Micro Pacific Development Inc. v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued May 10, 1999 Decided June 18, 1999

No. 98-1386

Micro Pacific Development Inc.,
d/b/a Saipan Grand Hotel,
Petitioner

v.

National Labor Relations Board,
Respondent

---------

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

--------

Joseph L. Manson, III argued the cause for the petitioner.
Ronald B. Natalie and Douglas W. Hall were on brief.

David A. Seid, Attorney, National Labor Relations Board,
argued the cause for the respondent. Linda Sher, Associate
General Counsel, Aileen A. Armstrong, Deputy Associate
General Counsel at the time the brief was filed, and Peter
Winkler, Attorney, National Labor Relations Board, were on
brief. John D. Burgoyne, Acting Deputy Associate General
Counsel, National Labor Relations Board, entered an appear-
ance.

 Before: Silberman, Henderson and Garland, Circuit
Judges.

Opinion for the court filed by Circuit Judge Henderson.

Karen LeCraft Henderson, Circuit Judge: Micro Pacific
Development Company d/b/a Saipan Grand Hotel (Saipan)
petitions the Court to set aside a final order of the National
Labor Relations Board (NLRB or Board). Despite Saipan's
assertion that four of its employees were supervisors engaged
in pro-union, coercive electioneering, the Board concluded
that the employees were not supervisors as defined in the
National Labor Relations Act (NLRA or Act) s 2(11), 29
U.S.C. s 152(11). Saipan now attacks the Board's conclusion
as unsupported by substantial evidence. In the alternative,
Saipan argues that the results of the union election cannot
stand because the Board erred in combining Saipan's resident
and nonresident employees into a single bargaining unit. For
the reasons set forth below, we grant Saipan's petition for
review in part and grant the NLRB's cross-application for
enforcement as to the remaining issues.

I. Background

A. The Representation Proceeding

Saipan is a beachfront resort hotel operating on the island
of Saipan in the Commonwealth of the Northern Mariana
Islands (CNMI).1 On August 2, 1995 the Commonwealth
Labor Federation and Hotel Employees and Restaurant Em-
ployees, Local 5, AFL-CIO (Union) filed a representation
petition with the Board, seeking certification as the represen-
tative of Saipan's employees. The parties entered into an
Election Agreement, stipulating that the Board had jurisdic-
tion and that the appropriate bargaining unit consisted of all
hotel employees.

After changing counsel, apparently due to original counsel's
"inexperience[ ] in NLRA matters," Pet'r Br. at 3, Saipan

__________
1 The Board's jurisdiction extends to labor cases arising in the
CNMI. See Micronesian Telecomm. Corp. v. NLRB, 820 F.2d
1097, 1099-1101 (9th Cir. 1987).

sought to withdraw from the stipulated election agreement
and requested a representation hearing. In its motion, it
asserted inter alia that the Board lacked jurisdiction over its
nonresident contract workers.2 The NLRB's Regional Di-
rector (RD) denied Saipan's motion, finding that no changed
circumstances justified withdrawal from the Election Agree-
ment and that the Board had previously asserted jurisdiction
over nonresidents working in the CNMI. See Micro Pac.
Dev., Inc., No. 37-RC-3720 (Sept. 20, 1995) (Order Den.
Employer's Mot. to Withdraw From Stipulated Election
Agreement & Req. for Representation Hr'g), Joint Appendix
(JA) 17-21. Saipan sought Board review of the RD's deci-
sion.

On October 5, pursuant to the Election Agreement, the
Board conducted a representation election among Saipan's
employees. From a total of 84 eligible employees, 49 voted
for unionization and 24 voted against. Three ballots were
challenged, a number insufficient to affect the results.

Saipan subsequently filed four objections. The first three
objections asserted that the Board lacked jurisdiction over
nonresident workers and that, even if the Board had jurisdic-
tion, nonresident workers were ineligible to vote in the elec-
tion and could not be included in a bargaining unit with
resident employees. In the fourth objection, Saipan claimed
that supervisors engaged in coercive pro-union conduct re-
quiring the election to be set aside.

On January 24, 1996 the Board denied Saipan's request to
review the RD's denial of its motion to withdraw from the
Election Agreement, holding that the jurisdictional issues
were raised by Saipan in its election objections and that the
denial of its request for review was without prejudice to the
right to pursue its argument in the representation litigation.

