It's found that it can achieve greater efficiency and be more productive more successful by centralizing taking away discretion and

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from these individuals on the ground and instead using a more centralized, more modern system essentially for distributing its cargo.

[00:23:50] Speaker 04:
It's that innovation that fundamentally takes away the independent judgment from these individuals and

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essentially takes away any need for them to act in a supervisory capacity on the ground.

[00:24:02] Speaker 01:
And are these titles in fact sort of legacy from the time when they were more like supervisors and superintendents doing the sort of pre-modern communications and computer planning version of the job?

[00:24:15] Speaker 04:
I think it would be fair to say that this is a holdover from the prior terminology and their role has changed within this system but they continue to

[00:24:25] Speaker 04:
have sort of a similar title.

[00:24:28] Speaker 04:
Another fundamental change has to do with rewarding and adjusting grievances, and that comes down to the hooky-pal system that used to exist and used to vest significant discretion in the superintendents and senior superintendents allowing them to send workers home.

[00:24:46] Speaker 04:
with a full day's pay or to make other adjustments and provide whatever incentives were necessary throughout the day in terms of hours and pay.

[00:24:56] Speaker 00:
I know this Hookey Pals system, I guess they've eliminated that now so you don't get paid if you don't work the hours.

[00:25:04] Speaker 00:
But it was not my impression that the idea of them being the first level for grievance had changed because I thought that was

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required by the CB.

[00:25:17] Speaker 00:
Is that now wrong?

[00:25:19] Speaker 04:
Your Honor, the collective bargaining agreement refers to first-line supervisor, or on-the-job supervisor, I believe is the terminology.

[00:25:26] Speaker 04:
It does not specify anywhere that the superintendents or senior superintendents are that individual.

[00:25:32] Speaker 04:
In fact, if you look at appendix page 922 and 923, which is the

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the grievance from 2012 that involved Senior Peter Capone, the other individual that's listed as receiving a grievance as a first level on-the-job supervisor is Manager Toparin.

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He is an undisputed managerial employee in this case, and yet he's the one who was considered the on-the-job supervisor.

[00:25:59] Speaker 04:
So that goes to our point that that sort of isolated and essentially unexplained

[00:26:05] Speaker 04:
In that regard, evidence in the record can't show authority to adjust grievances for all these employees because it's not clear why it even went to Peter Capone in that instance when the other one went to manager to Karen at the first level.

[00:26:21] Speaker 00:
It seems though if if the board is correct and the computerization of this planning and scheduling and all of that Actually leaves no discretion what council referred to as sort of decisions on the ground Then you have a unit that can be represented, but they have no job, right?

[00:26:44] Speaker 00:
I mean there doesn't seem to be any job.

[00:26:46] Speaker 00:
What are they doing?

[00:26:46] Speaker ?:
I

[00:26:47] Speaker 04:
Well, as the regional director explained, they are fundamentally the eyes and ears of the company on the ground.

[00:26:52] Speaker 04:
So you have the laborers who are actually doing the work, the lashing crews, the crane operators, and you have the superintendent a step back holding the actual printed out plan.

[00:27:05] Speaker 04:
And these plans are extremely detailed.

[00:27:07] Speaker 04:
If the court looks at appendix 721 through 27 for some samples,

[00:27:12] Speaker 04:
They show exactly where the container is supposed to go, what it contains, what its priority status is, what its hazardous potential might be.

[00:27:20] Speaker 04:
And the superintendent is the person who has that plan and has a radio and is telling the leads who then communicate the orders onto their lashing crews on the ship, or telling the crane operator who goes out and picks up the particular container and takes it to the right place.

[00:27:36] Speaker 04:
The superintendent's role is to communicate those orders that came down from above

[00:27:41] Speaker 04:
to the workers and then communicate back to the planners the issues that might arise on the ground for adjustment or approval by a general superintendent as necessary.

[00:27:52] Speaker 03:
So are they what Bell Aerospace referred to as straw bosses, lead men, set up men?

[00:28:00] Speaker 03:
who are protected by the act, even though they have only minor supervisory responsibilities.

[00:28:05] Speaker 04:
I think that's right, Your Honor.

[00:28:06] Speaker 04:
They're not necessarily lead men.

[00:28:07] Speaker 04:
There are lead men who independently are operating on the ship.

[00:28:11] Speaker 04:
But they do fulfill essentially a monitoring and communicating role, conveying instructions as a conduit of information that come down from above.

[00:28:21] Speaker 04:
and communicating issues that arise.

[00:28:23] Speaker 00:
But you know, in the earlier decision, the 2000 decision, the ALJ's decision was that they were specifically not lead men because those normally are people who could do the work but also have this additional responsibility.

[00:28:43] Speaker 04:
And again, they do a distinct job from what the actual leads do who are on the ship personally directing and taking part in the lashing and unlashing.

[00:28:55] Speaker 04:
What their job is, they do fulfill an important role, and it's a role that's distinct from the lead men, but their role does not transform them into supervisors because they fundamentally lack independent judgment.

[00:29:07] Speaker 04:
Their independent judgment, under Kentucky River and under the board's Oakwood decision, independent judgment is a matter of degrees.

[00:29:14] Speaker 04:
Independent judgment can be constrained by protocols, by plans, by instructions from above.

[00:29:22] Speaker 04:
And in that circumstance, it may be decreased to the level where it's no longer meaningful under the statute.

[00:29:27] Speaker 04:
At the same time, aside from the control, independent judgment may not exist because the decisions are simply routine or clerical.

[00:29:35] Speaker 04:
And where you have repetitive situations that arise and you have what the board refers to as an obvious or self-evident choice,

[00:29:44] Speaker 04:
that does not constitute independent judgment either.

[00:29:47] Speaker 04:
The example that the board gave in the Oakwood decision, one of the examples was a decision that's solely based on equalizing workloads.

[00:29:55] Speaker 04:
To the extent that there's any sort of activities that are not dictated by the flow plans, by the collective bargaining agreement, those kinds of decisions are

[00:30:09] Speaker 04:
essentially routine within the realm of activity that the seniors and superintendents have to contend with.

[00:30:21] Speaker 04:
Perfect question.

[00:30:23] Speaker 03:
Okay, thank you very much.

[00:30:24] Speaker 04:
We would ask that the court enforce the board's order in full.

[00:30:28] Speaker 03:
Thank you.

[00:30:29] Speaker 03:
Does the petitioner have any time?

[00:30:32] Speaker 03:
We'll give you one more minute.

[00:30:38] Speaker 02:
The board's argument seems to be that the planners in Salt Lake City took away the discretion that existed in 2000, but it didn't.

[00:30:48] Speaker 02:
What the planners do is provide information on where a container should go on a ship.

[00:30:54] Speaker 02:
It's up to the people on the ground to determine how that's accomplished.

[00:30:58] Speaker 02:
The fact that somebody in Salt Lake City is making a decision on whether a container goes in cell A, cell B, or cell C doesn't change the fact that somebody on the ground has to tell these workers what to do.

[00:31:15] Speaker 02:
And without this level of supervision, we've got over 100 hourly workers on the ground without a supervisor.

[00:31:24] Speaker 02:
Thank you.

[00:31:25] Speaker 03:
All right, we'll take a matter under submission.

[00:31:26] Speaker 03:
Thank you.