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United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 19, 2005 Decided December 16, 2005
No. 04-1317
CITIZENS INVESTMENT SERVICES CORPORATION,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with
No. 04-1334
On Petition for Review and Cross-Application for
Enforcement of an Order of the
National Labor Relations Board
James P. Hollihan argued the cause and filed the briefs for
petitioner. Burton J. Fishman entered an appearance.
Christopher W. Young, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
2
were Arthur F. Rosenfeld, General Counsel, John H. Ferguson,
Assistant General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel, and Meredith L. Jason, Attorney.
Before: HENDERSON, ROGERS and GARLAND, Circuit
Judges.
Opinion for the Court filed by Circuit Judge ROGERS.
Concurring opinion filed by Circuit Judge HENDERSON.
ROGERS, Circuit Judge: The only question in this appeal is
whether substantial evidence on the record considered as a
whole supports the finding of the National Labor Relations
Board that Citizens Investment Services Corporation (“the
Company”) violated section 8(a)(1) of the National Labor
Relations Act (“the Act”), 29 U.S.C. § 158(a)(1) (2000), by
discharging financial consultant Christopher Hayward because
of his protected concerted activity of protesting compensation
terms and payments for financial consultants. Because there is
substantial evidence, and consistent with our limited scope of
review, we deny the Company’s petition for review and grant
the Board’s cross-petition for enforcement.
I.
Section 7 of the Act, 29 U.S.C. § 157, guarantees
employees the right to engage in “concerted activities” not only
for self-organization but also “for the purpose of . . . mutual aid
or protection . . . .” The broad protection of Section 7 applies
with particular force to unorganized employees who, because
they have no designated bargaining representative, must “speak
for themselves as best they [can].” NLRB v. Washington
Aluminum Co., 370 U.S. 9, 14 (1962).
The right to engage in concerted activities is protected by
3
Section 8(a)(1) of the Act, 29 U.S.C. § 158(a)(1), which makes
it an unfair labor practice for an employer “to interfere with,
restrain, or coerce employees in the exercise of the rights
guaranteed in [S]ection 7.” Accordingly, an employer violates
Section 8(a)(1) by discharging an employee for engaging in
concerted activities protected by the Act. Gold Coast Rest.
Corp. v. NLRB, 995 F.2d 257, 263-64 (D.C. Cir. 1994).
The events at issue followed a change in ownership and
management of a financial services company. In 2001, Citizens
Financial Group (“Citizens”) acquired the commercial banking
operations of Mellon Bank, N.A., including the brokerage and
investment counseling business of a subsidiary of Mellon,
Dreyfus Investment Services Corporation (“Dreyfus”). Citizens
created a subsidiary, the Company, in order to house the
business acquired from Dreyfus and Mellon. During the
acquisition, Citizens offered certain Dreyfus financial
consultants employment at the Company. During the
negotiations with the Dreyfus financial consultants in October
2001, Dreyfus proposed commission terms that were less
favorable to experienced financial consultants than those
originally proposed in September 2001. Certain experienced
Dreyfus consultants complained about the changes immediately.
Christopher Hayward, who had worked for Dreyfus for six years
and who was involved in these complaints, nonetheless accepted
employment with the Company. In January 2002, the Company
distributed a final commission schedule that included relatively
unfavorable terms for more experienced financial consultants.
By April 2002, Hayward also began to complain that
commissions were not being correctly calculated based upon the
schedule. Hayward was discharged on July 2, 2002. The
decision to discharge him was made by John Halechko (a Senior
Vice President and Director of Investment Sales), Eric Hosie (a
Regional Sales Manager in an adjacent territory), Barbara Blyth
(a Human Resources Group Manager for Citizens), and David
4
Hunter (the Regional Sales Manager for the Pittsburgh area).
Based on a charge filed by Hayward alleging that he was
terminated as a result of his protected concerted activities, the
General Counsel to the Board filed a complaint alleging that the
Company, as a result of interfering with the exercise of Section
7 rights, had violated Section 8(a)(1) of the Act. The
Administrative Law Judge (“ALJ”) found that the Company had
violated Section 8(a)(1) and ordered that Hayward be reinstated
or offered a position commensurate with his prior position, that
any unfavorable references to the discharge be removed from
Hayward’s personnel files, and that Hayward be made whole for
any losses that he suffered as a result of his unlawful discharge.
