[00:00:01] Speaker 05:
Case number 16-1405 at Elm, Advanced Life Systems, Inc.

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Petitioner versus National

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Good morning.

[00:01:12] Speaker 00:
Good morning.

[00:01:13] Speaker 00:
My name is Gary Laughlin.

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I appear on behalf of Advanced Life Systems, the petitioner.

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We're here on appealing the findings of the NLRB that Advanced Life Systems committed unfair labor practices.

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And I believe the record is complete.

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If I may,

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This starts with a real question of the NLRB has never adequately defined when wage increases are given on a regular and consistent and predictable basis.

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This circuit had the problem in the Acme die case where you sent it back to the NLRB on two occasions.

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They were unable or unwilling to define what regular and predictable wage increases were, and the circuit finally threw up its judicial hands and say, we're not going to do it for you.

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You won't do it, so we're not going to enforce it.

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And what I think is important to look at

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is the NLRB found that the credited evidence shows that the respondent informed employees upon their hire to expect periodic wage increases once every six months.

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And in fact, a substantial majority of employees received wage increases of at least 25 cents an hour at least one time a year from August 2009 to January 2012.

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Regular and predictable to me is just that.

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You're going to get 25 cents an hour on your anniversary date.

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You're going to get 1% at the first of the year where people can do that.

[00:03:02] Speaker 02:
So what is the- Are you arguing about the 8A1 violation right now or?

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Which violation are you making this argument with respect to?

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I'm having trouble, Mike.

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Which violation that you were found as to the wage increases?

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The threats to not give wage increases, which were not threats at all, which we'll deal with in a moment, and the 8A3s and the, I believe, 8A5s on the Christmas gifts.

[00:03:32] Speaker 02:
But if you look at the actual... To focus just on the wages, so we don't have an 8A5 issue.

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We have an 8A3.

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8A3.

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Could you adequately raise and brief the 8A3 argument?

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I believe that the only thing we didn't do is mention 8A3.

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It was fully argued because to have that, the board relied on the violation of 8A1s.

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We indicated in the brief that to have an 8A1, you have to have a hostile motive.

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and, or as the board calls it, a union animus.

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And what the board is supposed to... I don't think that's for 8.A.1.

[00:04:13] Speaker 02:
I thought 8.A.1 just looked at how a reasonable employee could have interpreted your statements.

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But if you look at the American Shipbuilding case and you look at the Brown Fruits case, they both say to have an 8.A.1, you have to have a hostile motive in that situation.

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The Brown's Food case involved a lockout, and the Supreme Court said, no, there was no hostile motive shown, so therefore it was not in 8A1.

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And the Brown's Fruit case had to do with temporary replacements to allow them to go on.

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And the Supreme Court in both of those cases indicated the hostile motive was necessary to have that.

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In this case, the problem is,

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This circuit has said that when there's contradictory evidence, the board has to take that into account and it has to explain why it didn't do that.

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The uncontradicted evidence is that ALS did not oppose the union organizing drive.

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And the other contradictory evidence that the board did not bother to discuss

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was the fact that Mr. Woodcock at page 57 of the appendix said during the organizing, we can work this out ourselves, but if this is the route you want to go, meaning unionization, then there's nothing I'm going to do to stop it.

[00:05:43] Speaker 00:
Those are not indications of a hostile intent toward the union.

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So we go back to the board never understanding of being able to articulate what is an actual regular and predictable.

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And we look at the wages and the testimony.

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It's not supported because despite what the board found, the testimony of one employee was that about every six months, even 25 or 50 cents, depending upon performance,

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Larger raises every one to two years.

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If you look at the chart, if you look at appendix 76,

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doesn't happen.

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You look at the chart of the descent of the NLRB, there's no regular and predictable.

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The other employee said that you start as an EMT, get a wage increase when they got the paramedic certification, and you get periodic increases thereafter.

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That doesn't support the finding.

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The other one says you receive annual pay increases on the anniversary date.

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which was not consistent.

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But if you look at the joint exhibit one, and you look at the chart of the dissent of the NLRB, it certainly shows there was none.

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So how do you determine that?

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And the idea of a hostile intent, what if Mr. Woodcock, who made those statements, was uncertain or confused as to what the law requires?

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Because I don't think anybody's certain what the NLRB requires.

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If they're going to use this as being a regular and predictable increase, then anything is.

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And requiring them to do that.

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I think the board would say its concern was that you were talking about we're not going to do raises because of the union or because of the union thing.

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Or if the union, the pre-election, if the union comes in and we won't be able to keep doing this.

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Now why isn't that?

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sufficient just for 8A1, even if you didn't have a consistent practice.

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Because the question is you have to look at the entire statements Mr. Woodcock was saying.

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We only have to look at the ones that the board credited, the ALJ and the board credited.

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We have to take the facts as found by the ALJ, which the board adopted.

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They did that.

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But they did not look at and explain the contradictory evidence to that.

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They just simply said, we accept that credibility.

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And you have to look at the specific language used.

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I believe the specific language was, if the union comes in, I'm not able to give that.

