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National Labor Relations Board v. New Vista Nursing and Rehabilitation

United States Court of Appeals, Third Circuit

August 29, 2017


         On Application for Enforcement of an Order of the National Labor Relations Board & Cross-Petitions for Review (NLRB-22-CA-29988) Submitted Under Third Circuit L.A.R. 34.1(a) After Remand to the NLRB and Supplemental Briefing on May 6, 2016

          Beth S. Brinkmann Melissa N. Patterson United States Department of Justice Civil Division Julie B. Broido Linda Dreeben Milakshmi V. Rajapakse National Labor Relations Board Scott R. McIntosh United States Department of Justice Civil Division Benjamin M. Shultz United States Department of Justice Civil Division William S. Massey Gladstein Reif & Meginniss Counsel for Petitioner

          Louis J. Capozzi, Jr. Capozzi Adler Morris Tuchman Counsel for Respondent

          Victor Williams Catholic University of America School of Law Counsel for Amicus-petitioner

          Before: SMITH, Chief Judge, GREENAWAY, JR., and FISHER, Circuit Judges


          SMITH, Chief Judge.

         Respondent-Petitioner New Vista Nursing and Rehabilitation, LLC ("New Vista"), contends that the licensed practical nurses ("LPNs") employed at its nursing home could not unionize because they were "supervisors." The LPNs are supervisors, New Vista argues, because they have the "authority" to "discipline other employees[] . . . or effectively to recommend such action." 29 U.S.C. § 152(11). New Vista explains that the LPNs had such authority because their duties included filling out forms known as "Employee Warning Notices" or "Notices of Corrective Action, " which recommended discipline for certified nursing assistants ("CNAs").

         After New Vista refused to bargain with the LPNs' union, the National Labor Relations Board (the "Board") held that New Vista's refusal to bargain was unlawful because, among other things, the nurses did not have the authority to effectively recommend discipline. To determine whether the LPNs had such authority, the Board applied a four-part test squarely at odds with our controlling precedent-specifically NLRB v. Attleboro Associates, Ltd., 176 F.3d 154 (3d Cir. 1999). Therefore, we will deny the Board's petition for enforcement and grant New Vista's cross-petitions for review. In doing so, we will remand this case to the Board to allow it to determine whether the LPNs have the authority to effectively recommend discipline under Attleboro.

         Before we can move to the analysis by which the Board should determine whether the LPNs are statutory supervisors, we will first address the sundry procedural arguments advanced by New Vista. After the Supreme Court's decision in NLRB v. Noel Canning, 134 S.Ct. 2550 (2014), and our post-Noel Canning remand to the Board to clear up procedural and jurisdictional issues, we conclude that New Vista's procedural arguments are meritless.


         There are three levels of nursing staff at the New Vista home who are supervised by the Director of Nursing: (1) the "nursing supervisor" during the evening shift or "unit manager" during the morning shift; (2) LPNs[1]; and (3) "Certified Nurse Aides" also known as "certified nursing assistants" or "CNAs." See New Vista Nursing & Rehab., LLC, 357 N.L.R.B. 714, 715 (2011); JA0073-75; JA0079; JA0881. In January 2011, 1199 SEIU United Healthcare Workers East (the "Union") filed a petition to represent the LPNs.[2]

         The Board approved the bargaining unit and required that an election be held to determine whether the Union would serve as the LPNs' bargaining representative. JA0848-50, 0878-79. The bargaining unit was defined to include "[a]ll full-time and regular part-time Licensed Practical Nurses employed by the Employer at its Newark, New Jersey facility, excluding all other employees, guards, and supervisors as defined by the Act." JA0849-50.

