Fortuna Enterprises, LP v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 13, 2011 Decided December 9, 2011

No. 10-1272

FORTUNA ENTERPRISES, LP,
PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,
RESPONDENT

UNITE HERE LOCAL 11,
INTERVENOR

Consolidated with 10-1298

On Petitions for Review and Cross-Application for
Enforcement of an Order of the National Labor Relations
Board

Stephen R. Lueke argued the cause and filed the briefs for
petitioner.

Kira Dellinger Vol, Attorney, National Labor Relations
Board, argued the cause for respondent. With her on the brief
were John H. Ferguson, Associate General Counsel, Linda
Dreeben, Deputy Associate General Counsel, and Jill A. Griffin,
Supervisory Attorney.
 2

Eric B. Myers was on the brief for intervenor Unite Here
Local 11. Richard G. McCracken entered an appearance.

Before: GINSBURG1 and HENDERSON, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.

RANDOLPH, Senior Circuit Judge: This is a petition for
review of a National Labor Relations Board order finding
Fortuna Enterprises, L.P., in violation of § 8(a)(1) and (3) of the
National Labor Relations Act, 29 U.S.C. § 158(a)(1) & (3). The
Board cross-petitions for enforcement. Unite Here, Local 11, a
labor union, has intervened. Fortuna operates the Los Angeles
Airport Hilton Hotel and Towers. The case turns on whether
Hilton disciplined its employees for engaging in activities
protected by § 7 of the Act, id. § 157.

On May 10, 2006, Hilton suspended Sergio Reyes pending
an investigation into whether he had stolen property from a hotel
guest. Reyes supported an ongoing union organizing campaign
at the Hilton led by Unite Here. When other employees learned
of Reyes’ suspension, they decided to meet the next morning in
the staff-only cafeteria to speak about the matter with Hilton’s
general manager Grant Coonley or Tom Cook, the food and
beverage director.

On the morning of May 11 at 8:00 a.m., seventy to one
hundred employees gathered in the cafeteria. Hilton supervisors
learned of the gathering and its purpose a short time later.

1
As of the date the opinion was published, Judge Ginsburg
had taken senior status.
 3

Housekeeping director Anna Samayoa addressed the employees
on three separate occasions between 8:15 and 9:00 a.m. The
first time, she announced that they needed to return to work if
they were not on break; the second time, that they needed to
return to work or clock out and go home; and the third time, that
individuals who failed to choose one of those options would be
suspended. A handful of employees returned to work. The rest
insisted on staying put until they met with Coonley or Cook.
Supervisors suspended the holdouts at 9:00 a.m. and informed
them that anyone who did not promptly leave the premises
would be considered a trespasser. Undeterred, the suspended
employees remained in the cafeteria and repeated their demand
for a meeting.

The standoff persisted for roughly ninety more minutes,
during which time the employees became increasingly frustrated
with the lack of a management response. A delegation of
employees told company officials that the group wanted to
return to work. Management declined the offer, citing the
suspensions. Out of options and faced with the arrival of a
police officer, the employees left the cafeteria at approximately
10:30 a.m. All told, seventy-seven protesters were suspended
for five days each, due to their “[i]nsubordination” and “[f]ailure
to follow instructions.”

The suspensions left Hilton shorthanded for the remainder
of the day. Management called in temporary workers; even so,
some of Hilton’s operations were adversely affected. For
instance, Cook had to recruit staff from Hilton’s accounting and
sales offices to bus tables in the guest café, which converted to
buffet-style service due to the staff shortage. In addition, the
housekeeping division was unable to clean all of the hotel’s
guest rooms, which were 99.9% occupied at the time.
 4

Three weeks later, on June 3, a second incident resulted in
more disciplinary actions. On that date, a union – the California
Teachers Association – held a meeting in the hotel’s
international ballroom. The Association invited two of Hilton’s
employees, Isabel Brentner and Patricia Simmons, to speak to its
members about the May 11 work stoppage. Brentner and
Simmons did so during their lunch breaks. When management
learned of this, it issued each of them a written warning for
violating Hilton’s facilities use policy, which prohibits on-duty
employees from entering the hotel’s public areas without
authorization. Three other Hilton employees, Lilia Magallon,
Juana Salinas, and Joanna Gomez, received similar warnings
after management determined that they had also attended the
meeting. Although these employees denied entering the
ballroom, video footage taken by a nearby security camera
showed each of them disappearing from view near its entrance
for brief periods as they cleaned an adjacent lobby area.

