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Jam Productions, Ltd. v. National Labor Relations Board

United States Court of Appeals, Seventh Circuit

June 28, 2018

Jam Productions, Ltd., Event Productions, Inc., Standing Room Only, Inc., and Victoria Operating Co., Petitioners, Cross-Respondents,
National Labor Relations Board, Respondent, Cross-Petitioner, and Theatrical Stage Employees Union, Local No. 2 I.A.T.S.E., Intervenor-Respondent.

          Argued December 8, 2017

          Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board. No. NLRB-1, No. 13-ca-186575

          Before Kanne and Rovner, Circuit Judges, and Durkin, District Judge. [*]

          Rovner, Circuit Judge.

         The National Labor Relations Board ("the Board") seeks to enforce its order requiring Jam Productions, Ltd., Event Productions, Inc., Standing Room Only, Inc., and Victoria Operating Co. (collectively "Jam Productions" or "Jam") to bargain with the Theatrical Stage Employees Union Local No. 2, ("Local No. 2"). Jam argues that in the period before the election to determine whether Local No. 2 would represent Jam employees, the union attempted to influence the election outcome by steering premium union jobs to Jam employees. We have jurisdiction to review the Board's application for enforcement pursuant to 29 U.S.C. § 160(e). Because Jam presented enough evidence to warrant a hearing on the validity of the election results, we deny enforcement and remand for an evidentiary hearing.


         In mid-September 2015, Local No. 2 filed an election petition to represent employees of Jam Productions as a single employer. Jam produces concerts, shows, and events at venues in and around Chicago, including the Riviera Theatre, Park West Theatre, and Vic Theatre. In conjunction with these productions, Jam hires part-time and non-union stagehands to unload lighting and sound equipment into the venue, set it up, maintain it, take it down, and move it out of the venue after the show. Given the irregular schedule of shows at any given venue (shows followed by days or weeks without performances) and the fact that one venue (the Riviera) was closed for the entire summer because it lacks air conditioning, none of the stagehands are employed full time and their employment is generally sporadic.

         On September 30, Jam and Local No. 2 entered into a Stipulated Election Agreement identifying the potential bargaining unit as stagehands at the Riviera, Vic, and Park West Theatres employed during the payroll period ending on October 4, 2015. The unit was defined more specifically as: "All full-time and regular parttime stage production employees employed by the Employer at the Riviera, Park West, and Vic Theatres, but excluding production managers and crew leaders, office clerical employees and guards, professional employees and supervisors as defined in the Act." Given the sporadic nature of the work, the parties agreed to add the following additional definition to the Agreement: "Also eligible to vote are all employees in the unit who have been employed by the Employer for a total of 18 concerts, shows, and/or events over a 1-year period immediately preceding the eligibility date."

         The day after the parties signed the Election Agreement, however, the representation petition was held in abeyance pending the investigation of an unfair labor practice charge that Local No. 2 had filed only the day before it filed its representation petition. Local No. 2's charge was based on Jam's termination of the Riviera's crew leader, Chris Shaw and the fifty-three employees he supervised (the "Shaw crew"). The unfair labor practice charge was not resolved until April 6, 2016, when the Board's Acting Regional Director approved an agreement containing a non-admissions clause and providing that Jam would reinstate the terminated employees by offering them immediate and full participation in Jam's "on-call list."

         Just over a month after the unfair-labor-practice charge was resolved, on May 16, 2016, the election was held. Prior to the election, Jam had asked the Regional Director to move the eligibility date of the election back two weeks on account of the seven-month election delay. The Regional Director did not issue an order in response, so Jam included on its voter eligibility list five stagehands hired in the two-week period after the agreed-upon October 4, 2015 date, along with a notation about their hiring date. Local No. 2 prevailed with twenty-two votes in its favor and ten against; the victory was not entirely decisive, however, because there were an additional twenty-one ballots challenged by either Jam or Local No. 2. Eight of the challenges were uncontested, which left thirteen contested ballots-all union challenges contested by Jam. Five of those were the ballots cast by the employees who had been hired in the two weeks following the stipulated eligibility date. Local No. 2 challenged the remaining eight ballots on various grounds such as number of shows worked and whether the voting employees were in fact "supervisors" ineligible to vote.

         Jam also timely filed an objection contesting the election results on the grounds that Local No. 2 unlawfully provided economic benefits to employees during the critical period preceding the election. Specifically, Jam alleged that Local No. 2 provided employees premium, higher-paid work at union venues in the weeks before the election in an attempt to influence the employees-particularly the Shaw crew-to vote for the union.

         In response to Jam's objections, the Board's Acting Regional Director conducted an investigation and issued a Corrected Report on June 20, 2016, concluding that Jam's offer of proof in support of its objection fell short of demonstrating the required "substantial and material factual issues," see Park Chevrolet-Geo, Inc., 308 NLRB 1010, fn. 1 (1992), that, if proven, would warrant setting aside the election. Specifically, the Director concluded that although Jam had shown that employees did work union jobs during the critical period, it had not shown that Local No. 2 engaged in any wrongdoing by hiring those employees through its open referral system. The report further concluded that Jam's evidence of an undeserved financial benefit was too speculative to support its claim that Local No. 2 engaged in wrongdoing. As relevant here, the Director also sustained Local No. 2's challenges to the ballots of four of the five employees hired in the two weeks after the original eligibility date, [1] and certified Local No. 2 as the employees' bargaining agent.

         Jam filed a request for review, and on January 5, 2017, a three-member panel of the NLRB denied Jam's request and affirmed the Regional Director's Corrected Report certifying Local No. 2 as the relevant bargaining unit. On the issue of challenged ballots, one member of the panel would have overruled the four Local No. 2 ballot challenges to employees hired after the eligibility date. The dissenting panel member reasoned that the delay occasioned by the Board's resolution of the unfair labor practice prevented the Board from enforcing other material terms of the Election Agreement like the eligibility date; he also noted that there was no prejudice to Local No. 2 because Jam provided proper notice as to those four employees. He would have, however, denied Jam's request for review of five additional union challenges, so the four ballots he would have allowed would not have impacted the election's outcome.

         Jam then refused to recognize or engage in collective bargaining with Local No. 2, prompting the Board's general counsel to file a complaint alleging an unfair labor practice in violation of § 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (5). In its answer to the complaint, Jam repeated its objections and challenges to the certification of the election, but the Board rejected Jam's affirmative defenses and issued an order holding that Jam's refusal to bargain amounted to an unfair ...

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