United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 14, 2000 Decided June 27, 2000
No. 99-1078
Pacific Micronesia Corporation, d/b/a
Dai-Ichi Hotel Saipan Beach,
Petitioner
v.
National Labor Relations Board,
Respondent
Hotel Employees and Restaurant Employees
Local Union No. 5, AFL-CIO, and
Commonwealth Labor Federation,
Intervenor
On Petition for Review and Cross-Application for
Enforcement of an Order of the National
Labor Relations Board
Ronald B. Natalie argued the cause for petitioner. With
him on the briefs was Douglas W. Hall.
David A. Fleischer, Senior Attorney, National Labor Rela-
tions Board, argued the cause for respondent. With him on
the brief were Linda R. Sher, Associate General Counsel, and
Aileen A. Armstrong, Deputy Associate General Counsel.
Margaret A. Gaines, Supervisory Attorney, entered an ap-
pearance.
Intervenor Hotel Employees and Restaurant Employees
Local Union No. 5, AFL-CIO, joined in the brief filed by the
National Labor Relations Board. David A. Rosenfeld and
Victor J. Van Bourg entered appearances.
Before: Silberman, Williams and Ginsburg, Circuit
Judges.
Opinion for the Court filed by Circuit Judge Ginsburg.
Ginsburg, Circuit Judge: The National Labor Relations
Board held that Pacific Micronesia Corporation, d/b/a Dai-
Ichi Hotel Saipan Beach, violated ss 8(a)(1) & (5) of the
National Labor Relations Act, 29 U.S.C. s 151 et seq., by
refusing to bargain with or provide information to the Com-
monwealth Labor Federation and the Hotel Employees &
Restaurant Employees, Local 5, AFL-CIO (collectively, the
Union). Dai-Ichi claims it need not deal with the Union
because the Board improperly defined the bargaining unit for
which it was certified and because the election of the Union
as the employees' bargaining representative was invalid. We
agree with Dai-Ichi that the representation election was
invalid. Without resolving the unit determination issue,
therefore we grant the Company's petition for review and
deny the Board's cross-application for enforcement.
I. Background
Dai-Ichi operates a resort hotel located on the island of
Saipan in the Commonwealth of the Northern Mariana Is-
lands (CNMI). The Covenant to Establish a Commonwealth
of the Northern Mariana Islands in Political Union with the
United States of America, 48 U.S.C. s 1681 at 539 (West
1987), governs the relationship between the CNMI and the
United States. Section 502(a)(2) of the Covenant makes
certain federal laws, including the NLRA, effective in the
CNMI, see Micronesian Telecommunications Corp. v.
NLRB, 820 F.2d 1097, 1101 (9th Cir. 1987), while s 503(a) of
the Covenant provides that the "immigration and naturaliza-
tion laws of the United States" generally do not apply in the
CNMI. 48 U.S.C. s 1681. Acting under its reserved authori-
ty to regulate immigration, the CNMI enacted the Nonresi-
dent Workers Act (NWA) which "provide[s] strict[ ] enforce-
ment, control and regulation of nonresident workers," NWA
s 4411(b), by severely restricting the immigration of nonresi-
dents and by limiting the "employment of nonresident work-
ers ... to the duration of the specific job or employment for
which the alien was recruited." NWA s 4411(a). Among the
many restrictions the NWA places upon the employment of
nonresidents, the following are most noteworthy.
An employer in the CNMI may hire a nonresident worker
only if the Chief of Labor certifies that no resident is
available to fill the position. See NWA s 4433. Upon such
certification, the employer and the Chief must enter into a
"nonresident employment agreement," which memorializes a
description of the position, the time at which the employer
must again seek to fill the position with a resident, the
employment contract to be offered to the nonresident, and
the employer's commitment to secure a bond or surety for the
employee. See id. The actual employment contract in turn
must specify the term and location of employment, work
schedule, wage scale for regular and overtime hours, and any
pay deductions required by law. See NWA s 4433(g).
The Chief of Labor may authorize a nonresident employee
to work for no more than one year at a time, but the
employer may annually apply to extend his employment for
an additional year. See Alien Labor Rules and Regs. s II.D.
A nonresident may not work for anyone other than the
employer specified in the employment contract and neither
the employer nor the nonresident may alter the terms of their
employment contract without approval from the Chief. See
NWA s 4437(d). Upon the completion of the term of employ-
ment or the end of the employment relationship, a nonresi-
dent must immediately depart from the CNMI unless he has
filed a breach of contract claim against the employer, in which
case he may remain in the CNMI for a short time. See NWA
s 4434(g).
