NOTICE: This
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Anheuser-Busch, Inc. and Brewers and Maltsters, Local Union No. 6, affiliated with International Brotherhood of Teamsters. Case 14–CA–25299
September 29, 2007
SUPPLEMENTAL DECISION AND ORDER
By Chairman Battista nad members Liebman, Schaumber,
Kirsanow, and Walsh
On July 22, 2004, the National Labor Relations Board
issued its Decision and Order in this proceeding,[1] in
which it found, among other things, that the Respondent violated Section
8(a)(5) and (1) of the Act by failing to give notice to and bargain with the
Union prior to the installation and use of hidden surveillance cameras. The Board, in fashioning its remedial Order,
denied a make-whole remedy to the 16 employees whom the Respondent discharged
or suspended for misconduct detected through the use of the cameras. Subsequently, the Respondent petitioned the
United States Court of Appeals for the District of Columbia Circuit to review
the Board’s Order, the General Counsel cross-petitioned for enforcement of the
Order, and the
On January 3, 2006, the Board notified the parties that it
had accepted the remand and invited the parties to file statements of
position. The General Counsel, the Respondent,
and the
Background
The issue on remand is whether the Board should grant a make-whole remedy
to 16 employees disciplined by the Respondent for misconduct observed by means of cameras installed
without prior bargaining with the
The Respondent operates a brewery in
The Respondent operated the cameras from mid-May through June 30, and
during that time observed 16 employees engaging in misconduct. On July 1, after discontinuing the
surveillance, the Respondent notified the
The Respondent interviewed each of the 16 employees. Before each interview, the
The Respondent discharged 5 of the 16 employees. Each of the discharged employees had violated the Respondent’s rules by, inter alia, using illegal drugs (marijuana) at work. The Respondent suspended the remaining 11 employees, and issued “last chance” agreements to 7 of them. All of the suspended employees had violated Respondent’s rules by entering a restricted area and by being away from an assigned work location for an extended time period. Some of the suspended employees had also violated the Respondent’s rules by sleeping on duty or by urinating on the roof.
In its initial decision, the Board found that the Respondent violated
Section 8(a)(5) by failing to give the Union notice and an opportunity to
bargain before installing the hidden surveillance cameras. 342 NLRB at 560-561.[4] The Board’s remedial Order directed the Respondent
to cease and desist from the violations found and to post an appropriate
notice.
The Board, noting that the employees’ conduct violated plant rules and that the Respondent’s discipline was based on their misconduct, concluded that it would be “inconsistent with the policies of the Act, and public policy generally, to reward parties who engaged in unprotected conduct.” Ibid. In support of this conclusion, the Board cited Taracorp Industries.[5] Ibid. In that case, the employer discharged an employee for misconduct based on information obtained during an investigatory interview in which the employer unlawfully denied the employee’s request for union assistance. The Board’s Order in Taracorp nevertheless denied a make-whole remedy to the discharged employee. In its initial decision here, the Board found Taracorp instructive, explaining: “The Board [in Taracorp] reasoned that there was an insufficient nexus between the unfair labor practice committed (denial of representation at an investigatory interview) and the reason for the discharge (perceived misconduct) to justify a make-whole remedy.” Ibid.
In further support of its conclusion in the instant case, the Board relied on a provision in Section 10(c) of the Act that prohibits the Board from granting a make-whole remedy to employees who are disciplined “for cause.”[6] The Board explained that “[t]he principle that an employee discharged or disciplined for misconduct is not entitled to reinstatement and backpay even though the misconduct is uncovered in an unlawful way, is embodied in the remedial restrictions in Section 10(c) of the Act.” Ibid.[7]
The D.C. Circuit affirmed the Board’s unfair labor practice findings, but
remanded the make-whole remedy issue to the Board. With regard to this issue, the court noted
that although it “gives great deference” to the Board’s choice of remedy, the
Board was required to “distinguish adequately its applicable precedent.” 414 F.3d at 46. With regard to the Board’s reliance on Section
10(c), the court observed that Section 10(c) did not “expressly address whether
the Board shall or shall not deny make-whole relief where an employer would not
have discovered its employees’ misconduct but-for its own unlawful action,” and
that the Board, accordingly, could “fill [the statutory] interstices with a
reasoned approach.”
In analyzing the relevant Board precedent, the court noted that in Tocco, Inc., 323 NLRB 480 (1997), the Board ordered make-whole relief for
employees discharged for drug use after the employer unlawfully changed its
drug-testing policy. The court rejected
the Board’s explanation that Tocco
was distinguishable from the instant case because it involved a unilateral
change “to the very policy under which the employees were discharged.” Instead, the court reasoned that the employer
in Tocco did not alter its underlying
drug policy, but rather, changed its method of detecting which employees
violated that policy. The court found
that “[s]imilarly, in the instant case, the [Respondent] did not alter its underlying
conduct rules, but instead unilaterally instituted a new means for detecting
violations of a preexisting standard.”
