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No. 05-477

In the Supreme Court of the United States

DOUBLE EAGLE HOTEL & CASINO, PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

BRIEF FOR THE
NATIONAL LABOR RELATIONS BOARD
IN OPPOSITION

PAUL D. CLEMENT
Solicitor General
Counsel of Record
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217
ARTHUR F. ROSENFELD
Acting General Counsel
JOHN E. HIGGINS, JR.
Deputy General Counsel
JOHN H. FERGUSON
Associate General Counsel
LINDA J. DREEBEN
Assistant General Counsel
RUTH E. BURDICK
>Attorney
National Labor Relations
Board
Washington, D.C. 20570

QUESTIONS PRESENTED

1. Whether the National Labor Relations Board reasonably concluded that petitioner committed unfair labor practices by disciplining employees for violating an unlawful work rule that prohibited employee dis cussion of petitioner's tips-splitting policy anywhere on its property.

2. Whether the Board reasonably concluded that petitioner unlawfully maintained a "Confidential Infor mation" rule that specifically defined confidential infor mation to include wages and other terms and conditions of employment, and warned that breach of the non disclosure policy would lead to discipline.

In the Supreme Court of the United States

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No. 05-477

DOUBLE EAGLE HOTEL & CASINO, PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE TENTH CIRCUIT

BRIEF FOR THE
NATIONAL LABOR RELATIONS BOARD
IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-21) is reported at 414 F.3d 1249. The decision and order of the National Labor Relations Board (Pet. App. 22-44) and the decision of the administrative law judge (Pet. App. 45-71) are reported at 341 N.L.R.B. No. 17.

JURISDICTION

The judgment of the court of appeals was entered on July 13, 2005. The petition for a writ of certiorari was filed on October 11, 2005. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. Section 7 of the National Labor Relations Act (NLRA), 29 U.S.C. 157, guarantees the right of employ ees "to self-organization, to form, join, or assist labor organizations, * * * and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." Those Section 7 "orga nization rights are not viable in a vacuum; their effec tiveness depends * * * on the ability of employees to learn the advantages and disadvantages of organization from others." Central Hardware Co. v. NLRB, 407 U.S. 539, 543 (1972). Therefore, Section 7 encompasses the rights of employees to solicit and communicate with other employees regarding wages and other terms and conditions of employment. See Beth Israel Hosp. v. NLRB, 437 U.S. 483, 491 (1978). Employers violate Sec tion 8(a)(1) of the NLRA if they "interfere with, re strain, or coerce employees in the exercise of [those] rights." 29 U.S.C. 158(a)(1).

To strike an appropriate balance between employees' Section 7 rights and an employer's legitimate interest in maintaining discipline and production (see Republic Avi ation Corp. v. NLRB, 324 U.S. 793, 802 n.8 (1945)), the National Labor Relations Board has articulated special standards in certain industries for assessing the legality of rules restricting employee discussion at the work place. For casinos, the Board applies the same stan dards it developed for retail stores. Dunes Hotel, 284 N.L.R.B. 871, 875 (1987) ("the gambling area" of a ca sino "equates to [the] 'selling floor' areas") (quoting Bar ney's Club, 227 N.L.R.B. 414, 416 (1976)); see Montgom ery Ward & Co. v. NLRB, 692 F.2d 1115, 1121 (7th Cir. 1982) (describing retail store rules), cert. denied, 461 U.S. 914 (1983). Under those standards, an employer can issue a rule banning employee discussion of wages and other terms and conditions on the casino gambling floor and its adjacent aisles and corridors. Hughes Props., Inc. v. NLRB, 758 F.2d 1320, 1322-1323 (9th Cir. 1985). An employee no-discussion rule that extends to other public areas is overbroad and violates Section 8(a)(1), absent a demonstrated particular and legitimate employer interest. Ibid.; see Ark Las Vegas Rest. Corp. v. NLRB, 334 F.3d 99, 108-109 (D.C. Cir. 2003).

