NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of
Toering
Electric Company and Foster Electric, Inc. and Local
September 29, 2007
Decision and Order Remanding
By Chairman Battista and Members Liebman Schaumber,
Kirsanow, and Walsh
Section 8(a)(3) of the Act makes it an unfair labor practice for an employer “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . . .” The protection of this provision has been extended to applicants for employment.1 Consequently, an employer can violate Section 8(a)(3) by refusing to hire or to consider hiring an applicant because of union considerations.
In many instances, there is no question that an individual
who applies for work with an employer does so pursuant to a good-faith interest
in accepting a job if offered on acceptable terms. However, in some cases, it is apparent that alleged applicants have no
such interest. In this case, we address such behavior under the standard adopted by the Board in
Requiring that the General Counsel prove an applicant’s
genuine interest in securing employment is essential to the effective administration
of the Act. Our decision today will insure that only those for whom Congress
intended statutory protection as actual or potential employees will receive it.
As discussed below, the Board’s experience has shown that in some hiring
discrimination cases, particularly those involving “salting” campaigns, unions
submitted batched applications on behalf of individuals who were neither aware
of the applications nor interested in employment opportunities with the employer.
In other cases, individuals submitted applications but were not interested in
obtaining employment with the employer. Their applications, sometimes
accompanied by conduct plainly inconsistent with an intent to seek employment,
were submitted solely to create a basis for unfair labor practice charges and
thereby to inflict substantial litigation costs on the targeted employer. The
absence of a clear and consistently applied requirement that the General
Counsel must prove an applicant’s genuine interest in securing employment has
opened the door to these abusive tactics. By imposing this requirement under
Background Facts
International
Brotherhood of Electrical Workers President Jack J. Berry announced the
As part of recommended salting campaigns, the International Union’s Policy on Inside Construction Organizing (Organizing Policy) requires local unions to respond to blind newspaper advertisements to assure that “sufficient numbers of replies [are] submitted to make a prima facie case of statistical discrimination.” Minutes of a March 1994 meeting of Local Union 275, International Brotherhood of Electrical Workers, AFL–CIO (Local 275 or the Union), indicate that it was implementing the International’s Organizing Policy by going to area temporary employment agencies and “load[ing] them up with applications.”
Also in 1994, Toering Electric became a target of Local 275’s salting campaign. Its alleged refusal to hire or consider union-affiliated individuals that year generated several unfair labor practice charges.4 In July and August 1995, to settle these allegations, Toering Electric offered jobs to six Local 275 members but all six failed to show up for work. Other Local 275 members received back-pay awards pursuant to the settlement agreement. Local 275 boasted in its March 1995 newsletter that its salting campaign “put a big hurt” on Toering Electric’s business.
Local 275 again targeted Toering Electric in June 19965 when organizer James Jendrasiak twice mailed, in response to a blind help-wanted
newspaper advertisement, his resume and the resumes of three additional local
union members to Toering Electric.6
Jendrasiak solicited these resumes during union meetings for use in the salting
campaign. In his cover letter to Toering Electric, Jendrasiak identified all
four applicants as registered apprentices or journeymen and the local
After the
advertisement appeared in the newspaper again in July, Jendrasiak resubmitted
the four resumes he sent in June, along with the resumes of 14 other Local 275
journeymen and apprentices. Fellow union organizer James Leenhouts gave
Jendrasiak 12 of these 14 resumes from a file of resumes collected for salting
purposes.7 Of the 18 resumes submitted by Jendrasiak,
5 contained no work history dates,8
another 5 were stale,9 and 1 resume
was from Local 275 member Spofford,
who did not accept a 1995 job offer tendered by Toering Electric under the
settlement agreement. Jendrasiak determined that only four of the Local 275 members whose resumes he
received from Leenhouts had authorized the use of their resumes to respond to
blind help-wanted advertisements as part of the
It is undisputed that Toering Electric did not hire any of the individuals whose resumes it received from Local 275. According to Dennis Van Wyk, Toering Electric’s office manager, a bid proposal submitted in the summer of 1996 prompted the blind help-wanted advertisements. There was no immediate need for electricians. Although Van Wyk testified that he did consider the resumes, the fact that they were stale and incomplete led him to conclude that the individuals were not interested in employment. Van Wyk also testified that by late 1996, when Toering Electric was awarded the contract on which it had bid in the summer, its existing employees were available to begin work on the project, eliminating the need for new hires.
Judge’s Decision
Respondent Toering Electric argued before the judge that
the General Counsel failed to establish that the 18 individuals for whom the
The judge summarily rejected the Respondent’s argument and
found, among other things, that by refusing to hire any of the 18
union-affiliated individuals the Respondent violated Section 8(a)(3) and,
derivatively, Section 8(a)(1).12 The
Respondent excepted to the judge’s finding and renewed its argument that the 18
individuals were not genuinely interested in seeking employment and thus were
not entitled to statutory protection.