         One of New Vista's main objections to the bargaining unit was that the LPNs were supervisors under 29 U.S.C. § 152(11) because they have the "authority" to "discipline other employees[] . . . or effectively to recommend such action." If they were supervisors, the LPNs would not have a statutory right to be represented in collective bargaining. See 29 U.S.C. § 152(3) ("The term 'employee' . . . shall not include . . . any individual employed as a supervisor . . . ."); see also NLRB v. Ky. River Cmty. Care, Inc., 532 U.S. 706, 718 (2001) ("The Labor Management Relations Act, 1947 (Taft-Hartley Act) expressly excluded 'supervisors' from the definition of 'employees' and thereby from the protections of the Act."). To determine whether an individual is a supervisor, the Supreme Court has provided a three-part test:

Employees are statutory supervisors if (1) they hold the authority to engage in any 1 of the 12 listed supervisory functions [in 29 U.S.C. § 152(11)], (2) their "exercise of such authority is not of a merely routine or clerical nature, but requires the use of independent judgment, " and (3) their authority is held "in the interest of the employer."

Ky. River, 532 U.S. at 713 (quoting NLRB v. Health Care & Ret. Corp. of Am., 511 U.S. 571, 573-74 (1994)). One of the twelve listed supervisory functions is "disciplin[ing] other employees." 29 U.S.C. § 152(11).

         New Vista argued that it showed that the LPNs effectively have the power to discipline other employees because LPNs submitted disciplinary forms known as a "Notice of Corrective Action" or "Employee Warning Notice." E.g., JA0872-73, JA0884-86.

         The facts surrounding these forms were fiercely contested. See JA0856-0862. Some testimony suggested LPNs did not use the forms to effectively recommend discipline. One of the nurses had never seen the Employee Warning Notice until just prior to her testimony. See JA0276; see also JA0329. Similarly, testimony by another nurse was that LPNs rarely (if ever) recommended a specific kind of discipline. See JA0330.

         There was, however, countervailing evidence that supported New Vista's position. Most notably, Director of Nursing Victoria Alfeche testified that LPNs, in the exercise of their own discretion, frequently filled out these forms. Further, Alfeche explained that LPNs could recommend a specific type of discipline and that she acted on the forms as a matter of course. See JA0098-99, 0148.

         In his March 9, 2011 order, NLRB Regional Director J. Michael Lightner rejected New Vista's argument, applying a four-part test based on a vacated NLRB opinion: "To prevail, the Employer must prove that: (a) LPNs submit actual recommendations, and not merely anecdotal reports, (b) their recommendations are followed on a regular basis, (c) the triggering disciplinary incidents are not independently investigated by superiors, and (d) the recommendations result from the LPNs' own independent judgment." JA873 (citing ITT Lighting Fixtures, 265 N.L.R.B. 1480, 1481 (1982), vacated on other grounds sub nom. ITT Lighting Fixtures, Div. of ITT Corp. v. NLRB, 712 F.2d 40 (2d Cir. 1983)). Director Lightner's conclusion rested heavily on his finding that LPNs "simply report[ed] factual findings to their superiors without any specific recommendation for disciplinary action" and that the "higher authorities" at New Vista proceeded with independent investigations upon receiving the forms. See JA0873-74. Director Lightner also noted that there were very few examples in the record of LPNs who filled out the forms other than Grace Tumamak. See JA0875. Director Lightner further found that forms filled out by Ms. Tumamak could not show the authority of other LPNs because Ms. Tumamak served as the unit manager on one shift and as an LPN on another. See JA0850.

         The election to determine whether the Union would serve as the LPNs' bargaining representative was held on April 8, 2011. See JA0039. A majority of LPNs voted to be represented by the Union by a vote of 26 to 7. See id. Four additional votes were challenged. See id.

         That same day, the Board denied New Vista's request for review of Director Lightner's order that directed the election would occur. See JA0911, available at

         Because such denials are nonreviewable, New Vista pursued the standard course of testing the Union's certification by refusing to bargain. See NLRB v. FedEx Freight, Inc., 832 F.3d 432, 435 n.1 (3d Cir. 2016); JA0021; JA0042 ("Dear All; We are testing the certification and will not be bargaining."). New Vista asserted that the LPNs were statutory supervisors and, even if they had not been prior to the certification, they were as of March 25, 2011, because of a change in the LPNs' duties. See JA0049, 0053.

