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National Labor Relations Board v. Tito Contractors, Inc.

United States Court of Appeals, District of Columbia Circuit

February 3, 2017

National Labor Relations Board, Petitioner
Tito Contractors, Inc., Respondent

          Argued October 11, 2016

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

          Jonathan W. Greenbaum argued the cause and was on brief for Tito Contractors, Inc.

          Michael Ellement, Attorney, National Labor Relations Board, argued the cause for the National Labor Relations Board. Richard Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, and Jill A. Griffin, Supervisory Attorney, were with him on brief.

          Before: Henderson and Rogers, Circuit Judges, and Ginsburg, Senior Circuit Judge.



         Tito Contractors, Inc. (Tito) is a Washington, D.C.-based general contracting company. As it turns out, that label covers a diverse set of services, ranging from masonry to snow removal and recycling services. This case involves the question of what bargaining unit is appropriate when so varied a workforce seeks union representation. The National Labor Relations Board (NLRB or Board) concluded that Tito's employees should be included in a "wall-to-wall" bargaining unit. We believe that the Board failed to consider evidence pointing to the absence of the required "community of interest" among them. We therefore grant Tito's petition for review, deny the NLRB's application for enforcement and remand to the Board for further proceedings consistent with this opinion.

         I. BACKGROUND

         In November 2013, the International Union of Painters and Allied Trades, District Council 51, AFL-CIO (Union) filed a representation petition with the NLRB. The Union sought to represent "[a]ll employees employed by [Tito], excluding all project managers, recycling supervisors, clerical employees, managerial employees, professional employees, guards, and supervisors as defined by the [National Labor Relations] Act" (Act). Joint Appendix (JA) 116. The following month, an NLRB hearing officer (HO) held a hearing on the Union's petition. Tito raised two objections: first, that the proposed bargaining unit was inappropriate because its members did not share a sufficient "community of interest" and, second, certain employees should be excluded from the bargaining unit because they were supervisors within the meaning of the Act. We focus on the first of the challenges. Considering that challenge, the HO advised Tito that a "wall-to-wall unit of all employees employed by the [e]mployer involves a presumption . . . of appropriateness under Board law[.]" Id. at 15. She informed Tito that it was therefore "required to present an offer of proof that the unit sought is inappropriate." Id. Tito objected to the offer-of-proof procedure, arguing that it instead had the right to present testimony and other evidence on the issue of unit appropriateness.

         Notwithstanding its objection, Tito made an offer of proof, describing its business at some length. It divided Tito's operations into two halves: the "labor or contract side of the business" and the recycling side. Id. at 23. Tito further divided the labor side into three groups of employees: two mechanics, one warehouse employee and multiple laborers.[1]Regarding the first, Tito explained that it employed two mechanics who worked full-time in its Georgia Avenue office in the District of Columbia (District). The two performed routine maintenance on Tito vehicles but performed no work for Tito customers. Both mechanics "receive[d] benefits and vacation." Id. at 20. Second, Tito explained that its one warehouse employee worked full-time in Kensington, MD. There, he coordinated and received deliveries and organized the Tito warehouse. He was the only employee there and performed no contracting services. Third, Tito laborers worked in crews, performing a variety of tasks for its customers. Some laborers worked as painters, others as skilled masons and others as tile installers and carpenters. Some crews were assigned to "more permanent contracts[, ]" id. at 22, of which Tito provided a few examples. For example, four employees worked under Tito's contract with Arlington County, VA. The four reported to Arlington County's maintenance office each morning and complied with the "task orders" they received there. The tasks ranged from repairs to construction to snow removal. Arlington County controlled the Tito laborers' working hours and could request that they be removed from or remain on the job site. In addition, Tito had contracts with Baltimore, MD, and Fairfax County, VA, which contracts set forth specific work hours and standards for how Tito laborers were to complete their work.

         Tito also offered proof of the recycling side of its business. It had three separate recycling contracts with Maryland Environmental Services (MES) under which nearly sixty Tito employees worked at several recycling facilities in Maryland. The first contract covered two locations in Montgomery County, MD: a compost facility in Dickerson and a transfer station in Derwood. Tito employees at the Dickerson location performed such tasks as bagging compost, stacking bags, wrapping pallets, monitoring temperatures and groundskeeping. [2] The Derwood employees' duties, in contrast, included traffic control, equipment cleaning, groundskeeping and temperature monitoring. Under this contract, MES exercised considerable control of the Tito employees. For example, MES determined the number of employees needed and their hours, established their minimum pay rate, approved or denied overtime and "provide[d] that employees at these two facilities . . . be offered . . . [, ] if . . . eligible . . . [, ] medical and dental insurance." Id. at 25- 26.

         The second contract covered a different Derwood facility. At this facility, twenty-five Tito employees and one Tito supervisor sorted recyclables on a conveyor belt. They also performed minor custodial duties. Like the first, their contract included a minimum pay rate and provision for medical and dental insurance. In addition, Tito employees generally worked a ten-hour shift each day Monday through Thursday, with a half-hour unpaid lunch break and relief breaks as approved by an MES supervisor.

         The third MES contract covered a recycling facility in Cockeysville, MD. The contract required both skilled and unskilled labor, including provision of recycling services. Like the other MES contracts, the Cockeysville contract set a minimum pay rate. Tito employees working in Cockeysville were paid less than their counterparts in Dickerson and Derwood and they were not eligible for benefits.

         After Tito completed its offer of proof, the HO went off the record for seven minutes. Once back on the record, she announced that "[a]fter consulting with the [r]egional management, [she] receive[d] [Tito's] officer of proof" but declared that "the evidence proffered [was] rejected" and that she did not intend to "permit testimony on [the bargaining-unit] issue." Id. at 29. Tito objected, arguing that section 9 of the Act affords an employer a "hearing on issues subject to the petition." Id. The HO noted Tito's objection but instructed it to present its first witness on the supervisor issue only.

         During the hearing, two Tito witnesses testified-a Tito general manager and a Tito supervisor-on the supervisor issue. After their testimony concluded, Tito renewed its objection to the offer-of-proof procedure. It argued, in part:

Section 9(c)(1) of the Act affords the [e]mployer the opportunity to present evidence and witnesses for a full hearing on the representation petition. In this case, the Regional Director[3] took an offer of proof. Within a couple of minutes of providing that offer of proof, the Regional Director made a decision without a transcript and literally within a couple of minutes [made] a determination that the Employer would have to rest on the record on that issue with an offer of proof without the availability of presenting witnesses and evidence.

Id. at 108.

         Eleven days after the hearing, and after only Tito filed a post-hearing brief, the Board's Acting Regional Director issued a Decision and Direction of Election. In it, he concluded that the HO properly exercised her discretion in following the offer-of-proof procedure. Importantly, he acknowledged that "[t]here [was] no evidence of any interchange between the recycling employees, or between the recycling employees and any other classification of employee." Id. at 120. But he also noted that Tito had not proposed an alternative bargaining unit. He then concluded Tito had not overcome the "presumption" that an employer-wide unit was appropriate. Tito thereafter sought Board review. In the meantime, a mail-ballot election was held between February 28, 2014 and March 14, 2014.

         On November 17, 2014, the Board rejected Tito's unit-appropriateness petition, stating that "[t]he Employer's Request for Review of the Acting Regional Director's Decision and Direction of Election is denied as it raises no substantial issues warranting review" and that "[t]he Employer's request to reopen the ...

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