Submitted: May 14, 2013
Before WOLLMAN, MURPHY, and SMITH, Circuit Judges.
MURPHY, Circuit Judge.
In two separate National Labor Relations Board (NLRB) proceedings, RELCO Locomotives, Inc. (RELCO) was found to have unlawfully discharged a total of eight workers for engaging in protected labor activity. The NLRB ordered the workers reinstated and petitioned for enforcement of its orders. RELCO cross petitioned for review of each of the two orders. After the initial briefing was completed, RELCO raised a new issue challenging the Board's composition and claiming that several members had been appointed in violation of the recess appointments clause of the United States Constitution. We consolidated the cases for oral argument and now address both the labor law issues as well as RELCO's challenge to the recess appointments. Concluding that substantial evidence supports the Board's labor law conclusions and that we lack the authority to decide RELCO's challenge to the recess appointments, we grant the NLRB's application for enforcement and deny RELCO's petitions for review of the two NLRB orders.
Before the court are two separate NLRB decisions, designated here as RELCO I and RELCO II, each of which concerned the termination of four different employees by the company. RELCO builds and refurbishes locomotives in a plant located in Albia, Iowa. RELCO's management includes Chief Executive Officer Mark Bachman, Chief Administrative Officer Doug Bachman (Mark's brother),  Operations Manager David Crall, and Fabrication Supervisor Cliff Benboe, who together were responsible for most of the terminations at issue in this case. RELCO I involves the terminations of Jeffrey Smith, Ronald Dixon, Timothy Kraber, and Dana See, while RELCO II addresses the terminations of Mark Baugher, Charles Newton, Richard Pace, and Nicholas Renfrew.
Each evidentiary hearing before the Board was initially presided over by an Administrative Law Judge (ALJ). Its general counsel represented the Board during the proceedings and RELCO was represented by its own counsel. In each of the cases the ALJ issued a comprehensive opinion concluding that the complainants had been terminated because of protected labor activity and ordering that each be reinstated and receive backpay. See National Labor Relations Act, 29 U.S.C. § 158(a). In RELCO I the ALJ also found that a nondisclosure agreement required by RELCO was unlawful and ordered it rescinded. The NLRB affirmed in both cases, without substantial comment in RELCO II and with only minor and immaterial modifications in RELCO I. The factual circumstances surrounding each termination are discussed below.
A. RELCO I Evidentiary Hearing
1. Jeffrey Smith
Jeffrey Smith was a welder with RELCO from January 2008 until his termination in June 2009. In early 2009, Smith attempted to meet with RELCO CEO Mark Bachman to discuss the attendance system and a pay increase. After failing to arrange a face to face meeting, Smith composed a lengthy letter which he delivered to his supervisor to pass on to Bachman. In March 2009, Smith discovered a labor union insignia for the Brotherhood of Railroad Signalmen (BRS) on a train he was repairing. He wrote an email inquiring about representation, and the union responded by dispatching organizer Mark Ciurej. Smith became an enthusiastic union proponent among his coworkers at RELCO. He solicited his fellow employees to sign union cards on a daily basis before, during, and after work. Other employees testified that they viewed Smith as a persistent and visible organizer on behalf of the union campaign.
One RELCO employee Smith approached about the union was Jonathan Graber. Graber was adamantly opposed to a union and repeatedly rebuffed Smith, telling Smith he was a "damn fool" for trying to unionize. Smith only stopped approaching Graber after Graber told him he was implacably opposed to the union and did not want to discuss it anymore. A day or two after that conversation, Graber saw CEO Bachman at a carwash and informed him about the union activity. Bachman replied that he already was aware of the campaign. Graber also spoke to two other supervisors about the campaign. He denied naming any particular employees as participating in the campaign, but the ALJ found this disclaimer not credible.
