Menu Close

Stern Produce Co., an Arizona-based company, operates a wholesale produce distribution center in Phoenix. Since at least 2015, United Food and Commercial Workers, Local 99, has been trying to unionize Stern Produce’s warehouse employees and truck drivers.

In 2015 and 2016, this union filed unfair labor practice charges against Stern Produce, alleging that the company interfered with a scheduled representation election. In 2020, the union again lodged charges against the company. Stern Produce had laid off all its hourly workers at the start of the COVID-19 pandemic and then brought back some drivers when business resumed. The union claimed that Stern Produce had selectively failed to recall pro-union employees and had done so in order to dilute union support in its workforce. These charges were resolved by litigation and/or settlement.

In this current case one of the charges against Stern Produce involves a text message a supervisor sent to delivery truck driver Jose Ruiz. The other charge relates to a written warning a supervisor issued to another driver, Uvaldo Ponce. The evidence with respect to each charge was as follows.

While driving a truck for the company in July 2021, Ruiz parked to take a lunch break and covered the truck’s inward- facing camera. Ruiz’s truck, like virtually all Stern Produce trucks, was equipped with a system transmitting real-time data to the company about the vehicle’s location and operation. The truck was also fitted with one camera with a street view and another with a view of the driver and the truck’s cab. At some point later, Ruiz’s supervisor, transportation manager Nick Barr, sent Ruiz a text message: “Got the uniform guy for sizing bud, and you cant cover the camera it’s against company rules.” When Ruiz saw the message several hours later he replied: “OK Bud muy [sic] lunchtime.” The evidence showed that manager Barr did not know that Ruiz was on a lunch break. There was no set time for drivers to stop for lunch. Ruiz testified that after this solitary incident, manager Barr “never once touched the subject ever again.”

In August 2021, Ponce was at the Stern Produce facility when he heard two fellow drivers, Joe Metzgar and Mohamed Chayko, jokingly call each other “baby.” Ponce told Chayko, “you know they kill people like that in your country.” When Chayko asked Ponce to clarify, Ponce replied, “gays.” Chayko then asked Ponce where he thought Chayko was from. Ponce guessed Afghanistan and then Iraq; Chayko told Ponce he was wrong and left the room.

After concluding their investigation, owner Stern and manager Barr consulted with human resources and concluded that because Ponce had insulted Chayko based on his perceived race, ethnicity, and sexual orientation, Ponce’s conduct warranted a written warning. The written warning stated that Ponce’s comments violated “company policy around the use of disparaging or abusive words, phrases, slurs, and negative stereotyping.”

The union filed unfair-labor-practice charges based on these two incidents. The Board’s General Counsel issued a complaint, alleging that Stern Produce had created an impression of surveillance of organizing activities by making Ruiz aware that he was being watched, and that Ponce’s union support motivated Stern Produce’s decision to give him a written warning for a first-time offense.

The Administrative Law Judge sided with Stern Produce. The ALJ found that the message to Ruiz did not create an impression of surveillance, since manager Barr had engaged in “mere observation” in line with “longstanding company policies” about truck cameras. As for the warning to Ponce, the ALJ determined that it had not been motivated by Ponce’s prounion activities. The ALJ found that Stern Produce had issued the warning without knowing if Ponce was still involved with the union, and that the company had acted based on Ponce’s offensive and discriminatory comments, rather than any antiunion animus.

The National Labor Relations Board reversed the ALJ on both issues. Stern Produce Co., 372. N.L.R.B. No. 74, 2023 WL 2913118 (Apr. 11, 2023). Stern Produce’s petition for judicial review by the Court of Appeals for the D.C. Circuit presents the question whether the Board’s conclusions are “supported by substantial evidence on the record as a whole.”

The D.C. Circuit reversed the NLRB and found that the “Board lacked substantial evidence to find that Stern Produce violated the National Labor Relations Act. Stern Produce’s petition for judicial review is therefore granted, and the Board’s decision and order are vacated. The Board’s cross-application for enforcement was therefore denied in the case of Stern Produce Compay Inc., v NLRB – No. 23-1100 (March 2024).

The Board’s misguided attempt to find a labor-law violation in one text message is ‘the product of a familiar phenomenon’: years ago the Board took an expansive view of the scope of the Act and then, over time, it ‘presse[d] the rationale of that expansion to the limits of its logic.” NLRB v. Int’l Bhd. of Elec. Workers, Loc. 340, 481 U.S. 573, 597 (1987) (Scalia, J., concurring in judgment). The Board then focused its analysis here not on the statutory text – the ‘authoritative source of the law’ – but on its own constructions of (its own constructions of) the Act. Id. at 597-98. The Board extended the Act’s prohibition on ‘coerc[ing]’ employees to first reach acts that ‘reasonably tend’ to coerce, e.g., Blue Flash Express, Inc., 109 N.L.R.B. 591, 593 (1954); then acts that create an impression of surveillance, e.g., Harrington & Richardson, Inc., 136 N.L.R.B. 1095, 1098 (1962); and then ‘out of the ordinary’ actual or perceived surveillance of pro-union activity, e.g., Metal Indus., Inc., 251 N.L.R.B. 1523, 1523 (1980).”

“Relying on that logical progression, the Board here went one step further, asserting that a single communication to a prounion employee referencing a generally applicable policy of employee monitoring fell within Section 8(a)(1)’s ambit as ‘out of the ordinary’ surveillance. That argument, as explained, stretches Board precedent so far that not even ‘fidelity to [the] logic’ of those prior decisions can sustain the Board’s finding.”

The Court of Appeals concluded by commenting “that the Board’s majority and its General Counsel, at least at the time of these proceedings, should have brushed up on the ancient and wise legal doctrine de minimis non curat lex – that is, the law does not concern itself with trifles. Or should not.”