Analysis
1. The scope of statutory protection against
discrimination
In Phelps Dodge Corporation v. NLRB, the Supreme Court held that Section 8(a)(3)’s proscription against discrimination in regard to hire extends to discriminatory practices that affect applicants for employment.13 In proceedings below, the Board had found, inter alia, that the employer violated the Act when it refused to reemploy two former employees because of their union affiliation. The Supreme Court affirmed, reasoning that “[d]iscrimination against union labor in the hiring of men is a dam to self organization at the source of supply.” The Court explained that “such an embargo . . . was notoriously one of the chief obstructions to collective bargaining through self-organization” and that “the removal of such obstructions was the driving force behind the enactment of the National Labor Relations Act.”14 Thus, the Court found that the “prohibition against ‘discrimination in regard to hire’ must be applied as a means toward accomplishment of the main object of the [Act],”15 i.e., to eliminate “disruptions to the free flow of commerce.”16
Unlike most subsections of Section 8 of the Act, Section
8(a)(3) does not expressly limit its antidiscrimination protection to
individuals who are employees within the meaning of Section 2(3).17 Neither did the Supreme Court in Phelps Dodge recognize such a limitation
in holding that Section 8(a)(3) applied to job applicants in that case.
However, subsequent precedent makes clear that Section 8(a)(3) bars job discrimination
only against individuals who meet the statutory definition of “employee” in
Section 2(3). E.g., NLRB v. Town &
Country Electric, Inc., 516
Obviously, to the extent that Congress specifically excluded
certain categories of individuals from the definition of employee in Section
2(3), we must adhere to those exclusions.
This does not mean, as the dissent suggests, that the broad scope of
antidiscrimination provisions in Section 8(a)(3) dictates extending the protections
of statutory employees to all other workers who are not specifically
excluded. Our precedent is to the contrary. See, e.g.,
In determining whether applicants are statutory employees, “as the Board has implicitly recognized, . . . the general policy of not discouraging employees from union activity by protecting applicants for employment does not justify protecting all applicants for employment.” E & L Transport Co. v. NLRB, 85 F.3d 1258, 1267 (7th Cir. 1996) (citing Pacific American Shipowners Association, 98 NLRB 582, 596 (1952) (holding that nonemployee applicants for supervisory positions are not protected)).19 Because the former employees in Phelps Dodge were clearly interested in reemployment with the employer, the Court had no occasion to consider whether an individual lacking any such interest would be entitled to the protections afforded a Section 2(3) employee. The Respondent’s exceptions squarely present this issue, to which we now turn.20
We hold that an applicant for employment entitled to protection as a Section 2(3) employee is someone genuinely interested in seeking to establish an employment relationship with the employer. Simply put, only those individuals genuinely interested in becoming employees can be discriminatorily denied that opportunity on the basis of their union affiliation or activity; one cannot be denied what one does not genuinely seek. We further hold that the General Counsel bears the ultimate burden of proving an individual’s genuine interest in seeking to establish an employment relationship with the employer.
Our holding today is neither revolutionary nor restrictive of the statutory rights of employees, and derivatively of unions, to engage in legitimate organizational or other protected concerted activities, including salting campaigns. Contrary to the dissent’s protestations, our holding is consistent with statutory policy, Supreme Court precedent, and Board practice. It is also necessary to allay reasonable concerns that the Board’s processes can be too easily used for the private, partisan purpose of inflicting substantial economic injury on targeted nonunion employers rather than for the public, statutory purpose of preventing unfair labor practices that disrupt the flow of commerce.
a. The requirement of an actual or anticipated
economic relationship
The relationship between an employer and a putative job
applicant who has no genuine interest in working for that employer is not the
economic relationship contemplated and protected by the Act. The Board
addressed this issue in WBAI Pacifica
Foundation, supra, where, after examining and applying relevant Supreme
Court precedent, the Board held that unpaid staff are not statutory employees.
First, addressing the Court’s agreement in Phelps
Dodge and Town & Country Electric that applicants in those cases
were entitled to statutory employee status, the WBAI Pacifica Board emphasized that “in each case where the Court
found statutory employee status, there was at least a rudimentary economic relationship,
actual or anticipated, between
employee and employer.” 328 NLRB at 1274 (emphasis supplied). “Thus,” the Board
added, “when the Court stressed the breadth of Section 2(3) in Town & Country Electric, that
breadth was bounded by the presence of some form of economic relationship
between the employer and the individual held to have statutory employee
status.”
The Court’s finding of Section 2(3) employee status in Phelps Dodge and Town & Country Electric was based on the core statutory policy
of protecting employees’ rights to organize and bargain in order to restore
equality of bargaining power and thereby to prevent the disruption of commerce
caused by labor disputes. As the Board stated in WBAI Pacifica Foundation, “[t]he vision of a fundamentally economic
relationship between employers and employees is inescapable.”
