Last week the D.C. Circuit Court of Appeals reversed a National Labor Relations Board’s decision involving Weingarten rights, the application of its Wright-Line analysis, and a witness credibility determination. These core principles are no doubt headliners of the NLRB’s Big Top. In one fell swoop, the lion bit the lion tamer, the elephant tossed the mahout, and the trapeze artist lost his grip and came crashing down. Circus Circus Casinos, Inc., v NLRB, No. 18-1201 (June 12, 2020). This is the second recent decision tightening the Wright-Line analysis and will likely result in fewer discharged employees being reinstated. See our August 2019 Alert. “NLRB Holds Pretext Finding Standing Alone Insufficient.”

Case Background

Circus Circus arose in 2013 when, during a safety meeting, a temporary employee voiced his concern that second-hand marijuana smoke in hotel rooms could result in a positive drug test. Per OSHA requirements, the casino provides custom-fit respirators to employees likely to encounter airborne hazards during their work. Later, pursuant to OSHA regulations and the casino’s own policies, the employee was sent for a fit test for a respirator, but he refused due to mask-related anxiety. The company subsequently investigated the refusal to submit to the fit test, and when the employee appeared for his scheduled interview, he announced he had contacted the union hall, and that he was unrepresented (he did not request an alternative representative even though his shop steward worked right across the hallway). The casino proceeded with its interview. The employee was accompanied by a union steward as the subsequent termination meeting, ultimately the casino terminated the employee for refusing to be tested.

The NLRB’s Regional Director investigated the charges and dismissed them. The General Counsel (Richard Griffin) reversed that decision, and the case went to hearing before ALJ Mary Miller Cracraft (a former Board member). ALJ Cracraft, made witness credibility determinations, applied Wright-Line (and concluded the employer’s justification for termination was pretextual), and found the employee’s factual announcement that he was unrepresented was, in fact, a request for representation under Weingarten. The Board affirmed (although Chairman Ring dissented from the Weingarten violation).

The Court began with a primer of the role of the courts when reviewing rule-making and decisions issued by administrative agencies. As the Court explained, when new standards are adopted, the agency must acknowledge that the standard is being changed, demonstrate the new standard is permissible, and provide good reasons for the change. Conversely, agencies are required to apply their rules consistently and may not deviate from precedent without an explanation.

The Court reviewed the NLRB’s legal standing when it appeared in Court, noting that Congress had imposed judicial review to assure “the Board keeps within reasonable bounds.” It noted that when the Board applied an existing standard or established a new standard, it had to engage in “reasoned decision making,” and its standards had to be “rational and consistent with” the National Labor Relations Act.

The Trigger for Weingarten Rights Clarified

In the majority’s view, Weingarten rights (the right of a union-represented employee to have a union representative present during an investigatory interview likely to lead to discipline) only arise “where the employee requests representation.” The majority concluded the Board acted arbitrarily and capriciously by significantly altering the standard for a valid “Weingarten request,” and dismissed the allegation. In the majority’s view to be a valid request, the employee must “affirmatively request representation.” Reviewing the Board’s prior decisions involving this issue, the majority concluded the Board had never construed “mere statements of fact” as a request.

Wright-Line Pretext Analysis Explained

The Court (Chief Judge Srinivasan joined in this portion of the Court’s opinion) was unanimous in finding fault with the Board’s analysis of the employee’s discharge under its long-standing two-pronged Wright-Line rubric. It focused its attention on the second prong: “whether the employer reasonably believed the misconduct had occurred and whether the discharge was consistent with the employer’s policies and practices.” The Court faulted the Board for adopting facts about what happened at the clinic when the employee refused to submit to the fit test rather than the employer’s good faith belief about what had happened. The Court noted that under Wright-Line the actual events were “immaterial.” The Court also rejected the NLRB’s finding that the employee had purged his misconduct by offering to submit to a fit-test after the employer began its investigation. The Court next faulted the Board for failing to assess whether the discharge was consistent with the Company’s policies and practices. Finally, and refreshingly, the Court concluded the Board could not “second guess an employer’s legitimate and consistently enforced policies for safety and discipline in the workplace.” The Court vacated this part of the NLRB’s decision and remanded it to the NLRB to apply the correct standard.

Witness Credibility Determinations

The third issue focused on the ALJ’s witness credibility determination. The panel majority took the unusual step of rejecting the ALJ’s credibility determinations because she applied the criteria “unevenly, drew unsupported inferences, and failed to draw inferences warranted by the record that tended to favor the company’s account.” Notably, the panel deemed testimonial demeanor “too thin a reed” on which to disregard the testimony of six (6) witnesses, which included both union members and non-members.

Employer Takeaways

Employers can breathe a sigh of relief as a consequence of this decision. The current Board has already addressed the requirement of the Wright-Line analysis. The requirement that employees affirmatively request union representation at an investigatory interview brings certainty to misconduct investigations. And the reversal of an ALJ’s credibility determination may cause a more thoughtful and reasoned approach to witness testimony.

For more information, please contact your Baker McKenzie attorney.