Additionally, employer rules of conduct governing employee behavior violate Section 8(a)(1) when the rule "would reasonably tend to chill employees in the exer cise of their Section 7 rights." Lafayette Park Hotel, 326 N.L.R.B. 824, 825 (1998), enforced, 203 F.3d 52 (D.C. Cir. 1999) (Table). See NLRB v. Vanguard Tours, Inc., 981 F.2d 62, 67 (2d Cir. 1992) (citing Republic Aviation Corp. v. NLRB, 324 U.S. at 803 n.10).

2. Petitioner operates a hotel and casino in Cripple Creek, Colorado. Pet. App. 2. Its casino workers in clude slot and security employees who work on the ca sino gambling floor and receive tips from customers. Ibid. Petitioner maintains an unwritten policy that dic tates how tips are to be divided between slot and secu rity employees. Id. at 2-3. In May 2001, Petitioner changed the tips policy. Petitioner also established an unwritten tips rule that prohibited employees from dis cussing tips anywhere on petitioner's property. Id. at 3. In late October, shortly after a union organizing cam paign began among petitioner's employees, petitioner discharged employee Betty Ingerling and suspended employees Carol Marthaler and Barbara McCoy for vio lating its tips discussion rule. Id. at 14-15.1

Petitioner's employee handbook includes rules con cerning customer service and confidential information. Pet. App. 5, 18. The customer-service rule instructs em ployees "[n]ever [to] discuss Company issues, other em ployees, and personal problems to or around our guests," and to "[b]e aware that having a conversation in public areas with another employee will in all probability be overheard." Id. at 5. Petitioner's confidential-infor mation rule states:

Pursuant to Company policy . . . you may be re quired to deal with many types of information that are extremely confidential and with the ut most discretion must be observed. It is essential that no information of this kind is allowed to leave the department, other than by activity/job re quirement, either by documents or verbally. A list, which is not all-inclusive, of the types of in formation considered confidential is shown below:

o disciplinary information
o grievance/complaint information
o performance evaluations
o salary information
o salary grade
o types of pay increases
o amounts of pay increases
o termination data for employees who have left the company

Information should be provided to employees out side the department or to those outside the Com pany only when a valid need to know can be shown to exist.

* * * * *

Any breach or violation of this policy will lead to disciplinary action up to and including termina tion.

Id. at 18-19, 28.

3. The Board's General Counsel issued a complaint alleging that petitioner violated Section 8(a)(1) of the NLRA, 29 U.S.C. 158(a)(1), by maintaining several un lawful work rules. The complaint also alleged that peti tioner violated Section 8(a)(3) and (1), 29 U.S.C. 158(a)(3) and (1),2 by disciplining employees for break ing its unlawfully overbroad rule that prohibited em ployees from discussing tips anywhere on its property. Pet. App. 45.

The Board issued a decision finding, inter alia, that petitioner's maintenance of its rules on customer ser vice, confidential information, and discussion of tips vio lated Section 8(a)(1) of the NLRA, and that petitioner's discipline of employees under the invalid tips rule vio lated Section 8(a)(3) and (1) of the NLRA. Pet. App. 22- 41.3 The Board explained that petitioner could lawfully maintain a rule prohibiting employees from soliciting each other and discussing their working conditions in the casino's gambling areas and in adjacent aisles and corridors frequented by customers. But the Board found the customer-service rule unlawful because it ex tended to discussions in public places outside the gam bling area, such as restrooms, public restaurants, side walks, and parking lots. Id. at 26-27. The Board simi larly concluded that petitioner's rule "proscribing the discussion of tips and its tip policy anywhere on [its] property, is overly broad and unlawful." Id. at 24 n.6.

The Board held that petitioner's rule on confidential information was unlawful because, "on its face and on threat of discipline, [it] expressly prohibits the discus sion of wages and other terms and conditions of employ ment." Pet. App. 32 (applying the test of Lafayette Park Hotel, 326 N.L.R.B. at 825). As the Board explained, the rule "specifically defines confidential information to in clude wages and working conditions such as 'disciplinary information, grievance/complaint information, perfor mance evaluations, salary information, salary grade, types of pay increases and termination date of employ ees,' and then explicitly warns employees that '[a]ny breach or violation of this policy will lead to disciplinary action up to and including termination.'" Ibid.

