[00:00:05] Speaker 00:
case number six

[00:00:45] Speaker 03:
Good morning.

[00:00:46] Speaker 03:
Good morning, Your Honors, and may it please the Court.

[00:00:49] Speaker 03:
Melissa Murphy-Petros on behalf of the petitioners here.

[00:00:54] Speaker 03:
Petitioners challenged that part of the board majority's order, which found that the non-renewal of Ann Carter's contract for the two shows in question was unlawful under the act and ordered that Carter be reinstated to her position.

[00:01:11] Speaker 03:
The only issue here presented is

[00:01:14] Speaker 03:
whether Carter's contract was not renewed because of her protected activity at the December 13, 2011 staff meeting, as the board majority found, or as the ALJ and the board dissenter found, whether her contract was not renewed due to her long-standing attitude and performance issues.

[00:01:34] Speaker 05:
So actually, the only issue is, is there substantial evidence to support the board's determination?

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Is that correct?

[00:01:44] Speaker 03:
That is correct.

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That is the standard of review.

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And we submit that there is not substantial evidence to support the board's decision.

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The board, although it stated that it was accepting the credibility findings of the ALJ, in fact, rejected those findings by relying only on Mr. Sacks' testimony.

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The board did not look to

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the testimony of the choreographer, the dance captains, the dancers, all of these other people whom the ALJ specifically found to be credible in reaching its conclusion.

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It treated this case as if he were the only witness.

[00:02:19] Speaker 05:
You agree though that there can be evidence in the record that would support a contrary view and still

[00:02:28] Speaker 05:
there would be substantial evidence to support the board, do you not?

[00:02:33] Speaker 03:
I do.

[00:02:34] Speaker 05:
I still... So here, why couldn't the board say, we credit all these people who were complaining, but look at what happened with Mr. Sacks, who's the decision maker.

[00:02:48] Speaker 05:
Well, the... I'm sorry.

[00:02:49] Speaker 05:
The timing and the change of explanation.

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and cites all these cases about the problem with changes of explanation.

[00:03:00] Speaker 03:
The ALJ actually specifically addressed those issues with respect to Mr. Sacks' testimony, and those were credibility findings that we maintain the board majority also rejected.

[00:03:12] Speaker 05:
Mr. Sacks did testify contrary... What credibility determination did the board reject as to Mr. Sacks?

[00:03:21] Speaker 03:
The board rejected the ALJ's finding that his initial testimonies, that number one, he decided not to renew her contract after the December 13 meeting.

[00:03:31] Speaker 05:
And it was undisputed, he changed his position, correct?

[00:03:38] Speaker 03:
It was undisputed that yes, yes, and the ALJ specifically discredited that of his testimony which was not corroborated by anybody else.

[00:03:49] Speaker 02:
I thought, I'm trying to clarify that the ALJ credited his first testimony and didn't credit his second testimony.

[00:03:56] Speaker 03:
That's correct.

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His initial testimony is that he decided, he did not decide to renew her contract until after the December 13 meeting.

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and that he relied on input from Mr. Martina and others in making that decision.

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And I read the board to do something a little different, which is to say we're not going to give any credence to Sachs because his testimony had changed.

[00:04:23] Speaker 03:
That's correct.

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So the board rejected all of the credibility findings, which the ALJ made with respect to Mr. Sacks.

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She credited his initial testimony because it was corroborated by numerous other people, and she specifically discredited the second two pieces of testimony.

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And to discredit is a credibility finding.

[00:04:43] Speaker 05:
So let me be clear.

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I mean, the Seventh Circuit, like us, is bound by the Supreme Court's decisions and universal camera makes it perfectly clear that the board can properly reject credibility determinations.

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So that's why I just wanted to be clear.

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It wasn't disputed that Mr. Sacks changed his testimony about when he made the decision not to renew Mrs. Carter's contract.

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And I thought you had agreed.

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And the question was what inference to draw from that.

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And the ALJ drew one inference based on the corroborating testimony and the board drew another.

[00:05:30] Speaker 03:
That is correct.

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The board's own derivative inference is implicitly based on a rejection of the ALJ's very extensive and detailed credibility findings with respect to all of the other witnesses.

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Mr. Martina, the choreographer, the two dance captains, three of the other dancers.

[00:05:51] Speaker 05:
All I'm getting at is everybody, it's almost undisputed in the record.

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Isn't it undisputed in the record?

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that everybody wanted Mr. Sacks not to renew this dancer's contract.

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And he resisted.

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He said, let's give her another chance.

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Let's extend her contract.

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All right?

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And the board says, and then what happened?

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And then what happened is that I guess this in a sense is a story of no good deed goes unpunished.

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Mr. Sachs did have her contract renewed in order to give her other opportunities.

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He finally then

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listen to his colleagues at the show.

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And if you recall, Mr. Martina, whom the ALJ specifically credited, testified that in November of 2011, there were auditions going on for additional and new dancers to the show, and Ms.

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Carter was one of the dancers who was to be replaced.

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So I'm back to my point that there can be substantial evidence in the record for two different views

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as to what is the appropriate inference to draw from Mr. Sachs's changed testimony about when he made the decision.

[00:07:13] Speaker 03:
I think the key here, as a general principle, yes.

