W&m Properties of Connecticut , Inc. v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 16, 2007 Decided February 8, 2008
No. 06-1365
W&M P ROPERTIES OF CONNECTICUT , I NC.,
PETITIONER
v.
NATIONAL L ABOR RELATIONS BOARD ,
RESPONDENT
Consolidated with
06-1395
On Petition for Review and Cross-Application for
Enforcement
of an Order of the National Labor Relations Board
Peter D. Stergios argued the cause for petitioner. With
him on the briefs was Patrick M. Collins.
Jeffrey J. Barham, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Ronald E. Meisburg, General Counsel, John H.
Ferguson, Associate General Counsel, Linda Dreeben,
Assistant General Counsel, and Julie B. Broido, Senior
Attorney.

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Before: BROWN and GRIFFITH, Circuit Judges, and
EDWARDS , Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge GRIFFITH.
GRIFFITH, Circuit Judge: In this case, the National Labor
Relations Board determined that an employer’s decision not
to retain employees of a newly acquired business was
unlawfully animated by a desire to avoid dealing with a labor
union, in violation of the National Labor Relations Act.
Because the Board’s order is a product of reasoned
decisionmaking and is supported by substantial evidence in
the record, we deny the employer’s petition for review and
grant the Board’s cross-application for enforcement.
I.
W&M Properties of Connecticut, Inc. (“W&M”) is a real
estate management and marketing firm. In 2001, W&M
expanded its portfolio of managed commercial properties by
purchasing from TrizecHahn Corporation an 800,000-square-
foot office complex called First Stamford Place. Prior to
W&M’s purchase, maintenance at First Stamford Place had
been provided by a seven-person engineering staff employed
by TrizecHahn. These TrizecHahn engineers were union
members, having elected as their representative the
International Union of Operating Engineers, Local 30, AFL-
CIO (“Local 30”).
Beginning in September 2000, W&M conducted due
diligence to determine what improvements would be
necessary to bring the property up to its standards. After
touring First Stamford Place and settling upon a staffing
model, W&M Senior Vice President Richard Heller
conducted a series of job interviews to hire the necessary

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engineers. TrizecHahn employees participated in this process,
as did outside applicants. The union membership of the
TrizecHahn engineers did not go unnoticed. One W&M
interviewer made clear to a job applicant that First Stamford
Place would not have a unionized workforce, and several
TrizecHahn employees were questioned about their union
membership.
W&M offered jobs to two of the TrizecHahn engineers,
Hector Benitez and Omar Perez, but not to the others, Liam
McGoohan, Stephen Bonos, Richard Stofko, Henry Cassidy,
and Paul Schmitt. Benitez accepted the offer and Perez
declined. W&M filled the remaining positions with four
outside applicants and one employee transferred from another
W&M property, for a total of six engineers. The reconstituted
engineering staff of First Stamford Place lacked a majority of
union workers, with Benitez as the lone union member. As a
result, W&M refused to bargain with Local 30 and made
certain unilateral changes to the working environment at First
Stamford Place.
Local 30 filed a charge with the National Labor Relations
Board (“Board”), alleging violations of the National Labor
Relations Act (“NLRA”).1 An administrative law judge was
assigned to determine whether W&M had violated § 8(a)(1),
§ 8(a)(3), or § 8(a)(5) of the NLRA by interfering with the
employees’ right to unionize, failing to hire the union
employees, and refusing to bargain with the union. W&M
argued that its refusal to hire McGoohan, Bonos, Stofko, and
Cassidy was motivated by its determination, on the basis of
subjective and objective evaluations, that those engineers
1 The General Counsel’s complaint did not name Schmitt as a
victim of anti-union discrimination, so W&M’s refusal to hire him
is not at issue in this case.