Finally, the Board concluded that petitioner's disci pline of employees for discussing the tips policy was it self unlawful because it was based on the invalid tips rule. Pet. App. 23-24 n.3. The Board explained that, "where discipline is imposed pursuant to an overbroad rule, that discipline is unlawful regardless of whether the conduct could have been prohibited by a lawful rule." Ibid. (relying on Opryland Hotel, 323 N.L.R.B. 723, 728 (1997)).

Concurring in part and dissenting in part, Chairman Battista stated that, in his view, when the record clearly establishes that the discipline imposed was for conduct that an employer lawfully can proscribe, and the em ployer makes clear to the employees that their discipline is for that conduct, he would not find the discipline un lawful. Pet. App. 38.4 On the record in this case, how ever, he concluded that it was not clear that the employ ees were disciplined for discussions that occurred on the gambling floor; rather, the record indicates that they were disciplined for their discussion of tips and not on the basis of where the discussion occurred. Ibid.

4. The court of appeals enforced the Board's order and denied petitioner's petition for review. Pet. App. 1- 21. The court agreed with the Board that the rules con cerning customer service and discussion of the tips pol icy were invalid because they restricted employee dis cussion in places beyond the casino gambling floor and its adjacent aisles and corridors. Id. at 5-14.5

The court also upheld the Board's finding that peti tioner had unlawfully disciplined employees for violating the invalid rule prohibiting discussions of the tips policy anywhere on company property. In so doing, the court rejected petitioner's contention that its disciplinary ac tions should be held lawful because it disciplined the employees for discussing tips in the casino gambling area, where petitioner could have prohibited such dis cussion under a valid rule. Pet. App. 15-17. Noting that it must uphold the Board's interpretation if it is "a rea sonable one," the court concluded that the Board's "rule that all disciplinary actions imposed pursuant to an un lawful rule are unlawful" was a "reasonable" interpreta tion of the NLRA. Id. at 16. As the court explained, "[t]he Board has previously recognized the need to pro tect employees from rules that have a chilling effect on the exercise of their rights," and that the Board's rule "reduces the chilling effect that results from [the] impo sition of overbroad rules." Id. at 16, 17 (citing Lafayette Park Hotel, 326 N.L.R.B. at 825; NLRB v. Vanguard Tours, Inc., 981 F.2d 62, 67 (2d Cir. 1992)). The court also noted that "[t]he situation under consideration is analogous to [] constitutional overbreadth challenge[s]," which "[c]ourts permit * * * because they facilitate the striking down of laws which have a chilling effect on per sons whose actions may not be lawfully proscribed." Id. at 16.

The court of appeals upheld the Board's finding that petitioner's confidential-information rule was unlawful because it expressly prohibited employees from discuss ing wages and other terms and conditions of employ ment. Pet. App. 18-21. The court agreed with the framework set forth in Lafayette Park Hotel, 326 N.L.R.B. at 825, to balance the interest of employers in maintaining confidentiality rules and the rights of em ployees under Section 7 to discuss their terms of em ployment. While recognizing employers' legitimate in terest in maintaining the confidentiality of private infor mation, the court reasoned that employers could not prohibit employees from discussing their wages or work ing conditions. Pet. App. 19. The court concluded that "confidential information cannot be defined so broadly as to include working conditions." Id. at 20. The court thus held that petitioner's "definition of 'confidential in formation' clearly violates Section 8(a)(1) because it ex pressly includes 'salary information[,] . . . salary grade[, and] . . . types of pay increases.'" Ibid. (alterations in original).

ARGUMENT

The decision of the court of appeals is correct and does not conflict with any decision of this Court or an other court of appeals. This Court's review is therefore not warranted.