The Board affirmed, as relevant, the findings and order of the
ALJ, and the Company petitions for review.
II.
The Company challenges the Board’s findings at each step
of the analysis under Wright Line, 251 N.L.R.B. 1083 (1980),
enforced, 662 F.2d 899 (1st Cir. 1981). Under Wright Line, the
General Counsel must make a prima facie showing sufficient to
support the inference that the employee is engaged in protected
conduct and the employer was so aware, and that the protected
activity was a motivating factor in the employer’s decision to
take adverse action; the employer may rebut the inference by
showing by a preponderance of evidence that the same action
would have taken place even in the absence of the protected
conduct. Laro Maint. Corp. v. NLRB, 56 F.3d 224, 228 (D.C.
Cir. 1995); see NLRB v. Transp. Mgmt. Corp. 462 U.S. 393,
401-03 (1983).
The Company makes no reference in its briefs to our
standard of review, which is limited. Determining whether
activity is concerted and protected within the meaning of
Section 7 is a task that “implicates [the Board’s] expertise in
5
labor relations.” NLRB v. City Disposal Sys., Inc., 465 U.S. 822,
829 (1984). The Board’s determination that an employee has
engaged in protected concerted activity is entitled to
considerable deference if it is reasonable. Id. The Board’s
determination of questions of motive is “give[n] even greater
deference” by the court. Frazier Indus. Co. v. NLRB, 213 F.3d
750, 756 (D.C. Cir. 2000); see Laro, 56 F.3d at 229. The
Board’s findings of fact, if supported by substantial evidence on
the record considered as a whole, are conclusive even if a
reviewing court on de novo review would reach a different
result. United Servs. Auto. Ass’n v. NLRB, 387 F.3d 908, 913
(D.C. Cir. 2004). The court will not overturn the Board’s
acceptance of an ALJ’s resolution of conflicting testimony
unless the ALJ’s determinations are “hopelessly incredible” or
“self-contradictory.” Teamsters Local Union No. 171 v. NLRB,
863 F.2d 946, 953 (D.C. Cir. 1988) (quoting Conair Corp. v
NLRB, 721 F.2d 1355, 1368 (D.C. Cir. 1983)). Thus, the “Board
is to be reversed only when the record is ‘so compelling that no
reasonable factfinder could fail to find’ to the contrary.” United
Steelworkers of Am. Local 14534 v. NLRB, 983 F.2d 240, 244
(D.C. 1993) (quoting INS v. Elias-Zacarias, 502 U.S. 478, 484
(1992)).
A.
The Company acknowledges that under Meyers Industries
Inc., 281 N.L.R.B. 882, aff’d sub nom Prill v. NLRB, 835 F.2d
1481 (D.C. Cir. 1987), concerted activity may be found when an
employee’s activity is undertaken with or on the authority of
other employees, and not solely on behalf of the employee
himself. Thus, concerted activity includes circumstances where
individual employees work to initiate, induce or prepare for
group action. United Servs. Auto. Ass’n, 387 F.3d at 914.
Similarly, an individual “who brings a group complaint to the
attention of management is engaged in concerted activity even
though he was not designated or authorized to be a spokesman
6
by the group.” Prill v. NLRB, 755 F.2d 941, 954 (D.C. Cir.
1985).
The Company maintains that there is “no evidence . . . that
Hayward [acted] based on authorization from other employees”
and “no evidence suggests that . . . discussions [at group
meetings] took the form of group ‘complaints’ or protests,” as
opposed to individual inquiries about the status of delayed
payments. Petitioner’s Br. at 14. There also is, the Company
maintains, “no evidence that the group nature of these
discussions [about compensation issues] was ever
communicated to management.” Id. at 15-16. To reach these
conclusions, however, the Company ignores the evidence before
the Board with regard to the discussions following its
distributions of several drafts of its FY 2002 incentive plan for
financial consultants.