         In a decision and order dated August 26, 2011, the Board (Liebman, Becker, Hayes)[3] unanimously granted summary judgment in favor of the Union and against New Vista. See New Vista Nursing & Rehab., LLC, 357 N.L.R.B. 714.

         The Board's order granting summary judgment on the refusal to bargain charge and many of its subsequent orders denying New Vista's motions for reconsideration took place during what may fairly be described as unusual times for the Board. The political branches had not filled many of the vacancies on the Board. This led then-President Obama to make a series of recess appointments to fill the vacancies. See NLRB v. Noel Canning, 134 S.Ct. 2550, 2557-58 (2014) (describing the recess appointments); id. at 2557 ("As of January 2012, Flynn's nomination had been pending in the Senate awaiting confirmation for approximately a year."). As is relevant here, there were two different sets of recess appointments: (1) Craig Becker was recess appointed to the Board in 2010, and (2) Sharon Block, Terence Flynn, and Robert Griffin were all recess appointed in 2012. See NLRB v. New Vista Nursing & Rehab., 719 F.3d 203, 213 (3d Cir. 2013), abrogated by Noel Canning, 134 S.Ct. 2550; id. at 244-45 (Greenaway, Jr., J., dissenting).

         As described below, if there are an insufficient number of Board Members, the Board will be unable to muster a quorum. Without a quorum, the Board cannot issue legally enforceable orders. The National Labor Relations Act ("NLRA") provides that the Board shall have five members. 29 U.S.C. § 153(a). As the Supreme Court has held, there are three Board quorums, of which the first and third must exist for any given NLRB decision to be valid under 29 U.S.C. § 153(b). See generally New Process Steel, L.P. v. NLRB, 560 U.S. 674 (2010). First, three members of the Board constitute a quorum of the entire Board. See 29 U.S.C. § 153(b) ("[T]hree members of the Board shall, at all times, constitute a quorum of the Board . . . ."); New Process Steel, 560 U.S. at 680 ("Interpreting the statute to require the Board's powers to be vested at all times in a group of at least three members is consonant with the Board quorum requirement, which requires three participating members 'at all times' for the Board to act." (quoting 29 U.S.C. § 153(b)). Second, the Board may delegate its power to a three-member group. See 29 U.S.C. § 153(b) ("The Board is authorized to delegate to any group of three or more members any or all of the powers which it may itself exercise."); New Process Steel, 560 U.S. at 679 ("The first sentence of § 3(b), which we will call the delegation clause, provides that the Board may delegate its powers only to a 'group of three or more members.'" (quoting Labor Management Relations Act, 1947, § 3(b), Pub. L. No. 80-101, 61 Stat. 136, 139 (codified as amended at 29 U.S.C. § 153(b))). Third, two members of any three-member group constitute a quorum of a three-member group. See 29 U.S.C. § 153(b) ("[T]wo members shall constitute a quorum of any group designated pursuant to the first sentence hereof."); New Process Steel, 560 U.S. at 681 ("[T]he group quorum provision, which still operates to authorize a three-member delegee group to issue a decision with only two members participating, so long as the delegee group was properly constituted."). The two-member quorum of a three-member group ceases to exist as a viable quorum when the Board has fewer than two members. See New Process Steel, 560 U.S. at 679.

         On September 7, 2011, New Vista began filing the first of what would ultimately be five motions for reconsideration, arguing that the Board acted ultra vires because it had too few Members either serving or involved in a particular decision.