b. The statutory limitation on the Board’s
remedial authority
Our definition of the scope of Section 2(3) protection for applicants is also consistent with the remedial provisions of Section 10(c) of the Act. There is no provision in the Act for punitive remedies; instead, the Board’s remedies are limited to effecting “‘a restoration of the situation, as nearly as possible, to that which would have obtained but for illegal discrimination.’”23 The Seventh Circuit has stated that according “any relief” to individuals who would not have accepted a job even if it had been offered to them would be inconsistent with these principles:
The National Labor Relations Act is not a penal statute, and windfall remedies – remedies that give the victim of the defendant’s wrongdoing a benefit he would not have obtained had the defendant not committed any wrong – are penal. Suppose a salt would have spurned the employer’s job offer had it been made, yet the General Counsel seeks backpay for him. If the backpay is awarded, the salt will get money that he would not have gotten had the employer rather than violating the Act offered him a job.24
The Starcon
litigation itself underscores the necessity for requiring that the General
Counsel prove, during the initial unfair labor practice stage of litigation, an
applicant’s genuine interest in securing a job. In Starcon International v. NLRB, 176 F.3d 948 (7th Cir. 1999), the
court held that no affirmative remedy could be ordered for an alleged
discriminatee unless the General Counsel proved at the hearing on the merits
that he was available for and willing to accept a job offer from the
respondent. Only 2 of 107 alleged
discriminatees testified at the administrative hearing conducted pursuant to
the court’s remand instruction, and the judge found that the General Counsel
failed to prove that any of those failing to testify were available for and
willing to accept a job offer when vacancies arose. The Board affirmed the
judge’s finding under the law of the case established by the court, finding no
need to decide whether the same result would follow independently from the
application of
In our view, the policy expressed through the remedial
provisions of Section 10(c) against windfall and punitive backpay awards
further supports holding that only those job applicants who were actually
deprived of employment opportunities by an employer’s discrimination, i.e.,
those with a genuine interest in seeking to establish an employment
relationship with the employer, are entitled to protection as statutory
employees against hiring discrimination on the basis of union affiliation or
activity.
c. The objective of generating unfair labor
practice litigation
The Board’s experience in deciding hiring discrimination cases confirms that the protections afforded statutory employees must be limited to job applicants who are genuinely interested in seeking to establish an employment relationship with the employer. As shown below, the absence of any limitation on the scope of protection for job applicants creates the real and unacceptable possibility of abuse of the Board’s processes in efforts to accomplish goals fundamentally inconsistent with the policies and purposes of the Act.
Under the current approach to hiring-discrimination allegations,
the Board employs an implicit—and effectively conclusive—presumption that any
individual who actually applies for a job is entitled to protection as a
Section 2(3) employee. As a
consequence, applicants have been accorded statutory employee status and have
been alleged as 8(a)(3) discriminatees even when they have engaged in conduct
clearly intended to provoke a decision not
to hire them, or have engaged in antagonistic behavior toward the employer that
is wholly at odds with an intent to be hired. Such conduct has included mocking
a hiring official's Asian accent while soliciting workers to quit their jobs
and work for a union contractor;26
putting an arm around a hiring official's shoulder and threateningly stating
that "you're messing with the union now";27 entering an employer's office en masse
to apply while videotaping the proceedings;28
and making outrageous and defamatory statements about the employer at a public
meeting.29
The automatic presumption of an applicant’s genuine
interest in employment with the employer is just as flawed in the absence of
overt antagonism toward the targeted employer. This is particularly so in the
situation of batched union applications. In some cases, there is reason to
doubt that the submission of batched applications by a third-party union
representative was authorized by the putative individual applicants. Even if
authorized, there is reason to doubt that the applicants had any real interest
in going to work for a nonunion employer. On the contrary, consistent with the
International Union’s policy directive in this case, those applications may be
submitted for the sole purpose of creating “a prima facie case of statistical discrimination” upon which to base
unfair labor practice claims. The
same purpose may be ascribed to certain mass application efforts.30
Evidence in this case suggests that Local 275’s salting campaign had this objective. In the words of then-IBEW President Berry, the campaign was motivated by the desire to “drive the non-union element out of business.” Consistent with this goal, Local 275 filed several unfair labor practice charges against Toering Electric during the 1994 salting campaign. Toering Electric informally settled those charges by offering employment to six alleged discriminatees. Those individuals, however, rather than pursuing that employment (and organizing) opportunity, failed to show up for work. All of this supports the conclusion that the alleged discriminatees from the 1994 campaign were not interested in obtaining employment opportunities or in organizing Toering Electric’s employees; instead, they were interested in “put[ing] a big hurt” on Toering Electric’s business, as Local 275 later boasted in its March 1995 newsletter.
As mentioned, current Board law permits these cases to be
litigated as potential unfair labor practices because statutory employee status
is conclusively presumed from the mere submission of an application. In
practice, this means that the issue of an applicant’s genuine interest in
employment can generally be raised only as an affirmative motivational defense
by an employer claiming to have denied the applicant a job, or job consideration,
because it knew or had a good-faith reason to believe that the applicant had no
real interest in working for it.31 Consequently,
the General Counsel generally will not present evidence at the hearing of the
applicant’s genuine job interest. Any employer charged with 8(a)(3) hiring discrimination
is put to the task and expense, at every stage of an unfair labor practice
proceeding, of proving the applicant’s lack of genuine job interest. In
addition, the Board’s resources may be
devoted to extended litigation in cases where there was no actual loss of an
opportunity for work because the putative applicants never intended to work. As
a result, the resources of the federal government are used not to promote
collective bargaining but to impose economic injury on designated salting
targets.