1. Petitioner challenges (Pet. 16-24) the court of ap peals' conclusion that petitioner unlawfully disciplined employees for violating its invalid rule prohibiting em ployees from discussing the tips policy anywhere on peti tioner's property. While conceding that its rule was overbroad and invalid (Pet. 17 & n.3), petitioner argues that its disciplinary actions should be found lawful be cause the disciplined employees discussed the tips policy on the casino floor, a location where petitioner could by rule validly prohibit such discussions. It is by no means clear, however, that petitioner could prevail under such a theory on the facts of this case. Chairman Battista determined in his concurring opinion that, even applying a policy under which "not * * * all discipline imposed pursuant to an overbroad rule is necessarily unlawful," the disciplinary action imposed in this case nonetheless was unlawful. He reasoned that the record showed that petitioner's discipline of the employees "was based on their discussion of tips and not on the locus where the discussion occurred." Pet. App. 38.

In any event, petitioner's claim does not warrant re view. Specifically, petitioner claims that the court of appeals' decision (i) was based on a constitutional over breadth doctrine that was improperly applied to NLRA jurisprudence, and (ii) conflicts with this Court's deci sion in NLRB v. Transportation Management Corp., 462 U.S. 393 (1983), and with Section 10(c) of the NLRA, 29 U.S.C. 160(c). Those contentions lack merit and do not warrant review.

a. Petitioner's assertion that the court of appeals' decision was based on a "constitutional overbreadth" doctrine misapprehends the court's opinion. In uphold ing the Board's conclusion that petitioner's disciplinary actions violated the NLRA, the court of appeals princi pally relied on law developed under the NLRA rather than on constitutional overbreadth principles. Pet. App. 14-17. The court explained that, "[b]y adopting the rule that all disciplinary actions imposed pursuant to an un lawful rule are unlawful, the Board reduces the chilling effect that results from imposition of overbroad rules." Id. at 16.6 The court also cited Board decisions that "recognized the need to protect employees from rules that have a chilling effect on the exercise of their rights," and the court concluded that "the Board's inter pretation is reasonable." Id. at 16, 17 (citing Lafayette Park Hotel, 326 N.L.R.B. at 825; Vanguard Tours, 981 F.2d at 67). The court therefore held, in agreement with other courts of appeals, that the Board acted reasonably in concluding that "a disciplinary action for violating an unlawful rule is itself a violation of the NLRA." Id. at 17; see NLRB v. McCullough Envtl. Servs., Inc., 5 F.3d 923, 931 n.9 (5th Cir. 1993); NLRB v. Lummus Indus., Inc., 679 F.2d 229, 232, 233 & n.6 (11th Cir. 1982).7 Al though the court of appeals added the observation that "[t]he situation under consideration is analogous to a constitutional over-breadth challenge," Pet. App. 16 (emphasis added), the court did not, as petitioner as serts (Pet. 17), base its holding "on a novel and unwar ranted importing of a constitutional overbreadth doc trine as a new element of NLRA jurisprudence."

b. Petitioner also argues that the decision of the court of appeals is inconsistent with Transportation Management, which upheld, as a permissible construc tion of the NLRA, the Board's burden-shifting approach in cases in which the employer asserts both unlawful and lawful motives for a discharge or other adverse employ ment action.8 Petitioner argues that the court of ap peals' decision conflicts with Transportation Manage ment because it denied petitioner the right to assert the affirmative defense that it disciplined employees for a lawful reason. Petitioner further claims that the deci sion conflicts with Section 10(c) of the NLRA, 29 U.S.C. 160(c), which provides that the Board shall not require reinstatement or backpay if an individual was suspended or discharged for cause.

Because petitioner failed to raise those arguments before the Board, including in a motion for reconsidera tion, the NLRA prevents the Court from considering those arguments in the first instance. See 29 U.S.C. 160(e) ("No objection that has not been urged before the Board * * * shall be considered by the [reviewing] court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances."); Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665-666 (1982) (bar against judicial review under 29 U.S.C. 160(e) applies when party fails to preserve objec tion to Board's decision by filing motion for reconsidera tion with the Board); International Ladies' Garment Workers' Union v. Quality Mfg. Co., 420 U.S. 276, 281 n.3 (1975) (same). Petitioner could have raised those issues to the Board in a motion for reconsideration of the Board's conclusion that, "where discipline is imposed pursuant to an overbroad rule, that discipline is unlawful regardless of whether the conduct could have been pro hibited by a lawful rule." Pet. App. 24 n.3. Petitioner also failed to raise those arguments in the court of ap peals. This Court typically does not consider claims that were neither raised nor decided below, see Capital Cit ies Cable, Inc. v. Crisp, 467 U.S. 691, 697 (1984), and there is no reason to depart from that customary prac tice here.

