AMBRO, Circuit Judge.
For many years Cambria County, a political subdivision of Pennsylvania, owned and operated Laurel Crest Nursing and Rehabilitation Center ("Laurel Crest"). As a state-owned facility, labor relations at Laurel Crest were subject to Pennsylvania labor law. In January 2010, however, Grane Healthcare Co. ("Grane") bought Laurel Crest, and established a new entity, Cambria Care Center ("Cambria Care"), to serve as its operator.
The Act's preamble expressly states Congress's purpose in enacting a federal labor law.
Id. § 151. In service of these objectives, Congress included in the NLRA a number of substantive provisions prohibiting certain labor and management practices. Among other things, the Act prohibits employers from refusing to bargain collectively with their employees' representatives, id. § 158(a)(3), and from not hiring applicants based on their union membership or activity, id. § 158(a)(5).
This case arises from a decision and order of the National Labor Relations Board (the "Board") concluding that the Company, in connection with its takeover of Laurel Crest, violated these provisions. The Company has petitioned us for review, and the Board has cross-petitioned us for enforcement, of this decision and order. For reasons to be discussed, we deny the Company's petition for review and grant the Board's cross-petition for enforcement.
As noted, Laurel Crest's workforce was employed by Cambria County, a public employer subject to Pennsylvania's Public Employee Relations Act (the "PERA"), 43 Pa. Stat. § 1101 et seq. Laurel Crest had two unions — one for nonprofessional employees and one for nurses — certified under the PERA. In 1971, the Pennsylvania Labor Relations Board (the "PLRB") certified Local Union No. 1305 ("Local 1305") as the exclusive union representative of nursing aides, housekeepers, and other nonprofessional employees at Laurel Crest
When Grane, which owns multiple nursing facilities across Pennsylvania, attempted to purchase Laurel Crest on two separate occasions — unsuccessfully in 2003 and then successfully in 2009 — the unions were by and large against Grane taking over. In 2003, both unions publicly opposed the sale and filed legal action intended to stop it. In 2009, Local 1305 again opposed the sale outright, and publicly took that position, while the SEIU, though less absolute, engaged in a series of rallies to raise awareness about concerns it had with the sale.
Despite the opposition and expressions of concern, in September 2009 Cambria County entered into an asset purchase agreement with Grane. Following its execution, Grane implemented transfer of the facility to Cambria Care. That transfer was officially completed on January 1, 2010, and the facility became known as Cambria Care. During that acquisition period, from September 2009 through December 2009, Grane was responsible for all decisions relating to the facility's operations, including its initial staffing. Leonard Oddo, a Grane Vice President, interviewed and hired the top administrator at Cambria Care, Owen Larkin. And, even after hiring Larkin, Oddo and other Grane representatives remained in charge of hiring Cambria Care's workforce.
A variety of labor-related decisions relevant to this petition were made around this time. Prior to the consummation of the transfer, most Laurel Crest employees applied to work at Cambria Care, and the vast majority of those applicants were hired. Grane, however, did not hire four of the five Local 1305 officers who applied for positions. It also refused to hire an SEIU-represented employee who had participated in SEIU's public activities relating to the sale. In addition, Local 1305 and the SEIU each requested that Grane and Cambria Care recognize it as the exclusive bargaining representative of its unit of employees. Both Grane and Cambria Care refused to recognize or bargain with the unions, and continued to do so until the time the Board issued its decision and order.
Though Cambria Care became the facility's operator in January 2010, Grane retained control over aspects of its operations. Importantly, during the acquisition period Grane and Cambria Care entered into a management agreement designating Grane as the manager of the facility and Cambria Care as its operator. The agreement — which was executed by two individuals who were simultaneously officers for both Grane and Cambria Care — was adopted without negotiation and has not since been altered. Per that agreement, Grane's employees maintained a significant, ongoing presence at the facility, and continued to manage significant facets of the facility's operations.
This close relationship between the companies was also preserved by their ownership structure. Grane owns a controlling stake, 99.5%, of Cambria Care, and the overlap of the companies' officers is near complete. In addition, while Larkin is nominally in charge of Cambria Care, he
Shortly after Grane and Cambria Care took over of the facility, Local 1305 and the SEIU filed unfair labor practice charges against Grane and Cambria Care. Following its investigation, the Board's General Counsel issued a complaint alleging that Grane and Cambria Care were jointly and severally liable for failing to recognize and bargain with the unions in violation of NLRA § 8(a)(5) and refusing to hire the four Local 1305 officers and one SEIU-represented employee on the basis of their union membership or activities in violation of NLRA § 8(a)(3).