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or we're not permitted to give that, something to that effect.

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It's not if the union comes in, I won't give it to you because the union coming in, it's the question of how is it phrased?

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And how do you know?

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He's put into a quandary.

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If you give the raise and it's not regular and predictable, that's unilateral change and you get an unfair labor practice.

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If you're not able to discern and guess what the NLRB wants,

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then you've got an unfair labor practice for refusing.

[00:09:03] Speaker 02:
That's more your 8A3, 8A5 argument.

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I get that.

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I'm just trying to get back to how to interpret that pre-election statement about if, I'm paraphrasing here, if the union comes in, we won't be able to have wage increases.

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Why isn't that sufficient?

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I mean, even the dissent thought that was sufficient.

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It didn't even persuade them.

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Because under the American shipbuilding and under the brown foods, there has to be a hostile intent.

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And there is no hostile intent in those statements.

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It's a statement of what he believes he's able to do or not able to do.

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So even if a reasonable employee would have understood that as being hostile to the, whether they should vote for the union, anti-union, that's not enough in your view under 8A1?

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I don't agree with that, because I think that... You don't agree that it turns on how a reasonable employee would have interpreted it.

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Correct.

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Because if you look at the situation in this case, with the one pre-election statement, the employee said that they did not know if that's true or not, and they would look into it.

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And Woodcock said, if you organize with the labor union a lot of things that normally did

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day-to-day would have to be negotiated.

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And he specifically denied that statement.

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So you didn't, the NLRB didn't take into account the entire circumstance.

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The second conversation in October or December of 2012, he said we're not allowed to bring it in.

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And what Wicox said at the same time is what has been done in the past was discretionary and everything had to be negotiated.

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everything had to be negotiated and I'd be in just as much trouble as I am for not doing it.

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When you look at the conversation as a whole, you look at that, a reasonable employee is not going to believe that they're doing it because of the union animus.

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They're doing it because he's not certain.

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And the board has to prove under the American Shipbuilding and Brown Food that there was a hostile intent.

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There was no hostile intent here.

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It's undisputed that ALS did not

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opposed the union organizing drive.

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They simply said, if that's what you want to do, I'm not going to stop it.

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The other thing that I think is very important to look at is the issue of the Christmas gifts.

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The ALJ found and the board supported that the gifts came from Mr. and Mrs. Woodcock from their personal funds.

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It started as a project where the company gave potluck and then as the company grew and became more successful, Mr. and Mrs. Woodcock, out of their personal funds, provided gifts.

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And what the NLRB ignored was the fact that some of the gifts were cash, but many of them were physical items.

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There were trips, there were TVs, there were things like that.

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The company didn't keep records.

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The company didn't take income tax deductions.

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The Woodcocks didn't take deductions or keep records of it.

[00:12:13] Speaker 03:
I'm wondering if the IRS ever looked at this whole thing.

[00:12:17] Speaker 03:
The employees didn't pay taxes on it either, it sounds like.

[00:12:21] Speaker 00:
The employees didn't report it.

[00:12:23] Speaker 00:
It's in the record that they didn't report the gifts either.

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That's what I was thinking of, John.

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Sometimes a gift is a gift.

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And the NLD went out of their way to do that.

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If we look at the charge and the complaint, the Woodcocks were never named in that, only LS.

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And the board found that the respondent, meaning ALS, gave gifts.

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We showed ALS didn't.

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It's not supported by substantial evidence that ALS gave.

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Plus, there was no allegation or no attempt to pierce the corporate veil.

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Which was shown and that's required by your case that circuits in DuPois Relying on the NLRB case on White Oak, which is cited in the briefs.

[00:13:09] Speaker 04:
Okay, we have your argument.

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We'll give you some time for rebuttal.

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Thank you, sir.

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We'll hear from the board

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Good morning.

[00:13:38] Speaker 05:
Good morning, Your Honor.

[00:13:39] Speaker 05:
David Seid, from the Labor Board.

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At the outset, for a Section 8A1 violation, the test is whether there was a tendency to go worse.

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Here, the Board, including the dissenting Board member, did agree that there were two violations of Section 8A1.

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And in fact, before this Court, the companies only even contested one of them.

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That would be the 8A1 that occurred prior to this.

[00:14:01] Speaker 04:
If there were only 8A1 violations, what relief would be still in place?

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The remedy in that situation, Your Honor, would be for a notice posting and then for a cease and desist from engaging in that activity.

[00:14:14] Speaker 03:
I'm sorry.

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Could you repeat that?

[00:14:16] Speaker 03:
I didn't quite get what you just said.

[00:14:19] Speaker 03:
Louder.

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Louder.

[00:14:20] Speaker 03:
Sorry, Your Honor.

[00:14:21] Speaker 03:
Louder.

[00:14:21] Speaker 05:
The remedy, if there was just a Section 81 violation, there would be a cease and desist order from engaging in that activity and any like related activity and also for a notice posting.

[00:14:32] Speaker 03:
And what, when you say like activity, how would you phrase that in this case?

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What are they supposed to refrain from doing?