We recognize that union salting campaigns may involve activity protected by Section 7 of the Act. Although some salts, paid or unpaid, may genuinely desire to work for a nonunion employer and to proselytize coworkers on behalf of a union, other salts clearly have no such interest. In this respect, the Seventh Circuit has expressed its view that a common aim of union salting campaigns is "to precipitate the commission of unfair labor practices by startled employers."32 In our view submitting applications with no intention of seeking work but rather to generate meritless unfair labor practice charges is not protected activity. Indeed, such conduct manifests a fundamental conflict of interests ab initio between the employer’s interest in doing business and the applicant’s interest in disrupting or eliminating this business.
In the Jefferson Standard case,33 the Supreme Court recognized an employer's right to insist on employee loyalty and on a cooperative employee-employer relationship when it agreed with the Board that employees who distributed leaflets disparaging their employer’s services had engaged in unprotected conduct for which they could lawfully be discharged, even though the objective of their leafleting—to extract bargaining concessions—was lawful. The Supreme Court stated that
[t]here is no more elemental cause for discharge of an employee than disloyalty to his employer. It is equally elemental that the Taft-Hartley Act seeks to strengthen, rather than to weaken, that cooperation, continuity of service and cordial contractual relation between employer and employee that is born of loyalty to their common enterprise.34
Our decision today is consistent with these principles.
Clearly, employers are not to be immunized from lawful economic pressure
resulting from labor disputes. However, there is a meaningful distinction
between direct economic warfare between parties to labor disputes and the
subversion of the Board’s processes by one party for the objective of inflicting
economic injury on the other. The Board does not serve its intended statutory
role as neutral arbiter of disputes if it must litigate hiring discrimination
charges filed on behalf of disingenuous applicants who intend no service and
loyalty to a common enterprise with a targeted employer. Instead, the Board
becomes an involuntary foil for destructive partisan purposes. The Congressional goal of industrial peace
through the “friendly adjustment of industrial disputes” is not furthered by
extending the Act’s protections against hiring discrimination to such
applicants.
We seek to discourage cases where unfair labor practice allegations of hiring discrimination are filed for this objective. We therefore believe that a change in law is warranted so as to better insure against it. We find that this result is better achieved by shifting the focus with respect to an applicant’s genuine job interest from the employer’s proof of a motivational defense to the General Counsel’s proof that an applicant is entitled to the protected status of a statutory employee. Thus, we will abandon the implicit presumption that anyone who applies for a job is protected as a Section 2(3) employee. As more fully discussed below, we will impose on the General Counsel the burden of proving the applicant’s genuine job interest.
d. “Tester” cases
To some extent, a union member who applies to a nonunion employer for a job in which he has no real interest is comparable to a “tester” in civil rights discrimination cases, i.e., “an individual who, without the intent to accept an offer of employment, poses as a job applicant in order to gather evidence of discriminatory hiring practices.”35 The Seventh Circuit has interpreted Title VII to afford standing to “testers”;36 other courts have rejected that interpretation of the scope of Title VII’s coverage.37 Whatever the merits of the “testers” debate in the context of Title VII, we find that it sheds little light on understanding the scope of the Act’s protections against hiring discrimination. Although the two statutes have similar features and elements, in this respect they have distinct purposes and significantly different statutory schemes to accomplish them.
First, Title VII protects “individuals” from discrimination,38 while only those individuals who are statutory “employees” are entitled to the protections of the Act.39 Further, under Title VII, Congress authorized an aggrieved individual to act as a “private attorney general” and to pursue claims of employment discrimination by filing a charge with the Equal Employment Opportunity Commission and a civil action in court.40 No equivalent provision exists in the Act, which vests exclusive prosecutorial authority in the office of the General Counsel.41
Second, Title VII sweeps far more broadly than the Act,
prohibiting not only acts of discrimination, such as discriminatory refusals to
hire, but also the segregation or classification of any
individual on the basis of impermissible criteria.42 Indeed, a key premise in the Seventh Circuit’s
holding in Kyles that testers have
standing to sue was that Title VII “created a broad substantive right that
extends far beyond the simple refusal or failure to hire.”43 The Act contains no comparably
broad right. Hiring discrimination under the Act simply cannot occur unless the
individual actually was seeking an employment opportunity with the employer. Thus, even assuming the Seventh Circuit has
correctly interpreted Title VII, the same interpretation of antidiscrimination
protection under the Act is not warranted.44
Finally, the court in Kyles addressed only the testers’ standing to sue, not the merits of their Title VII lawsuit. Referring to the requisite proof of injury, the court opined that testers could show and be compensated for “humiliation, embarrassment, and like injuries,” even if they had no actual interest in working for the employer. 222 F.3d at 300. Such injuries do not constitute “discrimination in regard to hire” under Section 8(a)(3), which requires proof that “an employee’s employment conditions were adversely affected by his or her engaging in union or other protected activities.” Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982) (emphasis added).45
e. Town & Country Electric
To the extent that our decision today affects the salting activities of paid professional union organizers, it is consistent with the Supreme Court's decision in Town & Country Electric.46 There, the Court agreed with the Board that paid union organizers are not a fortiori excluded from the Act's protection because of a division of loyalties between organizing for the union and working for the employer. In reaching this conclusion, the Court noted that a paid union organizer could be subject to the union’s control as to organizing duties without forfeiting employee status because he would still be subject to the employer’s control as to work duties. The Court also stressed that there was no evidence that the organizers in that case had engaged in acts of disloyalty or that their union had suggested, required, encouraged, or condoned impermissible or unlawful activity. Those assumptions, in our view, do not apply to the litigation-based salting campaigns discussed above.