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But I think the key here that makes this case very unique is that this case is all about credibility.

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There is no smoking gun document that indicates his motive.

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This is what I'm trying to get you to focus on.

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It's not credibility in the sense, did he say he decided to fire her in October or November?

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And then did he later say,

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December.

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I mean, he testified both ways.

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So those are undisputed.

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And it's undisputed that the dance supervisors did not want him to renew this lady's contract.

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So I'm not sure I know what the credibility issue is there.

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It's undisputed.

[00:08:06] Speaker 03:
The credibility issue here, again, this is a case, as I was saying, where there literally is no documentary evidence.

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All of the evidence before the ALJ was testimonial.

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The ALJ heard all of these people, was the only person to see them and to observe their testimony and their demeanor on the stand, and determined that based on her findings,

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that all of these people were credible, based on her specific findings with respect to Mr. Sachs' testimony, crediting that which was corroborated, specifically discrediting the other, that Ms.

[00:08:39] Speaker 03:
Carter's contract would not have been renewed, regardless of what happened at the December 13, 2011 meeting.

[00:08:47] Speaker 02:
So it was Sachs, when he initially said,

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I didn't make the decision until later in December, but I was not going to renew her contract, regardless of what happened to that meeting, because of all the input I had received and all the issues we had had.

[00:09:08] Speaker 02:
The ALJ credits that testimony, as I understand it.

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Correct me if I'm wrong.

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I'm trying to understand.

[00:09:14] Speaker 02:
And then Sachs later testifies, actually I made the decision even before that December meeting and not to renew her contract and the ALJ discredits that testimony.

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So the ALJ believes his initial testimony he was going to not renew regardless.

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which was corroborated by Martina.

[00:09:37] Speaker 03:
Yes, by Martina and by Mr. Kelsey and Ms.

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Netria, the two dance captains as well.

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And the ALJ and the board, even more than the ALJ, are a little suspicious of the conflicting testimony and also the timing

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makes, I guess, a couple things.

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The timing makes it a bit suspicious for the Board that it occurs so quickly after the December meeting.

[00:10:00] Speaker 02:
And then secondly, the fact, as Judge Rogers said, that previously, Sachs had given our second and third chance kind of thing, even despite some more complaints in the past.

[00:10:13] Speaker 02:
So those are two things the Board relies on.

[00:10:16] Speaker 03:
They are two things the board relies on, and I'll note further, however... But why isn't that substantial evidence, I guess?

[00:10:21] Speaker 03:
Well, again, when relying on those, the board majority specifically stated that the ALJ did not look at those factors, did not consider them in her right-line analysis, and that is just factually untrue.

[00:10:36] Speaker 02:
So is the proper remedy here

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because I find this a very close case.

[00:10:40] Speaker 02:
I'll just put that on the table for both counsel.

[00:10:44] Speaker 02:
Is the proper remedy here under your view to send it back to the board?

[00:10:50] Speaker 02:
I know that's not your preferred remedy.

[00:10:53] Speaker 02:
Send it back to the board for the board to reconsider the case without making some of the mistakes of characterization that you have pointed out.

[00:11:04] Speaker 03:
You're right, that would not be my preferred remedy, of course, but that certainly would be a remedy that we would accept and would welcome.

[00:11:12] Speaker 02:
Because I see two things that are, and this is maybe a question for your opposing counsel, but two things the board says that seem a little

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less substantial or maybe incorrect.

[00:11:24] Speaker 02:
One is the thing, oh, because he had kept her on before, he necessarily was doing something different.

[00:11:30] Speaker 02:
He would have kept her on here, but for the December meeting.

[00:11:32] Speaker 02:
That doesn't follow to me.

[00:11:34] Speaker 02:
And I know you've raised that.

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And the second thing is the way the board characterizes the ALJ's credibility findings, as you point out, does not seem to correspond to how high read the ALJ's actual credibility findings.

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So you could note those things and send it back to the board and tell them to reconsider.

[00:11:51] Speaker 03:
You certainly could.

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And you could also reinstate the ALJ's order as it was, of course.

[00:11:57] Speaker 02:
I understand.

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That's your preferred remedy.

[00:11:59] Speaker 03:
Yes, but you certainly could send it back for further consideration.

[00:12:03] Speaker 02:
I find that remedy a tougher hill to climb, given what Judge Rogers is emphasizing, the standard of review.

[00:12:13] Speaker 02:
Although it is proper for us in looking at the board's opinion to make sure they characterized everything correctly and then to check the logic.

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And there are some holes there, as I see it.

[00:12:22] Speaker 02:
It's a little bit harder to just flat out reverse it, I think.

[00:12:25] Speaker 02:
But not impossible, so that's one of the things we're all exploring here.

[00:12:30] Speaker 04:
Let me ask you, were you as surprised as I was when I read footnote one in the board's order, the board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all relevant evidence convinces us that they are incorrect.

[00:12:47] Speaker 04:
We have carefully examined the record and find no basis for reversing the findings.

[00:12:52] Speaker 03:
Yes, yes, the board has said that it's accept, that's boilerplate language, it seems to appear in numerous decisions, but yes, they say they're.