414 F.3d at 47. Further, the
court noted, the Board granted a make-whole remedy in Great Western Produce, Inc., 299
NLRB 1004 (1990), where the employer unlawfully changed its method for
recording misconduct and then relied on misconduct documented through that new
system to discharge employees.
For these reasons, the court remanded the case for the Board “to address
the appropriate remedial order for the disciplined employees” because “it
remains for the Board to determine, based on policies consistent with the Act,
whether reinstatement is not appropriate here because an exclusionary rule
would improperly reward [employees] who engage[] in unprotected conduct.”
Analysis
Having accepted the court’s remand, we now respond to the court’s directives. As explained below, we conclude that Section 10(c) precludes the Board from granting a make-whole remedy on the facts of this case. Also, as explained below, we overrule Tocco and Great Western to the extent that they hold that an employer may not discipline employees for uncontested misconduct if that misconduct is detected through unilaterally and unlawfully implemented means.
A. The Appropriate Remedial Order
Section 10(c) provides, in pertinent part, that “[n]o order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.”
Section 10(c) thus prohibits a make-whole remedy where discipline is “for cause.” In its initial decision in this case, the Board cited Section 10(c) as support for its denial of a make-whole remedy. However, as the court observed, Section 10(c) does not “expressly address” the circumstances in the instant case – that is, “where an employer would not have discovered its employees’ misconduct but-for its own unlawful action.” 414 F.3d at 47. The court was not persuaded by the Board’s reliance on Section 10(c). We now articulate the rationale that the court found missing in our earlier decision.
1. The Weingarten cases
This not the first time that the Board and the courts have addressed the issue of whether Section 10(c) prohibits a make-whole remedy where the employer uses unlawful methods to detect employee misconduct. Under Weingarten,[9] an employer violates the Act if it conducts an investigatory interview after denying the interviewed employee’s request for the assistance of a union representative. Notwithstanding that fact, both the Board and reviewing courts consistently have held that Section 10(c) precludes the Board from granting a make-whole remedy to employees disciplined for misconduct uncovered through an unlawfully-conducted investigatory interview. See Taracorp Industries, 273 NLRB 221 (1984); Pacific Telephone & Telegraph Co. v. NLRB, 711 F.2d 134, 137-138 (9th Cir. 1983); General Motors Corp. v. NLRB, 674 F.2d 576, 577-578 (6th Cir. 1982); Montgomery Ward & Co. v. NLRB, 664 F.2d 1095, 1097 (8th Cir. 1981); NLRB v. Potter Electric Signal Co., 600 F.2d 120, 123-124 (8th Cir. 1979). Indeed, every circuit court that has decided the issue has affirmed this conclusion.[10]
The dissent asserts that the Board’s reliance on Section 10(c) in Taracorp is specific to Weingarten cases. We disagree. Because Section 10(c) precludes a make-whole remedy where the employer learns of employee misconduct through an unlawful investigatory interview, it follows that Section 10(c) also precludes such a remedy where, as here, the Respondent learns of the misconduct through unlawfully installed hidden surveillance cameras. In each situation, the employer acquires facts relating to the misconduct through unlawful means. In each situation, the reason for the discipline is not that the employee engaged in union or other protected concerted activities. Rather, in each situation, the employee is disciplined for actions the employer considers to be misconduct, i.e., the discharge or suspension is “for cause.”[11] Therefore, under the plain language of Section 10(c), the Board may not require the reinstatement of or award backpay to such employees.
We recognize that the Board, in its initial decision herein, cited Taracorp in support of its denial of a make-whole remedy (342 NLRB at 561), and that the court distinguished Taracorp on the basis that the employer in that case had a separate and untainted source of information regarding the employee’s misconduct. 414 F.3d at 48. The dissent contends that Taracorp and other Weingarten cases are distinguishable from the instant case because in those cases, the employer suspected the employee’s misconduct prior to conducting the disciplinary interview. However, the Taracorp Board’s holding did not turn on the presence of an untainted source. Indeed, the Taracorp decision does not even refer to the untainted information source, and instead relies heavily on Section 10(c)’s prohibition against making whole employees who have been discharged for cause. Similarly, although the Sixth Circuit’s General Motors decision cited above notes the presence of an untainted information source, the Eighth and Ninth Circuit decisions cited above do not, and instead rely solely on Section 10(c) in denying a make-whole remedy. Furthermore, in other Weingarten Board decisions issued shortly after Taracorp, the Board relied on Section 10(c) in denying a make-whole remedy even though the employer would not have discharged the employee absent the information obtained through the unlawful interview. See Illinois Bell Telephone Co., 275 NLRB 148 (1985), enfd. 784 F.2d 847 (7th Cir. 1986); Montgomery Ward & Co., 273 NLRB 1226, 1227 (1984), enfd. mem. 785 F.2d 316 (9th Cir. 1986).[12]
In sum, the employees in all of the foregoing Weingarten cases were disciplined “for cause.” Neither the Board nor the reviewing courts interpreted Section 10(c) as restricting the Board’s remedial authority only where the facts supporting the “for cause” discipline derived from an independent and untainted source. Rather, the Board and the courts applied Section 10(c) according to its literal terms, regardless of whether the misconduct that formed the basis of the discharge was uncovered through an unlawful means. Therefore, our conclusion in the instant case that Section 10(c) precludes the granting of a make-whole remedy is strongly supported by extant precedent.
