National Labor Relations Board v.  Labor Ready, Incorporated

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 NATIONAL LABOR RELATIONS BOARD,
Petitioner,
v. No. 00-2064 
LABOR READY, INCORPORATED,
Respondent. 
On Application for Enforcement of an Order
of the National Labor Relations Board.
(9-CA-34950)
Argued: April 5, 2001
Decided: June 1, 2001
Before WILKINS, KING, and GREGORY, Circuit Judges.
Enforcement granted by published opinion. Judge Wilkins wrote the
opinion, in which Judge King and Judge Gregory joined.
COUNSEL
ARGUED: Kevin L. Carr, SPILMAN, THOMAS & BATTLE,
P.L.L.C., Charleston, West Virginia, for Petitioner. Anne Marie
Lofaso, NATIONAL LABOR RELATIONS BOARD, Washington,
D.C., for Board. ON BRIEF: Niall Anthony Paul, Charles I. Woody,
SPILMAN, THOMAS & BATTLE, P.L.L.C., Charleston, West Vir-
ginia, for Petitioner. Leonard R. Page, General Counsel, John H. Fer-
guson, Associate General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel, Margaret A. Gaines, Supervisory Attor-

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ney, Sonya Spielberg, NATIONAL LABOR RELATIONS BOARD,
Washington, D.C., for Board.
OPINION
WILKINS, Circuit Judge:
The National Labor Relations Board (NLRB) seeks enforcement of
an order that, inter alia, bars Labor Ready, Incorporated from treating
certain workers as non-employees for purposes of the company’s no-
solicitation policy. Labor Ready asks us to deny enforcement and to
overturn the NLRB’s finding that it engaged in unfair labor practices.
We affirm the decision of the NLRB and grant its petition for enforce-
ment.
I.
A.
Labor Ready is a temporary employment agency with over 200
offices nationwide. Workers seeking placement through Labor Ready
must fill out an application and complete certain orientation proce-
dures, including safety training. Applications are kept on file, and
workers who have submitted applications ("incumbent workers")
return to the office whenever they desire an assignment. An incum-
bent worker who does not want an assignment on any given day is not
obligated to request or accept one.
Assignments ordinarily last one day. Labor Ready branches
observe either of two policies regarding the manner by which assign-
ments are distributed; one policy allows workers to receive assign-
ments by telephone, while the other requires workers to go to the
Labor Ready office every morning and wait for assignments.1 Those
who receive assignments return to the office at the end of the day for
1At oral argument, counsel for Labor Ready informed us that new
branches typically allow telephone assignments at first and then switch
to a policy requiring workers to come to the office for assignments.
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their paychecks. At the end of each day, the worker is contractually
"deemed to have quit." J.A. 463.
While in the waiting room, incumbent workers and new applicants
are not permitted to engage in any form of solicitation. The following
policy applies in Labor Ready offices:
NO SOLICITATION POLICY
It is our objective to provide a comfortable work environ-
ment which allows employees to complete their tasks with
the least amount of interruptions or disruptions. Thus Labor
Ready has established the following policy:
- Nonemployees (including job applicants) are
not allowed at any time to come upon Com-
pany premises for the purpose of any form of
solicitation or literature distribution. This pol-
icy prohibits third parties or strangers from
soliciting or handing out materials for any rea-
son, including but not limited to, political,
union, charitable, or similar activities. For the
purposes of this policy, applicants for employ-
ment, including but not limited to those waiting
for a job assignment or referral, are considered
nonemployees, strangers or third parties.
- Employees are prohibited from distributing any
form of literature or other materials in work
areas. Employees are also prohibited from
soliciting or distributing literature of any kind
or for any cause during their assigned working
time or soliciting an employee during that
employee’s working time at our site or a cus-
tomer’s site.
Id. at 485 (emphasis added).2
2The parties dispute whether Labor Ready ever had a broader prohibi-
tion against solicitation in effect. This question is not material to our res-
olution of the petition for enforcement, and accordingly we do not
address it.