After a six-day hearing, an administrative law judge ("ALJ") issued a decision in this matter making the following findings: (1) Grane and Cambria Care were a single employer subject to the Act, and thus jointly and severally liable for remedying unfair labor practices committed by either of them; (2) the Company, as a single employer, violated the Act by failing to recognize and bargain with Local 1305, though not by refusing to recognize and bargain with the SEIU;
We afford considerable deference to the Board. The Supreme Court has "emphasized often that the [Board] has the primary responsibility for developing and applying national labor policy." NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. 775, 786, 110 S.Ct. 1542, 108 L.Ed.2d 801 (1990). "We will [therefore] uphold a Board rule as long as it is rational and consistent with the Act, even if we would have formulated a different rule had we sat on the Board." Id. at 787, 110 S.Ct. 1542 (citations omitted). "Moreover, if the Board's application of such a rational rule is supported by substantial evidence on the record," we will "enforce the Board's order." Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987); see also NLRB v. Scott Printing Corp., 612 F.2d 783, 787 (3d Cir.1979); 29 U.S.C. § 160(e). In particular, we defer to the Board's credibility determinations, and will reverse them only if they are "`inherently incredible or patently unreasonable.'" St. George Warehouse, Inc. v. NLRB, 420 F.3d 294, 298 (3d Cir.2005) (quoting Atlantic Limousine, Inc. v. NLRB, 243 F.3d 711, 718-19 (3d Cir.2001)).
The Company raises three challenges to the Board's decision and order in its petition.
The Act prohibits covered employers, as that term is defined by the NLRA, from committing unfair labor practices such as refusing to bargain with their employees' representatives or not hiring an applicant based on his union membership or activities. 29 U.S.C. §§ 152(2), 158(a). "The single employer doctrine is a creation of the Board which allows it to treat two or more related enterprises as one employer within the meaning of the [Act]." Carpenters Local Union No. 1846 v. Pratt-Farnsworth, Inc., 690 F.2d 489, 504 (5th Cir.1982). When the Board finds that two nominally separate entities are a single employer, they are jointly and severally liable for remedying unfair labor practices committed by either of them. NLRB v. Browning-Ferris Indus. of Pa., Inc., 691 F.2d 1117, 1122 (3d Cir.1982); NLRB v. Emsing's Supermarket, Inc., 872 F.2d 1279, 1283 (7th Cir.1989).
"Single employer status ultimately depends on all the circumstances of the case and is characterized as an absence of an arm's length relationship found among unintegrated companies." Browning-Ferris, 691 F.2d at 1122 (quotation marks and citations omitted). The Board considers four factors in determining whether separate entities are a single employer: "(1) functional integration of operations; (2) centralized control of labor relations; (3) common management; and (4) common ownership." Id. No one factor is controlling, although the first three factors, particularly centralized control over labor relations, are generally considered more compelling that the fourth. NLRB v. Al Bryant, Inc., 711 F.2d 543, 551 (3d Cir. 1983).
The Company asks that we reverse the Board's determination that Grane and Cambria Care are a single employer. It does not challenge the Board's finding that Grane controlled operations at the facility during the acquisition period from September 2009 until December 2009, or that Grane and Cambria Care continued to have common ownership, common management, and interrelated operations following transfer of the facility into Cambria Care's hands in January 2010. Nonetheless, it argues that we must reverse the Board's ruling because the evidence in the record demonstrates that Grane did not control labor relations at the facility — arguably the most critical factor, Mercy Hosp. of Buffalo, 336 NLRB 1282, 1284 (2001) — from the day that the transfer occurred. We disagree.
Our biggest concern with the Company's argument is that it is based on discredited testimony. Owen Larkin — who, as noted, was Cambria Care's top administrator — testified that he, and not Grane, controlled day-to-day operations at the facility after the transfer. The Board found this testimony self-serving and overwhelmed by other evidence in the record. In particular, it found that Larkin's lack of knowledge about much of the facility's operations — including important aspects of the facility's financial dealings — undermined his claim that he was in charge. The Board found it more likely that Oddo, the Grane Vice President to whom Larkin reported, actually made many, if not most, of the important decisions at the facility.
We also do not deem as irrelevant evidence of Grane's control during the acquisition
There is, moreover, substantial evidence in the record that Grane continued to control operations at Cambria Care after the transfer date. As the ALJ explained,
Grane Healthcare Co., 357 NLRB No. 123, 2011 WL 6002197, at *52 (Nov. 30, 2011) (citation omitted). During the acquisition period, when Grane's control was complete, it took specific actions — including, as noted, putting in place the management agreement between Grane and Cambria Care — to ensure its influence would continue after the transfer date.
The Board's determination that Grane and Cambria Care are a single employer was based on detailed factual findings relating to each of the four factors normally considered to determine that status. Though we do not exhaustively recite those findings here, they describe two deeply integrated companies with centralized control emanating from Grane. We are not persuaded by the Company's contention that the Board's single-employer decision fails the substantial evidence test.