[00:13:01] Speaker 03:
I don't think it's a scrivener's error, I do think it's a boilerplate phrase that is researching for this case, it seems to show up quite a bit.

[00:13:11] Speaker 03:
They say that they did not, they say they accepted the ALJ's credibility findings, but

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You're saying something doesn't make it so.

[00:13:18] Speaker 02:
That's the point.

[00:13:18] Speaker 03:
When you read what they did.

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Keep going.

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I'm sorry, sir.

[00:13:21] Speaker 03:
When you read what they actually did, the only way to reach the conclusion that the majority came to, and dissenter Ms.

[00:13:29] Speaker 03:
Gamara I think pointed this out very eloquently, the only way to reach that conclusion is to not accept

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the credibility findings with respect to really all of the other witnesses, to just put them aside.

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And again, I would emphasize that even the finding that the ALJ made specifically discrediting some of Mr. Sacks' testimony is itself a credibility finding.

[00:13:54] Speaker 05:
What about the boards, just so I'm clear, and then I can take the other side of this argument when I'm discussing this with board counsel.

[00:14:03] Speaker 05:
The board says, in light of the judge's findings, that Sachs's decision not to renew her contract was only made after and shortly after Carter's protected activity and Sachs's failure to explain why Carter's performance and attitude issues suddenly became a concern.

[00:14:28] Speaker 05:
Well, we find his proffered reasons

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how for her discharge were pretextual.

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So I read that to mean that under right line, both the ALJ and the board agreed that her protected activity was a motivation, but it was the burden of the employer to demonstrate that it would have discontinued her contract anyway.

[00:15:00] Speaker 05:
And so the board is focusing on his failure to explain why all of a sudden he changed his mind.

[00:15:11] Speaker 05:
And there is record evidence, I think, as I'll mention to counsel, the board that could explain it, but he never made, he never offered that explanation.

[00:15:25] Speaker 03:
He did offer the explanation.

[00:15:28] Speaker 05:
How did he explain why Carter's performance and attitude issues suddenly became a concern after that meeting?

[00:15:40] Speaker 04:
Let me just say, I just want to say suddenly.

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is the board's interpretation of what he did.

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And for months, he was being hit with all these people saying, get her off here.

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She's driving us crazy.

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She's a bad dancer.

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So what he, to me, had extraordinary patience.

[00:16:00] Speaker 04:
But it's their characterization of suddenly that has no evidence.

[00:16:06] Speaker 03:
Yes, I do agree with Judge Henderson's characterization of the word suddenly.

[00:16:11] Speaker 03:
That definitely is the board's interpretation.

[00:16:13] Speaker 03:
When you read Mr. Sachs' testimony and the transcript as a whole, and this is at page A572 and page 25 of our opening brief, he was asked at trial, why did you not renew her contract?

[00:16:27] Speaker 03:
This goes to the very question.

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And he says the real simple answer is because Martina and the dance captains told me don't renew her on the new contract.

[00:16:36] Speaker 03:
I've block quoted, so I won't read the whole thing.

[00:16:39] Speaker 03:
But he states very specifically that he is finally listening to them and acting upon their concerns.

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And he's given her enough opportunities.

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He's not obligated to allow her infinite opportunities to continue to improve her performance.

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And it's a subjective issue, to be sure.

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We're talking about live theater versus something that can perhaps be more specifically quantified.

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But he does answer the question that it was performance and attitude issues, that it was not what she had to say at the meeting.

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Other dancers spoke at the meeting, too, as well, including one, Miss Boisheur, with whom

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apparently the discussion was quite heated, and she was not let go and remained with the show for quite some time afterwards.

[00:17:24] Speaker 05:
Were they terrible dancers?

[00:17:27] Speaker 03:
Mr. Carter, or excuse me, Mr. Martina, there's nothing in the record as to their abilities, but Mr. Martina's testimony is very clear that Ms.

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Carter from the beginning did not demonstrate what he was looking for as a choreographer.

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And again, it is a subjective

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judgment call that you're making when you are talking about live theater, as opposed to many other cases in which the board is involved.

[00:17:53] Speaker 02:
The bigger thing was her attitude as reflected by the complaints from the fellow dancers and the dance captains, right?

[00:18:03] Speaker 03:
Yes, it was certainly, if not bigger, I would say it was at least as big.

[00:18:07] Speaker 03:
Again, when you're working in the context of live theater, performers' attitudes and behavior backstage,

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can be very important in terms of how well they're going to perform when they do take the stage.

[00:18:19] Speaker 03:
And that was also a consistent complaint that the dance captains had been receiving from other dancers really since the time that she joined the show.

[00:18:30] Speaker 02:
A tricky aspect of that for me was, if she's constantly talking about the pay and the conditions of work,

[00:18:37] Speaker 02:
And then that's what comes up at the December meeting the pay That's the holiday pay and things like that the conditions of work That does sound like she's then being

[00:18:52] Speaker 02:
not renewed for protected activity.

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And so the complaining seems to blend into the protected activity a bit.

[00:18:59] Speaker 02:
How do we, I guess I would ask, how do I distinguish the allegation of complaining from the protected activity, if you understand the question?

[00:19:09] Speaker 03:
The allegation of her complaining to the co-workers.