The Court, moreover, did not hold that all individuals who submit an application must be considered statutory employees.47 Nor did the Court restrict the Board’s broad authority to interpret the scope of statutory protections for applicants, including paid union organizers. To the contrary, the Court characterized its narrow holding in the following terms: "We hold only that the Board's construction of the word 'employee' is lawful; that term does not exclude paid union organizers."48 The Court expressly recognized that "[t]his is not to say that the law treats paid union organizers like other company employees in every labor law context," and it specifically declined to express any view on "whether or not Town & Country's conduct (in refusing to interview, or to retain, 'employees' who were on the union's payroll) amounted to an unfair labor practice."49
2.
The modified
As previously stated, the Board has heretofore generally permitted litigation of an applicant’s genuine interest in a job only in the context of an employer’s effort to prove, as an affirmative defense, that it would have refused to hire or consider an applicant, even in the absence of union activity, because of the applicant’s lack of interest. The burden of proof thus borne by respondent employers is difficult at best because the employer must prove not only the applicant’s lack of interest but also that this lack of interest was the reason he was not hired. As a result, current Board law finds merit in this defense only in the most extreme cases of overt behavior inconsistent with a genuine interest in securing employment.
We believe that, in light of the Act’s overarching purpose, its remedial provisions, and the real and unacceptable possibility of abuse of the Board’s processes in litigation-based salting campaigns, the General Counsel should bear the ultimate burden of proving an applicant’s genuine interest in obtaining employment. As discussed above, the Congressional purpose embodied in Section 1 of eliminating industrial strife and encouraging the peaceful adjustment of labor disputes is not well served by enabling the use of the Board’s processes as an economic weapon to, in the words of IBEW President Berry, “drive the non-union element out of business.” Similarly, the remedial purposes of Section 10(c) of the Act are incompatible with awarding windfall backpay to job applicants who had no actual interest in working for the respondent employer and would not have accepted a job even if offered and applied only to precipitate unfair labor practices by the employer. We now hold, for all of the reasons stated above, that the General Counsel’s burden of proof in all hiring discrimination cases includes the burden to prove that the alleged discriminatee was an applicant entitled to protection as a Section 2(3) employee, i.e., an applicant genuinely interested in seeking to establish an employment relationship with the employer.
This requirement embraces two components: (1) there was an application for employment,50 and (2) the application reflected a genuine interest in becoming employed by the employer. As to the first component, the General Counsel must introduce evidence that the individual applied for employment with the employer or that someone authorized by that individual did so on his or her behalf. In the latter instance, agency must be shown.51
As to the second component (genuine interest in becoming employed), the employer must put at issue the genuineness of the applicant’s interest through evidence that creates a reasonable question as to the applicant’s actual interest in going to work for the employer.52 In other words, while we will no longer conclusively presume that an applicant is entitled to protection as a statutory employee, neither will we presume, in the absence of contrary evidence, that an application for employment is anything other than what it purports to be. Consequently, once the General Counsel has shown that the alleged discriminatee applied for employment, the employer may contest the genuineness of the application through evidence including, but not limited to the following: evidence that the individual refused similar employment with the respondent employer in the recent past; incorporated belligerent or offensive comments on his or her application; engaged in disruptive, insulting, or antagonistic behavior during the application process; or engaged in other conduct inconsistent with a genuine interest in employment. Similarly, evidence that the application is stale or incomplete may, depending upon the circumstances, indicate that the applicant does not genuinely seek to establish an employment relationship with the employer.53 Assuming the employer puts forward such evidence, the General Counsel, to satisfy the genuine applicant element of a prima facie case of hiring discrimination, must then rebut that evidence and prove by a preponderance of the evidence that the individual in question was genuinely interested in seeking to establish an employment relationship with the employer. Thus, the ultimate burden of proof as to the Section 2(3) status of the alleged discriminatee-applicant rests with the General Counsel.54
We emphasize that proof of an applicant’s genuine job
interest is an element of the General Counsel’s prima facie case under
3. Application of the new framework to this case
We recognize that the parties, when litigating this case, did not have the benefit of the guidance set forth in this opinion. In particular, the General Counsel was unaware of the burden placed upon him.