         In its First Motion for Reconsideration, New Vista argued that the August 26, 2011 order was ultra vires because it was posted on the Board's website after the expiration of the term of one of its signing members-then-Chairman Wilma Liebman. According to New Vista, if Chairman Liebman had not legally participated in the August 26, 2011 order, the delegee group only consisted of two members in violation of 29 U.S.C. § 153(b). See JA0051. New Vista also argued it was entitled to a hearing to investigate changed circumstances in the LPNs' authority to supervise, pursuant to Frito-Lay, Inc., 177 N.L.R.B. 820 (1969).

         On September 13, 2011, the Board filed an application for enforcement of its August 26, 2011 order with this Court. See JA0001.

         On December 30, 2011, the Board (Becker, Hayes) denied New Vista's First Motion for Reconsideration. As to Chairman Liebman, the Board explained that the August 26, 2011 order was made final prior to the August 27 end of Chairman Liebman's term and that the Board's subsequent acts with regard to the August 26, 2011 order were ministerial. See JA0012-14. With regard to the Frito-Lay argument, the Board rejected it "[f]or the reasons set forth in the Board's August 26, 2011 Decision and Order." JA0014.

         On January 3, 2012, New Vista filed its Second Motion for Reconsideration. The Second Motion argued that the December 30, 2011 order denying the First Motion for Reconsideration was not decided by a "proper quorum" because one of the three members of the panel, Chairman Pearce, had recused. See JA0055-57. Because the panel consisted only of Members Becker and Hayes, it was, according to New Vista, improperly constituted.

         On January 9, 2012, New Vista filed a petition for review of the December 30 order with this Court. See JA0002-03. We have treated this petition as a cross-petition for review opposing the Board's petition for enforcement of the August 26, 2011 order.

         On March 14, 2012, New Vista filed its Third Motion for Reconsideration. New Vista argued that the Board's December 30, 2011 order denying the First Motion for Reconsideration was ultra vires because Member Becker's recess appointment ended on December 17, 2011. According to New Vista, the Board (Becker, Hayes) lacked a two-person quorum to issue its December 30, 2011 order. See JA0058- 59.

         On March 15, 2012, the Board (Hayes, Griffin, Block) denied New Vista's Second Motion for Reconsideration. The Board held that there was a quorum for the December 30, 2011 order denying the First Motion for Reconsideration. Specifically, the March 15, 2012 order relied on the fact that, pursuant to New Process Steel, a two-member quorum of a panel can issue legally enforceable orders. See JA0015-16. The March 15, 2012 order quoted from the December 30, 2011 order showing that Pearce engaged in the delegation of power to the two-member quorum and then recused. See JA0016 ("Chairman Pearce, who is recused and did not participate in the underlying decision, is a member of the present panel but did not participate in deciding the merits of this proceeding.").

         On March 22, 2012, New Vista filed its Fourth Motion for Reconsideration, arguing that Members Griffin and Block were not Board members on March 15, 2012 because they had been illegally appointed during an intrasession recess. See JA60-61. New Vista again argued that the December 30, 2011 order was improper because Becker was no longer a Board member on December 30, 2011. See id.

         On March 27, 2012, the Board (Hayes, Griffin, Block) denied the Third and Fourth Motions for Reconsideration. See JA0017-18. The Board stated that the Board properly delegated its authority to a three-member panel and would "not entertain any further motions for reconsideration challenging the authority of the Board in this matter." Id.

         On April 5, 2012, New Vista filed a petition for review of the March 15 and March 27 orders. See JA0004-06. We granted New Vista's request that this petition be consolidated with New Vista's earlier petition for review for all purposes. These consolidated petitions for review are collectively treated as a cross-petition opposing the Board's petition for enforcement of the August 26, 2011 order.

         On May 16, 2013, we ruled on the Board's petition and New Vista's cross-petitions, holding that the "delegee group acted without power and lacked jurisdiction" when it issued the August 26, 2011 order because Becker's recess appointment was invalid. New Vista, 719 F.3d at 221, 244. Specifically, we held that recess appointments were legal only when made during Congress's "intersession breaks." Id. at 208.