In any event, petitioner's claim of a conflict with Transportation Management is without basis. Peti tioner argues that, because it could have maintained a rule barring discussion on the casino floor, it therefore could discharge employees for that activity even in the absence of a valid rule. The Board has long held, how ever, that where, as here, an employer disciplines em ployees pursuant to an overbroad rule, proof that the employer would have disciplined the employee for a law ful reason requires proof that the employee interfered with the employer's business operations "and that this rather than violation of the rule was the reason for the discharge." Miller's Discount Dep't Stores, 198 N.L.R.B. 281, 281 (1972), enforced on other grounds, 496 F.2d 484 (6th Cir. 1974). That rule, which preceded Transportation Management, is not inconsistent with that decision, and it reasonably takes account of the dan ger that, absent such proof, the discipline would be un derstood in the workplace as enforcement of the overbroad rule (which, as Chairman Battista noted, is how the discipline was understood in this case, Pet. App. 38-39).

Petitioner made no claim that the particular em ployee discussions leading to the discipline actually in terfered with its casino floor operations. Indeed, in the court of appeals, petitioner argued that the discipline was lawful because its rule prohibiting discussion of tips was limited to the casino floor. As petitioner acknowl edges (Pet. 17 n.3), the court rejected that factual con tention, and petitioner does not challenge that rejection. Accordingly, having failed to make a particularized showing that the employees' discussion interfered with its casino floor operations and that such interference, rather than its unlawful rule, was the actual reason for the discipline, petitioner has failed to establish that the employees were discharged for cause within the mean ing of Section 10(c). In those circumstances, the analy sis approved by this Court in Transportation Manage ment for situations in which discipline is based on both unlawful and lawful reasons is inapplicable. See Saia Motor Freight Line, 333 N.L.R.B. 784 (2001) (discipline for violating unlawful, overly broad rule itself consti tutes violation of Section 8(a)(3), without consideration of dual-motivation analysis under Transportation Man agement); see also Lummus Indus., 679 F.2d at 232, 233 n.6 (same).

2. Contrary to petitioner's argument (Pet. 25-30), the court of appeals' holding that petitioner's mainte nance of its confidential-information rule was unlawful does not conflict with the decisions of other courts of appeals. In the cases relied on by petitioner, the courts upheld differently worded confidential-information rules but did not disagree on the applicable legal standard. Because those decisions, like this one, turn on the partic ular facts, there is no warrant for this Court's review.

In evaluating rules proscribing discussion of informa tion, the Board determines whether maintenance of the rule "would reasonably tend to chill employees in the exercise of their Section 7 rights." Lafayette Park Ho tel, 326 N.L.R.B. at 825; accord Brockton Hosp. v. NLRB, 294 F.3d 100, 106-107 (D.C. Cir. 2002), cert. de nied, 537 U.S. 1105 (2003). In making that determina tion, the Board considers whether "employees could rea sonably believe that the rule prohibits discussions among employees concerning wages, benefits, and other terms and conditions of employment." Lafayette Park Hotel, 326 N.L.R.B. at 826; accord Brockton Hosp., 294 F.3d at 106-107. As the court of appeals explained be low, the Board's test recognizes both the need of em ployees "to discuss their terms of employment" and the "substantial and legitimate interest" of employers "in maintaining the confidentiality of private information, including guest information, trade secrets, contracts with suppliers, and a range of other proprietary informa tion." Pet. App. 19.