We do not think it can seriously be questioned that there
was substantial evidence Hayward was engaged in protected
concerted activity. Citizens distributed several versions of its
compensation plans and certain senior financial consultants,
including Hayward, responded to the management at Citizens
and then the Company with critical comments about the
compensation for senior financial consultants. Hayward and
other senior financial consultants also complained about the
accuracy of the Company’s calculation of their own commission
payments. Such complaints are plainly protected. See Eastex,
Inc. v. NLRB, 437 U.S. 556, 569 (1978). The evidence also
showed that Hayward engaged in two types of concerted
activity: individual acts taken in order to bring the complaints of
the group of experienced financial consultants to the Company’s
management, see Phillips Petroleum Co., 339 N.L.R.B. No. 111,
2003 WL 21802939, at *3 (2003), and group activities designed
to advance the interests of these consultants. The first is evident
in Hayward’s April 2002 email to Halechko regarding the
7
payment of certain commissions and reporting on “the general
consensus” among his fellow employees, and in Hayward’s June
6 email to Hunter which he signed as “union president.”
Whether a joke or not, the reference to “union president”
indicates that Hayward was representing the collective view.
The second is evident in his conduct at the Company’s quarterly
business meeting when, on behalf of the group, Hayward invited
the Human Resources Group Manager Blyth to join them at the
table where the senior financial consultants were sitting to
discuss compensation problems, and at Regional Sales Manager
Hunter’s monthly meetings, where Hayward repeatedly raised
compensation issues.
Further, the evidence shows management at various levels
was aware of Hayward’s participation and would, especially in
light of Hayward’s vocal complaints during group meetings,
have understood his participation to be associated with the
group’s common concerns. See NRLB v. Talsol Corp., 155 F.3d
785, 791, 796-97 (6th Cir. 1998); El Gran Combo de Puerto
Rico v. NLRB, 853 F.2d 996, 1003, 1005 (1st Cir. 1988);
Rockwell Int’l Corp. v. NLRB, 814 F.2d 1530, 1535 (11th Cir.
1987). Halechko acknowledged that issues raised in the emails
of Edward Chess Jr., Hayward’s co-worker, which also were
voiced by Hayward, were “valid and important to many of your
peers,” and asked that Chess “elaborate on what other decisions
being made are becoming dissatisfiers [sic] for the group.”
After Hayward asked Blyth to sit with the senior financial
consultants at the Company’s quarterly dinner meeting and
suggested that he might follow up with her at a later time, she
told Hunter that he “had some very unhappy [financial
consultants] . . . in how they’re being paid.”
B.
Whether a discharge violates Section 8(a)(1) depends on the
employer’s motive. The Company contends that the Board’s
8
finding that Hayward’s discharge was unlawfully motivated
improperly substitutes the Board’s business judgment for that of
Company management. As the Company views the evidence,
Hayward engaged in a course of conduct that challenged the
authority of management to implement philosophical and
organizational changes in the manner in which the Company
marketed its financial consulting services. In what it describes
as undisputed evidence, the Company claims that (1) Hayward
openly denigrated the skills and qualifications of newly-hired
financial consultants, (2) openly criticized the integrity and
management structure at the Company, and (3) eagerly
scheduled meetings when called by the manager of another
district to make a sale outside of Hayward’s geographic territory
(a practice the Company refers to as “poaching”) in conjunction
with denigrating a junior financial consultant who was unable to
complete the sale. Regarding its affirmative defense, the
Company maintains that the Board wrongly dismissed, in a
superficial manner, the reasons articulated by the Company for
its decision to discharge Hayward based on the ALJ’s faulty
view that Hayward’s objectionable conduct was simply not
serious enough to justify terminating the employment of one of
the Company’s leading producers. For example, the Company
— asserting without evidentiary support that Hayward was a
Vice President with responsibility for mentoring junior
employees — takes issue with the ALJ’s evaluation of the
seriousness of Hayward’s statement to a junior financial
consultant suggesting that only sycophants will get ahead in the
new organization.