Several days after Graber spoke with Bachman about the union campaign, Bachman called a meeting on May 15, 2009 with all RELCO employees to speak about unions. Bachman first asked several contractors who belonged to a union to leave the room. In an hour long speech Bachman expressed his opposition to bring a union to RELCO, indicating that it would result in layoffs and impede his ability to provide pay raises and other opportunities for advancement. Bachman then asked if any employees had questions. Smith rose and asked if Bachman would agree to a discussion with employees about forming a union. Bachman replied "shut up and sit down."
On Monday June 8, Smith was using a cutting torch to strip steel plates from locomotive frames. He was wearing steel tipped boots as required by RELCO safety policies. Unfortunately the cutting torch created sparks which burned the laces and the stitches binding the soles of the boots. To deal with the situation Smith replaced the burned laces with zip ties and fastened the body of the boot to the sole with duct tape. Fabrication supervisor Cliff Benboe demanded that Smith replace the boots. Smith informed Benboe that he could not afford new boots, but Benboe was unmoved. On Tuesday and Wednesday, Smith went to work wearing boots without steel toes. Benboe noticed the boots were different from those Smith had been wearing before and asked if they were steel toed. Smith asserted that they were, but when Benboe pressed against a boot with a hammer, he discovered that it did not have a steel toe. Benboe ordered Smith into the break room and told him to wait there.
Benboe returned with Operations Manager David Crall. The two informed Smith that he would have to get steel toed boots before he could return to work. Smith replied that he would not be able to acquire new boots until 10 the next morning when his wife received her paycheck. Smith claims he inquired as to how this would affect his attendance record since he was already at the maximum amount of tardiness before he would be discharged under company policy. Benboe and Crall deny the issue of attendance was ever raised. Benboe did write an incident report that indicated that Smith would not be returning until 10 the next morning.
That evening, Smith borrowed money from his mother in law to obtain new boots. Before he could call Benboe to inform him he would be able to return to work on time Thursday, he received a voicemail from Benboe. In the ensuing telephone conversation, Benboe instructed Smith to report to a meeting at 10 that morning. At the meeting, Benboe and Crall informed Smith that they had spoken with Bachman and decided to fire him for a gross safety violation, that is, for failure to wear steel toed boots. Smith claimed that the issue of attendance was never discussed at the meeting. Crall, by contrast, stated that the decision to fire Smith stemmed from his failure to arrive to work on time on Thursday, and that the supervisors had not yet come to a decision about the steel toed boots. The ALJ credited Smith's account of what had occurred at the meeting.
2. Ronald Dixon
Ronald Dixon worked as a fabricator at RELCO from December 2008 to September of 2009. Dixon was one of Smith's earliest recruits in the union campaign and regularly joined Smith in recruiting other employees. After Smith was terminated, Dixon became the leading union proponent among the RELCO employees. He continued soliciting employees to sign union cards until the day he was terminated. Like Smith, Dixon continually approached Jonathan Graber about forming a union and was rebuffed and told he was a "damn fool."
After Smith had been terminated and while Dixon was the leader of the RELCO employees favoring a union, BRS organizer Ciurej sent a five page letter to plant employees responding to anti union objections made in Bachman's May 15 speech. Bachman then called another meeting at the end of July to respond to Ciurej's letter. He followed up this meeting with a letter to all employees imploring them not to "fall for the union's hollow promises." He warned that if the employees joined the union, "our entire extremely generous wage and benefit package, that all of you already enjoy, would be negotiated between the Company and the union. The chalkboard could in essence be completely erased and all of these great benefits and wages you already have could be talked about for the first time between the parties." In September 2009, Ciurej planned to respond by handbilling outside the RELCO plant. Graber informed Bachman about Ciurej's plan.
About a week after Ciurej's handbilling, Dixon was assigned a job installing rain guards and spark arresters on top of a new locomotive. Dixon had never done this job before, so Benboe instructed him on how properly to perform the work. Dixon climbed to the top of the locomotive in accordance with Benboe's instructions and began work. Meanwhile, Bachman, Crall, and other managers were having a meeting in a conference room overlooking the shop floor. Bachman claims he looked out the window and saw Dixon working on top of the locomotive with his feet dangling over the edge. Bachman considered this to be an unsafe position because of the possibility of a fall. Dixon denied that his feet were ever dangling off the edge of the locomotive. Mark Baugher, an experienced fabricator, testified that he had seen Dixon working on the top of the locomotive that day and had not seen his feet hanging over the edge.In any event, Bachman instructed that Dixon be ordered off of the locomotive.