__________
2 At the time approximately 70 per cent of the hotel's non-
management work force consisted of Filipino nonresidents who
worked in the CNMI pursuant to one-year contracts.

On February 22 the RD overruled Saipan's election objec-
tions. See Micro Pac., No. 37-RC-3720 (Feb. 22, 1996) (Rep.
on Objections), JA 45-51. After Saipan filed exceptions, the
Board ordered a hearing before an administrative law judge
(ALJ) on Saipan's allegations of supervisory pro-union con-
duct. Relying solely on the Election Agreement, the Board
also adopted the RD's finding that the Board had jurisdiction
over the nonresident employees. See Micro Pac., No. 37-
RC-3720 (June 24, 1996) (Decision & Order Directing Hr'g),
JA 113-15.

On July 31, 1997 the ALJ overruled Saipan's objection
alleging coercive conduct by supervisors. The ALJ found
that Edwin Melon, Paquito Gonzales, Reynaldo Rojas and
Sesinando Laderas were employees rather than supervisors
and thus that their pro-union conduct was not objectionable.
In the alternative, the ALJ found that Rojas's and Laderas's
pro-union conduct was insufficient to materially affect the
election results but that, if Melon and Gonzales were found by
the Board to be supervisors, their conduct materially affected
the election. See Micro Pac., No. 37-RC-3720 (July 30, 1997)
(ALJ's Decision), JA 116-46. The Board fully adopted the
ALJ's findings and recommendation and certified the Union.
Because the Board affirmed the ALJ's findings that the four
individuals were employees, the Board found it "unnecessary
to pass on the judge's alternative findings."3 Micro Pac., No.
37-RC-3720 at 2 n.2 (Mar. 26, 1998) (Decision & Certification
of Representative), JA 195.

B. The Unfair Labor Practice Proceeding

Following certification, Saipan refused to bargain or fur-
nish requested information to the Union, whereupon the

__________
3 Although the Board did not reach the issue, the ALJ found that
Melon and Gonzales had engaged in pro-union behavior which
"reasonably tended to coerce employees in the exercise of their
Section 7 rights." JA 144-45. Between them, Melon and Gonzales
supervised 20 employees, enough to change the outcome of the
election. Indeed, Melon alone supervised enough employees (14) to
change the result. The NLRB decided the supervisory status issue
without reaching the coercion issue. See JA 195 n.2.

Union filed an unfair labor practice charge.4 In its answer,
Saipan admitted the allegations but challenged the validity of
the certification. Thereafter, the General Counsel moved for
summary judgment and the Board issued a show cause notice.

On August 19, 1998 the Board granted the General Coun-
sel's motion for summary judgment. In its Decision and
Order, the Board found that "[a]ll representation issues
raised by [Saipan] were or could have been litigated in the
prior representation proceeding," and that Saipan did not
offer to adduce "any newly discovered and previously unavail-
able evidence, nor [did] it allege any special circumstances"
that would require the Board to modify its decision in the
representation proceeding. Micro Pac. Dev., Inc., 326
N.L.R.B. No. 20 at 1 (Aug. 19, 1998). Accordingly, the Board
concluded that Saipan's refusal to bargain and to furnish
requested information violated the NLRA. The Board re-
quired Saipan to cease its unfair labor practices, post a
remedial notice, bargain with the Union upon request and
supply the requested information. See id. at 2. Saipan then
petitioned this Court to review the Board's decision and the
NLRB cross-applied for enforcement of its order.

II. DISCUSSION

Pursuant to section 10 (e) and (f) of the NLRA, 29 U.S.C.
s 160(e), (f), we will reverse the Board if, "upon reviewing the
record as a whole, we conclude that the Board's findings are
not supported by substantial evidence or that the Board acted
arbitrarily or otherwise erred in applying established law to

__________
4 The General Counsel issued a complaint, alleging that Saipan's
refusal to bargain and supply information violated NLRA s 8(a)(1),
(5), 29 U.S.C. s 158(a)(1), (5). Section 8(a)(1) and (5) of the NLRA
respectively make it an unfair labor practice for an employer "to
interfere with, restrain, or coerce employees in the exercise of the
rights guaranteed in section [7 of title 29]" and "to refuse to bargain
collectively with the representative of his employees." 29 U.S.C.
s 158(a)(1), (5). Section 7, in turn, grants employees, inter alia
"the right to self-organization" and "to bargain collectively through
representatives of their own choosing." 29 U.S.C. s 157.