The Board’s general counsel issued a complaint based on
the May 11 suspensions, the June 3 warnings, and several other
incidents. An Administrative Law Judge found the May 11
suspensions unlawful under § 8(a)(1) because the employees
were engaged in concerted action for the “mutual aid or
protection” of Reyes, their co-worker, and were thus protected
by § 7 of the Act. See 29 U.S.C. § 157. After considering the
factors mentioned in Quietflex Manufacturing Co., 344 N.L.R.B.
1055 (2005), the ALJ concluded that the employees’
organizational interests outweighed Hilton’s property rights.
The ALJ also found that the June 3 warnings violated § 8(a)(1)
and (3), for two reasons. First, the warnings resulted from
Hilton’s disparate application of its facilities use policy to
employees who Hilton knew had engaged in union activity.
Second, Hilton’s investigation was inadequate, and thus
pretextual, inasmuch as Hilton made no attempt to interview the
employees before disciplining them.
 5

The Board affirmed the ALJ’s rulings, findings, and
conclusions, subject to several minor modifications. Fortuna
Enters., L.P., 355 N.L.R.B. No. 122, 2010 NLRB LEXIS 280
(Aug. 24, 2010).2 With respect to the May 11 gathering, the
Board explained that “the length of the work stoppage in the
cafeteria and the potential for interference with the provision of
[hotel] services” made the § 8(a)(1) question a “close” one.
2009 NLRB LEXIS 136, at *4 n.8. But “the unrepresented
employees did not lose the protection of the Act, particularly
when [Hilton’s] officials failed to make it clear that the
employees would not be able to meet with senior management
at that time and would have alternative opportunities to present
their concerns.” Id. at *4 & n.8; see also 2010 NLRB LEXIS
280, at *3 n.3 (converting Member Schaumber’s position in the
2009 decision into the Board’s holding). As to Hilton’s policy
regarding employees in public areas, the Board found that Hilton
“disparately applied” the policy “to the employees and used
th[e] policy as a pretext to discipline known union supporters
who did not even violate the rule.” 2009 NLRB LEXIS 136, at
*3 & n.5; see also 2010 NLRB LEXIS 280, at *3 n.3. This
conclusion obviated the need to pass on the ALJ’s alternative
ruling that the warnings violated § 8(a)(1) and (3) because
Hilton’s investigation was inadequate. 2009 NLRB LEXIS 136,
at *3 n.5.

2
This decision reinstated and incorporated by reference two
earlier Board decisions, both of which were issued by a two-member
Board. See 354 N.L.R.B. No. 95, 2009 NLRB LEXIS 335 (Oct. 29,
2009); 354 N.L.R.B. No. 17, 2009 NLRB LEXIS 136 (Apr. 30, 2009).
The Supreme Court’s decision in New Process Steel, L.P. v. NLRB,
130 S. Ct. 2635 (2010), invalidated those decisions. See id. at 2644-
45. Because a three-member panel issued the Board’s decision under
review, the decision complies with New Process Steel. See id.
 6

I

Section 7 of the Act grants employees “the right to
self-organization . . . and to engage in other concerted activities
for the purpose of . . . mutual aid or protection . . ..” 29 U.S.C.
§ 157. Section 8(a)(1) prohibits employers from “interfer[ing]
with, restrain[ing], or coerc[ing] employees in the exercise of”
those rights. 29 U.S.C. § 158(a)(1).

On-the-job work stoppages may qualify as concerted
economic pressure entitled to protection under § 7. Quietflex,
344 N.L.R.B. at 1056; see also Molon Motor & Coil Corp. v.
NLRB, 965 F.2d 523, 525 (7th Cir. 1992) (citing NLRB v. Wash.
Aluminum Co., 370 U.S. 9, 15 (1962)). But the protection is not
absolute because on-site work stoppages trench upon employers’
private property rights. See Quietflex, 344 N.L.R.B. at 1056
(citing Hudgens v. NLRB, 424 U.S. 507, 522 (1976)). The
Board’s task is to accommodate these competing interests,
preserving each “with as little destruction of one as is consistent
with the maintenance of the other.” Hudgens, 424 U.S. at 521
(quoting NLRB v. Babcock & Wilcox Co., 351 U.S. 105, 112
(1956)). The proper resolution in a given case “depend[s] on the
nature and strength of the respective § 7 rights and private
property rights” involved. Id. at 522.