Approximately 77% of Dai-Ichi's employees are nonresi-
dents, and Dai-Ichi's Personnel Manager testified before the
Board that the company routinely seeks to extend the em-
ployment of any nonresident worker who has performed well.
Indeed, a significant portion of Dai-Ichi's nonresident work-
force has been in Dai-Ichi's employ for five or more years.
In November 1995 the Union petitioned for an election in a
bargaining unit consisting of all Dai-Ichi's workers. Dai-Ichi
objected to the election on various jurisdictional grounds;
alternatively it contended that the nonresident employees
"lack a community of interest with the resident employees,"
and therefore should be in a separate bargaining unit. The
Regional Director overruled Dai-Ichi's jurisdictional objec-
tions, established a single bargaining unit comprised of both
residents and nonresidents, and set the election for March 21,
1996. The Board rejected Dai-Ichi's request for review.
A little more than one week prior to the election the press
in the CNMI began describing various legislative proposals
relating to nonresident workers. (Although the record con-
tains only newspaper articles, the Board found that similar
reports aired on television at about the same time.) On
March 13, the Marianas Variety News & Views (Variety)
published a story entitled "Reyes to union: Leave us alone,"
which contains a statement by Rep. Pete Reyes, the majority
leader in the CNMI House of Representatives, announcing
his intention to introduce a bill limiting to two years the time
a nonresident worker could lawfully remain in the CNMI.
Reyes said he intended the bill to curtail "problems with
overstaying alien workers," and to "send[ ] a message to
union organizers that they cannot promise workers [an] indef-
inite stay in the [CNMI]." Three days later, the Pacific Daily
News ran an article entitled "Torres opposes union," report-
ing that Rep. Stanley Torres had announced his intention to
"introduce legislation ... to limit aliens to two renewals of
their employment contracts if they join labor unions." The
article also mentions that the announcement came approxi-
mately one week prior to the election at the Dai-Ichi hotel.
In the ensuing days prior to the election, the news media
circulated several more reports related to the legislative
proposals of Reps. Reyes and Torres. Variety published a
story on March 18 entitled "Reyes: Send home displaced
workers," which reported that Rep. Reyes' proposal would
prevent a nonresident worker who had been discharged from
remaining in the CNMI pending the outcome of his grievance.
Rep. Reyes is reported to have stated that he made the
proposal partially in response to a "recent demonstration
participated in by alien workers bearing placards calling
Saipan 'the island of the abusers.' " That same day articles in
Variety and in the Saipan Tribune quoted Rep. Torres as
saying his proposal would "limit all nonresident workers who
have joined a labor union to only two contract renewals."
Variety quoted Rep. Torres as saying that the bill "is not
about punishing those who will join the union [but rather]
about putting union organizers on notice that they could not
promise anything for these workers"; the paper also quoted
Elwood Mott Jr., a union organizer, as saying that the bill
would be inconsistent with "sections 7 and 8 of the National
Labor Relations Act." The Tribune article, entitled "Joining
a union: Hazardous to your health," mentioned that the
Union was attempting to organize Dai-Ichi's workforce, noted
that some U.S. government officials had accused the Union of
having connections to organized crime, and ended by pointing
out that Rep. Torres' bill "would allow non-union members to
continue to renew their employment contracts indefinitely."
Dai-Ichi attached this article to a flyer and circulated it to the
employees.
In the final few days before the election, the news media
reported that the bills as introduced would in fact apply to all
nonresidents, not just union members, but the stories contin-
ued to portray Reps. Reyes and Torres as very much opposed
to unionization. The March 19 Tribune, in an article entitled
"Torres: Union lying about dues," reported that Rep. Torres
had accused the Union of collecting excessive dues from
workers in Saipan and it quoted him as saying that "becoming
a union member will be a lifetime employment record and
may haunt you everywhere you go when looking for a new
job." That same day Variety reported that the Saipan Cham-
ber of Commerce strongly opposed Rep. Torres' bill and
quoted the president of the Chamber as stating that the bill
would "probably be unconstitutional" if applied only to non-
residents who join unions. On March 20, the Tribune report-
ed that Rep. Torres had introduced a bill "propos[ing] that
any 'nonresident' worker who has lived and worked in the
CNMI for two or more consecutive years be required to leave
the CNMI for at least 30 days before the worker may be
allowed to ... continue working." The remainder of the
report contrasts Rep. Torres' bill with an earlier law that had
limited nonresidents to four years in the CNMI; employers
had succeeded in having the four year limit repealed. Vari-
ety also published on March 20 a two-page advertisement
paid for by Rep. Torres that contained clippings from news-
paper articles and letters regarding the Union; several of the
articles featured in the advertisement were among the ones
described above.