[00:14:40] Speaker 05:
Right, Your Honor, it would be essentially the language that's already in the board's order, which would be to cease and desist from telling employees that they will not get raises if they choose or because they have chosen to be represented by a union, and then the equivalent part of the notice posting that would go along with that.

[00:14:58] Speaker 04:
They wouldn't get the back pay.

[00:15:01] Speaker 05:
That's correct.

[00:15:01] Speaker 04:
From just the 8A1.

[00:15:03] Speaker 04:
That's what I'm getting at.

[00:15:04] Speaker 04:
Thank you.

[00:15:05] Speaker 05:
That's all there was.

[00:15:06] Speaker 04:
And on the, I'm going to ask about both the bonuses and the Christmas gifts, or I guess gifts is a loaded term here, but on the bonuses, what is the test, first of all, as you would say, regular and predictable?

[00:15:24] Speaker 04:
Do you mean wage increases?

[00:15:25] Speaker 04:
I mean the wage increases, sorry.

[00:15:26] Speaker 05:
and your honor, and I apologize, you're referencing the section 83 violation or the section 85 because the section 83, again, the board has already... Give me both, give me both.

[00:15:34] Speaker 05:
Well, before this court, if, for the section 83, if an employer acts for unlawfully motivated reasons, there's a violation of section 83, and it's set forth in the board's brief, the board is entitled to... Yeah, on the wage increases, what do they have to be

[00:15:52] Speaker 04:
in order for them to be required to be continued, I guess is the way I would phrase it.

[00:16:01] Speaker 04:
Using plain English, not board English here.

[00:16:03] Speaker 05:
In the context of the Section 8A3, as the board's majority opinion stated, their employees were told when they were hired that they would receive regular wage increases.

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they did receive regular wage increases.

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And there are board cases that are cited by the board that a Section 8A5 violation is not in any way dependent on finding that there's an independent Section 8A3 violation.

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And that was in the company's opening brief.

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It hasn't disputed that.

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It has never taken issue with any of the cases cited by the board.

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I guess I don't understand how the wage increases were regular.

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here.

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And predictable.

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And predictable.

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That's what I was getting at.

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They have to be regular and predictable, correct?

[00:16:49] Speaker 05:
Your Honor, in the context of the Section 8A-5 violation under CAHPS, that would be correct.

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They would have to.

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But in the context of the Section 8A-3 violation, as this Court recognized in the Apney Die case, which ended up getting remanded on the 8A-5 violation, not the 8A-3, and the Court in that case was able to recognize that there can be an 8A-3 violation for unlawful motivation,

[00:17:12] Speaker 05:
completely independent of whether or not there's a separate Section 85 violation.

[00:17:15] Speaker 04:
So explain to me how that works, because that's, I'm stuck on that.

[00:17:18] Speaker 04:
How does that work?

[00:17:19] Speaker 04:
So even with an irregular wage increase, there can be an 883 violation in the facts of a case like this?

[00:17:27] Speaker 05:
Depending on the facts, yes, and in this case, while there might not have been a, on the facts of this case, again, the board didn't pass on the section 8A5 violation.

[00:17:37] Speaker 05:
I understand.

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And I realize that the dissenting opinion didn't go into that.

[00:17:41] Speaker 05:
But there is evidence that there, it may not have been every five months or every seven months, and there might not have been an exact wage review, but there was evidence that employees did receive regular wage increases.

[00:17:52] Speaker 04:
But what if that's wrong?

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Can there still be an 8A3 violation?

[00:17:56] Speaker 05:
Well, Your Honor, part of that, it would be up to the company to have made that argument to this Court.

[00:18:01] Speaker 05:
It simply didn't.

[00:18:01] Speaker 04:
Well, put that aside.

[00:18:02] Speaker 04:
I know your point on that.

[00:18:04] Speaker 04:
That's an important one.

[00:18:04] Speaker 04:
But put that aside for the moment.

[00:18:06] Speaker 04:
If there were not regular wage increases

[00:18:11] Speaker 04:
Just assume that for a second.

[00:18:12] Speaker 04:
There were not regular wage increases.

[00:18:14] Speaker 04:
Could there be an 883 violation?

[00:18:17] Speaker 05:
Again, there could be an 883 violation if the employer is acting out of unlawful motivation.

[00:18:24] Speaker 05:
If because the union has come onto the scene, it's doing something other than what it normally would have done because of the union, and there's evidence of unlawful motivation, there can be a Section 883 violation.

[00:18:33] Speaker 04:
So they're not continuing even the irregular wage increases because of the anti-union animus?

[00:18:40] Speaker 05:
They didn't explain it that way, though.

[00:18:45] Speaker 02:
They just cut everything off.

[00:18:47] Speaker 02:
That's correct, Your Honor.

[00:18:49] Speaker 05:
The evidence indicates employees were told when they were hired there would be periodic increases.

[00:18:53] Speaker 05:
They received periodic increases as the board found.

[00:18:56] Speaker 05:
There's ample evidence that employees did receive periodic increases.

[00:19:00] Speaker 05:
The union comes along.

