Gaetano & Associates, Inc. v. National Labor Relations Board

United States Court of Appeals for the Second Circuit

Gaetano & Associates Inc. (the Company) is the owner and developer of properties in New York City. The Company is its own general contractor and tries to perform as much of the construction work as possible. As part of two joint renovation projects in New York, the Company hired a number of carpenters. Representatives of the Carpenters’ Union began organizing efforts in early April 2003. The Company was aware of the union organizing activity even before a petition for an election was filed by either union.

A union representative called the Company on April 16, 2003, and spoke to William Gaetano, the owner, stating that his union represented the carpenters. This was followed up by a letter dated April 16 advising that the union claimed to represent a majority of the carpenters employed by the Company. Also on April 16, 2003, the Carpenters’ Union filed a petition for an election. The NLRB’s regional office immediately faxed a copy of this petition, along with a notice that a representation hearing would take place on April 25, 2003.

At the end of the working day on April 16, 2003, the owner laid off a large number of the carpenters. On the same day, the Company began replacing some of the fired employees. Furthermore, after the April 16 layoff, the Company entered into two subcontracts to install windows and sheetrock. With two minor exceptions, the subcontracted work could easily have been performed by the fired carpenters. The workers and the union brought charges against the Company. The ALJ found in favor of the carpenters, and the NLRB affirmed.

En Banc

Our review of NLRB orders is limited. “We must enforce the Board’s order where its legal conclusions are reasonably based, and its factual findings are supported by substantial evidence on the record as a whole.” . . . Moreover, we accept an ALJ’s credibility determinations, as adopted by the NLRB, unless the testimony is “incredible or flatly contradicted by undisputed documentary testimony

Mass Lay-Offs

The ALJ found, and the Board agreed, that the Company’s April 16, 2003 mass lay-off of carpenters was motivated by anti-union animus and that the company would not have made the same decision absent the concerted activity and thus that the Company had violated NLRA § 8(a)(1) and (3). Contrary to the Company’s argument, temporal proximity can be a sufficient basis from which to infer anti-union animus as a matter of law. Here, the lay-off occurred at the end of the day on April 16, 2003, in the middle of the workweek on the same day that union representative Byron Schuler called the Company to inform it that its carpenters sought to be represented by his union and the NLRB faxed the Company the union’s petition for a representation election. Immediately after laying off a significant number of its carpenters on April 16, 2003, the Company hired two carpenters to work at the main site and hired three more carpenters to work at that site a week later. The ALJ credited the testimony of a number of employees that at least 20 percent of rough carpentry remained at the time of the lay-off. The testimony is neither so incredible as to defy the laws of nature nor contradicted by documentary evidence, and therefore we do not disturb the ALJ’s finding.

The Company argues further that the Board erred in finding it liable for an unfair labor practice under the twopart test of Wright Line, . . . because its actions were taken for economic reasons. It relies on cases in which we found, on the basis of testimony and corroborating documentary evidence, substantial support for the employer’s proffered business justification for lay-offs that occurred in close temporal proximity to protected activity. The Company’s reliance is misplaced, however, because it has failed to produce any documentation supporting its proffered economic justifications, and the ALJ found the testimony of the Company’s principals inconsistent with its actions in hiring additional carpenters in April and May. In these circumstances, we find no error in the Board’s rejection of the Company’s affirmative defense.

Anti-Union Animus in Sub-Contracting

The Company next contends that the Board erred in finding that anti-union animus was a substantially motivating factor in the Company’s decision to sub-contract the window installation and related work because it relied on circumstantial evidence and the fact that the Company had committed other unfair labor practices. We disagree.

First, there is no prohibition on the Board’s consideration of circumstantial evidence. Second, the Board only noted the existence of other unfair labor practices in concluding that the circumstances of the outsourcing gave rise to an inference of anti-union animus. There is substantial evidence supporting the Board’s conclusion; namely, that the Company’s decision to subcontract the window installation was a departure from its policy, adopted in 1998, to use its employees to perform as much of the construction work as possible; that the Company knew of the employees’ union activity; and that the Company’s numerous unfair labor practices in response to the union campaign gave rise to the inference that the decision to subcontract soon after the employees engaged in protected activity was motivated by anti-union animus.