the facts of the case." International Union of Elec., Elec.,
Salaried. Mach. & Furniture Workers v. NLRB, 41 F.3d
1532, 1536 (D.C. Cir. 1994) (quotations omitted). Substantial
evidence is "more than a mere scintilla. It means 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); see also Universal
Camera Corp. v. NLRB, 340 U.S. 474, 488 (1951) ("[A]
reviewing court is not barred from setting aside a Board
decision when it cannot conscientiously find that the evidence
supporting that decision is substantial, when viewed in the
light that the record in its entirety furnishes, including the
body of evidence opposed to the Board's view."). Moreover,
the Board "is not free to prescribe what inferences from the
evidence it will accept and reject, but must draw all those
inferences that the evidence fairly demands." Allentown
Mack Sales & Serv., Inc. v. NLRB, 118 S. Ct. 818, 829 (1998).5

A. Supervisors

Section 2(3) of the NLRA excludes from the term "employ-
ee" "any individual employed as a supervisor." 29 U.S.C.
s 152(3). Section 2(11) defines "supervisor" as follows:

any individual having authority, in the interest of the
employer, to hire, transfer, suspend, lay off, recall, pro-
mote, discharge, assign, reward, or discipline other em-
ployees, or responsibly to direct them, or to adjust their
grievances, or effectively to recommend such action, if in
connection with the foregoing the exercise of such au-
thority is not of a merely routine or clerical nature, but
requires the use of independent judgment.

__________
5 Saipan urges us to abandon our traditional deference standard
and instead engage in a more probing review of the Board's
supervisory status determinations, pointing to other circuits which
have taken this approach. See, e.g., Beverly Enters. v. NLRB, 148
F.3d 1042, 1045 (8th Cir. 1998); NLRB v. Meenan Oil Co., 139 F.3d
311, 321 (2d Cir. 1998); NLRB v. St. Mary's Home, Inc., 690 F.2d
1062, 1067 (4th Cir. 1982). We give the Board's supervisory
findings their traditional "special weight." Desert Hosp. v. NLRB,
91 F.3d 187, 193 (D.C. Cir. 1996).

29 U.S.C. s 152(11). The first portion of section 2(11) is
stated disjunctively--the possession of any of the enumerated
powers is sufficient to establish supervisory status. Section
2(11)'s conjunctive language, however, mandates that the
exercise of any of the powers "must require independent
judgment, ... and cannot be merely routine, clerical, perfunc-
tory, or sporadic." Desert Hosp., 91 F.3d at 193. In short, to
be considered a supervisor, one must exercise only one of the
enumerated supervisory functions, using independent judg-
ment in doing so.

In its main attack on the ALJ's and the Board's findings,
Saipan asserts that Edwin Melon should have been consid-
ered a statutory supervisor. Melon was one of three "house-
keeping supervisors" reporting directly to Atsushi Suzuki, the
Assistant Front Manager in charge of Saipan's housekeeping
department. According to the ALJ's finding, Melon was the
only employee with that title from at least 1993 until six
months before the election.6 Even though the ALJ found
that Melon possessed several supervisory indicia7 and exer-

__________
6 After two other employees were promoted to supervisor, Melon
acted as a supervisor three days per week while the other two each
acted as supervisor two days per week. There was never more
than one housekeeping supervisor on duty during the day, except
during brief training periods. Melon was the highest paid non-
managerial housekeeping employee and was identified by the maids
as their primary supervisor before the election. Most of the
housekeeping staff worked from 9:00 a.m. to 5:00 p.m., with one
maid scheduled from noon to 8:00 p.m. and another scheduled from
5:00 p.m. to 1:00 a.m. High occupancy periods were dealt with by:
(1) overtime; (2) calling in maids who were not scheduled to work;
(3) adding "bonus" rooms--additional rooms for which the maid
received no compensation other than tips--to a maid's schedule; or
(4) scheduling maids for "back-to-back" room preparation, which
required them to return to the hotel in the early morning hours to
prepare vacated rooms. The maids viewed "back-to-back" assign-
ments as valuable because they were paid double time with a two-
hour minimum.