[00:19:01] Speaker 05:
The wage increases stop.

[00:19:02] Speaker 05:
The Christmas bonus has stopped.

[00:19:04] Speaker 04:
Right.

[00:19:04] Speaker 04:
So on the wage increases still, if they thought they were irregular,

[00:19:11] Speaker 04:
They might have thought it was actually unlawful to continue the irregular wage increases, correct?

[00:19:20] Speaker 05:
Your Honor, they could have thought that the so-called knowing position, so to speak, is actually erased for the first time by the company in its reply brief at page 22.

[00:19:29] Speaker 05:
That's not an argument that was made to this Court in its opening brief.

[00:19:33] Speaker 05:
The board in its decision at page 14 of the record did talk about even if the employer had a reasonable belief, and it did go through several paragraphs as to why that reasonable belief on the fact that this case wasn't sufficient.

[00:19:46] Speaker 05:
It was incumbent for the employer in its opening brief to address the board's decision.

[00:19:52] Speaker 04:
Okay, put that aside again for a second, and I take your point that mail.

[00:19:55] Speaker 04:
I have your point on that, but suppose they

[00:19:58] Speaker 04:
This is why the regular and predictable ultimately seems so key.

[00:20:02] Speaker 04:
If they weren't regular and predictable, then it would have been reasonable for the company to think we shouldn't continue these irregular wage increases because that might be unlawful.

[00:20:17] Speaker 04:
And therefore, we're not going to continue the irregular wage increases.

[00:20:21] Speaker 05:
I understand the court's concern.

[00:20:23] Speaker 05:
It was incumbent for the employer to have, first of all, introduced evidence at the hearing and let the administrative law judge make a decision.

[00:20:32] Speaker 05:
Generally, first of all, just relying on attorney advice is not a defense to an unfair labor practice.

[00:20:37] Speaker 05:
I think the case law is well settled on that.

[00:20:39] Speaker 05:
But it was incumbent to build a record if that's what the defense is going to be.

[00:20:43] Speaker 05:
It's incumbent in response to the board's decision.

[00:20:45] Speaker 04:
Didn't they argue that these were irregular?

[00:20:47] Speaker 04:
Yeah.

[00:20:48] Speaker 04:
I thought that's been a consistent argument throughout on as a general proposition, wage increases.

[00:20:54] Speaker 04:
I thought their argument was irregular.

[00:20:56] Speaker 04:
The board's argument was no, they were regular.

[00:20:58] Speaker 04:
Now that's kind of the key.

[00:20:59] Speaker 05:
Well, to the extent they're arguing that it was irregular, but to the argument that the company is so-called in a no-win position, that's not something that is raised until the first time in its reply brief.

[00:21:12] Speaker 03:
Well, let's deal for a moment, though, with this question of regularity.

[00:21:17] Speaker 03:
isn't that essential to the board's case that they be regular and predictable?

[00:21:22] Speaker 05:
The regular and predictable in the context of a Section 85, but it was totally appropriate for the board in this case to find that employees were, even apart from say a cap situation, that the employees were receiving regular wage increases.

[00:21:36] Speaker 05:
Looking at the chart,

[00:21:38] Speaker 05:
Almost all the employees, there might be a few that are at the outer ends that they might not have received a wage increase for a long time period.

[00:21:44] Speaker 05:
But most of the employees did receive at least one, if not more than one wage increase during the course of the year.

[00:21:53] Speaker 05:
And there's no evidence that employees had ever gone over that as a whole.

[00:22:00] Speaker 02:
I don't know why the no-win situation just isn't built into this problem, just by its very nature.

[00:22:06] Speaker 02:
And so what's the employer supposed to do if they say, all right, we're not, we are far from the cat's exception in this case.

[00:22:13] Speaker 02:
There's nothing automatic about these things.

[00:22:16] Speaker 02:
Things happen here and there, but there's nothing automatic or predictable about either the timing or the amount, either one.

[00:22:24] Speaker 02:
Neither one.

[00:22:25] Speaker 02:
Now, if the employer does anything, it won't be consistent with the past practice, and so that will be charged as an 8A3 violation.

[00:22:34] Speaker 02:
Will it not?

[00:22:34] Speaker 02:
And so what are, my question is, what is the employer supposed to do, and what evidence did you have here of anti-union animus other than the fact that because of the union, and no CATS exception, I can't keep doing these.

[00:22:52] Speaker 05:
Your Honor, as far as the animus comes from the two Section 81 violations that the Board found, only one of which is actually even contested before this Court.

[00:23:00] Speaker 02:
One of them was even pre-election.

[00:23:03] Speaker 05:
One was pre-election and one was post-election.

[00:23:07] Speaker 05:
And the one pre-election, the employee was told, Mr. Woodcock told employee Shower that there would be no raise if they chose the union.

[00:23:18] Speaker 05:
And I would just point out that the company essentially has challenged that on credibility grounds and asserted

[00:23:23] Speaker 05:
that shower cannot recall the specifics of that conversation.