In Quietflex the Board offered a list of factors it had
“considered” in previous cases “in determining which party’s
rights should prevail in the context of an on-site work stoppage
. . ..” 344 N.L.R.B. at 1056-57. 3 The Board did not quantify

3
The Quietflex factors are: (1) the reason the employees have
stopped working; (2) whether the work stoppage was peaceful; (3)
whether the work stoppage interfered with production, or deprived the
employer access to its property; (4) whether employees had adequate
opportunity to present grievances to management; (5) whether
 7

the particular weight of any factor and several of them appear to
overlap. See id. at 1056; cf. PDK Labs. Inc. v. DEA, 362 F.3d
786, 797 (D.C. Cir. 2004). For instance, determining “whether
the work stoppage was peaceful” may often involve the same
considerations as “whether the employees attempted to seize the
employer’s property.” See Quietflex, 344 N.L.R.B. at 1056-57.
And the seizure question may amount to the same thing as
whether the employees “deprived the employer of access to its
property.” Id. Although the sort of multi-factor balancing “test”
suggested in Quietflex may be incapable of predictable
application, see Exacto Spring Corp. v. Comm’r, 196 F.3d 833,
834-38 (7th Cir. 1999), we shall assume its validity.

Hilton asks us to set aside the order with respect to the May
11 suspensions on the ground that the Board’s assessment of
nine of the ten Quietflex factors was flawed. This court must of
course uphold the Board’s ruling so long as its legal
determinations are not arbitrary or capricious and its factual
findings are supported by substantial evidence. E.I. du Pont de
Nemours & Co. v. NLRB, 489 F.3d 1310, 1314 (D.C. Cir. 2007).

As to the first Quietflex factor – why the employees stopped
working – the Board determined that the employees occupied
the cafeteria to express support for co-worker Sergio Reyes, and
to ensure that Hilton would not unfairly target other union
supporters for discipline. Hilton claims that the occupation was
unprotected because it was intended only to seek information,

employees were given any warning that they must leave the premises
or face discharge; (6) the duration of the work stoppage; (7) whether
employees were represented or had an established grievance
procedure; (8) whether employees remained on the premises beyond
their shift; (9) whether the employees attempted to seize the
employer’s property; and (10) the reason for which the employees
were ultimately discharged. 344 N.L.R.B. at 1056-57.
 8

and thus did not grow out of a bona fide labor dispute. See Ne.
Beverage Corp. v. NLRB, 554 F.3d 133, 140 (D.C. Cir. 2009)
(“Section 7 and the relevant cases thereunder do not protect
employees who leave work to seek information from their union
or their employer.”). This contention fails to appreciate the
nature of the employees’ grievance. Unlike the employees in
Northeast Beverage, the Hilton employees did not leave work to
duplicate a request for information their union had already made
regarding the employer’s future plans. See id. at 135-36.
Instead, they gathered to express their shared concern about
discrimination against union supporters.4 The subject of their
concern falls within the Act’s definition of a “labor dispute,”
which includes “any controversy concerning terms, tenure or
conditions of employment,” 29 U.S.C. § 152(9), or at least the
Board was entitled to so find. See, e.g., NLRB v. Pepsi-Cola
Bottling Co. of Miami, Inc., 449 F.2d 824, 830 n.5 (5th Cir.
1971); see also 29 U.S.C. § 157 (guaranteeing employees the
right “to engage in . . . concerted activities for the purpose of .
. . mutual aid or protection”).

With two exceptions, there is nothing to the balance of
Hilton’s arguments against the Board’s application of the
Quietflex factors. The exceptions are the Board’s treatment of
factor (3) – “whether the work stoppage interfered with
production,” and factors (4) and (7) – “whether employees had
adequate opportunity to present grievances to management” or
access to “an established grievance procedure.” Quietflex, 344
N.L.R.B. at 1057.