7 Melon assigned housekeepers, directed their work, disciplined
them and recommended whether their contracts should be renewed.
See JA 125-28.

cised this authority "in the interest" of Saipan, see NLRB v.
Health Care & Retirement Corp. of Am., 511 U.S. 571, 578
(1994) ("[A]cts within the scope of employment or on the
authorized business of the employer are 'in the interest of the
employer.' "), he nevertheless concluded that Melon was not a
section 2(11) supervisor because he failed to meet the "inde-
pendent judgment" test of section 2(11). JA 130-31. The
Board adopted the ALJ's findings, concluding that there was
"no evidence that Melon's duties required the exercise of
independent judgment or that Melon effectively recom-
mended changes in the employees' terms and conditions of
employment." JA 195 n.2. For the following reasons, we
reject the Board's conclusion that Melon did not exercise
independent judgment as unsupported by substantial evi-
dence.

The Board's conclusion that Melon exercised no indepen-
dent judgment but rather performed duties that were "rou-
tine for the most part and decidedly clerical for the remain-
der" contradicts the ALJ's factual findings, which manifest
that Melon had substantial autonomy in dealing with the
housekeeping staff regarding scheduling, assignment and dis-
cipline. JA 130. As to assignments and scheduling, the
record established that Melon dealt with these issues often
"without regular or concerned oversight by Suzuki or another
assistant manager." JA 127; see Eskaton Sunrise Commu-
nity, 279 N.L.R.B. 68, 75 (1986) (employee who assigned
housekeeping duties, checked employees' work, obtained re-
placements for sick employees and performed written evalua-
tions held to be supervisor); Mr. Steak, Inc., 267 N.L.R.B.
553, 555 n.3 (1983) (scheduling employee working hours con-
fers supervisory status). As the ALJ noted, "[T]he more
typical handling [of overtime] was for Melon to recognize [a]
need, [and] merely inform Suzuki as to what he would do."
JA 128 (when the late shift maid did not report, "the problem
devolved to Melon for solution," and he was "both initiator of
the overtime inquiry, and also did so by one-on-one conversa-
tions rather than throwing the opportunity open to shift
members as a whole"). "[M]anagers [also] did not participate
in the decision" as to who received back-to-back assignments.

Id.8 Moreover, because of the "focused, sudden needs" asso-
ciated with occupancy surges, Melon was often required to
draw on "his awareness from experience and observation
about whether the composite capabilities of scheduled house-
keepers on a given day was sufficient to complete all readying
work throughout the hotel's guest rooms." JA 127, 128; see
Glenmark, 147 F.3d at 343 ("[T]he decisions of whether to call
in additional staff and whether to reorganize the schedule to
accommodate ... emergencies require the exercise of inde-
pendent judgment."). Thus, rather than being "practically
automatic", JA 130, "guest room preparation was greatly
affected by surges of people [which], in turn, created an array
of special procedures" and required Melon to make indepen-
dent determinations in scheduling and assigning the employ-
ees, JA 123; JA 860-61 (if Melon did not deem maid's reasons
for switching days "important" enough, he did not permit
switch even though another maid agreed); id. 714 (Melon
assigned bonus rooms without management oversight or com-
plaint); id. 127 (when need arose to have rooms "quick
cleaned," Melon's assignment process was not "given regular
or concerned oversight by Suzuki or another assistant manag-
er").

Moreover, it appears that Melon exercised independent
judgment in rewarding employees. For instance, the ALJ
found that the "potential of rewarding housekeeping employ-
ees was constantly present" and mentioned the distribution of

__________
8 In its brief, the Board even admits that Melon exercised inde-
pendent judgment. According to the Board,

At the start of each day, Manager Suzuki notified Melon if he
needed to distribute "bonus rooms" because of a housekeeper's
absence. Melon distributed the absent housekeeper's preas-
signed rooms by taking into account workload--that is, trying
to give extra rooms to the housekeepers whose preassigned
block of rooms contained few checkouts--and capability.