The Board concluded that the Company, as a single employer, violated § 8(a)(5) of the Act by failing to recognize and bargain with Local 1305. That section makes it "an unfair labor practice for an employer... to refuse to bargain collectively with the representatives of his employees." 29 U.S.C. § 158(a)(5). In order to be an employee representative entitled to bargain with an employer, a union or other entity must have the support of a majority of a properly defined unit of employees.
The Company misapprehends the issue. It is indisputable that Cambria County, as a political subdivision of Pennsylvania, was not covered by the NLRA. 29 U.S.C. § 152(2). Whether it was subject to the Act when it operated the facility, however, is not determinative. The Company is not being held liable for violations of the Act committed by Cambria County. It is being held liable for its refusal to recognize and bargain with Local 1305.
The imposition of this latter liability is permissible provided the majority support Local 1305 established under Pennsylvania law could, consistent with the NLRA, establish a presumption of majority support under federal law. In that respect, there is nothing in the Act precluding the Board from finding — as it did — that certification under Pennsylvania law is sufficient. The Act provides that an employer must bargain with a representative selected by a majority of employees to do so on their behalf. See 29 U.S.C. §§ 158(a), 159(a). It is silent, however, on the ways in which that majority support can be established.
While there may be instances where the process of establishing majority support under state law is so unreliable that the Board's application of the successorship doctrine would be irrational, this is not so here.
The purpose of the successorship doctrine is to encourage stability at a time of transition. As the Supreme Court explained in approving the Board's creation of the successorship doctrine,
Fall River, 482 U.S. at 39, 107 S.Ct. 2225 (footnote omitted). We see no reason why the Board's determination that this policy applies equally to a public-to-private transition is irrational or inconsistent with the Act. We therefore join other Courts of Appeals in approving the application of the successorship doctrine in this context. See Cmt'y Hosps. of Cent. Cal. v. NLRB, 335 F.3d 1079, 1084 (D.C.Cir.2003); Lincoln Park, 116 F.3d at 218-20.
The Board also concluded that the Company, as a single employer, engaged in an unfair labor practice by refusing to hire the five former Laurel Crest employees. Section 8(a)(3) of the Act provides in pertinent part that it is "an unfair labor practice for an employer[,] ... by discrimination in regard to hire or tenure of employment[,] ... to encourage or discourage membership in any labor organization." 29 U.S.C. § 158(a)(3). As we have previously explained,
NLRB v. Omnitest Inspection Servs., Inc., 937 F.2d 112, 122 (3d Cir.1991) (citations omitted). The Board found that the Company's refusal to hire was motivated by the requisite antiunion animus. That inference was primarily supported by findings that (a) there was a gross disproportion between the percentage of Local 1305 officers hired (20 percent) and the percentage of other former employees hired (80 percent), and (b) the Company's justifications
The Company argues that the determination by the Board that the Company violated § 8(a)(3) should be reversed because the Board's finding that the Company's justifications were mere pretext is not supported by substantial evidence.
Both witnesses testified that their no-hire decisions were based largely on discussions they had with other Laurel Crest employees. Lengle testified that she decided not to hire four of the employees on the basis of negative references she received from Rebecca Nelen, Laurel Crest's director of nursing, during in-depth discussions. Andrascik testified that she declined to hire the fifth employee based largely on negative references she received from that employee's former co-worker, Nancy McMahon.
The Board determined that these proffered reasons were pretextual because the testimony was contradicted by other evidence and was not internally consistent. Nelen, for example, had a different recollection of her interactions with Lengle. She testified that she only spoke with Lengle briefly, and that she did not recall having any conversations with Lengle about individual employees and their job performance. She also testified that because she had only been director of nursing for about a year, and had been busy with other matters during that time, she had not yet had time to get to know the employees by the time the alleged conversations were supposed to have taken place.
The Company contends that it was improper for the Board to discredit the testimony of Lengle and Andrascik because evidence in the record corroborates that testimony. The Company points in particular to the fact that some of the same criticisms Lengle and Andrascik cited as reasons for not hiring the employees were contained in their personnel files.
That some evidence corroborates a witness's testimony while other evidence contradicts it, however, does not make the Board's determination to discredit that testimony patently unreasonable. We are not charged with reweighing the evidence in this matter and making an independent determination as to whether these witnesses were credible. The Board considered
We summarize our holdings.
1. The Board's determination that Grane and Cambria Care are a single employer, and thus jointly and severally liable for violations of the NLRA committed by either of them, is supported by substantial evidence.
2. The Board acted consistently with the NLRA in applying the successorship doctrine to find that the Company had a duty to bargain with Local 1305.
3. The Board's ruling that the Company violated the NLRA by refusing to hire five former Laurel Crest employees is supported by substantial evidence.
We, therefore, deny the Company's petition for review and grant the Board's cross-petition for enforcement of its decision and order.