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were unsuitable for the task of maintaining First Stamford
Place according to W&M’s standards.
The administrative law judge ruled against W&M,
finding that anti-union animus motivated its hiring decisions.
W&M filed exceptions. The Board adopted most of the
administrative law judge’s findings in an order dated
September 20, 2006. As a remedy, the Board ordered W&M
to bargain with Local 30, hire and make whole McGoohan,
Bonos, Stofko, and Cassidy, and make whole other employees
aggrieved by the unilateral changes to working conditions at
First Stamford Place. W&M did not file a motion for
reconsideration with the Board, opting instead to go straight
to court. W&M petitions for review of the Board’s order and
the Board cross-applies for enforcement of its order.
II.
Before discussing the merits of W&M’s petition, we must
first address a jurisdictional bar to our consideration of one of
its arguments. Section 10 of the NLRA, which creates and
limits our jurisdiction to review the Board’s orders, provides:
“No objection that has not been urged before the Board . . .
shall be considered by the court, unless the failure or neglect
to urge such objection shall be excused because of
extraordinary circumstances.” 29 U.S.C. § 160(e); see also id.
§ 160(f) (incorporating subsection (e)’s jurisdictional
constraint). We are therefore powerless, in the absence of
“extraordinary circumstances,” to consider arguments not
made to the Board.
W&M claims for the first time in its opening brief that
the Board’s chosen remedy was unlawfully punitive. This
argument was not made to the Board and so comes too late.
See Quazite Div. of Morrison Molded Fiberglass Co. v.

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NLRB, 87 F.3d 493, 497 (D.C. Cir. 1996). If aggrieved by the
Board’s remedy, W&M should have filed a motion for
reconsideration pursuant to the Board’s rules and regulations.
See, e.g., Int’l Ladies’ Garment Workers’ Union v. Quality
Mfg. Co., 420 U.S. 276, 281 n.3 (1975); United Food &
Commercial Workers Union Local 204 v. NLRB, 506 F.3d
1078, 1087 (D.C. Cir. 2007); Cobb Mech. Contractors v.
NLRB, 295 F.3d 1370, 1377–78 (D.C. Cir. 2002); Epilepsy
Found. of Ne. Ohio v. NLRB, 268 F.3d 1095, 1101–02 (D.C.
Cir. 2001); Glaziers’ Local No. 558 v. NLRB, 408 F.2d 197,
202–03 (D.C. Cir. 1969); see also 29 C.F.R. § 102.48(d)(1)
(establishing procedures for motions for reconsideration).
Such a motion would have given the Board notice of W&M’s
objection, Local 900, Int’l Union of Elec., Radio & Mach.
Workers v. NLRB, 727 F.2d 1184, 1192 & n.8 (D.C. Cir.
1984), and an opportunity to fix its supposed mistake, see
Elastic Stop Nut Div. of Harvard Indus. v. NLRB, 921 F.2d
1275, 1284 (D.C. Cir. 1990). “[O]rderly procedure and good
administration require that objections to the proceedings of an
administrative agency be made while it has opportunity for
correction in order to raise issues reviewable by the courts.”
United States v. L.A. Tucker Truck Lines, Inc., 344 U.S. 33,
37 (1952).
By failing to file a motion for reconsideration, W&M
waived its challenge to the Board’s remedy and deprived us of
jurisdiction to consider it. Woelke & Romero Framing, Inc. v.
NLRB, 456 U.S. 645, 665–66 (1982). Contrary to W&M’s
suggestion, there are no “extraordinary circumstances”
excusing this error under § 10 of the NLRA. W&M argues
that its failure to file should be forgiven because a motion for
reconsideration would have been futile in light of the new
remedial framework announced in Planned Building Services,
Inc., 347 N.L.R.B. No. 64, 2006 WL 2206975 (2006). W&M
relies on NLRB v. FLRA, a case in which we entertained an