[00:23:26] Speaker 05:
His testimony actually at pages 35 and 36 was that while he couldn't recall all of the details of the entire- Couldn't recall anything of the conversation except that one line.

[00:23:36] Speaker 05:
But he definitely recalled that one line, that's correct.

[00:23:37] Speaker 04:
But if that, that might have been correct.

[00:23:41] Speaker 04:
if the wage increases were not regular and predictable before.

[00:23:45] Speaker 04:
I'm not disputing the 8A1 point.

[00:23:47] Speaker 04:
I'm just saying to carry over to the 8A3 on this point seems shaky if that was a correct statement of law.

[00:23:56] Speaker 04:
And whether it's a correct statement of law, I think, then turns on whether the wage increases had been regular and predictable.

[00:24:03] Speaker 05:
Your Honor, there's no indication that President Woodcock was thinking of any of the legal implications as far as the raises being irregular in the companies here.

[00:24:16] Speaker 05:
I mean, that was a statement that was made at that time.

[00:24:17] Speaker 02:
There wasn't a lot of evidence.

[00:24:19] Speaker 02:
Go ahead.

[00:24:20] Speaker 02:
There wasn't evidence the other way, really.

[00:24:21] Speaker 05:
And then the other statement, of course, was a statement that was made after the election when an employee asked about

[00:24:26] Speaker 05:
a raise that he was expecting to receive.

[00:24:29] Speaker 05:
And at that point, Mr. President Woodcock told the employee that he couldn't give a raise because of the whole union deal and that everything was frozen.

[00:24:37] Speaker 04:
That also is correct if it's – again, it all boils down to the regular and predictable again.

[00:24:45] Speaker 04:
Because that's a correct statement.

[00:24:46] Speaker 04:
If they were irregular, then what he said at that point is correct.

[00:24:51] Speaker 05:
Well, an employer, again, an employer needs to continue to do whatever it's, whatever it was doing prior to the union coming on to the scene.

[00:24:59] Speaker 03:
And the board's opinion does, does... Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa.

[00:25:04] Speaker 03:
That phrase opposes regularity.

[00:25:06] Speaker 03:
what you just said.

[00:25:07] Speaker 03:
If there's no regularity to it, then they don't, they're not required to keep doing whatever they were doing before.

[00:25:11] Speaker 05:
Well, there can be some discretion, as this Court recognized in the Acme Die case, where this Court recognized that regardless of whether the failure to increase wages was a Section 8A5 violation, if there was an unlawful motive, even if the wage increases there were periodic wage increases, not necessarily given at exactly set time periods,

[00:25:32] Speaker 05:
The court still found that there was a Section 883 violation, though on remand it eventually found that there was no, after the case came back to this court after remand, ultimately found that there was no Section 885 violation.

[00:25:44] Speaker 05:
And again, if the company's argument here, the board addressed some of the court's concerns at page 14 of the record.

[00:25:53] Speaker 05:
The company's opening brief doesn't address our CAG West or our bridges where the court explained how there could be 883 absence of section 885.

[00:26:05] Speaker 05:
And I understand the court's concerns, but it was incumbent for the employer to raise that before this court in its opening brief.

[00:26:12] Speaker 04:
Can you talk about the Christmas bonuses?

[00:26:18] Speaker 04:
Yes.

[00:26:19] Speaker 04:
They came from the personal funds, correct?

[00:26:23] Speaker 05:
That appears to be correct, Your Honor.

[00:26:27] Speaker 04:
So how can that be required to be continued when it wasn't something that the company was paying?

[00:26:33] Speaker 04:
Just a common sense question I had reading this.

[00:26:35] Speaker 05:
Well, the employees were told, again, as with Wade, employees were told when they would be hired that they would receive a Christmas payment.

[00:26:42] Speaker 04:
And if any employer, any employee, excuse me, thought,

[00:26:47] Speaker 04:
Oh boy, this is part of my wages.

[00:26:48] Speaker 04:
This is great.

[00:26:49] Speaker 04:
They presumably would have declared it on their taxes.

[00:26:51] Speaker 05:
And your honor, as cited in the board's brief, though not on this particular exact situation, the board has recognized, and I believe, I'm not sure if this is court's approval, I apologize, that an IRS determination, or how the IRS might treat something as indeterminate under the National Labor Relations Act.

[00:27:08] Speaker 04:
But it's how they understood it.

[00:27:10] Speaker 04:
So you said this is what the employees understood.

[00:27:14] Speaker 04:
If any employee understood this to be wages,

[00:27:19] Speaker 04:
and were law-abiding, they would presumably have declared it on their taxes.

[00:27:23] Speaker 05:
Your Honor, as the record indicates that at least a couple of employees did not report this for taxes, whether they should have, again, that's an IRS issue?

[00:27:33] Speaker 04:
No, it goes to their understanding.

[00:27:36] Speaker 04:
The IRS, most taxes, as you know, are self-reported and self-closed.

[00:27:41] Speaker 04:
Everything depends on an honor system.

[00:27:44] Speaker 04:
A lot of what goes on in the tax system, not what the IRS does.