[00:19:12] Speaker 03:
Oh, to her co-workers.

[00:19:15] Speaker 03:
Well, she wasn't always just complaining about pay and whatnot.

[00:19:18] Speaker 03:
A lot of it, apparently, according to the record, had to do with

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boyfriends and the costume fitters and things of that nature.

[00:19:25] Speaker 03:
So I think the ALJ came to the correct conclusion, again, in looking at everyone's testimony and observing their demeanor.

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But I know for Mr. Martina, he's very, very clear in his testimony that the negativity, what he kept calling the negative behavior backstage, was impacting other dancers' performances on stage.

[00:19:50] Speaker 03:
And so, yes, that obviously was a consideration.

[00:19:53] Speaker 03:
But the holiday pay issue that you mentioned at the December meeting was not raised by Carter.

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It was raised by another dancer.

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And those who testified that were present at the meeting said that Mr. Sacks's interchange with that second dancer was actually much more heated than his exchanges with Ms.

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Carter.

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And yet that dancer was

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was not let go.

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So I don't think there's anything suspicious about the timing.

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Her contract was due to expire on January 2nd.

[00:20:23] Speaker 03:
Contract renewals, the record makes clear for all of the dancers were going on in the middle to end of December.

[00:20:30] Speaker 03:
This is an industry practice.

[00:20:33] Speaker 03:
So there's really nothing suspicious about that.

[00:20:35] Speaker 03:
Ms.

[00:20:35] Speaker 03:
Carter testified clearly that

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She understood her contract was not for infinity, that every six months it could be renewed or not renewed, and that was always in play.

[00:20:48] Speaker 03:
And I think the ALJ did specifically address all of those issues.

[00:20:53] Speaker 04:
Was there anything in the record that they traditionally waited until the last month or so before they either extended the contract or didn't extend it?

[00:21:06] Speaker 04:
The reason being that if you told a dancer six months in advance, we're not going to renew your contract.

[00:21:11] Speaker 04:
Is there anything in the record about that?

[00:21:14] Speaker 03:
I'm sorry.

[00:21:14] Speaker 03:
There's no specific testimony, but when you look at the dates on the contracts that are in the record, they do tend to fall in that last couple of weeks before.

[00:21:24] Speaker 03:
the contract expired.

[00:21:26] Speaker 03:
And even Ms.

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Carter did not testify that she thought it was unusual as of December 13th or 21st, whatever it was, that she didn't seem to find that unusual that her contract had not been renewed.

[00:21:43] Speaker 03:
So that specific question wasn't asked, but it does seem to be the industry standard if you just look at the dates on which the contracts were all signed.

[00:21:51] Speaker 05:
And Mr. Sachs' email response indicates why you might not want to let these dancers know too soon.

[00:22:00] Speaker 03:
I'm sorry.

[00:22:00] Speaker 05:
He says, I hope you'll be a professional about it.

[00:22:03] Speaker 03:
Yes, he did say that to her.

[00:22:05] Speaker 03:
Right.

[00:22:05] Speaker 05:
To perform through the end of the contract.

[00:22:09] Speaker 03:
Yes, he did ask that she do that.

[00:22:11] Speaker 03:
And she did, in fact, perform to the end of her contract term.

[00:22:15] Speaker 05:
In terms of

[00:22:17] Speaker 05:
the extension of her contract.

[00:22:19] Speaker 05:
The contracts were for six months, but the extension was for a longer period.

[00:22:25] Speaker 05:
Is there any explanation as to that?

[00:22:28] Speaker 03:
There is not.

[00:22:30] Speaker 05:
I don't believe that that ever... So in reinstating her, what contract would she have?

[00:22:39] Speaker 03:
The final contract

[00:22:41] Speaker 03:
that she signed was the one that was due to expire on January 2nd, 2012.

[00:22:46] Speaker 03:
That date was specified.

[00:22:51] Speaker 03:
So I guess that would be, that may have been the extension.

[00:22:55] Speaker 03:
I would have to just double check on that.

[00:22:57] Speaker 03:
But the end date was specifically stated to be January 2nd of 2012.

[00:23:03] Speaker 05:
So what would she be reinstated to?

[00:23:10] Speaker 03:
The record is silent on that because.

[00:23:14] Speaker 05:
What's your employer, what's your client's understanding of that, of this order?

[00:23:20] Speaker 03:
I'm sorry?

[00:23:22] Speaker 05:
What is your client, your client is challenging this order.

[00:23:27] Speaker 05:
What is your client's understanding of what the order requires it to do as to Mrs. Carter?

[00:23:36] Speaker 03:
the board order.

[00:23:39] Speaker 03:
It would be to reinstate her employment with the contract terms, which would not include those which were found to be unlawful by the ALJ.

[00:23:48] Speaker 03:
Which contract?

[00:23:50] Speaker 03:
I would presume, and again maybe this speaks to further proceedings I suppose, that it would be

[00:23:58] Speaker 03:
It would track very similarly to the last contract that she had.

[00:24:02] Speaker 05:
So would that all be a matter to be worked out in the compliance proceedings?

[00:24:08] Speaker 03:
Yes.

[00:24:08] Speaker 03:
All right.

[00:24:08] Speaker 03:
Yes.