2. Statutory analysis
In the Weingarten decisions cited above, the Board explicitly relied on Section 10(c) in denying a make-whole remedy. However, in so doing, the Board may not have fully explained its resolution of the core issue – that is, why Section 10(c)’s prohibition of a make-whole remedy, where discipline is “for cause,” should be interpreted as including the situation where the misconduct in question is uncovered through unilaterally and unlawfully implemented means. We now accept the court’s invitation to “fill [Section 10(c)’s] interstices with a reasoned approach” and explain why we find that Congress intended Section 10(c)’s prohibition of a make-whole remedy to apply in such cases.
Congress did not explicitly define the term “for cause.” However, the Board has explained that in the context of the Act, the term was intended to refer to discipline that is not imposed for a reason that is prohibited by the Act. As the Board stated in Taracorp:
Cause, in the context of Sec. 10(c), effectively means the absence of a prohibited reason. For under our Act: “Management can discharge for good cause, bad cause, or no cause at all. It has, as the master of its own business affairs, complete freedom with but one specific, definite qualification: it may not discharge when the real motivating purpose is to do that which [the Act] forbids.”
273 NLRB at 222 fn. 8 (quoting NLRB v. Columbus Marble Works, 233 F.2d 406, 413 (5th Cir. 1956)). Since the discipline imposed here was not imposed for a prohibited reason, it was “for cause.” Accordingly, Section 10(c) precludes the Board from granting a make-whole remedy to the disciplined employees in the instant case.[13]
This meaning of the phrase “for cause” does not include an inquiry into the source of the employer’s knowledge of the misconduct. Although that may be relevant to an arbitration, it is not relevant under the Act. Indeed the Board has made clear that “[i]t is important to distinguish between the term ‘cause’ as it appears in Section 10(c) and the term ‘just cause’ . . . . Just cause encompasses principles such as the law of the shop, fundamental fairness, and related arbitral doctrines. Cause, in the context of Section 10(c), effectively means the absence of a prohibited reason.” Taracorp Industries, 273 NLRB at 222 fn. 8; accord: Elkouri & Elkouri, How Arbitration Works 974 (6th ed. 2003) (“‘[c]ause’ as used in Section 10(c), should not be confused with ‘just cause’ as that term is used by arbitrators”).[14]
Moreover, the legislative history of Section 10(c) shows
that Congress’ purpose in enacting Section 10(c) was to insure that an employee
who engaged in misconduct was subject to discipline for that misconduct. See Fibreboard
Paper Products Corp. v. NLRB, 379
The House Report states that [Section 10(c)] was “intended to put an end to the belief, now widely held and certainly justified by the Board’s decisions, that engaging in union activities carries with it a license to loaf, wander about the plants, refuse to work, waste time, break rules, and engage in incivilities and other disorders and misconduct.” H.R. Rep. No. 245, 80th Cong., 1st Sess., 42 (1947). The Conference Report notes that under § 10(c) “employees who are discharged or suspended for interfering with other employees at work, whether or not in order to transact union business, or for engaging in activities, whether or not union activities, contrary to shop rules, or for Communist activities, or for other cause [interfering with war production] . . . will not be entitled to reinstatement.” H.R. Conf. Rep. No. 510, 80th Cong., 1st Sess., 55 (1947).
Conversely, Section 10(c)’s legislative history does not reflect Congressional concern regarding the employer’s method for detecting the employee’s misconduct. The legislative history is silent regarding this issue. The legislative history quoted above affirmatively shows that the impetus for Section 10(c)’s prohibition on making whole employees disciplined for cause was Congress’ belief that the Board had overstepped its authority and interfered with legitimate management disciplinary prerogatives. If the Board in the instant case were to grant a make-whole remedy to the 16 disciplined employees, the Board would be overturning discipline for serious, admitted violations of lawfully established work rules.[15]
A termination of employment that is motivated by protected activity is unlawful under Section 8(a)(1) and/or (3), and is not “for cause.” The termination is unlawful, and the Board can order reinstatement and backpay. Similarly, a termination of employment that is accomplished without bargaining with the representative union is unlawful under Section 8(a)(5) and is not “for cause.”[16] Thus, when an employer has unilaterally subcontracted unit work and laid off unit employees, those actions are unlawful, and the Board can order reinstatement and backpay.