Although we acknowledge that the question of motive
presents a close question, “much of the conflict about what was
said and what could reasonably be understood in the context of
what had previously happened [would] cal[l] for credibility
determinations that this court is ill-positioned to second-guess,”
W.C. McQuaide, Inc. v. NLRB, 133 F.3d 47, 53 (D.C. Cir. 1998),
9
or would necessarily implicate the Board’s expertise in drawing
reasonable inferences from the evidence to make a
determination about an employer’s motive, and so merit the
court’s deference. The Company points to certain evidence in
the record to support its interpretation of events. Contrary to the
Company’s contentions, however, an examination of the
evidence before the Board reveals that there was substantial
evidence that Hayward was not the only person in his position
who criticized the newly hired financial consultants or openly
criticized the Company’s management structure. Such evidence
included evidence that in handling accounts outside of his
geographic district, Hayward neither initiated nor acted contrary
to Company policy but obtained the necessary approvals.
Moreover, at no time throughout his course of conduct,
identified by the Company as the reason for his discharge, did
the Company impose any discipline on Hayward, who remained
one of its top producers. Instead of being disciplined under the
progressive disciplinary measures as called for by the
Company’s employee manual, Hayward was discharged. Where
there is substantial evidence, the court must defer to the Board’s
findings.
The evidence before the Board indicates that the principal
concern of the senior financial consultants was the structure of
the Company’s incentive compensation plan, particularly its
failure to provide for trail payments, i.e., commissions paid to
consultants for ongoing management of investments originally
purchased in prior years. In determining the Company’s
motivation for discharging Hayward, the Board looked to direct
evidence from which it inferred that the Company took a dim
view of the consultants’ complaints about that plan. It pointed
to Halechko’s response to Chess’s October 2001 email, which
stated that Halechko was open to financial consultants’
suggestions as long as they were framed in a manner that didn’t
“piss [him] off”; to financial consultant Jeffrey Russo’s
10
testimony, which the ALJ credited, that the supervisors
expressed exasperation about the complaints and that Hosie told
Russo that the Company’s concern about Russo’s future with the
Company stemmed from Russo’s “complaining about
compensation and the trails and everything else,” that Hayward
complained a lot as well, and that he, Hosie, was in place to “fix
or get rid of the problem”; and to Hunter’s testimony drawing
“the direct connection between Hayward’s concerted activity
with his peers and the Company’s animus against him.” Other
direct evidence supported the inference drawn by the Board
regarding management’s attitude, specifically, Hayward’s
testimony, which the ALJ credited, regarding Blyth’s
uncomfortable reaction to Hayward’s invitation to speak
informally to the senior financial consultants about their
complaints at the quarterly company dinner; the Board observed
that Hayward’s account of Blyth’s reaction, which Hayward
paraphrased as “this doesn’t look good, me talking to you guys,”
reflected her “awareness that management considered the
experienced consultants to be pariahs due to their complaints.”
Although the Company contends the evidence shows that
management was open to receiving criticisms about its
compensation plan, and there is such evidence, as noted, this is
not the same as showing that there was not substantial evidence
to support the inferences drawn by the Board. The problems in
transition may have exacerbated the situation for the Company,
which claimed it had to rely on Dreyfus for information relating
to individual compensation, but this does not explain what the
Board characterized as the tone of the Company’s responses to
expressions of concern about the structure of the compensation
plan itself.
In addition, the Board relied on circumstantial evidence of
the type that the Board has previously considered highly
probative, namely, the failure to follow the Company’s formal
11
disciplinary process, which called for progressive discipline and
was outlined in the employee handbook, and the timing of
Hayward’s discharge. A failure to use the progressive discipline
system supports the inference of unlawful motive. See SCA
Tissue N. Am. LLC v. NLRB, 371 F.3d 983, 991 (7th Cir. 2004);
NLRB v. Dynatron/Bondo Corp., 176 F.3d 1310, 1321 (11th Cir.
1999). There was substantial evidence regarding the
discriminatory manner in which the Company dealt with
Hayward as compared to other complainers, such as Chess and
Russo, who were not discharged even though there were not
substantial differences in the nature of the employees’
complaints. See Laro, 56 F.3d at 230; Gold Coast Rest. Corp.,
995 F.2d at 264-65. Chess, like Hayward, was critical of
management as well as the terms of the Company’s proposal to
split the commissions between junior and senior financial
consultants. Russo, like Hayward, spoke out at the monthly
meetings about the errors in his commission checks. Yet only
Hayward was discharged. See MECO Corp. v. NLRB, 986 F.2d
1434, 1437 (D.C. Cir. 1993).