Resp't Br. at 17; see NLRB v. McCullough Envtl. Servs., 5 F.3d
923, 941 (5th Cir. 1993) ("the authority to assign operators to
specific tasks, based in part on their assessment of the employees'
ability and the expertise required" indicates supervisory status).

back-to-back room assignments, with their "prized overtime
guarantees," as the "most striking instance" of Melon's ability
to reward. JA 127. Although the selection process is un-
clear, "managers did not participate in the decision." JA 127.
We also note that Melon's usual practice of coupling a back-
to-back assignment with days off "was not always carried
through that mechanically." JA 127-28. The ALJ, however,
suggested that, in making the prized assignments, Melon was
not rewarding employees "within the meaning of the Act"
since "the employees earned their extra pay either by extend-
ing their shift or by appearing for odd late night times when
back to back was performed." JA 131 (emphasis original).
But we disagree with the ALJ's underlying inference that a
reward must be wholly gratuitous--Melon used independent
judgment in determining who received the choice assignments
notwithstanding the fact he did not control their compensa-
tion.9

Furthermore, the Board counsel's endorsement of the
Board's conclusion is based on insufficient evidence arbitrari-
ly culled from the record. See Universal Camera, 340 U.S. at
488 ("[A] reviewing court is not barred from setting aside a
Board decision when it cannot conscientiously find that the
evidence supporting that decision is substantial, when viewed
in the light that the record in its entirety furnishes, including
the body of evidence opposed to the Board's view."). For
example, the Board counsel relied on eleven portions of
transcript to support his conclusion that "Suzuki [rather than
Melon] preassigned the housekeepers to specific sections,
rotating their assignments periodically." Resp't Br. at 15.
Eight of the citations, however, involve witnesses whom the
ALJ disbelieved, two provide only weak support and the last
contradicts the Board's conclusion, see JA 864-65 (testimony
of Darlin Rebusquillo, noting that Melon assigned all bonus
rooms on days he acted as supervisor). Since the counsel
relied on evidence the ALJ deemed unreliable or untrustwor-
thy while at the same time accepting the ALJ's credibility

__________
9 Melon also exercised independent judgment by withholding
assignments from those who alienated him. See JA 1021.

findings, we reject his assertion that Melon's supervisory
status is based on substantial evidence from the record as a
whole. See Air Canada v. DOT, 148 F.3d 1142, 1151 n.15
(D.C. Cir. 1998) ("[W]here credibility of witnesses is at stake,
an [ALJ's] evaluation of the witness' testimony can be an
indicator of the substantiality of the evidence.") (citations
omitted); Capital Cleaning Contractors v. NLRB, 147 F.3d
999, 1004 (D.C. Cir. 1998) ("[A] court must uphold Board-
approved credibility determinations of an ALJ unless they
are hopelessly incredible or self-contradictory or patently
insupportable.") (quotations omitted).

Finally, we disagree with the Board's treatment of Perry
d/b/a Holiday Inn-Glendale, 277 N.L.R.B. 1254 (1985), which
Saipan relied on for the proposition that deciding whether an
employee should be asked to work overtime requires the
exercise of independent judgment. The ALJ initially refused
to use the decision "for any comparative purposes" because
(1) the individual held to be a supervisor in Glendale held the
position temporarily and could only authorize 10 to 20 min-
utes of overtime and (2) if he had been found not to be a
supervisor, there would have been 70 unsupervised employees
in the department. JA 132. Melon exercised much more
independent judgment than the temporary supervisor with
limited overtime authority in Glendale. Not surprisingly, the
Board also attempts to distinguish Glendale in its brief by
pointing to several facts which it claims are not present here.
See Resp't Br. at 29 n.l3. At least one fact in common with
Glendale was present here: the housekeeping employees
believed that Melon was in charge of them. He was identi-
fied by the maids as their primary supervisor in the months
immediately before the election, and in December 1993, a
number of housekeepers petitioned Saipan to replace him
because of supervisory shortcomings. This situation and
Saipan's response to it--which was to counsel Melon on
improved supervisory techniques--would not have occurred
unless Melon was both treated as a supervisor by Saipan and,
more importantly, viewed as such by the other employees.

Saipan also argues that the Board erred by not finding
Waiter Supervisor Paquito Gonzales, Waiter Supervisor Rey-

naldo Rojas and Bartender Supervisor Sesinando Laderas to
be statutory supervisors.10 As it does with regard to Melon,
Saipan contends that Gonzales, Rojas and Laderas exhibited
independent judgment by assigning, evaluating and disciplin-
ing other employees. But several factors distinguish Gon-
zales, Rojas and Laderas from Melon. Accordingly, we af-
firm the Board's decision not to classify Gonzales, Rojas and
Laderas as section 2(11) supervisors. See International Un-
ion, 41 F.3d at 1536.