Benboe testified that he then instructed Dixon either to center himself on top of the locomotive or position a ladder from which to work. Dixon claimed that he could not reach the part of the locomotive he was working on from a ladder. Nevertheless, he placed the ladder up against the locomotive in accordance with Benboe's wishes. Twenty minutes later, Bachman again claimed to have seen Dixon working with his feet hanging off the edge of the locomotive. Bachman ordered him off the car again and had Benboe escort him to the breakroom. Benboe informed Dixon there that he was fired for insubordination. Dixon initially assumed Benboe was kidding, but then asked to show Benboe where he had been working to demonstrate he had complied with his directive. Benboe refused and escorted Dixon out of the plant.
3. Timothy Kraber
Kraber began working for RELCO a second time in March 2008. He had previously worked with the company from January to July 2007. When Kraber had begun his work at RELCO, the company paid for the cost of cleaning and maintaining employee uniforms. In early 2009, however, RELCO began deducting $36 per month from each employee's paycheck for this service. Employees were disgruntled, but no serious opposition manifested itself until Kraber began to suspect that RELCO was overcharging them. Kraber had spoken to a driver for the cleaning service and learned that RELCO was charged only about $34 per month for the cleaning. Kraber asked Operations Manager David Crall about this discrepancy, and he promised to investigate it. Kraber also noted that employees had never signed paperwork acknowledging the pay reduction before RELCO started deducting cleaning charges from their paychecks.
On March 4, 2010, Doug Bachman called a meeting to discuss the uniform cleaning issue. He also brought forms for the employees to sign authorizing RELCO to deduct cleaning expenses from their pay. At the meeting, Kraber challenged Doug Bachman as to whether RELCO was being charged less for cleaning than the amount of the deduction. Doug Bachman claimed not to know the answer. Kraber then proposed that the employees refuse to sign the authorization form until the company provided information about the cost of cleaning, and the employees voted to accept Kraber's proposal. The meeting then became heated as employees grew convinced RELCO was overcharging them. Kraber and another employee actively challenged Doug Bachman, who was also very upset.
While all of this was going on, Kraber was having issues with his attendance. Kraber had begun experiencing back problems near the end of 2009 that required him to take medical absences. RELCO's attendance policy assigned workers "points" for every unexcused absence. Accumulating more than twelve points resulted in termination. Kraber met with Crall in December 2009 to discuss the number of points he had, contending that some of his points should be expunged because he had submitted written medical excuses. Crall promised to look into the matter. On December 4, 2009, Mark Bachman posted a memo near the employee breakroom about the medical release policy. The memo stated that only medical notes from a doctor would be acceptable for excused absences. Kraber, who had previously used notes from a chiropractor to substantiate his excused absences, claimed he never saw this memo.
Kraber missed work due to his back from January 19 through January 25, 2010. On the first two days Kraber saw a chiropractor who then referred him to a doctor. When he returned to work, Kraber submitted notes from the chiropractor and the doctor explaining his absence. Benboe and Crall met with Kraber on February 1 to tell him that he had fifteen points, well over RELCO's limit. They also informed him that due to the policy change his note from the chiropractor would not be accepted. Kraber contested the calculation of his points and said that he would "beat" them if the issue came before an unemployment hearing. He also informed the supervisors that he "wouldn't be dealing with this" if the workers had a union. Kraber spoke to supervisor Curt Peterson later that day, once again complaining about the attendance policy and suggesting that a union would solve these problems. Peterson promised to look into the attendance controversy and attempt to fix it. A few days later, Peterson told Kraber that his point total had been reduced to ten and would be reduced to six if he could provide a doctor's note to replace the chiropractor's note excusing January 19 and 20.