[00:24:12] Speaker 04:
There are no further questions.

[00:24:13] Speaker 04:
So the reinstatement says, full reinstatement to her former job, or if that job no longer exists, to a substantially equivalent position, without prejudice to her seniority, which I don't think they have any, do they, or any other

[00:24:28] Speaker 04:
rights or privileges previously enjoyed.

[00:24:31] Speaker 05:
And that's precisely why I asked the question.

[00:24:33] Speaker 03:
Right, yes.

[00:24:34] Speaker 03:
I don't think seniority would become an issue.

[00:24:36] Speaker 03:
The six-month contracts do remain the industry standard and are used.

[00:24:40] Speaker 03:
So I presume that that's what it would be.

[00:24:44] Speaker 04:
All right.

[00:24:45] Speaker 03:
Thank you.

[00:24:45] Speaker 03:
Thank you.

[00:24:49] Speaker 04:
Mrs. Bell?

[00:24:55] Speaker 06:
May it please the court, Kelly Isbell here on behalf of the National Labor Relations Board.

[00:24:59] Speaker 06:
David Sachs knew for 18 months that his choreographer did not want to renew Ann Carter's contract.

[00:25:05] Speaker 06:
It was not until after she engaged in protected concerted activity by leading an employee meeting at which she raised issues regarding pay and scheduling and injuries that he decided it was finally time to let her contract expire.

[00:25:23] Speaker 05:
So one of Martina's testimony that the Las Vegas Explanation Show had reached a point where it was in good shape and they were getting inquiries about taking the show on the road and it was a successful operation.

[00:25:47] Speaker 05:
Mrs. Carter hadn't changed from day one

[00:25:51] Speaker 05:
but they were receiving all of these applications from very good dancers.

[00:25:58] Speaker 05:
And so when they were doing the auditions, they were contemplating replacing or not renewing Mrs. Carter.

[00:26:08] Speaker 05:
The ALJ focused on all of that.

[00:26:11] Speaker 06:
I think the ALJ answered your question, Your Honor, by saying that when they held those two parts, when they held those auditions in November, there was no evidence, no one ever said that they actually found dancers better than Ann Carter.

[00:26:25] Speaker 06:
They were looking for, I think Sachs testified up to four dancers to replace his lowest four.

[00:26:30] Speaker 06:
There's no evidence they found those four dancers.

[00:26:33] Speaker 06:
And if they had, then they could have fired her then.

[00:26:36] Speaker 06:
The contract allowed for a two week

[00:26:40] Speaker 06:
notice and non-renewal.

[00:26:42] Speaker 06:
So if they had found dancers better than Ann Carter in November, they could have at least put that in the record, told the board about it, or let her go.

[00:26:51] Speaker 01:
Well, firing's harsher than not renewing.

[00:26:53] Speaker 06:
Not renewing.

[00:26:55] Speaker 01:
You're using not renewing there?

[00:26:57] Speaker 06:
Well, if in November, before the December protected concerted activity, they could have not renewed.

[00:27:04] Speaker 06:
Well, they could have let her go.

[00:27:05] Speaker 06:
They could have given her notice and let her go.

[00:27:07] Speaker 02:
So I have a question about the board's order, the board's opinion.

[00:27:13] Speaker 02:
It makes the point similar to the point you started with, I believe, which was Sachs had renewed her before, even after receiving complaints about her.

[00:27:26] Speaker 02:
But it just strikes me that that can't be the dispositive because there's concept of a tipping point, which is, okay, I'm going to give a second chance, I'm going to give a third chance.

[00:27:38] Speaker 02:
This is every employer in the country probably goes through this on a regular basis with, I want someone to improve, I want to help them.

[00:27:45] Speaker 02:
And then it's not happening and finally you reach the point of in this case not renewing the board didn't seem one of my questions about the board's opinions didn't seem to acknowledge that Part of the a judge reasoning and just the real world Reality of how these things can happen

[00:28:04] Speaker 06:
I think on this record, you started talking about it a little bit before, there are two parts to Rightline, right?

[00:28:11] Speaker 06:
There's no dispute that the protected concerted activity was a motivating factor in her discharge.

[00:28:17] Speaker 06:
Then we move to the second part of Rightline where we, where Sachs has to explain why he discharged her then.

[00:28:26] Speaker 06:
And the board found that his shifting explanations were a pretext.

[00:28:31] Speaker 02:
I want to get to the shifting explanations separately, but on this point, which is the paragraph before the shifting explanations point in the board's opinion, the board seems to rule out the possibility

[00:28:42] Speaker 02:
that he would have fired or would have non-renewed her anyway because he had renewed her previously.

[00:28:50] Speaker 02:
And that just struck me as a failure of logic there.

[00:28:53] Speaker 02:
I think unreasoned decision making, I guess.

[00:28:58] Speaker 06:
On this record.

[00:29:00] Speaker 06:
I don't find in Sachs' testimony anywhere where he says there was a tipping point.

[00:29:06] Speaker 06:
He never explains to the board or the ALJ, there was a straw that broke the camel's back.

[00:29:14] Speaker 06:
That never comes up.

[00:29:15] Speaker 06:
What he says is,

[00:29:18] Speaker 06:
They told me they didn't like her.