The Weingarten cases are consistent with this statutory analysis. In those cases, the employers unlawfully denied employee requests for union representation during investigatory interviews and discharged the employees based on information obtained during the interviews. The discharged employees in those cases engaged in misconduct for which they were discharged. The discharges accordingly were “for cause” within the meaning of Section 10(c), and the Board was precluded from granting make-whole remedies.
In the instant case, the 16 disciplined employees each engaged in misconduct warranting the discipline. Therefore, under the teaching of Fibreboard and the Weingarten cases, Section 10(c) applies to preclude a make-whole remedy for the discipline.
We are not unmindful, of course, that the misconduct was
discovered by virtue of the unlawfully installed surveillance cameras. However, our Order provides a proper remedy
for that violation. We have ordered the
Respondent to cease and desist from its unlawful conduct and to bargain with
the
For all these reasons, we conclude that Section 10(c) precludes the Board from granting a make-whole remedy for the disciplined employees.
The dissent contends that the D.C. Circuit, in its remand decision, held that Section 10(c) does not preclude the Board from granting a make-whole remedy on the facts presented here. In support of this contention, the dissent notes the court’s statement that Section 10(c) “does not expressly address” the issue of whether the Board may grant a make-whole remedy on these facts. However, a statute may require or prohibit an action without “expressly” requiring or prohibiting the action. For example, although Section 10(c) “does not expressly address” the issue of whether the Board may grant a make-whole remedy where a union supporter is discharged for misconduct warranting discharge, Section 10(c)’s no-make-whole prohibition clearly prohibits a make-whole remedy on those facts. Section 10(c) “does not expressly address” the issue presented here because it would have been impossible for Congress to envision all of the conceivable fact patterns in which suspensions or discharges for cause might arise in cases that could be brought before the Board. Rather, Congress left to the Board the task of interpreting and applying statutory language to a myriad of factual patterns. This is the very task the Court left to the Board in relation to the facts in this case. In the Court’s words, the Board is to “fill [the statutory] interstices with a reasoned approach.” 414 F.3d at 47.[17]
The dissent cites several situations where the Board has granted a make-whole remedy to employees who have committed arguably wrongful actions.[18] These cases are distinguishable because it is not clear whether the employees’ actions would have been wrongful or would have merited the discipline imposed—that is, whether the employees’ actions would have constituted “cause” for discipline—if the employer had not committed the unfair labor practices. By contrast, in the instant case, it is clear that the employees’ actions were wrongful and would have merited the discipline imposed—that is, the employees’ actions constituted cause for discipline – regardless of whether the Respondent had unlawfully implemented the hidden camera surveillance.
In addition to finding that Section 10(c) precludes the Board from granting a make-whole remedy, we also find that, even if the Board had authority to grant a make-whole remedy, compelling policy considerations would persuade us, in the exercise of remedial discretion, to deny a make-whole remedy. Those policy considerations are strongly evidenced by Section 10(c) and its legislative history. We find particularly compelling the policy consideration that employees who engage in misconduct, and who receive the appropriate discipline for that misconduct, should not benefit from their misconduct through a windfall award of reinstatement and backpay.[19]
B. Tocco and Great Western
The Board’s decisions in Tocco[20] and Great Western[21] stand in contrast to the cases discussed above. In Tocco, the employer unlawfully failed to bargain with the union before changing its drug-testing program. The change involved expanding the program from testing only employees identified as potential drug users to random testing of all employees. The employer did not change the penalty—discharge—for a positive drug test. Two randomly-tested employees tested positive and were discharged. The Board granted a make-whole remedy to the two employees, reasoning that the discharge was the result of the unlawful policy change.
In Great Western, the employer unilaterally changed some rules governing employee conduct; the employer also began recording misconduct violations in employees’ personnel files, thereby unilaterally changing its misconduct-recording policy. The employer discharged four employees, relying on violations of the unilaterally-changed conduct rules and on the employer’s knowledge of violations it had obtained as a result of the unilaterally-changed misconduct-recording policy. The Board granted a make-whole remedy to these four employees.[22]
In its initial decision here, the Board sought to distinguish its granting of a make-whole remedy in Tocco and Great Western from its denial of a make-whole remedy in the instant case. The Board found that the unlawful unilateral changes in Tocco and Great Western were changes in the employers’ misconduct standards themselves, whereas the unlawful unilateral change in the instant case was a change in the Respondent’s method for detecting misconduct. 342 NLRB at 561. Therefore, the Board reasoned, as in Taracorp, supra, there was “an insufficient nexus between the unfair labor practice and the employee discipline to justify revoking the discipline as a means to remedy the unfair labor practice.” Ibid.