[00:27:46] Speaker 04:
And they understood this not to be

[00:27:49] Speaker 04:
triggering any tax obligation, presumably, because they understood that it was a gift.

[00:27:55] Speaker 05:
They also understood it as a board reason we found as essentially a term of employment that was being given yearly.

[00:28:02] Speaker 05:
This was substantial.

[00:28:03] Speaker 05:
It increased based on the years of services.

[00:28:05] Speaker 03:
The family is not a party to this litigation nor to the administrative proceeding.

[00:28:11] Speaker 03:
The company is.

[00:28:13] Speaker 03:
If these funds were coming from the family, how is that

[00:28:17] Speaker 03:
compensation within the framework of this litigation.

[00:28:21] Speaker 05:
Your Honor, Mr. Woodcock was the primary owner of the company.

[00:28:27] Speaker 03:
I'm aware of that, but there's no bail-piercing exercise undertaken in the board opinion, is there?

[00:28:35] Speaker 05:
No, there isn't, Your Honor.

[00:28:36] Speaker 03:
There's no alter ego analysis undertaken.

[00:28:40] Speaker 03:
And without one of those, how can you make the

[00:28:45] Speaker 03:
gifts from the family, compensation from the company.

[00:28:49] Speaker 03:
I'm not saying they couldn't be done, but they haven't been done.

[00:28:52] Speaker 05:
Your Honor, I mean, the administrative logic decision, which was adopted by the Board, actually did reference a case where an employer had tried to argue that it was coming from the individual owner and not the company, and that would be the HSM Machine Works case.

[00:29:07] Speaker 05:
And again, it's not until the companies apply for it.

[00:29:10] Speaker 03:
I'm not suggesting that you couldn't have a bail piercing or an alter ego theory.

[00:29:16] Speaker 03:
I'm just saying I don't see one.

[00:29:18] Speaker 03:
The board does not seem to have undertaken one, and we're not supposed to affirm things on the basis that the board hasn't.

[00:29:28] Speaker 05:
That's correct.

[00:29:28] Speaker 05:
But I would just note that the, the administrative logic is adopted by the board had relied on a case HSM machine works where an employer had tried to rely on a gift being given by the owner and that it wasn't actually coming from the company.

[00:29:42] Speaker 03:
Did he say anything about in this case, how it's established that this was coming from the company by veil piercing, by, uh, or ego theory or by any other analysis?

[00:29:55] Speaker 03:
I mean, saying that it can be done and has been done in another case does not say that it's been done in this case.

[00:30:02] Speaker 05:
Well, there's, in that case, there wasn't, I just was trying to point out that it wasn't until the company's reply brief that it even addresses the case that was relied on by the Board, by the administrative logic that was adopted by the Board, but whether or not the employees paid taxes here

[00:30:19] Speaker 03:
It's certainly not determinative, but it could be evidence to what people would understand.

[00:30:24] Speaker 03:
Correct.

[00:30:24] Speaker 05:
But it's also, the evidence also indicates that the employees aren't necessarily separating this gift that's coming from Mr. Woodcock as an individual versus that they're receiving a Christmas payment from the owner of the company.

[00:30:39] Speaker 02:
Well, even as to that, though, I think, I mean, it's not quite the cat's test.

[00:30:43] Speaker 02:
It doesn't have to be automatic.

[00:30:44] Speaker 02:
But it seems to me for it to be a reasonable expectation as part of wages, there has to be some stability as to what you're receiving.

[00:30:55] Speaker 02:
In some years, I guess it's a raffle ticket.

[00:30:58] Speaker 02:
So you might get something, you might get nothing.

[00:31:00] Speaker 02:
And there's a completely erratic amount.

[00:31:03] Speaker 02:
And so how

[00:31:06] Speaker 02:
Even as a remedial measure, is this to be enforced?

[00:31:11] Speaker 02:
I mean, the board quite coyly said, just restore the status quo.

[00:31:17] Speaker 02:
Well, I'm not sure he even knows what the status quo is to restore.

[00:31:21] Speaker 05:
Your Honor, for the three witnesses who testify, and if I realize I'm over time, if I get over a minute to walk through the testimony, employee Yegotafah, he started in 2011.

[00:31:31] Speaker 05:
So he gets told that any bonus for him would be unfair because he had just started.

[00:31:36] Speaker 05:
And that's at pages 26 and 24 of the decision and 49 and 53 of the testimony in the appendix.

[00:31:46] Speaker 05:
Employee Gravel, he started in 2008.

[00:31:49] Speaker 05:
The evidence indicates that he went from $100 to $300 over a period of several years.

[00:31:55] Speaker 02:
And that's a page.

[00:31:57] Speaker 02:
I mean, this wasn't the most compelling case, right?

[00:32:00] Speaker 02:
So we have 2008.

[00:32:02] Speaker 02:
Gravel's the only one that got one in 2008.

[00:32:05] Speaker 02:
In 2009, all we have is that Gravel City got something but doesn't remember what.

[00:32:10] Speaker 02:
2010, no one got anything.

[00:32:13] Speaker 02:
In 2011, we've got, it's the only year you have all three of them getting something, and one of them's getting a gift card for $50 a coffee.