Kraber obtained a note from his doctor and submitted it to Peterson. Peterson contended that the note was illegible so Kraber called his doctor to request another. Instead, a nurse from the doctor's office called Peterson directly and explained the content of the earlier note. Peterson then told Kraber that the note sufficed and his points would be expunged. While RELCO contends that Peterson had told Kraber he needed to bring in another note, Kraber's account was corroborated by another witness. On February 26, 2010, Kraber missed work and was assessed two attendance points. Crall told Bachman that Kraber now had 12 points and thus could be terminated, but Bachman said he wanted to review Kraber's record himself before making any decision. Bachman was on vacation at the time, and though he returned sometime after February 28, he left again on a business trip on March 2. He returned to the plant on March 5 (one day after the meeting about the uniform cleaning charge) and terminated Kraber on March 8.
Kraber had meanwhile returned to work on March 1 and was surprised when a week later he learned from Benboe that he had been fired. Kraber protested that Peterson had removed the attendance points he had accumulated for his absences on January 19 and 20. Benboe said that the termination decision was "final" and escorted Kraber from the building. Kraber called Peterson at his home that night to ask why the points had not been removed. Peterson claimed he had not gotten around to it but would speak to management the next morning. When Kraber returned his work uniform the next morning, he asked Crall if Peterson had spoken to him and repeated that he had provided the doctor's note. Crall promised to look into the matter, but he failed to contact Kraber. When Kraber called Crall, he was told that Bachman would not reconsider his termination because he could not read the doctor's note.
4. Dane See
Dane See began working for RELCO in January 2009. He participated in the March 4, 2010 meeting with Doug Bachman about the cost of cleaning employee uniforms. After the meeting concluded, See contacted the cleaning company directly to ask how much it charged RELCO for the service. A customer service representative told See that RELCO was charged $6.20 per week per uniform. See then asked if the customer service representative would email him that quote. Instead, the representative emailed See to tell him that the $6.20 quote may have been inaccurate. After See emailed the representative once more, he had no further contact with the cleaning company.
The next day See discussed with his fellow employees what he had learned from the cleaning vendor. Later that day, See was confronted by Benboe and Crall about his contact with the cleaning representative, and then terminated for "inappropriate interaction with the vendor." Although RELCO initially claimed See had harassed the cleaning vendor it later discovered that See had been confused another employee. RELCO then changed its position and offered reemployment to See.
5. The nondisclosure agreement
Following the work uniform dispute, RELCO modified its nondisclosure agreement to forbid any employee from contacting its vendors to discuss the cost of uniform maintenance. The revised agreement also eliminated employee rights to recover litigation costs if the employee prevailed in an enforcement action brought by RELCO. Benboe distributed the new agreement on July 10 and warned employees that if they failed to sign it, they would have to "go upstairs" and speak to Bachman.Several employees refused to sign the agreement. Benboe met with employees again several weeks later, read the names of those who had not signed the agreement, and again threatened that they would be sent to Bachman if they refused. While a few employees still refused to sign the agreement, there is no evidence that Benboe or Bachman ever disciplined them in any way.
B. Findings by the ALJ and Rulings by the NLRB in RELCO I
The ALJ found that Smith, Dixon, Kraber, and See had all been unlawfully terminated. See 29 U.S.C. § 158(a). Specifically, the ALJ found that the nondiscriminatory reasons given for the terminations of Smith, Dixon, and Kraber were pretexts masking RELCO's intent to punish them for union activity. The ALJ found that the reason given for See's termination—inappropriate contact with a vendor—was itself protected activity because it was a natural extension of the concerted action by RELCO workers with regard to the work uniform cleaning expense. The ALJ ordered reinstatement of all four employees, expungement of negative references from their employment histories, and back pay.