On appeal, however, the court rejected the Board’s findings regarding the nature of the unlawful changes in Tocco and Great Western. The court found, contrary to the Board, that the unlawful changes in Tocco and Great Western, like the unlawful change in the instant case, did not involve changes in the employers’ misconduct standards but rather involved changes in the employers’ methods for detecting misconduct. The court accordingly rejected the Board’s basis for distinguishing Tocco and Great Western from the instant case. 414 F.3d at 47–48. We accept, as the law of the case, the court’s interpretation of those cases. As so interpreted, they are inconsistent with our interpretation and application of Section 10(c) here, and thus we overrule them.
As explained above, we interpret Section 10(c) to preclude the Board from granting a make-whole remedy where the employees were disciplined for cause, even if the employer learns of the misconduct through unlawful means. As is clear from our discussion, we decline to import the criminal law notion of the “exclusionary rule” into remedial decisions under Section 10(c). The exclusionary rule acts as a deterrent to government conduct that undermines Fourth and 14th Amendment strictures. Similarly, it could be argued that a make-whole remedy here would deter employers from engaging in unilateral action. However, we conclude that Section 10(c) bars that remedy. In addition, we have provided a remedy for the Respondent’s failure to bargain that should preclude a recurrence of the unlawful behavior. But since the employees engaged in conduct that clearly violated preexisting rules, and thus were discharged or disciplined for cause, we decline to order the Respondent to rescind such actions. Accordingly, we now overrule our decisions in Tocco and Great Western to the extent that those decisions hold that Section 10(c) does not limit the Board’s authority to grant a make-whole remedy where an employer disciplines an employee for cause, but the cause is uncovered through unilaterally and unlawfully implemented means.
ORDER[23]
The National Labor Relations Board orders that the
Respondent, Anheuser-Busch, Inc.,
1. Cease and desist from
(a) Failing and refusing to bargain with Brewers and
Maltsters, Local Union No. 6, affiliated with the International Brotherhood of
Teamsters (the
(b) Failing and refusing to respond in a timely fashion to requests for information respecting matters relevant to unit employees.
(c) 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) On request, bargain collectively with the Union as the exclusive bargaining representative of the Respondent’s employees with respect to the installation and use of hidden surveillance cameras and other mandatory subjects of bargaining.
(b) On request, bargain collectively with the
(c) Within 14 days after service by the Region, post at
its facility in
(d) 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.
Dated,
Robert J. Battista, Chairman
Peter
C. Schauamber,
Member
Peter N. Kirsanow, Member
(seal) National Labor Relations Board
Members Liebman and Walsh, dissenting.
Today, the majority overrules Board precedent and holds that an employer that disciplines employees based solely on information obtained in violation of Section 8(a)(5) need not make those employees whole. The majority reaches that conclusion by: (1) relying on a reading of Section 10(c) that a reviewing court has rejected as a matter of law, (2) advancing policy arguments at odds with the Act, and (3) relying on a line of cases that has no appropriate application here. We dissent. The employees here, whom the Respondent disciplined based solely on its unquestionably unlawful use of hidden surveillance cameras, are entitled to make-whole relief.
i. facts and
prior proceedings
The Union represents about 500 employees at the Respondent’s
brewery in
The Respondent had no idea who had placed the items in the
room, but it suspected that the room was being used for impermissible purposes,
possibly including use of drugs. It
decided to install a hidden video surveillance camera on the roof. The Respondent did not notify the
After a few weeks, the Respondent reviewed the video footage and determined that unauthorized individuals were entering the motor room. It then decided to install a second videocamera in the room itself. The Respondent operated both cameras continuously through June 30.
On July 1, after it had removed the cameras, the Respondent
notified the
Solely on the basis of information it obtained from reviewing
the surveillance tapes, the Respondent separately interviewed 18 employees.
Prior to the interviews, the
The Board held that the Respondent's installation and use
of hidden surveillance cameras was a mandatory subject of bargaining, and that
the Respondent therefore violated Section 8(a)(5) and (1) by failing to give
the Union notice and an opportunity to bargain prior to their installation. See Anheuser-Busch,
Inc., 342 NLRB 560, 561 (2004). But,
although the employees had been disciplined based on misconduct discovered
solely through the use of the unlawfully installed cameras, the Board, by a
vote of 2 to 1, declined to issue a standard order rescinding the discipline
and restoring the status quo. Rather,
the majority ordered the Respondent only to cease and desist from refusing to
bargain and, affirmatively, to bargain with the
The
Section 10(c) does not expressly address whether the Board shall or shall not deny make-whole relief where an employer would not have discovered its employees’ misconduct but for its own unlawful action. As the Seventh Circuit has observed, “[Section] 10(c)] does not prevent the Board from insisting that the employer [prove ‘cause’] without using the ‘fruit’ of the violation . . . . Section 10(c) does not speak to burdens of persuasion, fruits of violations, exclusionary rules, and the other paraphernalia of trials and inferences.”