Although the Company suggests that Hayward was not a
candidate for corrective action because he had been repeatedly
warned and failed to change his conduct, the Board could
reasonably decide not to credit this evidence. Hunter testified
that he warned Hayward informally about the tone of his
complaints and his activities in response to requests for
assistance from a branch outside of his geographic district. The
Board observed that “none of the purported admonitions is
documented in any way” and explained that crediting Hunter’s
testimony would show only admonitions of the type that “would
form a component of virtually every employment relationship,”
as there are no perfect employees. Taking issue with the
Board’s assessment of the seriousness of Hayward’s conduct,
the Company offers no explanation for the fact that conduct it
now maintains was serious enough to cause the discharge of a
12
highly productive employee was not, at the time, serious enough
to trigger the procedures indicated in the employee handbook,
whereby the employee’s alleged breaches of business decorum
would be documented in the form of a written Performance
Improvement Plan. There is no evidence to support the
Company’s assertion that Hayward was, as a Vice President and
a member of management, not subject to the handbook.
The timing of Hayward’s discharge also supports the
Board’s finding of unlawful motive. The Company discharged
him two weeks after he had identified himself as “union
president” in an email to Hunter. The Company’s argument that
only Hunter saw the email and he was no longer Hayward’s
supervisor ignores that Hunter participated in the conference
during which the decision to discharge Hayward was made, and
that Hunter’s recommendation of discharge was based, at least
in part, on Hayward’s complaints about the compensation issue.
See Tasty Baking Co. v. NLRB, 254 F.3d 114, 125-26 (D.C. Cir.
2001); Reno Hilton Resorts v. NLRB, 196 F.3d 1275, 1283 (D.C.
Cir. 1999).
Finally, there was substantial evidence to support the
Board’s conclusion that the Company’s affirmative defenses
were merely pretextual excuses. The Board has explained that
the lack of clarity and consistency in explaining reasons for
termination is an important factor in evaluating the proffered
justifications, and that “when an employer vacillates in offering
a rational and consistent account of its actions, an inference may
be drawn that the real reason for its conduct is not among those
asserted.” Black Entm’t Television, 324 N.L.R.B. 1161, 1161
(1997) (quoting Sound One Corp., 317 N.L.R.B. 854, 858
(1995)). The evidence of the Company’s explanations for
Hayward’s discharge — that he had acted unethically by
poaching sales and that he was a troublemaker and not a team
player — “hardly constitute[s] the showing that [the employer]
13
must make” in order to meet its burden to show it would have
discharged Hayward regardless of his protected concerted
conduct. O’Dovero v. NLRB, 193 F.3d 532, 537 (D.C Cir.
1999).
The Board observed that Hayward was not given a formal
written statement of the reasons for his discharge and that the
testimony of the managers left the question unclear as each
manager emphasized his or her own chosen factors. For
example, Blyth alone mentioned Hayward assigning accounts to
himself, and Hosie was the only one to mention Hayward’s
disparagement of fixed annuities as evidence Hayward was
disrespectful of the Company’s products. The Board pointed to
Hayward’s uncontroverted testimony regarding his final meeting
with management as the best illustration of the lack of clarity or
precision in the Company’s explanations. At that time, Blyth
said Hayward was being fired because of his poaching, while
Hosie and Halechko said it was because he did not fit in and was
not a team player.
Neither explanation, the Board could reasonably conclude,
is persuasive. The Company presented the testimony of
Halechko that poaching was unethical. Nevertheless, the
Company took no disciplinary action against Hayward although
its management was informed of the pertinent details and
Hayward, who did not initiate either transaction, had made no
effort to conceal the reasons Company managers brought him in
to make the sales. Hence, the Board reasonably could discredit
the Company’s contention that it considered the poaching to be
serious unethical conduct that played a critical role in the
decision to discharge Hayward. Although the Company objects
that the Board is interfering with its business judgments, the
evidence showed that the Company failed to take action
consistent with its claim that Hayward’s conduct was a serious
breach of ethics. The court cannot conclude that the Board’s
14
resolution of the conflicting evidence, in rejecting assertions that
Hayward acted unethically as not credible and a “tardily
formulated attempt to justify Hayward’s discharge,” was
“hopelessly incredible or self-contradictory.” See Teamsters
Local 171, 863 F.2d at 953 (quotations and citations omitted).