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argument that had not been urged before the Federal Labor
Relations Authority (“Authority”) by taking a rather broad
view of “extraordinary circumstances” in the waiver provision
of the Federal Labor Relations Act. See 2 F.3d 1190, 1195–96
(D.C. Cir. 1993) (per curiam) (construing 5 U.S.C. § 7123(c)).
W&M’s argument under NLRB v. FLRA fails.
The “extraordinary circumstances” we found in NLRB v.
FLRA consisted of the “patent futility” of filing a motion for
reconsideration in that case. Id. at 1196. The petitioner in
NLRB v. FLRA established patent futility by pointing to
instances in which the agency had already rejected its
contested argument in other proceedings. See id. By contrast,
W&M offers nothing but its own forecast regarding how the
Board might view its argument in light of the recently decided
adverse precedent in Planned Building. W&M claims that,
“[g]iven the Board’s fanfare in unveiling [a new remedial
standard] just seven weeks before the decision under review
here, it is manifestly clear it would have been a useless
exercise for W&M to seek reconsideration by the Board in
this case.” Reply Br. at 11. Such an assessment of the Board’s
likely disposition, relying on highly subjective indicia such as
“the Board’s fanfare,” is insufficient to prove patent futility
because it does not show that a motion for reconsideration
was “clearly doomed” by the agency’s rejection of identical
arguments. See Ga. State Chapter Ass’n of Civilian
Technicians v. FLRA, 184 F.3d 889, 892 (D.C. Cir. 1999). As
we have noted, “the requirement that a litigant present such a
petition is ordinarily not excused simply because the [agency]
was unlikely to have granted it.” Id. (citation and internal
quotation marks omitted). Given W&M’s failure to urge its
remedial challenge before the Board and its inability to
establish “extraordinary circumstances” justifying this
mistake, we conclude that the argument is waived and that we
therefore lack jurisdiction to consider it.

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III.
Turning to the merits that we may properly consider,
W&M levels two charges against the Board’s order: first, that
the Board impermissibly departed from precedent in
analyzing the decision not to hire TrizecHahn’s union
member employees; and second, that the findings of labor
violations lack the support of substantial evidence in the
record. “We will set aside the Board’s decision only if the
Board ‘acted arbitrarily or otherwise erred in applying
established law to the facts at issue, or if its findings are not
supported by substantial evidence.’ ” Waterbury Hotel Mgmt.,
LLC v. NLRB, 314 F.3d 645, 650 (D.C. Cir. 2003) (quoting
Plumbers & Pipe Fitters Local Union No. 32 v. NLRB, 50
F.3d 29, 32 (D.C. Cir. 1995)). Applying this deferential
standard of review, we find no fault with the Board’s
decision.
Departure From Precedent
The Board is not at liberty to ignore its prior decisions,
LeMoyne-Owen College v. NLRB, 357 F.3d 55, 60–61 (D.C.
Cir. 2004), but must instead provide a reasoned justification
for departing from precedent, Titanium Metals Corp. v.
NLRB, 392 F.3d 439, 446 (D.C. Cir. 2004). As we explained
in Greater Boston Television Corp. v. FCC, “an agency
changing its course must supply a reasoned analysis
indicating that prior policies and standards are being
deliberately changed, not casually ignored, and if an agency
glosses over or swerves from prior precedents without
discussion it may cross the line from tolerably terse to
intolerably mute.” 444 F.2d 841, 852 (D.C. Cir. 1970)
(footnotes omitted). In Planned Building Services, Inc., 347
N.L.R.B. No. 64, slip op. at 4–5 (2006), the Board departed

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from precedent regarding the standard used to evaluate
failure-to-hire claims in the successorship context. W&M
challenges the Board’s application of the new Planned
Building standard to the facts of this case, arguing that the
Board should have retained the old standard from FES (Div.
of Thermo Power), 331 N.L.R.B. 9 (2000), enforced, 301 F.3d
83 (3d Cir. 2002). Because the Board provided a reasoned
justification for its partial abandonment of FES in Planned
Building, we will not upset its new standard.
To trace the development of the failure-to-hire standard
as it applies to this successorship case, we begin with the
Board’s analysis of discriminatory-firing claims in Wright
Line, 251 N.L.R.B. 1083 (1980), enforced, 662 F.2d 899 (1st
Cir. 1981). Under Wright Line, if the General Counsel proves
that protected union conduct was a motivating factor in the
employer’s decision to terminate an employee, the burden
shifts to the employer, who must prove that it would have
made the same decision regardless of the union conduct. See
Office of Workers’ Comp. Programs v. Greenwich Collieries,
512 U.S. 267, 277–78 (1994); NLRB v. Transp. Mgmt. Corp.,
462 U.S. 393, 399–403 (1983) (citing Wright Line). In FES,
the Board adapted the Wright Line standard to the failure-to-
hire context by adding two items to the General Counsel’s
initial burden of proof: that the employer was hiring, and that
the unhired applicant had relevant experience or training for
the job. See FES, 331 N.L.R.B. at 12–13. This change ensured
that employers would only have to guard against the
discrimination claims of qualified job applicants.
The FES addendum to the Wright Line formula made
sense for most failure-to-hire claims, but not for the subset of
cases involving successor employers. In applying FES to
successorship cases, the Board came to see the pointlessness
of establishing that an employee was qualified to hold the