The court also rejected the Board majority’s attempts to distinguish Tocco, supra, and Great Western Produce, supra, 414 F.3d at 47–48, and the court reasoned that Taracorp, supra, upon which the Board majority had relied, was distinguishable. In Taracorp, the court observed, the employer had knowledge of the employee misconduct independent of and prior to the unlawful interview. 414 F.3d at 48. Here, however, the Respondent had no such knowledge independent of the unlawful use of the hidden cameras.
On remand from the court, the current majority reaches the same result. It again concludes that Section 10(c) bars a make-whole remedy and, in addition, it now overrules Tocco and Great Western. In so doing, it ignores both the plain language of the D.C. Circuit’s opinion and the applicable policies of the Act.
ii.
First, it is clear that, prior to this decision, the Board granted make-whole relief when an unlawful unilateral change directly resulted in discipline, and that it did so consistent with the Act. Section 10(c), of which the “for cause” language cited by the majority is only a small part, grants the Board authority to devise remedies—including reinstatement and backpay—to “effectuate the policies of this Act . . . .” It is well settled that the Board’s authority under Section 10(c) is broad and discretionary. See NLRB v. Seven-Up Bottling Co., 344 U.S. 344, 346 (1953). In exercising its authority, the Board is guided by the principle that remedial orders should “restor[e] the situation, as nearly as possible, to that which would have obtained but for [the unfair labor practice].” Die Supply Corp., 160 NLRB 1326, 1344 (1966) (quoting Royal Plating and Polishing Co., 148 NLRB 545, 548–549 (1964), supplemented 152 NLRB 619 (1965)); accord: Planned Bldg. Services, 347 NLRB No. 64, slip op. at 5 (2006); Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941). “Effective redress for a statutory wrong should both compensate the party wronged and withhold from the wrongdoer the ‘fruits of its violations.’” International Union of Electrical Radio and Machine Workers v. NLRB, 426 F.2d 1243, 1249 (D.C. Cir. 1970), cert. denied 400 U.S. 950 (1970).
Consistent with the foregoing principles, when an employer violates Section 8(a)(5) and (1) by unilaterally changing terms and conditions of employment, the Board restores the status quo ante. See, e.g., Detroit News, Inc., 319 NLRB 262 fn. 1 (1995) (“it is customary to order restoration of the status quo to the extent feasible”); Martin Marietta Energy Systems, 316 NLRB 868 fn. 5 (1995) (Board's “traditional remedial requirements” include making employees whole for losses resulting from respondent's unlawful unilateral changes). Employees who have been discharged or disciplined as a direct result of an unlawful unilateral change are entitled to have the discipline rescinded and to be reinstated and made whole.3
Until the present case, the Board has never drawn a
distinction between employees disciplined as a result of a unilateral change
and those disciplined as a result of a unilateral change in “detection
methods.” Rather, as the court stated,
the Board has ordered employees made whole in both types of cases. In Great
Western, supra, for example, the employer violated Section 8(a)(5) by
unilaterally implementing certain work rules, including a recordkeeping system
that tracked employee infractions. The Board
ordered discharged employees reinstated and made whole because the new
recordkeeping system was the source of management’s knowledge of their rule infractions.
In Tocco, Inc., the employer had previously maintained a drug policy that allowed it to test employees for “cause.” 323 NLRB at 484. But in violation of Section 8(a)(5), the employer unilaterally changed its definition of “cause,” from evidence of drug possession or use by a specific employee to a concern that the plant's overall safety, efficiency, and production were declining. Applying that new definition, the employer tested employees it previously would not have tested, and then discharged three employees who tested positive. The Board ordered the employer to rescind the unilaterally implemented policy, restore the old policy, and reinstate the discharged employees and make them whole. See id. at 481 fn. 1.
In sum, Board precedent, consistent with the Board’s remedial authority, plainly supports a make-whole remedy for the 16 employees in the present case, whose conduct was discovered only through the unlawful use of the surveillance cameras.
iii.
Having previously tried unsuccessfully to distinguish Great Western and Tocco, the majority now overrules them as inconsistent with Section 10(c). The majority’s conclusion that 10(c) bars a make-whole remedy is both flatly contrary to the law of the case and wrong on the merits.
A.