As to the Company’s defense that Hayward was discharged
because he was a troublemaker and not a team player, Board
precedent has recognized that if management perceives pressing
protected complaints in front of other employees as “making
trouble,” this attitude “supports the inference that the Company
discharged [the employee] for engaging in concerted activities.”
Dayton Typographical Serv. v. NLRB, 778 F.2d 1188, 1193 (6th
Cir. 1985). Here, the Board found such an inference. It rejected
the Company’s contention that its discharge of Hayward was
justified by Hayward’s disruptive behavior and attitudinal
problems, which the Company claims were interfering with the
efforts to build a team atmosphere among the financial
consultants, as “simply another way of indicating that he was
terminated because he engaged in protected concerted activity
when he persistently complained about the structure of the
compensation plan and the manner in which compensation was
actually being paid under that plan.”
Although the Board credited the managers’ description of
the new working environment, there was substantial evidence,
as the Board found, that this proved too much. Accepting the
testimony of Halechko, Hunter, and Hosie that Hayward’s
conduct and comments were undermining the team operation
that the Company sought to build, the evidence showed that both
Hosie and Hunter agreed that the financial consultants’
relationships with bank managers were of critical importance
and that Hayward had no problems with them. Halechko’s
testimony was not to the contrary. The evidence did show that
Hayward criticized newer financial consultants, but that he was
15
one of a number of senior financial consultants who were
critical, and Halechko acknowledged that Hayward was not a
ring leader in this problem. The Board could reasonably
conclude that the evidence failed persuasively to demonstrate
that Hayward’s bad attitude was a motivating factor in
Hayward’s dismissal. Whether a court, upon de novo review,
would reach the same conclusion, is irrelevant. When viewed
in light of Hayward’s prominent and persistent involvement in
protected concerted activity, the Board determined, in the
exercise of its expertise in evaluating such claims, that the
Company’s abrupt termination of an outstanding producer with
no prior disciplinary record is more comprehensible as an effort
to punish Hayward for his protected concerted activities. Again,
the Board’s resolution of credibility in concluding that the
Company’s reasons were pretextual was not “hopelessly
incredible or self-contradictory.” Teamsters Local 171, 863
F.2d at 953 (quotations and citations omitted).
Neither Epilepsy Foundation of Northeastern Ohio v.
NLRB, 268 F.3d 1095, 1105 (D.C. Cir. 2001), Alldata Corp. v.
NLRB, 245 F.3d 803 (D.C. Cir. 2001), nor the cases from the
Eighth Circuit on which the Company relies are of particular
help to the Company. Neither of the cases from this circuit
involved protected activity, and, in each, the court concluded
there was no evidence to support the Board’s position. Epilepsy,
268 F.3d at 1105; Alldata, 245 F.3d at 809. The same cannot be
said here. Similarly St. Lukes Episcopal-Presbyterian Hospitals,
Inc. v. NLRB, 268 F.3d 575, 579-81 (8th Cir. 2001), did not
involve protected activity, and in Carleton College v. NLRB, 230
F.3d 1075 (8th Cir. 2000), the Board did not find that the
employer’s affirmative defense was pretextual, id. at 1077, but
instead erroneously reasoned, the court held, that unprofessional
insubordination could not become the proper foundation of an
affirmative defense if such behavior arose in the context of an
employee’s other protected activity, id. at 1080-81.
16
The Company, in contending that the Board has displaced
its lawful business judgment with regard to its proffered
affirmative defense, emphasizes and credits aspects of the
evidence that the Board did not emphasize and did not credit.
Because it is not the role of the court to second-guess the
Board’s evaluation of the evidence, we conclude, in light of the
substantial evidence on the record considered as a whole, that
the Company fails to demonstrate that the Board could not have
reasonably rejected the Company’s account of its motivations.
See Teamsters Local 171, 863 F.2d at 953. Accordingly,
because there was substantial evidence to support the Board’s
finding that Hayward’s protected concerted activity was a
motivating factor in the Company’s decision to discharge him,
we deny the petition for review and grant the cross-petition for
enforcement.