[00:29:19] Speaker 06:
I decided not to renew her contract.

[00:29:22] Speaker 06:
But he never explains why then.

[00:29:25] Speaker 06:
Why was that the time?

[00:29:28] Speaker 02:
Because her contract was about to expire.

[00:29:30] Speaker 02:
So he had to make a decision.

[00:29:31] Speaker 02:
So you're presented, you know,

[00:29:34] Speaker 02:
wanted to avoid the decision, but he had to make the decision that it was coming up in early January.

[00:29:40] Speaker 06:
Martina testified that they were holding auditions.

[00:29:45] Speaker 06:
He wanted to replace her.

[00:29:47] Speaker 06:
The discussions about replacing her never occurred until after the meeting.

[00:29:51] Speaker 06:
Kelsey testified and was credited by the ALJ.

[00:29:54] Speaker 06:
Discussions about not renewing Carter never came up until after the December 13th meeting.

[00:29:59] Speaker 06:
All of the complaints about her had been happening for 18 months.

[00:30:04] Speaker 04:
The only thing that... Are you discounting Martina?

[00:30:06] Speaker 04:
Martina says, in October, he was... This is Martina.

[00:30:12] Speaker 04:
He, Sachs, was starting to see what was happening from my standpoint.

[00:30:16] Speaker 04:
And we had very much discussed whether we were going to give her notice or whether we were going to let the contract ride out.

[00:30:22] Speaker 04:
And it was decided to let the contract ride out.

[00:30:26] Speaker 04:
And did Mr. Sacks agree to that decision?

[00:30:29] Speaker 04:
He did.

[00:30:31] Speaker 04:
Well, what the ALJ... That was in October when they were doing these, when they were trying to decide who they were going to replace.

[00:30:39] Speaker 06:
What the ALJ says about that testimony is that no matter what Martina believed, David Sacks was the decision maker, that Martina might have believed a decision had been reached then, but no decision was reached until after the protected concerted activity.

[00:30:56] Speaker 02:
But the problem in this case, as you well aware, is that's the same time when you would normally be making the decision, which is December of non-renewing someone.

[00:31:06] Speaker 02:
And so that's the conundrum there.

[00:31:09] Speaker 02:
And on the shifting explanations point for SACS, because that's the next paragraph of the board's opinion, my concern about that paragraph is the board seems to say, well, he had conflicting explanations, therefore we're not going to credit him.

[00:31:25] Speaker 02:
Whereas the ALJ said, he had conflicting explanations, I'm going to credit his first set of testimony, as I read the ALJ, at least.

[00:31:37] Speaker 02:
And the problem, as Judge Henderson underscored, is the board says it's accepting all the ALJ's credibility findings, but it doesn't seem to accept the credibility finding that, at least as I read it, the ALJ accepted Sachs's first round of testimony.

[00:31:54] Speaker 06:
Well, his first round of testimony, as I read it, is just that they decided, he decided to let her go.

[00:31:59] Speaker 02:
Not because of the protected activity.

[00:32:04] Speaker 06:
Well, he says that after, at the end of 2011, I don't know if you've read his testimony, it is not clear.

[00:32:15] Speaker 02:
It's a good word.

[00:32:18] Speaker 06:
he listened to Martina and the dance captains and decided not to renew her contract.

[00:32:23] Speaker 06:
But there is no explanation by Sachs that he doesn't go any further than that, for example.

[00:32:30] Speaker 06:
So what the board is saying is that the ALJ has made a derivative inference.

[00:32:34] Speaker 06:
There's no testimony that says I decided solely on the, I never considered the productive activity

[00:32:41] Speaker 06:
We documented her bad performance.

[00:32:43] Speaker 06:
This was the end.

[00:32:44] Speaker 06:
I'd given her three chances.

[00:32:45] Speaker 06:
That's not the testimony.

[00:32:47] Speaker 06:
The ALJ only credits what SACS said because everybody else said we started talking about it after the December meeting.

[00:32:54] Speaker 06:
The ALJ had made a derivative inference because... What do you mean by derivative inference in this context?

[00:33:02] Speaker 02:
I thought the ALJ just said, I believe, I conclude based on all the testimony that SACS

[00:33:09] Speaker 02:
would have non-renewter, regardless of what she said at the December.

[00:33:17] Speaker 06:
And that's the inference.

[00:33:17] Speaker 06:
That's what I mean.

[00:33:18] Speaker 06:
There's no direct testimony exactly that way.

[00:33:21] Speaker 06:
I mean, that's something you have to draw from all the testimony.

[00:33:24] Speaker 02:
And the board.

[00:33:25] Speaker 02:
That's what Sachs ultimately says in his first round of testimony.

[00:33:35] Speaker 02:
You have to either believe Sachs or not believe Sachs when Sachs says, in essence, I would have non-renewter even absent what happened in the December meeting.

[00:33:49] Speaker 02:
Either believe him or not on that.

[00:33:51] Speaker 02:
And the Yale J ends up believing that, as I understand it, in part because of all the corroboration from Martina and the dance captains and what have you.

[00:34:00] Speaker 02:
There's reason to be skeptical of that, I understand, because of the timing and because of his prior behavior.

[00:34:06] Speaker 02:
But he says that.