Judicial review of the Board’s construction of the Act is governed by Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842–843 (1984), which states:
When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter . . . . If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute . . . Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.
The “precise question at issue” here is whether a make-whole remedy is appropriate for employees who are disciplined or discharged for misconduct discovered solely through an unlawful unilateral change. The court’s answer to the first question under Chevron - whether Congress has “directly spoken” to the issue here - was a resounding no. The court stated that Section 10(c) “does not expressly address” that issue. 414 F.3d at 47. The court emphasized that Section 10(c) “does not speak to burdens of persuasion, fruits of violations, [or] exclusionary rules,” and “does not prevent the Board from insisting that the employer [prove ‘cause’] without using the ‘fruit’ of the violation.” 414 F.3d at 47 (quoting Communication Workers, supra at 851) (emphasis supplied). Thus, the law of the case is that Section 10(c) does not resolve the issue here.
Under the second step of Chevron, the Board is free to set forth a “permissible construction” of the Act that resolves the issue in a manner consistent with the Act’s policies. Accordingly, the court in the present case stated that the Board may “fill interstices [in the Act] with a reasoned approach” and may “determine, based on policies consistent with the Act,” whether a make-whole remedy is appropriate here. See 414 F.3d at 47, 48. What the majority has done instead, however, is to take the remand as an opportunity to reiterate, albeit in greater detail, the very position the court rejected: that Section 10(c) precludes a make-whole remedy. The majority’s 10(c) analysis is therefore contrary to the law of the case.
B.
Even if the court had not already rejected the argument that Section 10(c) bars a make-whole remedy, the majority’s 10(c) argument would not withstand scrutiny. The majority contends that the legislative history of Section 10(c) shows an intent to insure that employees who engaged in misconduct would be subject to discipline for it. That is true, insofar as it involves 8(a)(1) and (3) cases in which the Board must determine whether an employee was disciplined because of Section 7 activity. But the legislative history gives no indication that it was intended to preclude make-whole relief in the circumstances present here, where the discipline was the direct result of a 8(a)(5) violation without which the employer would have had no grounds for discipline.
The “for cause” language in Section 10(c) was added to the Act as part of the 1947 Taft-Hartley amendments. The Supreme Court has explained the purpose of the language as follows:
The amendment was sparked by a concern over the Board's perceived practice of inferring from the fact that someone was active in a union that he was fired because of anti-union animus even though the worker had been guilty of gross misconduct.
. . . “In the past, the Board, admitting that an employee was guilty of gross misconduct, nevertheless frequently reinstated him, ‘inferring’ that, because he was a member or an official of a union, this, not his misconduct, was the reason for his discharge.” H.R.Rep. No. 245, 80th Cong., 1st Sess., at 42 (April 11, 1947) (emphasis added).
The proviso was thus a reaction to the Board's readiness to infer anti-union animus from the fact that the discharged person was active in the union, and thus has little to do with the situation in which the Board has soundly concluded that the employer had an anti-union animus and that such feelings played a role in a worker's discharge.
NLRB v.
Transportation Mgt. Corp., 462
Here, those concerns do not apply. The Respondent’s unfair labor practice does not stem from antiunion animus, nor does it involve Section 7 activity. Rather, the violation was a unilateral change in working conditions that led directly to discipline and discharge. There is no indication that the “for cause” proviso was intended to bar relief under those circumstances.5
C.
Absent any legislative history indicating that the “for cause” language was intended to apply here, the majority is left only with the Board’s application of Section 10(c) in 8(a)(1) Weingarten cases such as Taracorp Industries, 273 NLRB 221 (1984). As the D.C. Circuit held in this proceeding,6 however, Taracorp is distinguishable: it represents a narrow exception, inapplicable here, to the Board’s standard make-whole remedial policy.7
In Taracorp, the employer learned of an employee’s misconduct and summoned the employee for an interview. The employee requested, and was refused, union representation during the interview. After the interview, the employee was discharged for the misconduct. The Board held that the employer violated Section 8(a)(1) by denying the employee's request for union representation. The Board, however, found that a make-whole remedy “in the context of a Weingarten violation” was contrary to Section 10(c). 273 NLRB at 221. The Board reasoned that in Weingarten cases, there is “not a sufficient nexus between the unfair labor practice committed (denial of representation at an investigatory interview) and the reason for the discharge (perceived misconduct) to justify a make-whole remedy.” Id. at 223.
In the present case, the majority finds that the reason for the discipline, as in Taracorp, was misconduct, and that Section 10(c) therefore bars a make-whole remedy. The majority’s application of Taracorp is erroneous for three reasons.
First, the Board’s language in Taracorp is specific to Weingarten cases, and the decision gives no indication that the Board intended its holding to apply outside that context—nor has the Board ever done so.