KAREN LECRAFT HENDERSON, Circuit Judge, concurring:
I join the majority opinion but do so with reluctance
because this case is much closer than my colleagues
acknowledge. While we must uphold the Board’s factual
findings “if supported by substantial evidence on the record
considered as a whole,” Regal Cinemas, Inc. v. NLRB, 317
F.3d 300, 306-307 (D.C. Cir. 2003) (quoting 29 U.S.C. §
160(e) (emphasis added)), I believe the full discharge of our
duty to review the whole record results in a squeaker even
under this deferential standard of review.1
The evidence supporting Citizens Investment’s affirmative
defense—that it would have discharged Hayward in the
absence of any protected concerted activity—is illustrative.
The Board considered the two reasons Citizens Investment
advanced for Hayward’s termination: to wit, “two specific
instances of asserted misconduct”—both involving poaching
clients—and “a generalized allegation that Hayward had a bad
attitude and was not a team player.” J.A. 22. It found
Citizens Investment’s first rationale—the two instances in
which Hayward poached sales outside his
territory—pretextual because, in its view, management was
“not seriously perturbed” “at the time th[ese] incident[s] took
place,” management failed to discipline Hayward as a result
and “logic and common sense lead to a firm conclusion that
Hayward’s conduct was in no way objectionable.” J.A. 23.
The Board dismissed the fact that the members of
management involved in the decision to terminate Hayward
testified that the two poaching incidents played a significant
role in their decision. For instance, John Halechko testified
that his decision to recommend that Hayward be terminated
1
The U.S. Supreme Court articulated this now-bedrock principle
of administrative law in Universal Camera Corp v. NLRB, 340 U.S.
474, 488 (1951), in which the Court stated: “The substantiality of
evidence must take into account whatever in the record fairly detracts
from its weight. This is clearly the significance of the requirement . . .
that courts consider the whole record.”
2
was based on, inter alia, Hayward’s transacting business in
other financial consultants’ territories. J.A. 391-92. Eric
Hosie, whose recommendation that Hayward be terminated
was based on his one-on-one conversations with Hayward,
testified that, as a result of their conversations, he believed
that Hayward was not a “team player.” J.A. 548. His
contemporaneous notes from a meeting with Hayward in May
2002, two months before Hayward was terminated, recited
that Hayward appeared “willing to circumvent colleagues and
tell me it is because he is better—teamwork.” J.A. 714.
Barbara Blyth attended the meeting at which the decision was
made to terminate Hayward and testified that the decision was
“primarily” based on the fact that he “cross[ed] into other
individuals’ territories.” J.A. 589-90. Her contemporaneous
notes from the meeting listed among the reasons for
Hayward’s termination “racist client,” a reference to one of
the instances in which he made a sale outside his assigned
territory. J.A. 715.
Second, the Board concluded that Citizens Investment’s
“generalized allegation” that Hayward had a bad attitude and
was not a team player was pretextual. Its conclusion was
drawn from evidence that Hayward was not alone in his
criticism of Citizens Investment’s change in business
direction and his denigration of junior financial consultants
and, further, from its assessment that Hayward’s attitude was
no worse than that of other senior financial consultants. The
Board based this finding on two pieces of evidence: first, only
Chess, another senior financial consultant, complained to
management about newly hired financial consultants; and,
second, Halechko testified that Hayward was not the “ring
leader” of the senior consultants in belittling their juniors.
J.A. 24. Regarding the former, the Board missed the point
that Hayward’s attitude problem did not involve complaints to
management about junior consultants but rather about his
giving the new hires the cold shoulder and undermining their
3
abilities, see J.A. 392, 548, 590, and about his challenging
management’s new business focus. See J.A. 463-64. And the
Board mischaracterized the latter. Halechko responded “no”
to counsel’s question whether Hayward was the “ring leader”
in “not respecting newly hired, more junior financial
consultants,” J.A. 433-34—he did not testify to Hayward’s
undercutting senior management by questioning Citizens
Investment’s business decisions, as the Board erroneously
found. J.A. 24.
