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Contemporary Cars, Inc. v. National Labor Relations Board

United States Court of Appeals, Seventh Circuit

February 26, 2016

Contemporary Cars, Inc. doing business as Mercedes-Benz of Orlando and AutoNation, Inc., single and joint employers, Petitioners/Cross-Respondents,
National Labor Relations Board, Respondent/Cross-Petitioner, and International Association of Machinists and Aerospace Workers, Intervening-Respondent.

Argued September 24, 2015

Petition for Review and Cross-Application for Enforcement of a Decision and Order of the National Labor Relations Board Nos. 12-CA-026126, 12-CA-026233, 12-CA-026306, 12-CA-026354, 12-CA-026386 & 12-CA-026552

Before Manion, Rovner, and Hamilton, Circuit Judges.

Hamilton, Circuit Judge.

This case involves a car dealership and its parent company's efforts to frustrate their employees' rights to organize. An administrative law judge found that the petitioner-employers engaged in a series of unfair labor practices aimed at coercing their employees' choices in the run-up to a December 2008 union election and frustrating their employees' protected concerted activities after the election. The judge also found that petitioners fired an employee due to anti-union animus and after the election unlawfully made multiple changes to employees' working conditions without bargaining with the union. The National Labor Relations Board largely affirmed the judge's order. It adopted the judge's findings of fact and all but one conclusion of law, and it expanded one remedy the judge ordered.

The employers have petitioned for judicial review. The Board has cross-petitioned for enforcement of its order. Having reviewed the extensive record of the numerous charges in this case, we deny the employers' petition and enforce the Board's order in its entirety.[1]

Specific issues are numerous. In Parts I and II, we lay out the factual and legal backgrounds relevant to this case. In Part III we review the findings that petitioners violated § 8(a)(1) of the National Labor Relations Act ("the Act") by interfering with their employees' rights to organize a union and to engage in concerted activity for mutual aid or protection. In Part IV we review the finding that petitioners violated § 8(a)(3) of the Act by firing an employee due to anti-union animus. Finally, in Part V we review the findings that petitioners violated § 8(a)(5) of the Act by failing to bargain with the union over changes they made to terms and conditions of employment.

I. Factual and Procedural Background

Petitioner Contemporary Cars, which we call the "dealership, " does business as Mercedes-Benz of Orlando and sells and services cars in Maitland, Florida. Bob Berryhill, the dealership's general manager, is responsible for the dealership's overall operations. Petitioner AutoNation owns the dealership, as well as over 200 other dealerships throughout the United States.

This case focuses on the dealership's service department. The service department had thirty-seven technicians as of October 2008, although it has since shrunk to twenty-five. The dealership divided technicians into three teams, each supervised by a team leader. The dealership paid technicians by the job rather than by the hour: it assigned each service task a specific number of hours-a "book time"-and paid a technician for those hours regardless of how long the job actually took. Thus, if business in the service department was slow, technicians sat idle and took home less pay. A technician's "skill rating, " a letter grade from D to A with "diagnostic" technician above A as the highest level, determined earnings per book hour.

Rumors of union organizing at the dealership had been circulating for years. In the summer of 2008, the International Association of Machinists began a campaign in earnest to organize the service technicians. Over the summer, the technicians talked among themselves and held off-site meetings. Technician Anthony Roberts emerged as one leader of this campaign, frequently talking to his fellow employees about the union. The union supporters kept their meetings relatively quiet. Higher levels of dealership management seem not to have known about the union effort, but team leader Andre Grobler must have known. On two occasions over the summer, Grobler commented to a technician that the technician must have been in a rush to get to a union meeting.

In late September 2008, general manager Bob Berryhill found out about the organizing drive. On September 25, he began calling service technicians into his office for individual meetings. During those meetings, Berryhill asked the technicians about the union activity. He also asked them if they had any problems with how things were run at the dealership. According to one technician, Berryhill said he was working on the problems the technician brought up.

On October 3, 2008, the union filed its representation petition. The Board's Regional Director held a hearing, approved the proposed bargaining unit, and an election was scheduled for December 16. The dealership sought review of this determination, and a two-member panel of the Board summarily denied the request.