4
The Northeast Beverage employees were represented by a
union actively bargaining on their behalf. See 554 F.3d at 135. Here,
by contrast, the employees were not represented by a union or engaged
in ongoing talks with Hilton. This distinction is meaningful insofar as
unrepresented employees are entitled to some leeway to “speak for
themselves as best they [can].” Wash. Aluminum, 370 U.S. at 14.
 9

In mentioning interference with production, Quietflex
dropped a footnote stating: “It is not considered an interference
of production where the employees do no more than withhold
their own services.” Id. at 1057 n.6. We are not quite sure what
to make of this. Suppose all fifty employees on an assembly
line walked off the job. Or suppose only half of them walked
off but this was enough to require shutting down the line.
According to the Board’s footnote, in neither instance would
there have been an interference with production – a conclusion
at odds with reality. Furthermore, the point of this Quietflex
factor is unclear. Some protected activities exert economic
pressure on the employer by interfering with production. A
strike is the prime example. See Div. 1287, Amalgamated Ass’n
of Street, Elec. Ry. & Motor Coach Emps. of Am. v. Missouri,
374 U.S. 74, 80-82 (1963); NLRB v. Erie Resistor Corp., 373
U.S. 221, 234 (1963). An on-site work stoppage is a form of
strike. See 29 U.S.C. §§ 142(2) (defining a strike as “any strike
or other concerted stoppage of work by employees”), 163
(protecting “the right to strike”). We do not know whether the
Board in Quietflex meant to suggest that if the stoppage exerted
economic pressure – that is, if it interfered with production or
the provision of services – this would render the activity less
protected. We do know that a majority of the Board in this case
at least acknowledged that the work stoppage had “the potential
for interference with the provision of services,” 2010 NLRB
LEXIS 280, at *3 n.3; 2009 NLRB LEXIS 136, at *4 n.8, even
though the participating employees did “no more than withhold
their own services,” Quietflex, 344 N.L.R.B. at 1057 n.6. The
record also shows that the work stoppage did disrupt some of
Hilton’s operations.

In any event, it does not appear that the interference-with-
production factor played a significant role in the Board’s ruling
against Hilton. The apparently decisive consideration related to
Hilton’s handling of employee grievances. See 2009 NLRB
 10

LEXIS 136, at *4 n.8. In this regard, the Board stated that
management never told the employees gathered in the cafeteria
that the two senior officials they wanted to talk with were not
available, or that the employees would have other opportunities
to present their concerns. Id. In so holding the Board adopted
the ALJ’s determination that the complaint procedure Hilton had
in place “addressed only individual complaints and not group
grievances like the one presented in the instant case.” 2009
NLRB LEXIS 136, at *1-2, 50.

The record does support the finding that Hilton officials
suspended the employees without notifying them that a meeting
with senior managers was not immediately possible or offering
a future opportunity to meet. But those omissions are much less
significant if Hilton employees had access to an established
procedure for handling “group grievances.” The Board found
that they did not. Hilton responds that it did have such a
procedure in place, that it was widely known and often used, and
that management therefore had no obligation to inform the
employees in the cafeteria that it would hear and consider their
concerns in the future. We agree.

Grievance procedures provide an orderly means for
resolving employee concerns and thus promote the Act’s goal of
achieving “industrial peace and stability.” Auciello Iron Works,
Inc. v. NLRB, 517 U.S. 781, 785 (1996). For this reason, the
availability of a grievance procedure cuts against the
justification for protecting on-the-job work stoppages. See, e.g.,
Cone Mills Corp. v. NLRB, 413 F.2d 445, 451-52 (4th Cir.
1969); Cambro Mfg. Co., 312 N.L.R.B. 634, 636 (1993). Hilton
had an “open door” policy to handle employee complaints. The
Board acknowledged the policy, but then erred in finding it
inadequate on the ground that the policy did not deal with group
grievances. That finding is at odds with the text of the policy,
 11

which is in no way limited to individual complaints.5 And it is
contrary to Hilton’s longstanding implementation of the “open
door” policy. The record demonstrates that Hilton managers
addressed group grievances relating to hotel equipment,
employee uniforms, working conditions, and other matters on
numerous occasions. To the extent the Board’s decision rests on
its comparison of Hilton’s “open door” policy to the one at issue
in HMY Roomstore, Inc., 344 N.L.R.B. 963 (2005), the analogy
fails. The Roomstore policy, unlike Hilton’s, was “used to
resolve individual problems and not group complaints.” Id. at
963 n.2. The Board’s grievance procedure finding therefore is
not supported by substantial evidence.