The ALJ also found that a nondisclosure agreement RELCO had distributed to its employees was overly broad and violated the National Labor Relations Act (NLRA). While RELCO argued that the issue was moot because the company has since withdrawn the agreement, the ALJ found no evidence that it had been withdrawn and ruled that the issue was not moot because the presence of the agreement had a substantial chilling effect on the ability of workers to engage in concerted action and it therefore required remediation. He ordered RELCO to post a public notice to its employees indicating that it had reinstated Smith, Dixon, Kraber, and See, and would refrain from interfering with the NLRA rights of its employees.
RELCO appealed to the NLRB, which affirmed the ALJ's decision in a two page order. It noted that the suspicious timing and pretextual nature of RELCO's termination decisions were strong evidence that hostility to unionization was the true reason for the firing of Smith, Dixon and Kraber. It also observed that only disputed issue with respect to See was whether his actions with respect to the work uniform charges were protected activity under the NLRA, and concluded that the ALJ correctly determined that it was. The Board also rejected RELCO's challenge to the ALJ's credibility terminations and found no basis to reverse them. Finally, the Board modified the ALJ's remedial order to include also an order for public rescission of the nondisclosure agreement.
C. RELCO II Evidentiary Hearing
1. Mark Baugher
Mark Baugher began working for RELCO as a fabricator in March 2007. RELCO encouraged, but did not require, its fabricators to become certified welders. Baugher was not certified, and he attended union meetings and signed a union card during the 2009 campaign. On September 13, 2010, Baugher asked his supervisor to grant him a personal day off from work. He wanted to testify in the RELCO I unfair labor practices trial, but he did not reveal that information to his supervisor. The supervisor advised Baugher that he could only grant him a half day.
Later that day, CEO Mark Bachman emailed Operations Manager David Crall and asked him to prepare a reprimand to Baugher for not wearing his hard hat while on duty. Crall replied by asking for more details, but Bachman did not provide them because at that time he was occupied with hearings in RELCO I. The hard hat matter was put aside until the following week, and no one spoke to Baugher about the alleged infraction. On September 14, Baugher asked project manager Cliff Benboe for a vacation day. When Benboe expressed doubt that he could approve it on such short notice, Baugher revealed that he had been subpoenaed in the RELCO I case. Benboe replied "Oh, you're involved in this too?" and placed a call to Crall. Baugher was then granted time to appear and testify at the ALJ hearing. Baugher testified against RELCO at the hearing on September 15 and contradicted Bachman's claim that Dixon had been working on top of a railcar with his feet dangling. Bachman was present for Baugher's testimony and read his related statement and affidavit.
The union election at RELCO was held on October 20, and a majority of employees voted against forming a union. Six days later while Baugher was working on a locomotive with another employee, he placed a blue flag on the train. The blue flag is a safety precaution which indicates to employees that a train is being serviced. RELCO safety rules prohibit moving a train or removing the flag before the worker who placed it can be located. Baugher neglected to remove the flag at the end of his shift, and RELCO personnel attempted unsuccessfully to locate him. After checking and verifying that the locomotive was clear, RELCO personnel removed the blue flag. Baugher discovered his blue flag was missing the next morning and informed Benboe about it. On November 1 RELCO suspended Baugher two days without pay and placed him on probation, citing both the hard hat incident on September 13 and the blue flag incident on October 26. The disciplinary report also claimed that Baugher had been smoking while working in an enclosed car on September 13, loitering, and exhibiting poor work performance.
In early December 2010, Baugher asked Crall when his probation would be lifted. Crall gave a vague response which did not identify any specific steps Baugher should take to lift his probation. At the end of the month Baugher received a performance review from Crall, his first in several years. Baugher was given a "satisfactory" rating in sixteen areas, an "exceeds expectations" rating in one, and "below expectations" in eight. Baugher's "growth potential" as an employee was rated "performance plateau." This term, which the ALJ described as something of a misnomer, meant that RELCO believed that Baugher had "learned basic job skills and knowledge and [was] actively working on refining that skill and knowledge." It differs from the also oddly named "performance peaking" rating, which is a negative assessment indicating that the employee has been performing similar tasks for an extended period without improvement or desire to expand his or her skill set.