         Shortly thereafter, the Board filed a petition for rehearing en banc. On July 16, 2013, we stayed further consideration of New Vista pending the Supreme Court's resolution of Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013), which also addressed the legality of recess appointments to the Board. See Order, No. 12-1027 (3d Cir. filed July 15, 2013).

         On June 26, 2014, the Supreme Court issued its decision in Noel Canning. 134 S.Ct. 2550. The Supreme Court held that, as used in the Appointments Clause, "the phrase 'the recess'" is not limited to recesses between congressional sessions. Id. at 2561. Recess appointments could be made during an intrasession recess, but such a recess that is "less than 10 days is presumptively too short to fall within the Clause." Id. at 2567. Further, "pro forma sessions" are not "periods of recess, " so no recess appointments could be made during any intrasession recess punctuated by pro forma sessions fewer than ten days apart. Id. at 2574.

         Applying those rules, the Supreme Court held that Griffin's and Block's recess appointments were invalid. When Griffin and Block received their recess appointments, the Senate had been holding "pro forma sessions every Tuesday and Friday." Id. at 2557. Because these pro forma sessions limited the length of the intrasession recess, the resulting 3-day recesses were "too short to trigger the President's recess-appointment power." Id. at 2574.

         At the same time, the Supreme Court implied that Member Becker's appointment was valid because it was made during a two-week intrasession recess. See id. at 2558 ("The President appointed Member Becker during an intra- session recess that was not punctuated by pro forma sessions, and the vacancy Becker filled had come into existence prior to the recess."); see also New Vista, 719 F.3d at 213 ("Member Becker . . . was appointed on March 27, 2010, one day after the Senate 'adjourn[ed]' for two weeks." (quoting 156 Cong. Rec. S2180 (daily ed. Mar. 26, 2010) (statement of Sen. Kaufman)).

         Following the Supreme Court's Noel Canning decision, we granted the Board's motion for panel rehearing. In response to this Court's questions, the Board admitted it "undisputedly lacked a quorum" for its March 15, 2012, and March 27, 2012 orders.[4] Motion of the National Labor Relations Board for Limited Remand of the Administrative Record, No. 11-3440, Doc No. 003112144322 (3d Cir. Dec. 2, 2015). The Board requested that we remand the administrative record so that it could rule on the motions for reconsideration it denied in March 2012. See id. We granted the motion for remand. See Order, No. 11-3440 (3d Cir. filed Dec. 4, 2015).

         On remand, the Board (Miscimarra, Hirozawa, McFerran) again denied New Vista's Second and Third Motions for Reconsideration on the merits and then denied New Vista's Fourth Motion for Reconsideration as moot. SA14-18.

         New Vista then filed a Fifth Motion for Reconsideration, arguing a lack of transparency and that there was no valid quorum to enter the most recent order because Member Hirozawa should have recused himself. Among other things, New Vista claimed that Member Hirozawa's former law firm represented the Union in this case. See SA19-20. On January 5, 2016, the Board denied the Fifth Motion for Reconsideration, with Member Hirozawa denying the request for recusal. See SA21-26. The Board explained that New Vista knew that the Board planned to review the Fourth Motion for Reconsideration "expeditiously." SA23. As to recusal, the Board referred New Vista to an attached statement by Member Hirozawa. See id. Member Hirozawa explained that he did not recuse because, among other things, he had no involvement with "this matter or any other matter concerning" New Vista while in private practice and his first work on this case was more than five years after he left his previous firm. See SA24-26.

         Following New Vista's denial of the Fifth Motion for Reconsideration, we ordered supplemental briefing and requested a supplemental appendix. See Order, No. 11-3440 (3d Cir. filed Jan. 21, 2016). Having received this supplemental material, we now review the Board's petition for enforcement and New Vista's cross-petitions for review.


         We have jurisdiction over the Board's petition for enforcement pursuant to 29 U.S.C. § 160(e) and jurisdiction over New Vista's petitions to review the Board's final order pursuant to 29 U.S.C. § 160(f). See 800 River Rd. Operating Co. LLC v. NLRB, 784 F.3d 902, 906 (3d Cir. 2015).