Second, in cases since Taracorp, the Board has addressed the precise issue presented here: whether make-whole relief is appropriate when an employee is disciplined for misconduct discovered solely through an unlawful unilateral change. See Tocco and Great Western, supra. Unlike the majority, we would not overrule those cases in favor of applying a rule developed for a different type of violation under a different section of the Act.
Third, even assuming that a Taracorp analysis would otherwise be appropriate, here there is a stronger nexus between the unlawful unilateral change and the discipline imposed on the employees. In Taracorp, as in the typical Weingarten case, the employer had knowledge or suspicion of the employee's wrongdoing before conducting the disciplinary interview at which the Weingarten violation occurred. Although the majority asserts that the Taracorp cases do not rely on that distinction, the Board in Taracorp did, in fact, focus on whether there was a “sufficient nexus” between the unfair labor practice and the reason for the discharge. 273 NLRB at 223. Logically, in cases like the present one, and unlike Taracorp, the absence of any source of knowledge or suspicion of the misconduct aside from the unfair labor practice itself establishes such a nexus. For here, absent the unlawful installation and use of the cameras, the Respondent had no reason to focus its inquiry on those 16 employees, let alone to discipline them. The nexus is reinforced by the fact that the Respondent confronted the employees with the videotaped evidence during their interviews. In the Weingarten cases, in contrast, it cannot be said that the employer learned of the misconduct solely through the unlawful conduct.8 In short, Taracorp is distinguishable, and the majority’s expansion of it is unjustified.
iv.
Finally, the majority decision is contrary to the Act’s
policies. Restoring the status quo—which
would be accomplished here by reinstatement and backpay—is the Board’s standard
remedy for an 8(a)(5) unilateral change.
See section II, supra. Discipline
imposed pursuant to an unlawful unilateral change is doubly destructive: it damages both the affected employees and
the union’s status as bargaining representative. The union’s status “is further damaged with
each application of the unlawfully changed term or condition of employment. No otherwise valid reason asserted to justify
discharging the employee can repair the damage suffered by the bargaining representative
. . . .” Great Western, supra at 1005.
Here, it is unlikely that the
Furthermore, by prohibiting a make-whole remedy, the
majority decision allows the Respondent to retain the benefits of its unlawful
action, while at the same time removing the most effective deterrent to future
unilateral changes. “If a party who unlawfully refuses to bargain is permitted
to retain the fruits of unlawful action, the Act is rendered meaningless, and
defiance of the board’s orders is encouraged.”
NLRB v. Warehousemen’s Local 17,
451 F.2d 1240, 1243 (9th Cir. 1971), enfg. 182 NLRB 781 (1970); accord: Southwest Forest Industries v. NLRB, 841
F.2d 270, 275 (9th Cir. 1988), enfg. 278 NLRB 228
(1986).
Finally, we do not condone the employees’ conduct here, and we are mindful of the principle that Board remedies should not grant the employees a “windfall.” But there is no windfall under the Tocco and Great Western approach. An employee will not be made whole if the evidence shows that he would have been disciplined even absent the unlawful unilateral change. See Great Western, supra at 1007. Thus, in cases like Great Western and this one, a make-whole remedy would not leave employees any better off than they would have been absent the employer’s violation.10
v.
Here, without the unlawful camera use, the Respondent
would not have known of the employees’ conduct and they would not have been
disciplined. A make-whole remedy is
therefore appropriate and consistent with Board precedent. Contrary to the majority, we would not
revisit a 10(c) analysis that was rejected by the court, nor would we overrule
applicable 8(a)(5) precedent in favor of the approach in 8(a)(1) Weingarten cases that have no
appropriate application here. Accordingly,
we dissent from the majority’s change in the law and from its decision to deny
make-whole relief to the 16 employees who were disciplined as a direct result
of the Respondent’s unlawful conduct.
Dated,
Wilma
B. Liebman, Member
Dennis
P. Walsh,
Member
National Labor Relations Board
APPENDIX
Notice to Employees
Posted by Order of the
National Labor Relations Board
An Agency of the
The National Labor Relations Board has found that we violated Federal labor law and has ordered us to post and obey this notice.
FEDERAL LAW GIVE YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
We will not refuse to bargain collectively with Brewers and Maltsters, Local Union No. 6, affiliated with the International Brotherhood of Teamsters over the installation and use of hidden surveillance cameras within our facility and other mandatory subjects of bargaining.
We will not refuse to respond in a timely fashion to requests for information respecting matters relevant to unit employees.
We will not in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights guaranteed you by Section 7 of the Act.
We
will, on request, bargain collectively with the
We
will, on request, bargain collectively with the Union as the exclusive
representative of our employees by timely providing the
Anheuser-Busch, Inc.