On the day of the election Variety ran an article reporting
the parties' predictions of victory, a statement by Dai-Ichi's
counsel accusing the Union of charging excessive dues, re-
sponses by Union supporters claiming the Union would re-
duce dues if it won, and a statement by Rep. Torres that the
Union has a history of striking and that strikes "would cause
civil unrest in the CNMI." Variety also published an article
entitled "2-year, 4-year limits for workers opposed" in which
Diego Benavente, Speaker of the CNMI House of Represen-
tatives, stated that he intended to "lobby his colleagues in the
House against any legislation seeking to impose a limit on the
legal stay of non-resident workers in the CNMI." Speaker
Benavente is quoted as stating that Rep. Torres' bill "is not
only for union members but for all non-resident workers" and
that federal law prevents the CNMI from "treat[ing] union
members differently." Finally, the Tribune printed an article
in which Dai-Ichi's counsel is quoted as saying the Union lied
to employees when it told them it would charge reduced dues
and that Dai-Ichi planned to file unfair labor practice charges
against the Union for deceptive advertising.
The election of March 21 resulted in a decisive defeat (157
to 91) for the Union. The Union filed objections to the
election, including three objections claiming, as the Regional
Director characterized them, that "third parties interfered
with employee free choice ... by threatening the reinstate-
ment of the four year limit on non-resident worker's [sic]
contract renewals and/or threatening to limit non-resident
worker's [sic] contracts to two years." Finding that the
"remarks published in the barrage of newspaper articles"
described above "constitute third party conduct so aggravated
that they created a general atmosphere of fear, reprisal, and
confusion rendering a free election impossible," the Regional
Director recommended overturning the election results. The
Board adopted the Regional Director's findings, rejected Dai-
Ichi's objections, and directed that a second election be held.
The second election was held on February 5, 1998. This
time the Union prevailed (131 to 121) and Dai-Ichi filed
objections to the election, including its claim that the Board
erred by overturning the results of the first election. The
Regional Director rejected Dai-Ichi's objections and certified
the Union as the representative of the bargaining unit; the
Board rejected Dai-Ichi's request for review.
In order to obtain judicial review, Dai-Ichi refused to
provide information to or to bargain with the Union. Upon
the Union's filing an unfair labor practice charge, the General
Counsel issued a complaint claiming Dai-Ichi had violated
ss 8(a)(1) & (5) of the NLRA. Finding no issues of disputed
fact, the Board granted summary judgment in favor of the
General Counsel and directed Dai-Ichi to bargain with the
Union. Dai-Ichi petitioned this court for review of the
Board's order, the Board cross-applied for enforcement, and
the Union intervened in support of the Board.
II. Analysis
Dai-Ichi argues that the Board erred by overturning the
first election and by including within a single bargaining unit
both resident and nonresident employees. We must uphold
the Board's decisions unless "upon reviewing the record as a
whole, we conclude that the Board's findings are not sup-
ported by substantial evidence or that the Board acted arbi-
trarily or otherwise erred in applying established law to the
facts of the case." Micro Pacific Development Inc. v. NLRB,
178 F.3d 1325, 1328-29 (D.C. Cir. 1999). To meet the re-
quirement of "[s]ubstantial evidence," the Board must pro-
duce "more than a mere scintilla" of evidence; it must
present on the record "such relevant evidence as a reasonable
mind might accept as adequate to support a conclusion,"
Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938),
taking into consideration the "record in its entirety ...
including the body of evidence opposed to the Board's view."
Universal Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951).
Our review for substantial evidence also must ensure that the
Board has "draw[n] all those inferences that the evidence
fairly demands." Allentown Mack Sales & Serv., Inc. v.
NLRB, 522 U.S. 359, 378-79 (1998).
We think there is serious reason to doubt the propriety of
the bargaining unit in this case because of the inherent
conflict of interest between resident and nonresident employ-
ees, but the matter is far from clear. See Saipan Hotel Corp.
v. NLRB, 114 F.3d 994, 998 (9th Cir. 1997). We need not
decide that issue, however, because we agree with Dai-Ichi
that the Board erred by overturning the results of the first
election.
The Board's precedents establish that it rarely overturns
the results of a representation election because of misconduct
not attributable to a party to the election, and then only if
that "misconduct was so aggravated as to create a general
atmosphere of fear and reprisal rendering a free election
impossible." Westwood Horizons Hotel, 270 NLRB 802, 803
(1984). In this case the Board found the statements made by
various members of the CNMI House of Representatives, as
reported by the news media, constituted "third party threats"
that made it impossible for the employees freely to decide
whether to vote for the Union. We question seriously the
idea that statements made by lawmakers concerning legisla-
tive proposals designed to address political issues could ever
be grounds for overturning a representation election. Cf.
