DC Circuit Affirms NLRB's Application of Quietflex Factors to Find On-site Work Stoppage Protected Activity | Practical Law

DC Circuit Affirms NLRB's Application of Quietflex Factors to Find On-site Work Stoppage Protected Activity | Practical Law

In Fortuna Enterprises, LP v. Nat'l Labor Relations Bd., the employer petitioned for review of an National Labor Relations Board (NLRB) order finding that it violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by suspending employees for participating in a peaceful on-site work stoppage. The US Court of Appeals for the District of Columbia Circuit denied the employer's petition and granted the Board's cross-application for enforcement, holding that the Board's clarification of the third Quietflex factor was reasonable and entitled to deference, that substantial evidence supported the Board's determination that the striking employees did not prevent other employees from working and that the striking employees should be protected despite the existence of an established open door grievance policy.

DC Circuit Affirms NLRB's Application of Quietflex Factors to Find On-site Work Stoppage Protected Activity

by Practical Law Labor & Employment
Published on 24 Jun 2015 • USA (National/Federal)
In Fortuna Enterprises, LP v. Nat'l Labor Relations Bd., the employer petitioned for review of an National Labor Relations Board (NLRB) order finding that it violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by suspending employees for participating in a peaceful on-site work stoppage. The US Court of Appeals for the District of Columbia Circuit denied the employer's petition and granted the Board's cross-application for enforcement, holding that the Board's clarification of the third Quietflex factor was reasonable and entitled to deference, that substantial evidence supported the Board's determination that the striking employees did not prevent other employees from working and that the striking employees should be protected despite the existence of an established open door grievance policy.
On June 12, 2015, in Fortuna Enterprises, LP v. Nat'l Labor Relations Bd., the employer petitioned for review of an NLRB order finding that it violated Section 8(a)(1) of the NLRA by suspending employees for participating in a peaceful on-site work stoppage. The US Court of Appeals for the District of Columbia Circuit denied the employer's petition to review the Board's order and granted the Board's cross-application for enforcement, holding that:
  • The Board's clarification of the third Quietflex factor was reasonable and entitled to deference.
  • Substantial evidence supported the Board's determination that:
    • striking employees did not interfere with production or the provision of services by preventing other employees from working; and
    • the employees should be protected notwithstanding the availability of the employer's open door grievance procedure.
(No. 14-1099, (D.C. Cir. June 12, 2015).)

Background

Fortuna operates the Los Angeles Airport Hilton Hotel and Towers. Fortuna petitioned for review of an NLRB order finding that it violated Section 8(a)(1) of the NLRA by suspending 77 employees for participating in a peaceful on-site work stoppage. The panel (Board) heading the NLRB's judicial functions cross-petitioned for enforcement of the order and Unite Here, Local 11 intervened in support. The Court of Appeals granted petition in part, denied petition in part and remanded the matter (Fortuna Enterprises, LP v. NLRB, 665 F.3d 1295 (D.C. Cir. 2011)).
On remand, the Board clarified the factors set out in Quietflex Manufacturing Co., and found that the peaceful on-site work stoppage was protected activity under the NLRA, even though the employer had an "open door" grievance policy (344 N.L.R.B. 1055 (June 30, 2005); Fortuna Enterprises, L.P., 360 N.L.R.B. slip op. 128, (May 30, 2014)).
In Quietflex, the Board identified ten factors to consider when determining whether the organizational rights of employees engaged in a work stoppage outweigh the property rights of the employer, including:
  • The reason the employees have stopped working.
  • Whether the work stoppage was peaceful.
  • Whether the work stoppage interfered with production, or deprived the employer access to its property.
  • Whether employees had adequate opportunity to present grievances to management.
  • Whether employees were given any warning that they must leave the premises or face discharge.
  • The duration of the work stoppage.
  • Whether employees were represented or had an established grievance procedure.
  • Whether employees remained on the premises beyond their shift.
  • Whether the employees attempted to seize the employer’s property.
  • The reason for which the employees were ultimately discharged.
(344 N.L.R.B. at 1056.)
On remand in Fortuna, the Board:
  • Clarified that the focus of the third Quietflex factor is whether striking employees interfere with production or the provision of services by preventing other employees who are working from performing their duties.
  • With respect to the fourth and seventh Quietflex factors, accepted the Court of Appeals' determination that employees had access to an established grievance procedure through Fortuna's open door policy, but found that these factors weighed slightly in favor of protecting the employees because:
    • the employees reasonably believed their managers would still meet with them; and
    • having an established grievance procedure does not mean that the NLRA affords no protection to employees who engage in peaceful, non-disruptive on-site work stoppages without first attempting to resolve their complaint through approved channels.
(, at *7-8.)
For more information, see Legal Update, On-site Work Stoppage Protected Despite Employer's "Open Door" Grievance Policy: NLRB.
Fortuna petitioned for review, and the NLRB filed a cross-application for enforcement.