[00:32:20] Speaker 05:
Correct, Your Honor, and that was employee, you got to five because he was a new employee.

[00:32:23] Speaker 02:
Right, but I'm just saying, is there anything remotely

[00:32:26] Speaker 02:
I would worry as an employer if you don't have some predictability here and maybe it's not as strict as the CAT standard for wage increases, but if there's not either a sufficient time period or sufficient predictability as to what they're getting, you're going to have the employer back in a

[00:32:42] Speaker 02:
heads of the board wins, tails the employer loses situation, because whatever they do, someone's going to say, that's not what I thought I was going to get.

[00:32:51] Speaker 02:
And so the very lack of predictability and consistency seems relevant to this issue to me as well.

[00:32:56] Speaker 02:
Why am I wrong?

[00:32:57] Speaker 02:
Sure.

[00:32:58] Speaker 05:
Two points.

[00:32:59] Speaker 05:
First, as far as the overall amount of money, President Woodcock acknowledged that he spent about $10,000 to $15,000 a year.

[00:33:05] Speaker 05:
So we have a general framework.

[00:33:07] Speaker 05:
And as far as the individual employees, there is a consistency.

[00:33:10] Speaker 05:
There was one year where Mr. Woodcock or President Woodcock approached the employees and whether they would be willing to give up the Christmas bonus because an employee's house had burned down.

[00:33:19] Speaker 05:
And so that's why one year nobody received it.

[00:33:22] Speaker 02:
I don't know how that helps you rather than hurts you.

[00:33:24] Speaker 02:
That seems entirely unemployment related.

[00:33:26] Speaker 02:
And it all went to one person and no one else got anything.

[00:33:30] Speaker 02:
It sounds like he's just, you know, he has a heartfelt response to his employees at Christmas time.

[00:33:35] Speaker 05:
Because he went to the employees and the employees agreed not to have any Christmas bonus that year because they all agreed to help out this employee.

[00:33:42] Speaker 02:
No good deed goes unpunished, right?

[00:33:44] Speaker 05:
Well, that was something that the employees agreed to.

[00:33:47] Speaker 05:
And as far as consistency, again, there are the three employees.

[00:33:51] Speaker 05:
Employee shower, he started in 2009.

[00:33:53] Speaker 02:
Did he say he felt like he had to go to the employees, or he just wanted to give a heads up why the Christmas party was going to be a bit different that year?

[00:34:02] Speaker 05:
The finding by the board was that he went to the employees to ask them if it would be okay.

[00:34:11] Speaker 05:
Instead of giving them bonuses, it would be okay to give this to the one employee.

[00:34:17] Speaker 05:
And just very quickly, Employee Shower, who started in 2009, there was some confusion about the year that the money got donated to this one employee.

[00:34:26] Speaker 05:
But apart from that, his testimony was consistent in the context that he had initially gotten a $50 bonus that went up to $100.

[00:34:33] Speaker 05:
Gravel, he started in 2008.

[00:34:36] Speaker 02:
Wait, for shower I got, so he was employed in 2009 and his testimony was impeached.

[00:34:40] Speaker 02:
So he didn't have anything for 2009.

[00:34:42] Speaker 02:
2010 was no gift and 2011 was $100.

[00:34:47] Speaker 02:
So all I got is the $100 gift for him.

[00:34:49] Speaker 02:
Am I missing something?

[00:34:50] Speaker 05:
His testimony was that one year he received $50, one year he received $100 and it was impeached.

[00:34:55] Speaker 05:
There was a lot of confusion as to which year the no bonuses were given to individual employees and it was given all to one employee.

[00:35:02] Speaker 04:
What do you think the lesson is for family-owned businesses who don't yet have a unionized workforce?

[00:35:12] Speaker 04:
The message is don't give them Christmas gifts, right?

[00:35:15] Speaker 05:
Well, Your Honor, again, the board would disagree with the characterization that this was simply a gift.

[00:35:19] Speaker 05:
This was not a hammer or a turkey.

[00:35:21] Speaker 05:
Don't give them Christmas payments.

[00:35:22] Speaker 05:
This was not a hammer or a turkey.

[00:35:24] Speaker 04:
Don't give them anything.

[00:35:24] Speaker 04:
Don't give them anything.

[00:35:25] Speaker 05:
This is $10,000 or $15,000 being given year after year to about 50 employees, not an insignificant

[00:35:32] Speaker 04:
And that raises the question, what is the total amount of money that's at stake here?

[00:35:38] Speaker 04:
Do we have some sense of that?

[00:35:40] Speaker 04:
I was just curious as a practical matter.

[00:35:41] Speaker 05:
Your Honor, that would be a compliance issue as far as the gifts.

[00:35:45] Speaker 05:
I'm sorry, I think we've characterized the gifts, and obviously the board characterizes it as a Christmas payment.

[00:35:50] Speaker 05:
The testimony from President Woodcock was $10,000 to $15,000.

[00:35:55] Speaker 05:
And how about on the other?

