Exiting Hearing Doomed Employer's Appeal Tied to Hearing Officer Errors: DC Circuit | Practical Law

Exiting Hearing Doomed Employer's Appeal Tied to Hearing Officer Errors: DC Circuit | Practical Law

In 800 River Road Operating Co. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that an employer's decision to walk out of a National Labor Relations Board (NLRB) hearing on the employer's election objections about whether union supporters coerced voters prior to a representation election precluded the employer from arguing that a hearing officer's (HO) erroneous rulings were prejudicial and that the NLRB abused its discretion by validating the HO's report.

Exiting Hearing Doomed Employer's Appeal Tied to Hearing Officer Errors: DC Circuit

Practical Law Legal Update w-005-6901 (Approx. 6 pages)

Exiting Hearing Doomed Employer's Appeal Tied to Hearing Officer Errors: DC Circuit

by Practical Law Labor & Employment
Law stated as of 07 Feb 2017 • USA (National/Federal)
In 800 River Road Operating Co. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that an employer's decision to walk out of a National Labor Relations Board (NLRB) hearing on the employer's election objections about whether union supporters coerced voters prior to a representation election precluded the employer from arguing that a hearing officer's (HO) erroneous rulings were prejudicial and that the NLRB abused its discretion by validating the HO's report.
On January 24, 2017, in In 800 River Road Operating Co. v. NLRB, the US Court of Appeals for the District of Columbia Circuit held that although a hearing officer (HO) made several erroneous rulings during an NLRB hearing on the employer's election objections about whether union supporters coerced voters prior to a representation election, the NLRB did not abuse its discretion in affirming the HO's report and overruling the employer's objections because:
  • The employer's decision to walk out of the hearing after losing on the HO's procedural rulings rendered those rulings harmless error.
  • The employer could not show that the HO's rulings prejudiced its case any more than its own litigation strategies.
( (D.C. Cir. Jan. 24, 2017).)

Background

In March 2012, a unit of employees at Woodcrest nursing facility elected the 1199 SEIU United Healthcare Workers East Union as its bargaining representative. The Woodcrest filed multiple objections to the election, two of which proceeded to a hearing before an NLRB Hearing Officer (HO) over a three-day period in May 2012. Those two objections involved Woodcrest's allegations about improper conduct by supervisors seeking to coerce voting employees to support the union before the election by, among other things:
  • Soliciting union authorization cards (or creating the impression that they were soliciting cards).
  • Promoting the union.
  • Creating the impression that they supported the union and that voting employees should do likewise.
On the hearing's second day (a Friday), Woodcrest met ex parte with the HO and requested that he issue subpoenas to six subordinates of one of the offending supervisors. Although NLRB regulations required issuance of the subpoenas, at the end of the hearing's second day, the HO:
  • Denied Woodcrest's request to issue the six subpoenas, stating that the subpoenas were "exploratory" and that Woodcrest had failed to establish that the witnesses had firsthand knowledge of facts related to Woodcrest's objections.
  • Did not allow eight other subpoenaed witnesses to testify at the hearing.
  • Denied Woodcrest's request to treat the offending supervisor as a hostile witness.
On the hearing's third day (a Monday), Woodcrest refused to continue participating in the hearing, leaving the room after informing the HO that his Friday rulings prevented Woodcrest from making its case.
In June 2012, the HO issued a report recommending that the NLRB overrule Woodcrest's objections. In January 2013, the NLRB affirmed the HO's report and certified the union, finding that the HO:
After Woodcrest refused to bargain with the union to permit appellate review of the election proceedings, the union filed unfair labor practice (ULP) charges, and the NLRB's General Counsel issued a complaint against Woodcrest. The NLRB granted summary judgment in favor of the General Counsel, issuing an order requiring Woodcrest to bargain with the union. (See 800 River Road Operating Co., 362 N.L.R.B. No. 114 (June 15, 2015).)
The NLRB's order triggered jurisdiction by the DC Circuit. (Under the NLRA, the court did not have jurisdiction over the NLRB's decision certifying the union.) Woodcrest appealed, asking that the DC Circuit:
  • Set aside the NLRB's summary judgment order on Woodcrest's ULPs.
  • Remand for a new election instead of a new hearing based on the:
    • HO's alleged abuse of discretion and prejudicial error in his rulings during the hearing; and
    • NLRB's alleged abuse of discretion in affirming the HO's report "with little analysis."