Given the current state of the record evidence on the issue of the June and July 1996 alleged discriminatees’ status as applicants for employment, we think it prudent and fair to remand this case to the judge in order to apply to the facts of this case the new analytical framework set forth above for determining whether an individual applicant is an employee under Section 2(3).56 Although there is some evidence in the record that suggests the alleged discriminatees’ genuine interest in seeking employment, there is also evidence that suggests otherwise.
For example, although Rager testified that he would have
considered taking a job with the Respondent if one were offered, he also
testified that he was fully employed elsewhere and was not actively looking for
work. Additionally, his resume was 6 years out of date. Harris similarly
testified that he was fully employed elsewhere and was not actively looking for
work. Cosgrove, Hamstra, Stadt, Scott, and Petznik did not testify, and their resumes
were stale or incomplete. Although Jendrasiak testified that these five alleged
discriminatees authorized the use of their resumes for salting and
organizational purposes, he did not testify whether he was authorized to use their
resumes for the purpose of obtaining work for them with Toering Electric.
Smith, Spofford, and Watters also did not testify at the hearing. Thus, there
is no evidence that these alleged discriminatees were genuinely interested in
seeking an employment relationship with Toering Electric, that they indicated
to anyone such an interest, or that they authorized, or even knew of, the
The General Counsel and the Respondent are entitled to an opportunity to adduce additional evidence relevant to the issue of whether the alleged discriminatees are Section 2(3) employees under the analytical framework set forth above. Therefore, we shall remand this issue to the judge for further factual development and consideration of this issue consistent with this Decision and Order.
4. Remaining issues
(a) Refusal to hire Jendrasiak in 1995
The judge found, and we agree, that the Respondents
violated Section 8(a)(3) and (1) by failing to consider or to hire James
Jendrasiak on about August 22, 1995 and on September 22, 1995.57 Importantly, the Respondents did not
challenge Jendrasiak’s status as a genuine applicant on these occasions.
Accordingly, under the framework set out above, because the General Counsel
introduced Jendrasiak’s applications and elicited testimony from Jendrasiak
that he applied in a manner consistent with the Respondents’ application
procedures, and there is no evidence in the record to the contrary, we find
that the General Counsel has met his burden of proving by a preponderance of
the evidence that Jendrasiak was an applicant entitled to protection as a
statutory employee on these occasions.
We adopt, for the reasons stated by the judge, his finding that Respondent Foster Electric violated Section 8(a)(3) and (1) when it refused to hire Jendrasiak in September 1995. The judge also found that Respondent Toering Electric violated Section 8(a)(3) and (1) when it refused to hire Jendrasiak in August 1995. In their exceptions to the judge’s findings, the Respondents contend that the decision not to hire Jendrasiak in August 1995 was lawfully based on the following legitimate, nondiscriminatory reasons: (1) Jendrasiak lied on his application; (2) he had “terrible references”; (3) he failed to list work experience on the application he submitted to Toering Electric; and (4) his pay expectations were “way out of line.” We reject the contention that Jendrasiak was disqualified by virtue of misrepresentations on his application for the reasons stated by the judge. We reject the Respondents’ remaining contentions for the reasons that follow.
The Respondents contend that Jendrasiak was lawfully rejected because they received a “bad” reference for Jendrasiak from a prior employer. As more fully set forth in the judge’s decision, in August 1995, union organizer Jendrasiak applied for work through American Careers, an employment agency, in response to an ad placed by David Toering, who was seeking journeymen electricians for both Toering Electric and Foster Electric. American Careers service manager John Williams subsequently interviewed Jendrasiak. During the interview, Williams called David Toering, who asked Williams to find out where Jendrasiak acquired the hours needed to become a journeyman and if any of his prior employers were union shops. When Jendrasiak either said “no” or avoided answering the question, he was sent to Toering Electric’s offices.
While Jendrasiak was en route, Williams contacted one of Jendrasiak’s prior employers, Kemco Electric, and discovered that it was, in fact, a union contractor. Williams immediately called David Toering and apprised him of this information. Toering told Williams to continue checking Jendrasiak’s references.
When Jendrasiak arrived at Toering Electric’s office, he was told that there had been a mistake and that he should call Williams. Thereafter, Jendrasiak filled out a Toering Electric application on which he indicated that he was a “voluntary union organizer.” Toering told Jendrasiak that he had applied for a job with American Careers, not with his company. After Jendrasiak left, Toering called Williams and told him that he had had some bad dealings with “these guys,” i.e., union members, in the past and did not want to interview Jendrasiak.
Although not mentioned by the judge in his decision, Williams testified that after Jendrasiak had left Toering Electric’s office, Toering called him and asked him to continue checking Jendrasiak’s references. Williams testified that one of Jendrasiak’s prior employers, Mellema Electric, told him that Jendrasiak was “hired through union hall—very much a complainer—would never be hired back—just quit one day.” Another prior employer checked by Williams, Spencer-Redner, indicated that Jendrasiak was a “good employee.”
It is evident from the foregoing that the Respondents rejected Jendrasiak’s application before they knew of the "terrible" reference from Mellema Electric. Accordingly, we reject the Respondents’ contention that the reference in any way justifies their refusal to consider or hire him on August 22, 1995.