Under that test, the Board has upheld confidentiality rules that restrict disclosure of business information and do not explicitly refer to information concerning "em ployees," because those rules reasonably protect the em ployers' interest in maintaining the confidentiality of its proprietary information and "employees * * * reason ably would understand" that such rules are "designed to protect that interest rather than to prohibit the discus sion of their wages." Lafayette Park Hotel, 326 N.L.R.B. at 826 (rule prohibiting divulging of "Hotel- private information"); see Super K-Mart, 330 N.L.R.B. 263, 263 (1999) (restricting disclosure of "Company busi ness and documents"). On the other hand, the Board has invalidated those confidentiality rules that expressly prohibit employees from revealing information about "employees" and that define information about employee wages and working conditions as confidential. E.g., Brockton Hosp., 294 F.3d at 106-107 (affirming Board's invalidation of rule that provided that information con cerning "associates [i.e., employees] * * * should not be discussed either inside or outside the hospital, except strictly in connection with hospital business," because employees could believe that rule restricted their right to discuss wages and working conditions); IRIS U.S.A., Inc., 336 N.L.R.B. 1013 (2001) (invalidating rule stating that information about employees is strictly confidential and cannot be disclosed to anyone, including other em ployees).

The court of appeals correctly applied those princi ples in upholding the Board's finding that petitioner's confidential-information rule was unlawful. As the court stated, petitioner's policy restricted employees from communicating information considered "confidential," a term that was explicitly defined to include information concerning salary, grievances and complaints, discipline, and other terms and conditions of employment. See Pet. App. 18-21. The court observed that, in conjunction with petitioner's rule prohibiting employees from communi cating "confidential information," employees could rea sonably conclude that discussion of salary information was proscribed. Id. at 20.

In the cases relied on by petitioner (Pet. 26-28), the courts, on different facts, determined that the specific language of the confidentiality rules at issue would not reasonably tend to chill employees' exercise of their right to discuss wages and terms and conditions of em ployment with other employees or with union officials. In Community Hospitals v. NLRB, 335 F.3d 1079 (D.C. Cir. 2003), the rule at issue-which restricted the "[r]elease or disclosure of confidential information con cerning patients or employees," id. at 1088-did not ex pressly define confidential information to include infor mation about salary and working conditions. The court concluded that a reasonable employee would not believe that the rule would bar an employee from discussing his or her wages and working conditions. Id. at 1089. Peti tioner's policy, unlike the rule at issue in Community Hospitals, explicitly encompassed salary information and information about grievances and discipline. In ad dition, because the policy in Community Hospitals ex pressly treated "confidential information con cerning * * * employees" on a par with "confidential information concerning patients," id. at 1088 (emphasis added), the court concluded that a reasonable employee would not interpret the rule to prohibit discussion of his or her own wages or employment conditions, id. at 1089.

In NLRB v. Certified Grocers of Illinois, Inc., 806 F.2d 744 (7th Cir. 1986), a company official, replying to an employee's question about how the union had ob tained her address, stated that an employee's name and address were confidential and that the leak could only have come from petitioner's payroll, personnel, or data- processing departments. The court found that the offi cial's statement "could only have been understood to mean * * * that it was against company policy for workers to disclose information to which they had access by virtue of their employment in the payroll, personnel, or data-processing departments," and not to implicate employees' rights under Section 7 to discuss their wages and other terms and conditions of employment. Id. at 747.9

Petitioner contends (Pet. 29 & n.6) that its rule ap plied only to "information obtained through the course of employment," and that no employee would read the rule to limit discussion of his or her own working condi tions. Petitioner made the same argument below in challenging the Board's fact-finding in this case. That challenge was correctly rejected by the court of appeals, and it does not warrant further consideration by this Court. See Universal Camera Corp. v. NLRB, 340 U.S. 474, 491 (1951) ("Whether on the record as a whole there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals."). In any event, petitioner's rule expressly defined confidential information in terms of working conditions, and the rule stated that its examples of confidential information were "not all-inclusive." Pet. App. 18. In addition, petitioner distributed the rule to all employees by placing it in the employee handbook under the general information section, along with other rules that unlawfully restricted employee communica tion and discussion at the workplace. See pp. 4-5 and note 3, supra. In those circumstances, the rule was sus ceptible to a broad reading that "would reasonably tend to chill employees in the exercise of their Section 7 rights." Lafayette Park Hotel, 326 N.L.R.B. at 825.

4. CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

 

PAUL D. CLEMENT
Solicitor General

ARTHUR F. ROSENFELD
Acting General Counsel
JOHN E. HIGGINS, JR.
Deputy General Counsel
JOHN H. FERGUSON
Associate General Counsel
LINDA J. DREEBEN
Assistant General Counsel
RUTH E. BURDICK
>Attorney
National Labor Relations
Board

DECEMBER 2005

1 Before the Board and the court of appeals, petitioner claimed that its rule only prohibited discussion of tips on the casino floor. The court, on substantial evidence grounds, upheld the Board's finding that the rule instead prohibited discussion anywhere on petitioner's property. Petitioner does not challenge that finding. Pet. 17 n.3.

2 Section 8(a)(3) of the NLRA makes it unlawful for an employer to "discriminat[e] in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization." A Section 8(a)(1) violation is "derivative" of a violation of Section 8(a)(3). Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 698 n.4 (1983).

3 Petitioner does not challenge certain other Section 8(a)(1) violations found by the Board, including that petitioner: maintained language in its employee handbook that prohibited employees from being on its property unless working their scheduled shift and from providing any information about petitioner to the media without prior approval; threatened to call, and called, the police to remove union supporters engaged in handbilling from public property adjacent to the casino; threatened employees with reprisals if they discussed their suspensions with other employees or talked with union representatives or distributed or read union literature; and removed union literature from the employee lunchroom. Pet. App. 3-4 & n.1, 22 n.1, 58-63.

4 Chairman Battista's views are in accord with views that have been expressed by other former Board members. See Saia Motor Freight Line, 333 N.L.R.B. 784, 785-786 (2001) (Member Hurtgen, concurring); Miller's Discount Dep't Stores, 198 N.L.R.B. 281, 283 (1972) (Chairman Miller, dissenting), enforced on other grounds, 496 F.2d 484 (6th Cir. 1974). The Board, by contrast, permits an employer to escape liability for disciplining employees pursuant to an unlawful rule only when the employer can demonstrate interference with its business operations "and that this rather than violation of the rule was the reason for the discharge." Id. at 281.

5 The court, however, modified the cease-and-desist provision of the Board's order to limit the order to the areas outside of the gambling floor and the adjacent aisles and corridors. Pet. App. 13-14.

6 The Board cited Opryland Hotel, 323 N.L.R.B. at 728, and Saia Motor Freight Line, 333 N.L.R.B. 784 (2001). Pet. App. 23-24 n.3.

7 Although petitioner argues (Pet. 18) that those decisions do not present the exact situation presented here, the decisions support the general principle approved by the court of appeals in this case, and petitioner does not suggest that the decisions conflict with the court of appeals' decision below.

8 Under that approach, the Board's General Counsel must first show that union activity was a motivating factor in an employer's decision to "discharge or [engage in] other adverse action" against a statutory em ployee. Transportation Mgmt., 462 U.S. at 401. Once that showing is made, the employer can avoid liability by demonstrating as an affir mative defense that it would have made the same decision in the absence of any protected activity. Id. at 401-402.

9 NLRB v. Brookshire Grocery Co., 919 F.2d 359 (5th Cir. 1990), on which petitioner relies (Pet. 28), is wholly inapposite. There, the Fifth Circuit summarily affirmed the Board's uncontested finding that the employer had unlawfully "promulgated a workplace rule that forbade the discussion of confidential wage information between employees." 919 F.2d at 363. The quotation relied upon by petitioner-that Section 7 "does not extend to the unauthorized dissemination of information ob- tained from an employer's confidential files or records," ibid.-referred not to construing the employer's confidentiality rule, but instead to the legality of the employer's discharge of an employee who had stolen evaluations of co-workers and a list of wage increases from his super visor's desk and had shared that information with others.