Outcome

The DC Circuit:
  • Denied Woodcrest's petition for review and accompanying request to set aside the NLRB's Order and remand for a new election.
  • Enforced the NLRB's order requiring Woodcrest to bargain with the union.
  • Held that although the HO erred in denying the subpoenas sought by Woodcrest, and may have committed error in other rulings, the NLRB did not abuse its discretion in affirming the HO's report and overruling Woodcrest's objections because:
    • Woodcrest's voluntary decision not to try the case after losing on the HO's procedural rulings rendered those rulings harmless error; and
    • Woodcrest could not show that the HO's rulings prejudiced its case any more than its own litigation strategies.
The DC Circuit noted that:
The DC Circuit determined that the NLRB did not abuse its discretion when it found that:
  • The HO's denial of Woodcrest's subpoena requests did not prejudice Woodcrest because:
    • Woodcrest's decision to abandon the hearing on its third day precludes the court from separating whatever harm Woodcrest suffered as a result of the subpoena denial from the prejudice caused by Woodcrest's decision (and the decision might have even had a greater prejudicial impact than the denial of the subpoenas);
    • while the HO's denials of Woodcrest’s subpoena requests prevented subordinates of the offending supervisor from testifying, by leaving the hearing, the HO did not get to hear potentially vital testimony from five witnesses who were due to testify that they had direct knowledge of the offending supervisor's conduct;
    • Woodcrest failed to show that the subpoena denials excluded critical evidence; and
    • Woodcrest's failure to include on lists provided to the regional director the six subpoenaed witnesses and five additional witnesses it planned to call on the hearing's third day precluded Woodcrest from showing that the HO's refusal to issue the subpoenas was more prejudicial than Woodcrest's decision not to call the five employees.
  • The HO's refusal to permit eight subpoenaed witnesses to testify after two full days of hearing testimony was itself not an abuse of discretion because:
    • although the HO limiting witnesses solely to those with "direct knowledge" may have left Woodcrest unable to meet its burden of showing objectionable conduct by the union, nine of Woodcrest's ten witnesses failed to provide any testimony of objectionable conduct and even provided testimony contradicting Woodcrest's claims;
    • the HO reasonably concluded that he needed a "more substantial" offer or proof to allow additional witnesses to testify; and
    • the HO was willing to allow witnesses to testify as long as Woodcrest could explain how it knew what the witnesses were likely to say in their testimony.
  • The HO's refusal to allow Woodcrest to treat the offending supervisor as a hostile witness was not an abuse of discretion because:
    • court rules of evidence are not controlling in proceedings involving an election challenge (29 C.F.R. § 102.66(a));
    • the HO has discretion not to apply a nonbinding rule; and
    • the HO even allowed Woodcrest to ask the supervisor leading questions and to pursue lines of questioning over union objections.
The court also rejected Woodcrest’s argument relying on the DC Circuit's decision in ManorCare of Kingston PA, LLC v. NLRB that the NLRB abused its discretion by making a decision that was too "cursory" or "truncated," finding that decision was not applicable because:
  • That decision involved the NLRB disregarding its own precedent on coercion and actual violent threats that cause voter intimidation (see 823 F.3d 81, 87 (D.C. Cir. 2016)).
  • This case involved a hearing in which multiple witnesses provided "virtually no testimony of objectionable conduct" and in which the employer voluntarily walked out of the hearing instead of presenting additional evidence to bolster its case.

Practical Implications

The DC Circuit's decision in 800 River Road illustrates that a party intending to challenge an HO's rulings in an election objections hearing should generally proceed with the evidence it can introduce despite objectionable HO rulings. If it does not, it likely will forfeit the right to challenge those rulings because the NLRB and a reviewing appellate court is less likely to hold the erroneous HO rulings were prejudicial error if the party failed to introduce available evidence. Here the DC Circuit acknowledged that at least some of the rulings (particularly on the subpoenas) were erroneous, and yet the employer's litigation decision to exit the hearing was fatal to all of its arguments about prejudice and abuse of discretion on the part of both the HO and the NLRB.
A party in a similar position as Woodcrest should participate in the hearing through its conclusion, even if they think that an HO's rulings are precluding it from making its case. By seeing the hearing through, the disgruntled party will be in a stronger position to convince a court (and perhaps the NLRB at an earlier stage) that erroneous rulings during a hearing prejudiced its case and constituted abuse of discretion.