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B.
Donald Huff is a heavy equipment operator and an employee of the
Affiliated Construction Trades Foundation, a union-affiliated organi-
zation. In 1996, Huff became involved in a unionization drive
directed at Labor Ready and the businesses to which Labor Ready
supplied temporary workers. As part of this effort, Huff submitted an
application at the Labor Ready office in South Charleston, West Vir-
ginia. One week later, he brought in a busload of union members to
file applications.
Huff received an assignment lasting several days in December
1996. Initially, Huff was paid at the end of each day, and then the
assignment was renewed by telephone the next day. After a few days,
however, he was issued a weekly time ticket; a few days after that,
he received a paycheck for several days of work.
At some point, the South Charleston Labor Ready office changed
its procedure for distributing assignments; whereas incumbent work-
ers previously could receive assignments by telephone, the new policy
required them to appear at the office early in the morning and remain
there to await placement. In response, Huff and three other men began
circulating a petition at the Labor Ready office on December 30,
1996, requesting that Labor Ready resume telephone placements. The
manager of the South Charleston office, Michael Tucker, directed
them to stop, and they complied. After consulting with the union,
however, Huff resumed circulating the petition. Tucker repeatedly
ordered him to stop, but Huff and his associates refused, asserting that
their activity was protected under the National Labor Relations Act
(NLRA), 29 U.S.C.A. §§ 151-169 (West 1998).
The following week, there was a video camera set up on a tripod
in the Labor Ready waiting room and pointed toward the table where
Huff and his associates usually sat with their petition. Tucker told
Huff the video camera was on but refused to explain why it was there.
The next day, Huff found his regular table occupied and observed that
the camera had been turned toward the only other available table in
the waiting room.
Over the next several weeks, Huff continued organizing at the
South Charleston Labor Ready office and extended his efforts to the
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office in Huntington, West Virginia. His activities culminated in a
confrontation with Tucker on February 25, 1997. On that day, Tucker
repeatedly told Huff to stop circulating his petition on Labor Ready
premises, or Tucker would call the police. Huff refused, again claim-
ing that his activities were protected under the NLRA. Initially, the
video camera was not in the waiting room, but Tucker brought it out
and set it up to record Huff’s activities. Tucker then called the police.
The police told Huff to leave the premises, and he did so.
As a result of this incident, Huff was removed from the roster of
incumbent workers. When Huff subsequently returned his hard hat
and boots to the South Charleston office, Tucker advised him that he
was "permanently barred" from all Labor Ready offices nationwide.
J.A. 351.
C.
In response to Huff’s banishment, the union filed a charge with the
NLRB alleging various unfair labor practices. An administrative law
judge (ALJ) found that Labor Ready had violated the NLRA in sev-
eral respects. In particular, the ALJ found, based on two alternative
rationales, that Labor Ready improperly treated Huff as a non-
employee. The ALJ’s broader rationale construed Supreme Court pre-
cedent to require that all job applicants be treated as employees for
NLRA purposes. See id. at 4 (citing Phelps Dodge Corp. v. NLRB,
313 U.S. 177, 182-87 (1941) (holding that the NLRA prohibits
employers from refusing to hire job applicants because they are union
members)). The narrower rationale focused on the specific facts of
this case: "[Huff] was . . . an employee, because he had actually been
sent to work by [Labor Ready], his application for employment was
on file, and he was waiting at [Labor Ready’s] office for another
assignment, as [Labor Ready’s] rule required." Id. (footnote omitted).
In connection with this fact-specific approach, the ALJ determined
that the Labor Ready policy requiring its workers to quit at the end
of each day "was a rule . . . only on paper and not in practice,"
because workers were sometimes assigned to jobs lasting several days
or more and paid for multiple days of labor in a single paycheck. Id.