[00:35:57] Speaker 05:
As far as the pay increases, that would be a determination of compliance matter.

[00:36:02] Speaker 04:
We don't have a sense of that.

[00:36:04] Speaker 05:
It would be impossible for me as counsel here without... That's fine.

[00:36:10] Speaker 04:
I was just curious if you had a sense.

[00:36:14] Speaker 04:
Okay.

[00:36:14] Speaker 04:
Thank you very much.

[00:36:15] Speaker 04:
Thank you, Your Honor.

[00:36:30] Speaker 00:
We have a disparity in height on that.

[00:36:36] Speaker 00:
As I tell people frequently, I find myself to be short for my weight.

[00:36:41] Speaker 00:
Perfect weight for 6'2".

[00:36:46] Speaker 00:
The cases that are cited in the brief are pretty clear in my mind.

[00:36:52] Speaker 00:
If the employer exercises discretion as to amount, timing, or who gets the

[00:36:59] Speaker 00:
wage increase, then it is discretionary.

[00:37:03] Speaker 00:
It is not fixed and it is not predictable.

[00:37:07] Speaker 00:
When you look at the chart that was developed by the dissenting opinion of the board, it very clearly shows that the wage increases were not fixed, predictable, and timing.

[00:37:19] Speaker 00:
They varied over time.

[00:37:21] Speaker 00:
The question that you asked is what is this about?

[00:37:24] Speaker 00:
How do you figure the amount in question is

[00:37:29] Speaker 00:
perhaps answered with a big question mark by the document that was produced by the compliance officer, region 19 of the NLRB.

[00:37:40] Speaker 00:
How do you figure it?

[00:37:42] Speaker 00:
He said, well, maybe what I do is I average the wages that each employee got, the increases got.

[00:37:49] Speaker 00:
Or maybe I instead will average the classifications wages.

[00:37:54] Speaker 00:
Or maybe I will average the total wages and give each person that.

[00:38:00] Speaker 00:
That flies in the face of being regular and predictable, and I find it very hard that the NLRB could sit here and in good conscience and straight face say that what happened here was regular and predictable wages, which is what indicates that.

[00:38:15] Speaker 00:
It's also interesting that they turn gifts from the Woodcocks, gifts that Mr. and Mrs. Woodcock paid out of their friends, and they change it from a gift to a bonus.

[00:38:30] Speaker 00:
I mean, that's a nice turning of the word.

[00:38:32] Speaker 00:
But these were gifts.

[00:38:33] Speaker 00:
That's all it was.

[00:38:34] Speaker 00:
And sometimes a gift is a gift.

[00:38:37] Speaker 00:
But even if you look at the language about Christmas gifts, the board said that the respondent granted Christmas payments to employees ranging from $50 to $500.

[00:38:53] Speaker 00:
And you look at the actual testimony.

[00:38:56] Speaker 00:
That of Schauer says that he did a longevity bonus around Christmas time of between $50 and up to $500.

[00:39:04] Speaker 00:
If you look at what he actually got, he was employed three years, he got one gift of $100, which would have been his third year.

[00:39:12] Speaker 00:
There is no evidence in the record to show any employee ever got a $500 gift or bonus.

[00:39:20] Speaker 00:
The other employee, Gavel, said you get a bonus in December.

[00:39:24] Speaker 00:
He didn't mention the frequency or the amount.

[00:39:28] Speaker 00:
And what he got is $100 in one year, he got $300 in another.

[00:39:33] Speaker 00:
The other, whose name I always have trouble pronouncing, Utagafa, something to that effect, got a $50 coffee guard.

[00:39:42] Speaker 00:
And that's the evidence upon which the board found that the respondent gave away gifts

[00:39:49] Speaker 00:
bonuses of between 50 and 100.

[00:39:52] Speaker 00:
And if it has to be supported by substantial evidence, where is the substantial evidence in the record?

[00:40:00] Speaker 00:
Mr. and Mrs. Woodcock did not keep records of the gifts they gave, the TVs, the money, or things.

[00:40:06] Speaker 00:
I don't have records of the gift that I've given to my children and grandkids over the years.

[00:40:12] Speaker 00:
I don't know what I did.

[00:40:13] Speaker 00:
I don't know the amount of money.

[00:40:15] Speaker 00:
They did the same thing.

[00:40:17] Speaker 00:
They can't be considered a part of the employment, because it's not based upon that.

[00:40:20] Speaker 00:
It's based upon their goodwill.

[00:40:23] Speaker 00:
And how do you determine it if they provided clothing, socks, TVs, trips?

[00:40:29] Speaker 00:
How do you determine that?

[00:40:32] Speaker 00:
The total amount is $10,000 to $15,000.

[00:40:35] Speaker 00:
Everything, not the dollars amount.

[00:40:38] Speaker 00:
And there's no substantial evidence to support that.

[00:40:41] Speaker 00:
I ask that you decline to enforce the board's order.

[00:40:44] Speaker 00:
Thank you for your time.

[00:40:44] Speaker 04:
Thank you to both counsel.

[00:40:45] Speaker 04:
The case is submitted.