Although Gonzales, Rojas and Laderas had some authority
to make assignments within shifts and to assign occasional
overtime, their decisions were reviewed by management and,
in the case of Laderas, often overruled. We agree with the
ALJ that the hotel's "rigidly structured management team for
food and beverage operations ... was a dominating feature of

__________
10 The hotel has several restaurants and two bars. Yoshitaka
Mitsuda, the restaurant manager, oversaw restaurant operations.
He worked 6 days per week, generally from 9:00 a.m. to 11:00 p.m.
Mitsuda spent approximately 2 to 3 hours per day observing
employees and also approved all vacation and sick leave. Five
assistant restaurant managers (ARM) assisted Mitsuda in supervis-
ing restaurant operations. The ARMs worked six days per week
from mid-morning to approximately 11:00 p.m. The ARMs sched-
uled employees for shifts and decided whether to replace sick
employees. In addition to providing general oversight throughout
all of the restaurants, the ARMs also assisted in serving customers
when the restaurants were busy. Also, Adelaida Ventura and
Melinda Javier served as "head supervisors" in the hotel's food
services operation although they usually spent up to 90 per cent of
their time performing regular waitress duties.

Gonzales and Rojas began working for Saipan in 1991. In 1994
Gonzales became a "waiter supervisor" in which capacity he served
until the spring of 1996, when his contract was not renewed. Rojas
also became a "waiter supervisor" in 1994. Gonzales and Rojas
reported to head supervisors Ventura and Javier. Laderas began
working at the hotel in 1991. In 1993 he was appointed "bartender
supervisor," a position he held until his contract was not renewed in
December 1995. Laderas reported to ARM Takeo Yamashiro, who
managed the Southern Cross bar and Coral restaurant.

the various restaurant and food serving operations." JA 138,
140. We find this finding significant because the managers'
overlapping six-day work weeks and their continuous, on-site
oversight of operations leaves no doubt that they, rather than
the waiter and bartender supervisors, were in charge. Thus,
the Board reasonably concluded that Gonzales, Rojas and
Laderas acted only as "leadmen" regarding assignments and
scheduling with limited authority to assist in operations but
with no true decision making power. NLRB v. Bell Aero-
space Co., 416 U.S. 267, 280-81 (1974) (Congress sought to
distinguish between supervisory personnel, vested with "gen-
uine management prerogatives," and employees--such as
"straw bosses, leadmen, and set-up men, and other minor
supervisory employees"--who enjoy NLRA's protections even
though they perform "minor supervisory duties." (quotation
omitted)); see JA 138-43 ("all true judgmental factors were
absorbed into the layered array of manage[rs] above").

In addition, Gonzales and Rojas occasionally informed man-
agement about the performance of other employees but the
Board reasonably found no evidence that Saipan made any
decision to adjust the wages of any employee based upon
their opinions. See Beverly-Enters.-Pa., Inc. v. NLRB, 129
F.3d 1269, 1270 (D.C. Cir. 1997); see also NLRB v. Adco
Elec., Inc., 6 F.3d 1110, 1117 (5th Cir. 1993) (reporting
problems "is nothing more than ... any ... employer would
expect of experienced employees"). Although a manager
suggested that Rojas effectively evaluated other employees,
the ALJ discredited his testimony with Rojas's own state-
ment. See JA 140-41. Nor does Saipan advance its case by
showing that Laderas completed written evaluations of other
employees. The evaluations contained no recommendation
and failed to affect any employee's terms and conditions of
employment. Laderas received no instructions about the
evaluations and never spoke to employees about them. In-
stead, Laderas believed that Saipan used the evaluation to
choose the employee of the year.

Similarly, we find no evidence that Gonzales, Rojas and
Laderas ever effectively disciplined other employees. Al-
though Saipan relied on (to support their disciplinary authori-

ty) a document that they were asked to draft, the document
speaks of voluntary compliance and the ALJ reasonably
discredited evidence suggesting that Gonzales had in fact
exerted his disciplinary authority. See Capital Cleaning
Contractors, 147 F.3d at 1004; JA 137, 982-87 (policy state-
ment). Thus, the Board reasonably refused to classify Gon-
zales, Rojas and Laderas as section 2(11) supervisors because
their exercise of supervisory authority was at best "perfuncto-
ry" and "sporadic." Desert Hosp., 91 F.3d at 193.