A three-member panel of the NLRB affirmed the decision of the
ALJ. The panel generally relied on the ALJ’s reasoning, but added,
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"In adopting the [ALJ’s] conclusion that [Labor Ready] violated [the
NLRA] by its no-solicitation rules, we emphasize the particular facts
of this case." Id. at 1. The panel further adopted the ALJ’s order,
which bars Labor Ready from restricting solicitation among incum-
bent workers;3 prohibits video surveillance of employees; grants Huff
reinstatement (at his election) and back pay; and mandates the posting
of an announcement addressing these concerns. The NLRB now seeks
enforcement of this order.
II.
The NLRA secures the right of employees "to engage in . . . con-
certed activities for the purpose of collective bargaining or other
mutual aid or protection." 29 U.S.C.A. § 157. Interference with this
right constitutes an unfair labor practice. See id. § 158(a)(1). As inter-
preted by the Supreme Court, these provisions create a presumption
that prohibitions against solicitation among employees are invalid,
while a countervailing presumption protects the right of employers to
exclude non-employee solicitors. See Lechmere, Inc. v. NLRB, 502
U.S. 527, 532-33 (1992); NLRB v. Babcock & Wilcox Co., 351 U.S.
105, 113 (1956). Thus, the validity of the restrictions enforced by
Labor Ready depends on whether incumbent workers were "employ-
ees" for purposes of the NLRA.4
The NLRA defines the word "employee" to include "any
employee," subject to specified exceptions. 29 U.S.C.A. § 152(3). We
extend considerable deference to the NLRB’s interpretation of this
provision and its application of the provision to a particular worker
3The order uses the phrase "employee applicants." Id. at 6. We con-
strue this term to mean workers with applications on file, whom we have
classified as "incumbent workers."
4Labor Ready contends that, because its no-solicitation policy was
declared facially invalid, the decision of the NLRB may be upheld only
if we conclude that all job applicants must be treated as employees for
all purposes. We disagree. The narrower question of whether incumbent
workers are employees is properly before us, both because the Labor
Ready policy expressly classifies incumbent workers as non-employees
and because the NLRB opinion "emphasize[d] the particular facts of this
case." J.A. 1.
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or class of workers. See NLRB v. Town & Country Elec., Inc., 516
U.S. 85, 89-90 (1995); Sam’s Club, a div. of Wal-Mart Stores, Inc. v.
NLRB, 173 F.3d 233, 239 (4th Cir. 1999).
Here, it is undisputed that workers who receive assignments from
Labor Ready are Labor Ready employees while at the job site. The
sole question before us is whether that employee status abides over-
night or, as Labor Ready maintains, the employment relationship is
dissolved each evening and not renewed unless and until the worker
receives another assignment.
There is scant case law addressing the question of whether an
employment relationship is continuous or intermittent. Indeed, the
only apposite case we have found is NLRB v. Waterman S.S. Corp.,
309 U.S. 206 (1940). In Waterman, a shipping company signed con-
tracts called "articles" with each crew member; the articles were
signed before each voyage and apparently expired when the voyage
was completed. See Waterman, 309 U.S. at 210-11. The company and
a union also entered into a collective bargaining agreement that, inter
alia, described the workers’ duties between voyages. See id. at 217.
While two ships were in drydock between voyages, the company
replaced several crew members who were affiliated with a different
union. See id. at 209. The NLRB held that these discharges amounted
to unlawful discrimination on the basis of union preference. See id.
The Supreme Court upheld this decision, noting in the process that the
expiration of the discharged workers’ articles did not terminate their
employee status. See id. at 213-20.
Two relevant principles emerge from Waterman. First, as a matter
of law, employee status under the NLRA may survive during the
interval between the completion of one assignment and the com-
mencement of another. This is so even when, as here, there is no for-
mal "obligation of employer or employed to continue the relationship
when the day’s work is done." Id. at 219. In accord with this princi-
ple, courts have applied the NLRA to off-duty workers soliciting
between shifts, see NLRB v. S. Md. Hosp. Ctr., 916 F.2d 932, 935 (4th
Cir. 1990) (per curiam), and to a part-time worker who received
assignments on an as-needed basis, see NLRB v. Int’l Van Lines, 409
U.S. 48, 50 n.2 (1972); these cases do not even mention the possibil-
ity that such workers lacked employee status. Significantly, the
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NLRA has also been applied to relations between temporary employ-
ment agencies and the workers who seek assignments from them. See,
e.g., NLRB v. W. Temp. Servs., Inc., 821 F.2d 1258, 1267 (7th Cir.