[00:34:09] Speaker 02:
And the ALJ believes that.

[00:34:11] Speaker 02:
And the board says, we do not challenge the ALJ's credibility findings, yet it seems to, in essence, challenge the ALJ's credibility findings.

[00:34:20] Speaker 02:
That's why I think a remand might be in order here.

[00:34:22] Speaker 02:
You can roll that into your answer and all that.

[00:34:26] Speaker 06:
OK.

[00:34:26] Speaker 06:
You might have to catch me off on this.

[00:34:28] Speaker 06:
I don't know if I can hold it all in my head.

[00:34:31] Speaker 06:
I think that's where there's a legal finding there, right?

[00:34:35] Speaker 06:
So David Sacks says, we decided, we talked about it.

[00:34:39] Speaker 06:
Tiger didn't want her anymore.

[00:34:40] Speaker 06:
I said, OK, we'll get rid of her.

[00:34:42] Speaker 06:
But the legal inference from that, that the ALJ drew, is he would have fired her anyway.

[00:34:48] Speaker 06:
Right, that's a legal conclusion.

[00:34:50] Speaker 06:
And the board disagrees because of all the things we've talked about, the timing and the shifting potential.

[00:34:55] Speaker 02:
Why is that not factual?

[00:34:55] Speaker 02:
He would have, he had decided in his own head, or he had said to people, which we don't have that, but he had decided in his own head that he was going to non-renew her, regardless of what had happened at the December meeting.

[00:35:11] Speaker 06:
I don't read that as testimony, certainly.

[00:35:15] Speaker 06:
And what we know from the facts is that that decision was not made until after the meeting and after the protected concerted activity.

[00:35:21] Speaker 02:
I'm with you on that, that part of it.

[00:35:24] Speaker 02:
And the ALJ says that in the part of the testimony credits.

[00:35:29] Speaker 02:
The point then becomes

[00:35:31] Speaker 02:
Yeah, the timing is suspicious.

[00:35:33] Speaker 02:
He says, well, I would have done it anyway.

[00:35:35] Speaker 02:
And the question is, are you lying or are you telling the truth?

[00:35:38] Speaker 02:
That's really what it comes down to.

[00:35:40] Speaker 02:
Are you lying or are you telling the truth when you say that?

[00:35:43] Speaker 02:
And the ALJ has to figure out, are you lying or are you telling the truth?

[00:35:45] Speaker 02:
And that's really hard to do.

[00:35:47] Speaker 02:
And so that's a tough thing to do in trials every day.

[00:35:53] Speaker 02:
And the ALJ does it based on the other testimony.

[00:35:56] Speaker 02:
He says, I conclude that he was going to non-renew her anyway.

[00:36:01] Speaker 02:
and the board comes in and says, we accept credibility, but then it doesn't really accept credibility because it doesn't accept that line not lying for it.

[00:36:14] Speaker 06:
And I know I'm way past my time.

[00:36:17] Speaker 06:
Let's not forget also that the ALJ did not do part of the right-line analysis.

[00:36:21] Speaker 06:
She identified the shifting explanations and she did not discuss the pretextual analysis of the board.

[00:36:27] Speaker 05:
Well, she didn't say pretext, but she was dealing with

[00:36:30] Speaker 05:
the second part of right line.

[00:36:32] Speaker 05:
I mean, she cites right line, and then she deals with the first prong, and then she turns to the second prong.

[00:36:38] Speaker 05:
So I agree, she doesn't use the word pretext, but isn't that what she's trying to figure out?

[00:36:43] Speaker 06:
I think she does.

[00:36:44] Speaker 06:
What the board is saying is that she never explained the shifting explanations as part of pretext when the board in the second prong.

[00:36:50] Speaker 05:
So my question is whether or not the error, and let me say, Judge Kavanaugh's point,

[00:36:58] Speaker 05:
I thought this was a difficult case and therefore went back to reread Universal Camera about our standard of review here because all of our cases keep talking about that and we have this K decision from this circuit saying that the board is free to reject these cases.

[00:37:19] Speaker 05:
credibility determination.

[00:37:21] Speaker 05:
So I wondered whether what the board was concerned about was not that the AOJ didn't understand there were two parts to the right line analysis, but rather that she didn't understand that it was the employer's burden to demonstrate.

[00:37:43] Speaker 05:
And so Sachs, who is the decision maker,

[00:37:47] Speaker 05:
really has to say on the record what are the reasons that he would have fired her even if this December 13 meeting had never occurred.

[00:37:59] Speaker 05:
And that's what I thought in that sentence I quoted and I will not quote again.

[00:38:04] Speaker 05:
I thought that's what the board was getting at.

[00:38:08] Speaker 05:
And so the question is, given universal camera and our standard of review,

[00:38:13] Speaker 05:
Why wouldn't we want to send this back to the board for a further explanation of how it wants to resolve this case?

[00:38:29] Speaker 06:
I think you certainly could.

[00:38:30] Speaker 06:
I mean, I think the board's view is, as it stated, that it did not

[00:38:36] Speaker 06:
overturn any credibility determinations that even on this record, I think even if you decide the board did overturn a credibility determination that Sachs had decided to not renew her contract without, but not because of the PCA.