The Respondents’ contention that they lawfully refused to consider Jendrasiak because his application with Toering Electric did not list prior work experience or previous employers is also without merit. It is undisputed that Jendrasiak provided this information to American Careers, and that American Careers faxed Toering Electric a copy of the application that Jendrasiak completed for American Careers. That document, which is part of the record in this case, lists Jendrasiak’s prior employers. This information was incorporated by reference in the application that Jendrasiak subsequently completed at Toering Electric’s office. Accordingly, Jendrasiak did not fail to provide the Respondents with information about his work history and prior employers at the time he applied for work.
The Respondents further contend that Jendrasiak would have
been rejected because he sought wages in excess of those paid by the Respondents.
The record evidence belies this contention. On the application he submitted to
Toering Electric, Jendrasiak stated that he sought a wage of $18 per hour. The
Respondents contend that this is far in excess of the $12 to $12.50 per hour
that they pay starting journeymen. However, David Toering admitted that in
April 1997 he hired John Haggerty, an out-of-state journeyman without a
As noted above, we have adopted the judge’s finding that the Respondents’ failure to consider or hire Jendrasiak in August 1995 was motivated by his union affiliation. We rely on the direct evidence of unlawful motivation cited by the judge in his decision. In addition, having concluded that the Respondents’ stated reasons for their actions are false, we find that the circumstances of this case warrant an inference that their true motivation was an unlawful motive that the Respondents wished to conceal.58
(b) Single employer/agency
For the reasons stated by the judge, we adopt his finding that the Respondents, Toering Electric and Foster Electric, are not a single employer. For the reasons that follow, as well as the reasons stated by the judge, we also adopt the judge’s finding that David Toering, the president of both companies, and Dennis Van Wyk, Toering Electric’s office manager, were agents of both Toering Electric and Foster Electric for the purpose of considering and hiring applicants for employment in 1995 and 1996.
The Board applies common law principles when examining whether a person is an agent of the employer.59 Agency is established when there is actual, or express, authority to engage in the conduct.60 Actual authority refers to the power of an agent to act on his principal's behalf when that power is created by the principal's manifestation to him. That manifestation may be either express or implied.61 Agency may also be established by a showing of apparent authority, which results from a manifestation by the principal to a third party that creates a reasonable basis for the latter to believe that the principal has authorized the alleged agent to perform the acts in question.62
Applying these principles to the facts of this case, we find, in agreement with the judge, that Toering and van Wyk were agents of both Respondents.63 In support of this finding, the judge found as follows: (1) when placing an order for electricians with American Careers, a job placement agency, in August 1995, David Toering told American Careers Service Manager John Williams that he was seeking journeymen for both companies; (2) Foster Electric Office Manager Bruce Bartels testified that he always contacts van Wyk when Foster needs electricians; and (3) van Wyk testified that he handled the financial arrangements when Toering Electric lent employee William Brooks to Foster Electric. In addition to these facts, we note that David Toering was the president of both companies. The Respondents’ common application form states that only the president of the company “has any authority to enter into any agreement for employment for any specific or indefinite period of time.” Under all the circumstances of this case, we find that Toering and van Wyk had at least apparent authority to act on behalf of both Respondents for the purpose of considering and hiring applicants for employment in 1995 and 1996.64
Amended Conclusions of Law
1. By refusing to interview, consider, and hire James Jendrasiak on or about August 22, 1995, Respondents Toering Electric Company and Foster Electric, Inc. have engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(3) and (1) and Section 2(6) and (7) of the Act
2. By refusing to consider for hire and hire James Jendrasiak on September 22, 1995, Respondent Foster Electric, Inc. violated Section 8(a)(3) and (1).
3. Respondents, through David Toering, did not unlawfully interrogate employee David Segar in September 1996 in violation of Section 8(a)(1) of the Act.
ORDER
A. The National Labor Relations Board orders that the
Respondent, Toering Electric Company,
1. Cease and desist from
(a) Failing and refusing to consider for hire and refusing to hire applicants for employment on the basis of their union affiliation or activity or Respondent’s belief or suspicion that they may engage in organizing activity if they are hired.
(b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
(a) Within 14 days from the date of this Order, offer James Jendrasiak instatement to the position for which he applied on or about August 22, 1995, or, if that job no longer exists, to a substantially equivalent position, without prejudice to his seniority or any other rights or privileges he would have enjoyed.
(b) Make James Jendrasiak whole for any loss of earnings and other benefits suffered as a result of the discrimination against him in the manner set forth in the remedy section of the judge’s decision.
(c) Within 14 days from the date of this Order, remove from its files any reference to its unlawful refusal to consider for employment and refusal to hire James Jendrasiak, and within 3 days thereafter notify him in writing that this has been done and that the refusal to consider him for employment and refusal to hire him will not be used against him in any way.
(d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(e) Within 14 days after service by the Region, post at
its facility in
(f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.
B. The National
Labor Relations Board orders that the Respondent, Foster Electric, Inc.,
1. Cease and desist from
(a) Failing and refusing to consider for hire and refusing to hire applicants for employment on the basis of their union affiliation or activity or Respondent’s belief or suspicion that they may engage in organizing activity if they are hired.