Crall indicated that Baugher had not bettered himself since joining the company and set goals for him which included obtaining his welding certificate and keeping his work area organized. While Bachman claimed that Baugher was given a 60 to 90 day deadline to obtain his welding certificate, the ALJ discredited that assertion and found no deadline had been communicated. Baugher took the welding certification test in early January, but did not pass. He was unable to retake the test, in part because he could not find times when both he and Benboe (who was to oversee the test) were available. After Baugher's failed test, no RELCO manager spoke about certification or any other issue relating to his performance review, nor indicate any dissatisfaction with his work. Baugher continued to be assigned to welding projections throughout early 2011. Although RELCO managers asserted that they had difficulty finding work for non certified welders in Baugher's position, the ALJ discredited that testimony.
On March 11, Benboe and Crall terminated Baugher. The reason given was that he had not made sufficient improvements on the areas identified in his performance review. Baugher asked Benboe if he had any problems with Baugher's performance, and Benboe answered he did not. Benboe told Baugher that he had been informed Baugher was being terminated only a half hour earlier. At an unemployment hearing, Crall testified that Baugher was given until the end of RELCO's first quarter to complete his welding certification. Baugher testified that this was the first he had heard of any such deadline.
2. Charles Newton
Charles Newton began working as a fabricator for RELCO in 2008. Newton attended union meetings and told his supervisor Jim Cronin that the unionization campaign probably arose from what Newton characterized as the company's rough tactics towards its workers. Newton was also scheduled to testify during the RELCO I unfair labor practices hearing. Crall approached Newton shortly before the hearing and asked if he would speak to RELCO's attorney about his involvement in the case and what he would address in his testimony. Newton agreed and conversed with both RELCO's attorney and Crall for approximately five minutes.
Newton testified in RELCO I on September 15 about the company's nondisclosure agreement and the warnings that employees who refused to sign it would be sent to speak with Bachman. Newton denied seeing a memo RELCO claimed it posted rescinding the agreement. Bachman was present in the courtroom for Newton's testimony and had the opportunity to review his statement and affidavit. Newton was also an observer on behalf of the union during the subsequent union election on October 20. In that capacity Newton attended a meeting with Crall, another supervisor, and an NLRB agent regarding procedures to be used during the election. As noted above, a majority of employees voted against unionizing.
Newton received a work order to create a rear headlight for a train cab on November 29. He sought clarification of the work order from Cronin, his supervisor. Cronin suggested that he use a headlight located elsewhere in the shop for comparison. Newton then walked over to the location of that headlight and returned, passing Crall twice along the way. Crall asked Newton what he was doing, and Newton replied that he was in the process of building a headlight. Later, Cronin warned Newton that he was being "watched" and should not walk around anymore. Newton replied that he had only been inspecting a cab light as suggested by Cronin. Cronin warned him he should "be careful, they're watching you."
Later the same day, a coworker asked Newton to assist him in bending a remote box. RELCO employees commonly approached one another directly for assistance if a foreman was not around. Newton agreed to help and walked to get his work gloves. Benboe saw Newton walking and asked what he was doing. Newton told him he was helping a coworker, and Benboe replied that he was walking around too much. When Newton offered to document his steps on a piece of paper, Benboe told him to drop the issue. At the end of Newton's shift, Cronin handed Newton a warning which alleged he had been unproductive and stating that any "further occurrence will result in disciplinary action, up to and including termination." Newton had never before been disciplined by RELCO or told he needed to increase his productivity.
In December of 2010 Crall gave Newton his first performance review in several years. The review stated that Newton's attendance was unacceptable and that he was "below expectations" in attitude, volume of acceptable work, and meeting deadlines. RELCO set goals for Newton to improve his attendance, obtain his welding certificate, and stay on task. It also rated Newton's growth potential as "performance plateau, " the same level Baugher had received. Newton challenged RELCO's tabulation of his attendance record, and Crall eventually conceded error and agreed Newton's attendance was acceptable. Newton also challenged ...