B. Bargaining Unit

Saipan also argues that the Board's decision to include its
resident and nonresident employees in the same bargaining
unit was not supported by substantial evidence. According to
Saipan, its resident and nonresident employees do not share a
sufficient "community of interest" to permit their combination
into one bargaining unit because of the control over the terms
and conditions of nonresident employment imposed by CNMI
immigration law. Pursuant to the CNMI's Non-resident
Workers' Act (NWA) and the regulations promulgated there-
under,11 Saipan must follow specific procedures in hiring,
employing, retaining and terminating nonresident workers
and must adopt wages, benefits and other terms and condi-
tions of employment applicable only to nonresident employ-
ees. Besides creating differences in the wages and benefits
of nonresidents and residents, the provisions mandate a mini-
mum number of hours per week that nonresidents must work
and effectively prohibit nonresidents--but not residents--
from transferring to other positions. See NWA, 3 N. Mar. I.
Code Ch. 4 (1983); Alien Labor Rules & Regulations
(ALRR), 10 N. Mar. I. Reg. 4 ss II, III (1988). Because of

__________
11 The CNMI retains "local control over immigration," H. R. Rep.
No. 94-364, at 9 (1975), because the covenant that delineates the
political relationship between the United States and the CNMI and
enumerates which federal laws apply expressly excludes the "immi-
gration and naturalization laws of the United States." Covenant to
Establish a Commonwealth of the N. Mariana Islands in Political
Union With the United States, s 503(a), reprinted at 48 U.S.C.A.
s 1681.

these differences, Saipan contends that a unit consisting of
residents and nonresidents is inappropriate because their
conflicting interests make it impossible for a union to carry
out its duty to fairly represent both groups. As a result,
Saipan concludes that nonresident and resident workers do
not share a community of interest and requests a Board
hearing on the issue.

Were Saipan writing on a clean slate, it could argue that
the Board erred by combining its resident and nonresident
employees into a single bargaining unit. See, e.g., Lycee
Francais de New York, 273 N.L.R.B. 1538 (1985) (finding no
community of interest between resident and nonresident em-
ployees at private school); but see Saipan Hotel Corp., d/b/a
Hafadai Beach Hotel, 320 N.L.R.B. 192 (1995); see also
Thomas-Davis Med. Ctrs., P.C. v. NLRB, 157 F.3d 909, 914
(D.C. Cir. 1998) (Board must provide "reasoned explanation,
either consistent with precedent or explaining its departure
therefrom" in interpreting its rules). But Saipan is not
writing on a clean slate because in the Election Agreement, it
stipulated that a unit containing all of its employees constitut-
ed an appropriate bargaining unit.12 See JA 3. Aside from
asserting that it changed its original counsel who was appar-
ently inexperienced in labor matters, Saipan offers no
changed or unusual circumstances entitling it to withdraw its
stipulation. See NLRB v. Unifemme, Inc., 570 F.2d 230 (8th
Cir. 1978) (requiring changed or unusual circumstance to
withdraw stipulation); Sunnyvale Med. Clinic, 241 N.L.R.B.
1156 (1979) (similar); cf. NLRB v. Local Union No. 74,
International Ass'n of Marble, Slate & Stone Polishers,
Rubbers & Sawyers, Tile & Marble Setters' Helpers, &
Marble Mosaic & Terrazzo Workers' Helpers of U.S. &
Canada, 471 F.2d 43, 45-46 (7th Cir. 1973) (alleged inexperi-
ence and lack of knowledge of NLRB procedures of union's
first counsel did not constitute "extraordinary circumstances"
under NLRA s 10(e)). In its motion to withdraw, see JA 10,
Saipan argued that "unusual" circumstances existed because

__________
12 Saipan also admitted in its pleadings that the bargaining unit is
appropriate. See JA 215, 224, 228.

the stipulated unit contained "nonresident employees who are
outside the Board's jurisdiction." The RD, however, found
that Saipan failed to present evidence of unusual or changed
circumstances. The RD further noted that the Board previ-
ously asserted its jurisdiction over both resident and nonresi-
dent workers in the CNMI, see Saipan Hotel Corp., d/b/a
Hafadai Beach Hotel, 320 N.L.R.B. 192 (1995) (Hafadai), and
the Ninth Circuit enforced the Board's decision, see 114 F.3d
994 (9th Cir. 1997), cert. denied, 118 S. Ct. 1034 (1998). Thus,
the RD, and ultimately the Board, rejected Saipan's argu-
ments.