         "The Board's legal determinations are subject to plenary review, but we will uphold the Board's interpretations of the Act if they are reasonable." MCPc Inc. v. NLRB, 813 F.3d 475, 482 (3d Cir. 2016) (citing Mars Home for Youth v. NLRB, 666 F.3d 850, 853 (3d Cir. 2011)). "[W]e will accept the Board's factual findings and the reasonable inferences derived from those findings if they are 'supported by substantial evidence on the record considered as a whole.'" Advanced Disposal Servs. E., Inc. v. NLRB, 820 F.3d 592, 606 (3d Cir. 2016) (quoting 29 U.S.C. § 160(f)). Where the Board has adopted the Regional Director's findings, we perform our substantial evidence review of the Regional Director's findings. See MCPc, 813 F.3d at 482.

         We review a Board member's decision whether to recuse under an abuse-of-discretion standard, reversing only when a decision is "arbitrary or unreasonable." 1621 Route 22 W. Operating Co., LLC v. NLRB, 825 F.3d 128, 143-44 (3d Cir. 2016).


         To put it mildly, motions for reconsideration have piled up in this case. The following table shows the tangled nature of the five motions for reconsideration:

         Orders and Motions under Consideration

         (Image Omitted)

         We will address the motions for reconsideration in reverse chronological order. In resolving all of these motions, as we do, in favor of the Board, we conclude that we must remand so that the Board may apply an appropriate test to determine whether the LPNs have the authority to discipline other employees.


         New Vista's Fifth Motion for Reconsideration alleged that the Board's December 17, 2015 order was invalid because (1) New Vista did "not even know the Board was considering the matter"-in its brief, New Vista frames this as a "lack of transparency, " New Vista Supp. Br. 5[5]-and (2) Member Hirozawa should have recused. See SA19. Both arguments fail.

         First, with regard to the Board's "transparency, " New Vista now argues that there were two failures: (a) the Board acted with "great alacrity" in resolving the Fourth Motion for Reconsideration in its January 5, 2016 order, New Vista Supp. Br. 1-2, and (b) the Board engaged in unlawful ex parte communication with its general counsel prior to resolving the Fourth Motion for Reconsideration, see New Vista Supp. Br. 2-5. The first argument does not present any legal deficiency and we do not have jurisdiction to address the second because it was not presented to the Board. If we had jurisdiction, we would find this argument unavailing.

         With regard to the Board's "alacrity" in resolving the Fourth Motion for Reconsideration or failure to tell New Vista that it would soon be resolving the Fifth Motion for Reconsideration, New Vista fails to present any factual or legal basis for overturning the January 5, 2016 order. First, New Vista provides no legal hook on which to hang its grievance. And with regard to the facts, there is substantial evidence to support a finding that New Vista knew that the Board planned to act expeditiously. The Board had previously advised this Court it would resolve New Vista's outstanding motions within thirty days. See SA4. Accordingly, the Board is entitled to the benefit of the presumption of regularity. See Kamara v. Att'y Gen., 420 F.3d 202, 212 (3d Cir. 2005).

         With regard to the ex parte communications argument, we lack jurisdiction to consider this argument because New Vista failed to raise this argument before the Board. See 29 U.S.C. § 160(e) ("No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances."); FedEx Freight, 832 F.3d at 437 ("The crucial question in a section 160(e) analysis is whether the Board received adequate notice of the basis for the objection." (internal quotation marks omitted) (quoting FedEx Freight, Inc. v. NLRB, 816 F.3d 515, 521 (8th Cir. 2016))); id. at 448 ("[T]he Court of Appeals lacks jurisdiction to review objections that were not urged before the Board . . . ." (quoting Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 666 (1982))). New Vista only argued in its motion (and the Board only addressed in its order) that the Board ruled too ...

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