NLRB v. Gissel Packing Co., 395 U.S. 575, 617-18 (1969)
(stating employer's comments about representation election
must be more limited than those regarding "the enactment of
legislation ... where the independent voter may be freer to
listen more objectively and employers as a class freer to
talk"). Nevertheless, we need not and do not decide that
question here because the Board's determination that the
reports "created an atmosphere of confusion, and fear of
reprisals so as to render impossible the rational, uncoerced
selection of a bargaining representative" is not supported by
substantial evidence. Indeed, there are two major deficien-
cies with the evidence the Board relies upon to support its
determination: Most of the news reports could not have
affected in any way the employees' ability to decide freely
whether to select the Union as their bargaining representa-
tive, and to the extent any of the reports conceivably could
have affected the employees' ability to choose freely, the
reports are too insignificant to have caused such fear and
confusion that free choice was impossible.
The Board overturned the results of the first election
because it determined that the reports in the media made it
impossible for the employees to vote freely. In order to
support this determination, therefore, the Board needed at a
minimum to present evidence of events from which "it reason-
ably appears that the freedom of choice of the employees
could have been interfered with." James Lees & Sons Co.,
130 NLRB 290, 291 n.1 (1961). Although the type of evidence
required in this case seems self-evident, see, e.g., Westwood
Horizons Hotel, 270 NLRB at 803 (threats of physical vio-
lence if employees voted against Union); James Lees & Sons
Co., 130 NLRB at 291 ("[N]umerous statements and conduct
by various responsible groups and individuals in the commu-
nity ... reasonably conveyed the view to the employees that
in the event of unionization the Employer would shut down its
plant and other employers would not locate in the communi-
ty"), the Board repeatedly attempts to justify its decision to
overturn the first election by relying upon evidence that
simply is not relevant to the employees' free choice.
For example, the Regional Director observed that passage
of the bills limiting the amount of time nonresidents could
remain in the CNMI would have meant immediate job loss
and deportation for a significant number of Dai-Ichi's long-
term employees. Noting that threats of deportation and job
loss are quite serious, he then opined that many of Dai-Ichi's
workers might have "reasonably conclud[ed] that it was bet-
ter to stay and work without union representation, than to be
sent back to their homeland[s]." The gap in this reasoning is
obvious: Passage of the proposed legislation was not in any
way contingent upon the outcome of the election. Therefore,
the pendency of the legislative issue (and the reports thereon)
had no bearing upon the employees' ability to choose freely in
the election. Although it is quite possible that news of the
legislative proposals caused fear and confusion among Dai-
Ichi's employees--perhaps causing some of them to worry
that they would not be able to remain in the CNMI--they
simply had no reason to fear the consequences of voting for
the Union. Yet the Board overturned the first election on the
ground that the employees' fear and confusion "render[ed]
impossible" a "free expression of choice." Westwood Hori-
zons Hotel, 270 NLRB at 803. From the evidence in the
record, that is a non sequitur.
In this court the Board highlights four aspects of the
record in support of its conclusion. First, the Board points
out that some early reports had erroneously described the
bills as limiting the number of times nonresidents who joined
a union could renew their employment contracts while leaving
unaffected the renewals of nonresidents who did not join a
union. Second, the Board notes that several articles about
the proposed legislation refer to the impending election at
Dai-Ichi. Third, the Board points out that some of the
reports contain statements indicating that the proposals were
intended to deter the Union. Finally, the Board relies upon
one of the articles that quotes Rep. Torres as stating that
joining a union "may haunt you everywhere you go when
looking for a new job." We consider these four points both
seriatim and cumulatively, but are nonetheless constrained to
conclude they do not, even in the aggregate, constitute sub-
stantial evidence supporting the Board's determination that
the employees were unable to vote freely in the first election.
First, although some of the early reports did refer to
(nonexistent) legislative proposals that would have adversely
affected only nonresidents who were union members, later
reports repeatedly corrected those early mis-descriptions.
The last article to err in that regard appeared on March 18;
all subsequent articles either expressed opposition to such a
proposal or stated that the actual proposals would apply to all
nonresident workers, union and non-union alike. A report on
March 19 stated that the Chamber of Commerce believed a
bill targeting union members would be unconstitutional and
that it would strongly oppose a bill limiting the number of
times any nonresident's contract could be renewed. Then, on
March 20, the Tribune reported that the bills actually intro-
duced applied to all nonresidents regardless whether they
were members of a union, and Variety published an article on
March 21 reiterating that the bills applied to all nonresidents.