(b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act.
(a) Within 14 days from the date of this Order, offer James Jendrasiak instatement to the positions for which he applied on or about August 22, 1995 and September 22, 1995, or, if those jobs no longer exist, to a substantially equivalent position, without prejudice to his seniority or any other rights or privileges he would have enjoyed.
(b) Make James Jendrasiak whole for any loss of earnings and other benefits suffered as a result of the discrimination against him in the manner set forth in the remedy section of the judge’s decision.
(c) Within 14 days from the date of this Order, remove from its files any reference to its unlawful refusal to consider for employment and refusal to hire James Jendrasiak, and within 3 days thereafter notify him in writing that this has been done and that the refusal to consider him for employment and refusal to hire him will not be used against him in any way.
(d) Preserve and, within 14 days of a request or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(e) Within 14 days after service by the Region, post at
its facility in
(f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.
It is further
ordered that the allegations regarding Respondent Toering Electric
Company’s refusal to hire the 18 alleged discriminatees whose resumes were submitted
to it by the
It is further ordered that the administrative law judge shall prepare a second supplemental decision setting forth credibility resolutions, findings of fact, conclusions of law, and a recommended Order, as appropriate on remand. Copies of the supplemental decision shall be served on all parties, after which the provisions of Section 102.46 of the Board’s Rules and Regulations shall be applicable.
Dated,
Robert J. Battista, Chairman
Peter
C. Schaumber,
Member
Peter N. Kirsanow Member
(seal) National
Labor Relations Board
Members Liebman and Walsh, dissenting in part.
Today’s decision continues the Board’s roll-back of statutory protections for union salts who seek to uncover hiring discrimination by nonunion employers and to organize their workers. The Board has recently acted to minimize the economic consequences for employers who discriminate against salts, by shifting the burden of proof to the General Counsel with respect to the length of the backpay period.1 Now, the majority goes much farther.
Without the benefit of briefs, oral argument, or even a
request to reconsider precedent, it legalizes hiring discrimination in some,
perhaps many, cases involving salts, by requiring the General Counsel to prove
that a job applicant was “genuinely interested in seeking to establish an
employment relationship.” Seven years
ago, a full Board issued
The majority’s new approach is impossible to reconcile with the National Labor Relations Act, with its policies, and with Supreme Court precedent.3 It refuses to recognize that Federal labor law permits employees to pursue their own economic interests in organizing, in eliminating antiunion discrimination, and in protecting the gains won by unionized workers, through means that have an adverse impact on employers—especially employers who break the law. The Board, with the approval of the courts, has long treated salting as a legitimate tactic. But that era seems to be ending.
Below, we explain how current law appropriately addresses the genuine-applicant issue. We then refute the majority’s reasons for overturning the existing legal framework and demonstrate that the approach adopted by the majority is not permitted by the Act. Finally, we identify critical flaws in the new standard, even considered on its own terms.
i.
This case properly should be decided under the analytical
framework established by the Board in
In accordance with those principles,
The FES Board
rejected the position of then-Member Brame, that the General Counsel should be
required to prove that the applicant had a “bona fide interest in employment”
with the respondent employer.
Until today, the protection of the Act has extended to all applicants for paid employment, including union salts. Apart from statutory-employee status, which the Act grants very broadly,9 there has been no other status, such as being a “genuine applicant,” that must be established to claim protection. See, e.g., Progressive Electric, Inc. v. NLRB, 453 F.3d 538, 551–553 (D.C. Cir. 2006), enfg. 344 NLRB 426 (2005).10
Instead, the focus in hiring-discrimination cases has been on the motive of the employer. That focus is dictated by Section 8(a)(3). The ultimate question under that provision is whether the employer’s rejection of an applicant was motivated by antiunion animus. It makes no difference whether the union applicant coveted the job, detested the job, or simply wished to test his employability and the employer’s adherence to the law. Cases like this one illustrate that some employers simply maintain and enforce a policy of refusing to hire union applicants, without regard to an applicant’s qualifications, let alone the extent of the applicant’s interest in the job. The refusal to hire or consider a union applicant, solely because of his union affiliation, surely implicates the prohibition of Section 8(a)(3) against “discrimination in regard to hire.” 29 U.S.C. §158(a)(3).
The Supreme Court has explained why this is so, in upholding the Board’s view that job applicants are statutory employees:
Discrimination against union labor in the hiring of men is a dam to self organization at the source of supply. The effect of such discrimination is not confined to the actual denial of employment; it inevitably operates against the whole idea of the legitimacy of organization. In a word, it undermines the principle which ... is recognized as basic to the attainment of industrial peace.
Phelps Dodge,
supra, 313
The
The Supreme Court has employed a similar analysis in
rejecting the argument that, because the statutory definition of “employee”
could be read to exclude a person who has “obtained other regular and
substantially equivalent employment,” the Board was powerless to order
reinstatement of a discharged worker who had found another job. The Board’s authority, the Court explained,
was not “confine[d] . . . to the correction of private
injuries.” Phelps Dodge, supra, 313