1987). These decisions demonstrate that incumbent workers could be
employees for NLRA purposes while waiting at the Labor Ready
office, even though they are not required to work on any particular
day and do not perform any work or receive any compensation while
awaiting placement. See Waterman, 309 U.S. at 215 (noting that "men
standing idly by without pay at the end of a voyage still regard[ed]
themselves in the employ of the shipowner").
The second principle that emerges from Waterman is that whether
a worker retains employee status in the temporal interstices between
assignments depends on whether, as a factual matter, such workers
"are customarily continued in their employment with recognition of
their preferential claims to their jobs." Id. at 219. It is somewhat diffi-
cult to apply this standard here, because most assignments obtained
through Labor Ready are too brief to allow workers to acquire "pref-
erential claims." On at least one occasion, however, Huff stayed with
an assignment for several consecutive days. Furthermore, there was
ample evidence that incumbent workers are "customarily continued in
their employment" beyond the limited period Labor Ready is willing
to acknowledge. In particular, Labor Ready retained the applications
submitted by incumbent workers and allowed workers to keep equip-
ment (such as Huff’s boots and hard hat) for longer than the duration
of their assignments. In light of these circumstances, the NLRB did
not err in determining that Labor Ready and the incumbent workers
engaged in a continuing relationship rather than a series of discon-
nected moments of employment.
This conclusion is not undermined by the fact that workers were,
by the terms of their application, "deemed to have quit" each evening.
The shipping company in Waterman invoked a comparable provision
of the crew members’ articles, under which all obligations were dis-
charged when the crewmen received their wages at the end of a voy-
age; the Supreme Court, however, determined that this provision had
a more limited effect than the company ascribed to it. See id. at 211-
13. The provision at issue here is not so ambiguous and must be
accorded due weight, but it is not dispositive. See Cilecek v. Inova
Health Sys. Servs., 115 F.3d 256, 261 (4th Cir. 1997) (treating express
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contract provision as one of several factors establishing that plaintiff
was independent contractor rather than employee). Ultimately, this
provision does not control the outcome here because, as the ALJ
determined, it was contrary to Labor Ready’s own practices. Here, as
in Waterman, the realities of the workplace in question are more com-
pelling than the contractual terms emphasized by the employer.
Finally, it is significant that Huff and other incumbent workers
were present in the Labor Ready office every morning because a
Labor Ready policy required them to be there in order to receive
assignments. By conditioning the receipt of assignments on physical
presence in the Labor Ready office, Labor Ready exerted a measure
of control over incumbent workers between assignments. Such con-
trol is a key landmark on the boundary between employees and inde-
pendent contractors. See Cilecek, 115 F.3d at 260. While that
distinction goes to the nature of a particular relationship, rather than
its existence vel non, this exercise of control over workers tends to
refute Labor Ready’s claim that there was no relationship whatsoever.
III.
For the foregoing reasons, we affirm the NLRB’s decision that
Huff and other incumbent workers were "employees" within the
meaning of 29 U.S.C.A. § 152(3). In light of this decision, we have
no difficulty upholding the specific components of the NLRB’s order.
Because incumbent workers are employees, they have a statutory
right to engage in solicitation; thus, the Labor Ready policy barring
solicitation by such workers is invalid. Also, it is effectively undis-
puted that, if Huff was an employee, his rights under the NLRA were
violated by the videotaping of his activities in January 1997 and by
his permanent banishment from Labor Ready offices the following
month. Finally, Labor Ready has not challenged the specific remedies
prescribed by the NLRB. Accordingly, we grant the petition for
enforcement of the NLRB order.
ENFORCEMENT GRANTED
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