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same job he had performed for the predecessor employer.
Planned Building acted on this realization by removing the
FES burden from successor’s-failure-to-hire cases, in essence
treating the decision not to hire a predecessor’s employee as it
would a firing. See Planned Building, slip op. at 4–5.
The Board provided a sound rationale for this change,
explaining that elimination of the FES burden in the
successorship context promotes efficiency by removing an
extraneous analytical step. See id. at 4 (“[I]t serves no purpose
to require the General Counsel to demonstrate, in each
successorship case, that the employees have relevant
experience or training for essentially the same jobs in the
successor’s work force that they performed in the
predecessor’s work force.”). The FES elements of job
availability and applicant qualification are presumptively
satisfied in a successorship case, so the inquiry reverts to the
Wright Line analysis. See id.
W&M challenges the Board’s rationale by attacking a
Planned Building straw man. W&M argues that the
presumption that a predecessor’s employees are qualified to
work for a successor prevents a successor from choosing its
own personnel policies. This contention mistakenly assumes
that the presumption of qualification is irrebuttable. A
successor employer is well-positioned to explain to the Board
how its employment expectations differ from those of its
predecessor. Nothing in Planned Building prevents a
successor employer from making this point.
By providing a reasoned justification for its departure
from precedent, the Board avoided a finding of arbitrary and
capricious action under the Administrative Procedure Act, 5
U.S.C. § 706(2)(A). See Titanium Metals Corp. v. NLRB, 392
F.3d 439, 446 (D.C. Cir. 2004).

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Labor Violations
The Board found that W&M violated the NLRA by
interfering with the employees’ right to unionize, declining to
hire its predecessor’s employees because of their union
membership, and refusing to bargain with the union. See 29
U.S.C. § 158(a)(1), (3), (5) (proscribing such conduct). We
review the Board’s order to determine whether it enjoys the
support of substantial evidence in the record. Waterbury Hotel
Mgmt., LLC v. NLRB, 314 F.3d 645, 650 (D.C. Cir. 2003).
Our review of the Board’s factual conclusions is “highly
deferential,” Capital Cleaning Contractors, Inc. v. NLRB, 147
F.3d 999, 1004 (D.C. Cir. 1998), for we must treat the
Board’s findings of fact as “conclusive” if supported by
substantial evidence, 29 U.S.C § 160(e). We will not disturb
the Board’s “reasonably defensible” interpretation of the
facts, Traction Wholesale Ctr. Co. v. NLRB, 216 F.3d 92, 99
(D.C. Cir. 2000), regardless whether we might rule differently
de novo, Evergreen Am. Corp. v. NLRB, 362 F.3d 827, 837
(D.C. Cir. 2004). Greater still is the deference due a
credibility determination or a finding regarding motive. See
Capital Cleaning, 147 F.3d at 1004.
W&M challenges the finding that it unlawfully
interrogated Perez about his union membership. Coercive
interrogation of this sort violates § 8(a)(1) of the NLRA,
which makes it an unfair labor practice “to interfere with,
restrain, or coerce employees in the exercise of” their right to
unionize. 29 U.S.C. § 158(a)(1). The standard for unlawful
interrogation is whether an employer’s questions about union
membership “reasonably tended to interfere with, restrain, or
coerce.” Facchina Constr. Co., 343 N.L.R.B. 886, 886
(2004), enforced mem., 180 Fed. Appx. 178 (D.C. Cir. 2006).
The Board, after properly examining the “totality of the