Outcome

The DC Circuit denied Fortuna's petition to review the Board's order and granted the Board's cross-application for enforcement, holding that:
  • The Board's clarification of the third Quietflex factor was reasonable and entitled to deference.
  • Substantial evidence supported the Board's determination that:
    • striking employees did not interfere with production or the provision of services by preventing other employees from working; and
    • factors governing Fortuna's grievance procedure slightly supported protecting employees.
The DC Circuit first considered the Board's explanation of Quietflex factor three, finding that:
  • It disagreed with Fortuna's contention that the Board imposed an unworkable standard for the third Quietflex factor and that this factor should weigh against protection.
  • The withdrawal of the services of the striking employees did not affect the non-striking employees' ability to do their jobs.
  • The Board was not required to create different rules for the service industry.
  • Although the record shows that the work stoppage did disrupt some of the hotel's operations (Fortuna, 665 F.3d at 1302), it does not compel a finding that the work stoppage interfered with the provision of services by other employees because:
    • in contending that the "record" shows that other employees were prevented from eating lunch, Fortuna relied on testimony by hotel managers that the ALJ rejected as hearsay, and based on the admissible evidence, the Board reasonably determined that Fortuna "did not present the testimony of a single employee that the work stoppage interfered with their ability to use the cafeteria" (Fortuna, , at *6 n. 19);
    • Fortuna decided to assign three separate hotel managers to oversee the work stoppage, therefore causing some of its losses by its own response to the work stoppage; and
    • the Board reasonably determined that "although [Fortuna] contends that there were some rooms that were not cleaned, it does not assert that it was unable to provide a clean room to any guest" (Fortuna, , at *6 n. 19).
Next, the DC Circuit considered the Board's analysis of Quietflex factors four and seven and rejected Fortuna's arguments that the Board erred in its analysis of these factors and failed to give proper weight to the Hilton's "open door" policy because:
  • The Board addressed the terms of the remand and came to a reasoned conclusion that other "factors, taken together, substantially outweigh the significance of the availability of a grievance procedure in the circumstances of this case" (Fortuna, , at *10).
  • Nothing in the NLRA, the Quietflex test or judicial and Board opinions analyzing on-site work stoppages mandates that the existence of an alternative group grievance procedure prevails over the other Quietflex factors.
Finally, the DC Circuit considered Fortuna's remaining challenges to the Board's decision, finding that:
  • Although balancing tests can be susceptible to results-driven application and, therefore, "the sort of multi-factor balancing 'test' suggested in Quietflex may be incapable of predictable application" (Fortuna, 665 F.3d at 1300), the DC Circuit assumed the Quietflex test's validity.
  • While Quietflex may be subject to abuse, the record does not demonstrate that the Board abused the test in this case.
  • The fact that the Board reaffirmed its prior decision does not mean that its analysis was results-driven.

Practical Implications

This decision provides clarification about how the Board will analyze Quietflex factors three, four and seven in connection with a peaceful on-site work stoppage. Based on the Board's analysis in Fortuna, it appears unlikely the Board will find that a work stoppage interferes with other, non-striking employees' ability to perform their duties unless presented with very strong evidence. Further, the existence of an open door grievance policy will not necessarily strip protection from employees who engage in peaceful on-site work stoppages without first attempting to resolve their complaint through this established grievance procedure if the other Quietflex factors weigh in favor of protecting the striking employees.