Saipan now claims that the RD and the Board abdicated
their responsibilities under the Act by relying on Hafadai
and by not making an independent determination about the
appropriateness of the bargaining unit in this case.13 Saipan,
however, ignores our precedent in asserting that the Board
must determine the appropriateness of the bargaining unit
notwithstanding its stipulation.

When it sets out de novo to define a bargaining unit, the
NLRB determines which employees share common inter-
ests.... This is a matter for the Board's expertise, and
we will rarely disturb its conclusion. When the parties
stipulate the bargaining unit, however, the Board has a
more limited role. First it must ensure that the stipu-
lated terms do not conflict with fundamental labor princi-
ples. Having done so, its task is simply to enforce the
agreement. If the terms of the stipulation are unambig-
uous, the Board must hold the parties to its text.

__________
13 Saipan relies primarily on NLRB v. Indianapolis Mack Sales
& Serv., Inc., 802 F.2d 280, 284 (7th Cir. 1986) ("Section 9(b)
imposes a nondelegable duty on the Board to determine appropri-
ateness" of bargaining unit), to support its argument. But Mack
Sales is inapposite because there the employer refused to stipulate
to the bargaining unit and the ALJ then declined to receive
evidence on the issue. See 802 F.2d at 284 ("NLRB cannot
discharge [its] obligation by simply finding that the parties did not
vigorously pursue the issue" (emphasis added)).

Avecor, Inc. v. NLRB, 931 F.2d 924, 932 (D.C. Cir. 1991), cert.
denied sub nom. Oil, Chem. & Atomic Workers Intern.
Union v. Avecor, Inc., 502 U.S. 1048 (1992); accord NLRB v.
Southern Indiana Gas & Elec. Co., 853 F.2d 580, 582 (7th
Cir. 1988), cert. denied, 488 U.S. 1031 (1989) ("Once parties
enter into a stipulation ... the parties are bound by their
agreement unless it violates the Act or Board policy.").

Saipan nevertheless asserts that its stipulation placing resi-
dents and nonresidents in the same bargaining unit was
improper because both the NWA and the ALRR set forth
requirements that do not apply to resident employees. See
Pet'r Br. at 35-43. Yet in Hafadai, the Board held, with
Ninth Circuit approval, that the CNMI labor and immigration
laws and regulations do not preclude residents and nonresi-
dents from comprising a single bargaining unit. See 320
N.L.R.B. 192 (1995), enforced, 114 F.3d 994, 997-99 (9th Cir.
1997). Although Saipan argues that the Board improperly
relied on this authority, the Board cannot ignore its precedent
without a "reasoned explanation." Thomas-Davis Med. Ctrs.,
157 F.3d at 914.14

Accordingly, we grant the petition for review in part and
remand to the Board to determine whether Melon's conduct
violated the NLRA. In all other respects, we deny the

__________
14 We also find no merit in Saipan's request for a hearing to
determine whether the stipulated bargaining unit was appropriate.
Pursuant to 29 C.F.R. s 102.69(d), the Board conducts a hearing if
the objecting party has raised substantial and material factual
issues. See Amalgamated Clothing Workers, 424 F.2d 818, 828
(D.C. Cir. 1970). Where, as here, the RD assumed the facts alleged
in the objections to be true but found, as a matter of law, that those
facts did not justify setting aside the election, no hearing is re-
quired. See NLRB v. Air Control Prods., 335 F.2d 245, 249 (5th
Cir. 1964). Because Saipan offered no evidence in support of its
objection except the CNMI regulations, there were no material
facts at issue and the RD (and later the Board) could rely on
Hafadai to answer the purely legal question whether the CNMI
regulations prevent resident and nonresident employees from inclu-
sion in a single bargaining unit.

petition for review and grant the Board's cross-application for
enforcement.

So ordered.