In the weeks before the election, Berryhill and AutoNation vice president and assistant general counsel Brian Davis held group meetings and distributed literature to "educate" the technicians on the effects of having a union. At one of these meetings, Davis encouraged employees to call him if they had any concerns that management was not addressing. In the run-up to the election, Davis visited the dealership often. Shortly before the election, he approached one technician to ask how he felt about the union's chances. Team leader Grobler's interrogation of employees also continued. On December 9, one week before the election, general manager Berryhill held an unscheduled meeting on the service shop floor. He announced that the dealership was working on fixing problems the technicians had and that he was replacing two team leaders, Grobler and Oudit Manbahal, with new team leaders.

Like many businesses, the dealership encountered tough economic times in the second half of 2008. From October to November, the service department's gross profit dropped from $414, 000 to $295, 000. November 2008's profits were the worst the dealership's controller could recall. Sometime in 2008, AutoNation area manager Pete DeVita began talking with Berryhill about "right-sizing" the dealership. In October or November 2008, Berryhill began talking with other managers at the dealership about laying off technician Anthony Roberts, who was then playing a leading role in the union organizing. On December 8, 2008, about a week before the union election, the dealership laid off Roberts, though Roberts had a higher skill rating, more hours, and more seniority than many other technicians. The dealership also laid off one tire technician and one alignment technician at that time.

Throughout the union campaign, one pro-management technician, James Weiss, reported to Berryhill regarding the union effort. The administrative law judge did not credit Weiss's testimony that he engaged in anti-union activity at management's request, but the judge did credit, and substantial evidence supports, that Weiss reported information to management whether management asked for it or not.

On December 16, 2008, the technicians voted in favor of unionizing, but as explained below, the dealership contested the result. The economic woes continued into 2009, and the service department's decline in business accelerated. In February, without attempting to bargain with the union, the dealership reduced the "book times" for some pre-paid maintenance jobs. According to the dealership, these were "technical corrections" because, previously unnoticed by the dealership, new pre-paid maintenance plans reduced the amount of work required for each job as compared to the prior plans. That spring, also without bargaining, the dealership temporarily suspended the technician skill level reviews it had used to determine rates of pay. Finally, again without bargaining, the dealership laid off four more service technicians in April 2009.

Litigation of the union election has reached the United States Courts of Appeals twice already. After the election, the dealership challenged the certification of the union as the exclusive representative of a bargaining unit consisting of service technicians. In 2009, a two-member panel of the Board affirmed the certification. Contemporary Cars, Inc., 354 NLRB No. 72 (2009). The dealership petitioned for judicial review. The D.C. Circuit held the appeal in abeyance pending the Supreme Court's decision on actions by two-member panels of the Board. In 2010, after the Supreme Court held that the Act requires the Board to decide cases with a minimum of three members, New Process Steel, L.P. v. NLRB, 560 U.S. 674, 676 (2010), a three-member panel of the Board set aside the 2009 two-member Board ruling. Six days later, the original two members plus a third issued a new order affirming the Regional Director's determination. Contemporary Cars, Inc., 355 NLRB 592 (2010). In 2012, the Eleventh Circuit enforced the 2010 Board order. NLRB v. Contemporary Cars, Inc., 667 F.3d 1364, 1373 (11th Cir. 2012).

These unfair labor practice proceedings began in 2010 when the Board's general counsel filed a complaint alleging that the dealership and AutoNation had violated sections 8(a)(1), (3), and (5) of the National Labor Relations Act. 29 U.S.C. § 158(a)(1), (3), (5). In 2011, an administrative law judge found after an evidentiary hearing that the dealership and AutoNation had indeed violated the Act by interfering with their employees' protected rights to engage in concerted activity and to organize a union, by firing Anthony Roberts due to anti-union animus, and by failing to bargain with the union over mandatory subjects of bargaining. In 2012, the Board affirmed the administrative law judge's order with only two minor corrections. The Board expanded one remedy ordered by the judge and corrected one conclusion of law, thereby reviving one § 8(a)(1) charge that had been dismissed by the judge. Contemporary Cars, Inc., 358 NLRB No. 163 (2012).