A review of the whole record, however, manifests that
Hayward’s attitude was in fact worse than that of other senior
financial consultants. Eric Hosie testified about Hayward’s
inappropriate conduct and denigrating comments. He stated
that Hayward told him that Saunders and Kennedy, two junior
consultants, were not qualified to be financial consultants. He
testified that Hayward used the two poaching incidents as
examples of Saunders’s ineptitude as a financial consultant.
J.A. 530. Hosie’s notes of his May 2002 conversation with
Hayward indicated that Hayward had “[c]rossed from
troubleshooter to maker—should help [junior consultants] not
hurt them” and that his “views on new reps [were] very poor
and likely fueling retail’s discontent.” J.A. 714. Barbara
Blyth testified that management was troubled by Hayward’s
open boasting about the two poaching incidents. Her notes
from the meeting in which the decision was made to terminate
Hayward listed among the determinative factors that Hayward
“denigrated peers (Mike Kennedy).” J.A. 715. In addition,
there was evidence that Hayward was vocal in criticizing
management’s new business direction. For instance, at an
informal gathering at a local restaurant, Hayward advised new
financial consultants that, in order to “get ahead,” they would
have to “kiss a lot of ass.” J.A. 461. He openly questioned
senior management’s restructuring of the company after
Citizens Investment took over. See J.A. 463-64 (David
Hunter, regional sales manager, testified that Hayward “did
4
not feel any respect for the decisions that were being made by
the senior management,” that Hayward “expressed a great
deal of—a lack of trust of John [Halechko]” and “Lisa
Binder” and that Hayward’s criticism of management
involved primarily the “structure of the program.”). Indeed,
the only evidence that Hayward’s attitude was no worse than
that of the other senior financial consultants was Halechko’s
testimony denying that Hayward was the “ring leader” in “not
respecting newly hired, more junior financial consultants.”
J.A. 433-34.
In sum, there was, in my view, plenty of evidence to
conclude that Citizens Investment would have fired Hayward
without regard to any protected activity he engaged in.2 This
2
I limit my review of the record to Citizens Investment’s
affirmative defense to illustrate that the whole record included
evidence impugning the Board’s finding of pretext. I also believe,
however, that my colleagues disregard evidence that undermines the
Board’s findings with regard to the General Counsel’s prima facie
case. For instance, the Board found that management took a “dim
view” of the senior financial consultants’ compensation-related
complaints. This finding is undercut, however, by evidence that
management expressly encouraged senior financial consultants’
compensation-related complaints. See J.A. 643 (e-mail from Halechko
to Chess in which Halechko reassured Chess he was not “complainer”
for raising concerns about his compensation and Chess’s points were
“valid and important to many of [his] peers”); J.A. 666 (Halechko
informed Hayward he did not want consultants’ compensation
concerns “swept under the rug”); J.A. 276 (Halechko encouraged
Hayward to take compensation-related concerns up corporate ladder).
Another example is the Board’s mischaracterization of Hunter’s
testimony that Hayward displayed a “constant lack of deportment” in
airing his various complaints. Hunter testified that, while Hayward
complained about everything, it was not his complaining that posed a
problem but his manner of doing so. See J.A. 458 (he “did not exhibit
any restraint or decorum in his criticism”); id. 477 (“nothing wrong
with complaining, but how you do it”). My colleagues also draw
5
evidence notwithstanding, our limited scope of review
constrains me to join my colleagues in denying the petition
for review.
inferences from the evidence that I believe are unwarranted.
Particularly troublesome is the leap they (and the Board) make in
interpreting the email Hayward signed as “union president, west.”
J.A. 671. While I have no quarrel with their conclusion that it
evidenced “protected concerted activity,” see maj. op. at 7-8, I do not
think it can reasonably be interpreted as “significant circumstantial
evidence of an impermissible motivation.” J.A. 20; maj. op. 13 (“The
timing of Hayward’s discharge also supports the Board’s finding of
unlawful motive. The Company discharged him two weeks after he
had identified himself as ‘union president’ in an email to Hunter.”).
Hayward had been making the same complaints for a long time and
the Board missed the joke—according to Hayward’s own testimony,
the soi-disant “union president” line was intended to describe his role
in bringing compensation issues to management’s attention in a
“funny” way. J.A. 235. The title was meant as a joke, not a
“threateningly prounion” battle cry, J.A. 24, and the Board cited no
evidence that management viewed it differently.