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circumstances,” Vincent Indus. Plastics, Inc. v. NLRB, 209
F.3d 727, 737 (D.C. Cir. 2000), found that Heller’s coercive
questioning of Perez violated § 8(a)(1) of the NLRA.
Substantial evidence supports this conclusion. Testifying
before the administrative law judge, Perez described the
following interaction:
[Q:] Okay. Anything else you recall being discussed
in that meeting with Mr. Heller?
[A:] Yes. He asked me, you know, like — he also
asked me how long I was a member of Local 30.
[Q:] And what did you tell him?
[A:] I told him for almost eight years. You know, he
also asked me, you know, like, if I was to get laid
off, like, if the Union would get me another job.
Questions about union membership have a tendency to
coerce. See Allegheny Ludlum Corp. v. NLRB, 104 F.3d 1354,
1359 (D.C. Cir. 1997). This is especially so where the
questioning occurs behind closed doors and is initiated by a
company official, as it was in this case. See Timsco Inc. v.
NLRB, 819 F.2d 1173, 1178 (D.C. Cir. 1987); Perdue Farms,
Inc., Cookin’ Good Div. v. NLRB, 144 F.3d 830, 835–36
(D.C. Cir. 1998). A reasonable jury viewing this record could
have found W&M’s questioning to violate § 8(a)(1) of the
NLRA, so we conclude that substantial evidence supports the
Board’s finding to that effect. See Allentown Mack Sales &
Serv., Inc. v. NLRB, 522 U.S. 359, 366–67 (1998).
W&M also challenges the finding that it discriminatorily
refused to hire TrizecHahn’s unionized employees, in
violation of § 8(a)(3) of the NLRA, 29 U.S.C. § 158(a)(3).
The Board’s finding to this effect is built upon two
propositions, each of which finds support in the record. First
is the proposition that W&M harbored anti-union animus

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against the TrizecHahn engineers. Gerrit Blauvelt, W&M’s
Director of Property Management, told one job applicant that
W&M would never recognize Local 30 because the owners
did not want a unionized workforce at First Stamford Place,
and told another that “if anyone was going to work for W&M
that it would have to be non-Union.” The second proposition
is that W&M’s excuse for not hiring the TrizecHahn
engineers was a pretext for anti-union animus. W&M claimed
that its decision not to hire McGoohan, Bonos, Stofko, and
Cassidy was based on its walking tours, which showed First
Stamford Place to be in disrepair; on its neutral and objective
hiring criteria; and on its interviews, which revealed certain
employees to be unsatisfactory. The Board reasonably
discredited the disrepair argument because W&M made no
effort to attribute the problems found to the employees not
hired, and in fact showed an interest in hiring Joe Morra
despite his responsibility, as Property Manager, for the poor
condition of First Stamford Place. The Board inferred from
the hiring of Benitez and outside applicant Adalberto Sotillo,
both of whom lacked relevant experience, and from the failure
to hire more qualified and better trained employees, that
W&M’s alleged criteria were illusory. Finally, the Board
discredited W&M officials’ claims that subjective but neutral
observations from the interviews supported the decision not to
hire. Substantial evidence supports the finding of a violation
of § 8(a)(3) of the NLRA because, taken together, these items
from the record are enough to persuade a reasonable jury that
protected union conduct was a motivating factor in W&M’s
decisionmaking process, and that it failed to establish an
affirmative defense under Wright Line and Planned Building.
See Allentown Mack, 522 U.S. at 366–67.
Finally, the Board found that W&M’s objection to the
administrative law judge’s conclusion on the § 8(a)(5) refusal-
to-bargain charge depended on its contention that the

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§ 8(a)(3) finding was erroneous. Having properly rejected
W&M’s challenges to the § 8(a)(3) finding, the Board
reasonably found no merit in W&M’s exceptions to the
administrative law judge’s findings on the § 8(a)(5) charge.
IV.
For the reasons set forth in this opinion, we deny W&M’s
petition for review and grant the Board’s cross-application to
enforce its order.
So ordered.

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