The dealership and AutoNation petitioned to our circuit for judicial review. In 2014, the Supreme Court issued a decision holding that two of the Board members who decided the 2012 case had been appointed unconstitutionally. NLRB v. Noel Canning, 573 U.S. __, 134 S.Ct. 2550, 2557 (2014). In light of Noel Canning, we vacated the Board's 2012 decision and remanded for further proceedings. In 2014, the Board issued an order consistent with and incorporating by reference its 2012 order. Contemporary Cars, Inc., 361 NLRB No. 143 (2014). This petition for judicial review and cross-petition for enforcement followed.

II. Legal Framework and Standard of Review

The National Labor Relations Act protects employees' rights to organize a union and to engage in "concerted activities for the purpose of collective bargaining or other mutual aid or protection." 29 U.S.C. § 157. Section 8(a)(1) of the Act makes it an unfair labor practice for an employer to "interfere with, restrain, or coerce employees in the exercise" of these rights. 29 U.S.C. § 158(a)(1). Section 8(a)(3) makes it an unfair labor practice to discriminate in hiring, "tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization." § 158(a)(3). And § 8(a)(5) makes it an unfair labor practice for an employer to refuse to bargain collectively with the employees' representative. § 158(a)(5). The Act empowers the Board to find that a person or company has engaged in unfair labor practices, and it gives the Board broad discretion to remedy unfair labor practices to "effectuate the policies" of the Act. § 160(a), (c).

The dealership and AutoNation petitioned under § 160(f) to modify or set aside the Board's order finding that they engaged in unfair labor practices. The Board cross-petitioned under § 160(e) to enforce its order. We may enforce, modify and enforce as modified, or set aside in whole or in part the Board's order. § 160(e), (f).

Our review of a Board order is deferential. We review the Board's factual findings to see if they are supported by substantial evidence. Id. We consider the entire record and will affirm if we find "such relevant evidence that a reasonable mind might accept as adequate to support the conclusions of the Board." NLRB v. Teamsters "General" Local Union No. 200, 723 F.3d 778, 783 (7th Cir. 2013) (citation and internal quotation marks omitted). This requires "more than a mere scintilla" of evidence, International Union of Operating Engineers, Local 150 v. NLRB, 325 F.3d 818, 828 (7th Cir. 2003) (citation and internal quotation marks omitted), but we do not reweigh the evidence, NLRB v. KSM Industries, Inc., 682 F.3d 537, 543– 44 (7th Cir. 2012). Rather, we determine only whether "there is evidence in the record supporting the Board's outcome that could satisfy a reasonable fact finder." Id. The presence of contrary evidence does not compel us to reverse the Board's order as long as there is also substantial evidence supporting it. Teamsters "General" Local Union No. 200, 723 F.3d at 783.

Because the Board has the principal responsibility for interpreting and enforcing the Act, we do not overturn the Board's conclusions of law so long as they have "a reasonable basis in law." Roundy's Inc. v. NLRB, 674 F.3d 638, 645 (7th Cir. 2012) (citation and internal quotation marks omitted); see also Ford Motor Co. v. NLRB, 441 U.S. 488, 496 (1979); NLRB v. Local Union No. 103, International Ass'n of Bridge, Structural & Ornamental Iron Workers, 434 U.S. 335, 350 (1978). And we give particular deference to the Board's credibility determinations, which we will disturb only in extraordinary circumstances, such as obvious incredibility or clear bias. Teamsters "General" Local Union No. 200, 723 F.3d at 783; Bloomington-Normal Seating Co. v. NLR B, 357 F.3d 692, 695 (7th Cir. 2004).

Where the Board has adopted the administrative law judge's findings of fact and conclusions of law, we review the judge's determinations under the same standard we apply to a Board decision. Teamsters "General" Local Union No. 200, 723 F.3d at 783. Here, the Board summarily adopted most of the administrative law judge's findings of fact and conclusions of law, but with a few exceptions.

III. Section 8(a)(1) Violations

The administrative law judge found, and the Board affirmed, that the dealership and AutoNation in a number of instances acted unlawfully to frustrate their employees' protected rights to engage in concerted activity and to organize a union. The judge's findings are supported by substantial evidence and have a reasonable basis in law.

We analyze each unfair labor practice below. We start by reviewing the findings of coercive activity in violation of ยง 8(a)(1) in the run-up to the union election. We then review findings of ...

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