The later reports clearly dispelled any notion that the pro-
posed legislation affected only those nonresidents who joined
a union. The Board's emphasis solely upon the earlier arti-
cles, therefore, is misplaced.
Second, mention of the election at Dai-Ichi in some articles
lends no support to the Board's determination. To begin,
only three of the articles even mention the then-impending
first election in relation to the proposed legislation. The rest
of the articles either do not mention the election at all or
mention it in a way that does not relate to the proposed
legislation. For example, an article appearing in the Tribune
on March 19 begins by mentioning that "[w]ith an election set
this week at the Dai-Ichi Hotel ... Rep. Stanley T. Torres
has renewed his criticism" of the Union, but that article does
not mention any of the legislative proposals. Even assuming,
however, that some of the articles did lead employees to
believe that the legislation was introduced because of the
Union's efforts to organize Dai-Ichi's workforce, those arti-
cles cannot reasonably be seen as constraining the employees'
ability to vote freely in the election. Not one of the articles
ever intimates that the results of the election could affect the
legislative outlook in any way. Although it may have been
reasonable for an employee to speculate that the Union's
efforts to organize Dai-Ichi's workforce at least partially
precipitated the proposals, it would not have been reasonable
for an employee to conclude that the results of the election
could do anything to defeat or otherwise derail the proposals,
which dealt with larger issues of immigration and employ-
ment policy.
Nor does the Board's third point, that some news reports
indicated the legislative proposals were designed to deter the
Union's organizers, suggest that the employees were unable
to vote freely in the first election. Only by quoting fragments
of the articles out of context can the Board argue otherwise.
For example, the Board argues that several of the articles
"quoted the legislators as saying they wanted to 'send a
message to union organizers,' " implying that the proposals
were designed to deter unionization. Read in context, howev-
er, the reports are much less ominous. In fact, the articles
containing the phrase "send a message" state in substance
that Reps. Torres and Reyes "wanted to send a political
message to union organizers 'that they could not promise
alien workers permanent residency in the island.' "
Some of the articles cited by the Board do indicate that
some legislators were adverse to unionization in general and
to the Union in particular but those articles simply do not
support the Board's conclusion that the employees were
unable to vote freely. The Supreme Court has held that in an
election contest even the employer, who has some direct
control over his employees' economic well-being, "is free to
communicate to his employees any of his general views about
unionism or any of his specific views about a particular union,
so long as the communications do not contain a 'threat of
reprisal or force or promise of benefit' " for voting respective-
ly against or for unionization. Gissel Packing Co., 395 U.S.
at 618. Overturning an election based upon statements made
by legislators requires more reason to believe that employees'
freedom of choice was compromised: The Board will overturn
an election if conduct attributable to the parties "created such
an environment of tension and coercion as to have had a
probable effect upon the employees' actions at the polls," but
will overturn an election based upon third party conduct only
if the misconduct is "so aggravated as to create a general
atmosphere of fear and reprisal rendering a free election
impossible." Overnite Transp. Co. v. NLRB, 140 F.3d 259,
264-65 (D.C. Cir. 1998). Applying this standard, the state-
ments made in the present case by various legislators op-
posed to unionization in general and accusing the Union in
particular of corruption cannot possibly be a ground for
overturning the first election. If the rule were otherwise, the
electoral process would be subject to endless manipulation by
politicians and their allies in labor or management.
With respect to the Board's last point, the statement
attributed to Rep. Torres appeared in an article in which he
accused the Union of charging excessive dues and of engaging
in "sneaky" and potentially illegal campaigning. The article
ends with the following passage: "In closing his statement,
Torres said that although workers have a right to choose
whether or not to join a union, 'becoming a union member will
be a lifetime employment record and may haunt you every-
where you go when looking for a new job.' " This statement,
like the statements just discussed, is nothing more than Rep.
Torres' expression of general dislike of unions and cannot be
a ground for overturning an election. Therefore, this portion
of the record also fails to provide meaningful evidence for the
Board's finding that the employees were unable to vote freely
in the first election.
Considering the Board's evidence as a whole, we think it
falls well short of being substantial. None of the individual
points is probative, and taken as a whole they do not add up
to any more than the sum of the parts. We are therefore
constrained to conclude that the Board has failed to support
with substantial evidence its decision to overturn the first
election.
III. Conclusion
The Board's finding that news reports "created an atmo-
sphere of confusion, and fear of reprisals so as to render
impossible the rational, uncoerced selection of a bargaining
representative" in the first election is not supported by
substantial evidence. Consequently, we grant Dai-Ichi's peti-
tion for review and deny the Board's cross-application for
enforcement.
It is so ordered.