[00:38:55] Speaker 05:
But understand, universal camera and arcade decision make it clear that's not a problem, all right?

[00:39:01] Speaker 05:
if the board overturns a credibility determination.

[00:39:04] Speaker 06:
That was my next point.

[00:39:05] Speaker 05:
All right.

[00:39:06] Speaker 05:
So then, was the board really saying, because it's presumed to know our president and universal camera, that there is a heavy burden under the second prong of right line, and it wasn't satisfied that Sachs had met it?

[00:39:29] Speaker 05:
And that's why it's so difficult in this case to figure out what is the rationale.

[00:39:37] Speaker 05:
I mean, we're very deferential for all the reasons Universal County says, but did the board give a sufficient explanation?

[00:39:47] Speaker 06:
Well, I think you've identified the crux of the board's decision.

[00:39:51] Speaker 06:
It did not think Sachs had made his right line.

[00:39:56] Speaker 06:
it met his right-line burden of showing that he would have fired her in the absence of protected concerted activity.

[00:40:01] Speaker 06:
The board relied on pretext and the shifting explanations and the timing.

[00:40:06] Speaker 06:
Once you come up with pretextual explanations or shifting explanations and the board determines their pretext that hide the true motive, you fail.

[00:40:15] Speaker 05:
But what if you take Judge Kavanaugh's points here that the board seems to reject the notion that, you know,

[00:40:26] Speaker 05:
Mr. Sax's patience had been tried enough and he was ready to move on.

[00:40:31] Speaker 05:
It had nothing to do with the fact that she was complaining at this December 13 meeting.

[00:40:38] Speaker 06:
I think the board would want to see

[00:40:42] Speaker 06:
some sort of proof that that was actually the reason, some sort of indication.

[00:40:49] Speaker 06:
It could have been his testimony.

[00:40:51] Speaker 06:
I don't read his testimony as saying that explicitly.

[00:40:54] Speaker 06:
He said several times that they had disciplined her and written her up formally, but he couldn't find those.

[00:41:01] Speaker 06:
ALJ drew an adverse inference because he said there was a meeting at which she was talked to, but they didn't call the manager who was still employed, who was actually at that meeting, and ALJ drew an adverse inference, but that meeting never happened.

[00:41:14] Speaker 02:
So I think if there was... That's a question, I think, of whether she was aware of it.

[00:41:19] Speaker 02:
That's not a question of what his mindset was.

[00:41:25] Speaker 06:
Right, but in terms of meeting your right-line burden, there's the PCA, and then there's a firing.

[00:41:30] Speaker 02:
It would help the show's mindset if he had actually made her aware to help you out there.

[00:41:36] Speaker 02:
Exactly right.

[00:41:37] Speaker 02:
But he could have had a mindset of, boy, she's getting a second chance, a third chance.

[00:41:41] Speaker 02:
He might not have informed her, but in his own mind, he might have thought she needs to improve to get renewed.

[00:41:51] Speaker 02:
And on the universal camera point, I just wanted to ask one question.

[00:41:55] Speaker 02:
Judge Rogers describes the law accurately.

[00:41:59] Speaker 02:
There is some law that suggests when you overturn the ALJ, that means that the board's reasoning has to be scrutinized more carefully and there's more art than science in how that's articulated in the case law.

[00:42:13] Speaker 02:
But here, what seems to me,

[00:42:15] Speaker 02:
to be a potential problem and I'm reiterating what I said before is that the board did not purport to be overturning a credibility finding when in reality it seems like that's exactly what it was doing and that might be a reason for a remand to let it clear up what exactly its rationale is in a case like this.

[00:42:36] Speaker 06:
And I mean that would certainly be

[00:42:39] Speaker 06:
I mean, I think I've probably told you over and over again what the board's view is.

[00:42:46] Speaker 04:
All right.

[00:42:48] Speaker 04:
Thank you.

[00:42:49] Speaker 04:
Thank you.

[00:42:50] Speaker 04:
Does the opposing council have any time left?

[00:42:55] Speaker 04:
I think you want to reply to take a minute, but we've been back and forth over this record a thousand times.

[00:43:02] Speaker 03:
We have, Your Honor.

[00:43:04] Speaker 03:
I would just simply emphasize, to Judge Ryder's point, that the ALJ did in fact conduct an appropriate pretext analysis under right line.

[00:43:13] Speaker 03:
She didn't use the word pretext, but it goes on for pages.

[00:43:16] Speaker 03:
She cites right line repeatedly.

[00:43:18] Speaker 03:
So she did in fact do what she was supposed to do, and we believe reached the correct conclusion.

[00:43:23] Speaker 02:
Where do you think's the best place where he said, Sachs, I would have non-renewed her even absent the December meeting?

[00:43:32] Speaker 03:
He was not asked that question specifically, but this page I cited previously, excuse me, A572, he was specifically asked, and they were discussing the decision to not renew her after the meeting.

[00:43:46] Speaker 03:
So that testimony is in the context of after the December 13 meeting, he's asked, why did you not renew her?

[00:43:52] Speaker 03:
And he explains that it is in reliance on Martina and the dance captains, and that really enough was enough.

[00:44:02] Speaker 03:
Thank you.