As we have said, the Board never quantified the weight to
be given to any one of the Quietflex factors. In this case, we
know only that the Board emphasized the absence of a group
grievance procedure in its decision and that its finding to this
effect was in error. We therefore grant the petition for review

5
The policy states:

Hilton Los Angeles Airport is proudly committed to
maintaining an open door policy. Any discrimination
or recrimination against a team member for
presenting an issue, problem or complaint is
prohibited.

A team member should always attempt to work out
problems with his/her immediate supervisor. If the
issue or problem remains unresolved, the team
member can seek assistance from his/her department
manager, the Director of Human Resources and the
General Manager.
 12

with respect to the Board’s assessment of the May 11 protest
and remand this issue for reconsideration by the Board.6

II

Section 8(a)(3) of the Act makes it an unfair labor practice
for an employer to “discourage membership in any labor
organization” by “discriminat[ing] in regard to . . . any term or
condition of employment.” 29 U.S.C. § 158(a)(3). To prove a
§ 8(a)(3) violation, the Board must first demonstrate that anti-
union animus motivated the employer to take an adverse
employment action. See Tasty Baking Co. v. NLRB, 254 F.3d
114, 125-26 (D.C. Cir. 2001). The employer’s motive may be
inferred from knowledge of an employee’s union activities,
expressions of hostility towards the union, the timing of the
adverse action, or other circumstantial evidence of like kind.
Id.; see also Waterbury Hotel Mgmt., LLC v. NLRB, 314 F.3d
645, 651 (D.C. Cir. 2003). “If the Board succeeds” in making
out a prima facie case, “the employer still can successfully
mount an affirmative defense by showing that it would have
taken the same action in the absence of anti-union
considerations.” Sierra Realty Corp. v. NLRB, 82 F.3d 494, 495
(D.C. Cir. 1996); see NLRB v. Transp. Mgmt. Corp., 462 U.S.
393, 399-404 (1983) (approving the burden-shifting test adopted
in Wright Line, 251 N.L.R.B. 1083 (1980)).

6
This outcome also requires us to set aside and remand the
Board’s separate ruling that Rogelio de la Rosa violated § 8(a)(1)
when he threatened to suspend Fidel Andrade for participating in the
May 11 work stoppage. 2009 NLRB LEXIS 136, at *4, 29-30. The
Board held that de la Rosa’s threat was unlawful because the work
stoppage was protected by § 7. If it was not protected, the threat was
lawful.
 13

There is no question that the warnings issued to Brentner,
Simmons, Magallon, Salinas, and Gomez adversely affected the
terms or conditions of their employment. It is also clear that, as
Hilton stipulated, management knew each of the employees had
engaged in union activities. Hilton claims, however, that there
is no evidence that it knew the employees had engaged in
protected activity on June 3 and that there is no evidence to
show that their participation in the May 11 protest motivated the
company to issue the warnings. See 2009 NLRB LEXIS 136, at
*61-62 (ALJ’s findings to same effect). Hilton’s points are
accurate, but inconsequential. In most circumstances, § 8(a)(3)
liability cannot arise unless the employer knows of an
employee’s union activities. Davis Supermarkets, Inc. v. NLRB,
2 F.3d 1162, 1168 (D.C. Cir. 1993). But there is no requirement
that those activities occur on the same day the adverse
employment action is taken. Hilton’s stipulation that it knew
generally of the employees’ union activities fully satisfied this
standard. Therefore, the Board met its burden under § 8(a)(3) so
long as substantial evidence supports its finding that anti-union
animus played a role in Hilton’s decision to issue the warnings.

The record provides ample support for the Board’s finding.
Sue Trobaugh, Hilton’s human resources director, testified that
she knew about, but chose not to investigate, other violations of
the facilities use policy. According to Trobaugh, maintenance
staff complained that other employees were using public
restrooms near the hotel lobby. This created extra cleanup work
and contravened the facilities use policy, which required on-duty
employees to use restrooms located in the hotel’s non-public
areas. Although Trobaugh was aware of these violations, she
decided that they were not “an investigative matter” and thus
made no effort to pursue them. Hilton’s selective enforcement
of the policy against Brentner, Simmons, Magallon, Salinas, and
Gomez, but not against other, equally culpable employees, not
only justifies the Board’s inference of anti-union animus, but
 14

also forecloses any argument that Hilton “would have taken the
same action in the absence of the unlawful motive.” Tasty
Baking Co., 254 F.3d at 126-28; see also Waterbury, 314 F.3d
at 653; U-Haul Co. of Cal., 347 N.L.R.B. 375, 388-89 (2006),
enforced, 255 F. App’x. 527 (D.C. Cir. 2007).

For these reasons, we enforce the portion of the Board’s
order finding that Hilton violated § 8(a)(1) and (3)7 by issuing
warnings to Brentner, Simmons, Magallon, Salinas, and Gomez.

III

In addition to its rulings on the May 11 suspensions and the
June 3 warnings, the Board also held that Hilton committed a
number of other § 8(a)(1) violations. See 2009 NLRB LEXIS
335, at *1-3; 2009 NLRB LEXIS 136, at *1-5. Hilton maintains
that the Board erred in doing so, but confines its argument to a
short footnote. As a result, we will not consider Hilton’s
objections. See Comm’r v. Simmons, 646 F.3d 6, 12 (D.C. Cir.
2011). The Board is entitled to summary enforcement of these
additional, effectively uncontested rulings. Flying Food Grp.,
Inc. v. NLRB, 471 F.3d 178, 181 (D.C. Cir. 2006).8

7
Conduct that violates any of the more specific prohibitions
of § 8, including § 8(a)(3), also interferes with employees’ § 7 rights
and thus violates § 8(a)(1) derivatively. See Metro. Edison Co. v.
NLRB, 460 U.S. 693, 698 n.4 (1983); ROBERT A. GORMAN &
MATTHEW W. FINKIN, BASIC TEXT ON LABOR LAW: UNIONIZATION
AND COLLECTIVE BARGAINING 150 (2d ed. 2004).

8
For the sake of clarity, these findings are that Hilton
managers unlawfully (1) interrogated employee Ricardo Molina; (2)
threatened employees Antonio Campos and Beatrice Reyes; (3) barred
various employees from wearing union insignia; (4) warned employee
Nathalie Contreras for protesting customer harassment of other
employees; and (5) pushed Campos away from co-workers who were
 15

The same is true of the Board’s rulings regarding threats
made by managers Chriss Draper and Anna Samayoa towards
union-affiliated employees. Hilton contends that the Board
erred by “declining to rule” on these incidents, despite the ALJ’s
conclusion that each gave rise to a § 8(a)(1) violation. Although
some cases have suggested that § 10(c) of the Act requires the
Board to resolve every charge that is presented to it, see Oil,
Chem. & Atomic Workers Local Union No. 6-418 v. NLRB, 711
F.2d 348, 362 (D.C. Cir. 1983); Int’l Union, United Auto.,
Aerospace & Agric. Implement Workers v. NLRB, 427 F.2d
1330, 1331-32 (6th Cir. 1970), any omission on the Board’s part
was harmless in this instance, see Tasty Baking Co., 254 F.3d at
123. The Board determined that resolving the threat claims
“would be cumulative and would not materially affect the
remedy.” 2009 NLRB LEXIS 136, at *4 n.6. That conclusion
is entitled to substantial deference, see Petrochem Insulation,
Inc. v. NLRB, 240 F.3d 26, 34 (D.C. Cir. 2001), and is
reasonable given the already sweeping nature of the remedial
orders, see 2009 NLRB LEXIS 335, at *3-4, 10-12; 2009 NLRB
LEXIS 136, at *7-8, 83-87.

* * *

For the foregoing reasons, the petition for review is granted
in part and denied in part. The cross-petition for enforcement is
likewise granted in part and denied in part. The case is
remanded to the Board for further proceedings consistent with
this opinion.
So ordered.

engaged in protected activity.