United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued December 6, 2001 Decided January 15, 2002

No. 00-1523

Tradesmen International, Inc.,
Petitioner

v.

National Labor Relations Board,
Respondent

Sheet Metal Workers' International Association,
Local Union No. 33 of Northern Ohio, AFL-CIO,
Intervenor

On Petition for Review and Cross-Application
for Enforcement of an Order of the
National Labor Relations Board

Maurice Baskin argued the cause and filed the briefs for
petitioner.


Michael E. Avakian was on the brief for amici curiae
Associated Builders and Contractors, Inc. and the Center on
National Labor Policy, Inc.

Richard A. Cohen, Senior Attorney, National Labor Rela-
tions Board, argued the cause for respondent. With him on
the brief were Arthur F. Rosenfeld, General Counsel, John
H. Ferguson, Associate General Counsel, Aileen A. Arm-
strong, Deputy Associate General Counsel, and Fred L. Corn-
nell, Attorney.

Craig Becker argued the cause for intervenor. With him
on the brief was Richard P. James.

Before: Sentelle and Rogers, Circuit Judges, and
Williams, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: Tradesmen International, Inc.
("Tradesmen"), a labor leasing company, petitions this Court
for review of a National Labor Relations Board ("NLRB" or
"the Board") decision in which the NLRB found that Trades-
men violated sections 8(a)(1) and (3) of the National Labor
Relations Act ("the Act"), 29 U.S.C. ss 158(a)(1), (a)(3), by
refusing to hire Matthew Oakes, a union organizer, after he
unsuccessfully lobbied the city of Lorain, Ohio to require
Tradesmen to pay a surety bond for work performed in the
city. Tradesmen argues in part that its refusal to hire Oakes
did not violate the Act because Oakes's activity before the
Lorain Board of Building Standards and Appeals was not
protected activity. Because we find that the NLRB failed to
establish a nexus between Oakes's activity and the employ-
ment conditions of Tradesmen or union workers, we grant the
petition for review and vacate the decision and order of the
NLRB.

I. Background

In July 1996, the city of Lorain, Ohio adopted Ordinance
118-96 ("Lorain Ordinance"), which requires general and
subcontractors to post a $5000 surety bond when performing
construction work in the city. Of particular significance to


this case is the ordinance's definition of "Sub-Contractor,"
which means "any person who performs a special skill, trade,
craft, or profession as a business for profit in the City, and as
part of a construction contract, whether on behalf of the
general contractor, building owner, or agent of an owner."
Lorain, Ohio, Ordinance 118-96 s III(b)(2) (July 25, 1996).
Petitioner Tradesmen is a construction labor leasing compa-
ny. It does not bid on, nor does it become a party to,
construction contracts. Rather, it "leases" skilled workers to
construction companies that bid on, and enter into, construc-
tion contracts.

On January 15, 1997, Tradesmen contracted with Bay
Mechanical and Electrical, Inc. ("Bay Mechanical") to supply
it with employees who could work on a large construction
project in Lorain. Bay Mechanical, as a subcontractor on the
project, posted a bond. Tradesmen, as a leasing company,
did not. In late March 1997, Matthew Oakes, a union orga-
nizer for the Sheet Metal Workers International Association,
Local Union No. 33 of Northern Ohio, AFL-CIO ("the Un-
ion"), contacted Tradesmen and inquired about openings for
Heating, Ventilation and Air Conditioning ("HVAC") posi-
tions. Although Oakes was qualified for HVAC positions,
there were no such positions available through Tradesmen at
that time. A few months later, Oakes met with Lorain City
Building Inspector Jack Murphy and provided him with a list
of three companies, including Tradesmen, that Oakes believed
were violating the Lorain Ordinance by operating as subcon-
tractors but not posting bonds. As a result, Murphy ordered
all Tradesmen employees to vacate the Bay Mechanical con-
struction site. However, at Tradesmen's request, Murphy
allowed Tradesmen employees to return to the job site pend-
ing a ruling by the Lorain Board of Building Standards and
Appeals ("Lorain Board") as to whether Tradesmen was to be
considered a "subcontractor" for purposes of the Lorain
Ordinance.

The Lorain Board held a hearing on May 28, 1997. Oakes
attended the hearing accompanied by union counsel and, after
identifying himself as a Local 33 member, testified that
Tradesmen should be subject to the Lorain Ordinance be-


cause it operated as a subcontractor. Tradesmen responded
that it was an employee leasing agency that merely provided
other companies with skilled workers. The Lorain Board
adjourned without immediately rendering an opinion. Two
days later, Oakes contacted Tradesmen to inquire once again
about available HVAC work. He was informed by Trades-
men's Vice President that because he intentionally tried to
hurt Tradesmen's business at the Lorain Board hearing,
Tradesmen would not hire Oakes for any open positions. In
response to that conversation, the NLRB's General Counsel
filed a complaint alleging that Tradesmen violated sections
8(a)(1) and (3) of the Act. Specifically, the complaint alleged
that Tradesmen refused to hire Oakes because he tried to
lobby the city of Lorain to require Tradesmen to pay a surety
bond, thus increasing Tradesmen's cost of doing business in
Lorain. In June 1997, the Lorain Board issued its ruling:
Tradesmen was not a subcontractor for purposes of the
Lorain Ordinance and was therefore not required to post a
bond.

II. Proceedings Below

The General Counsel's complaint was heard before an
Administrative Law Judge ("ALJ"), who dismissed the com-
plaint after finding that Oakes's "solo effort to increase
Tradesmen's cost of doing business in Lorain was not 'con-
certed activity' as defined by Section 7 of the Act." Trades-
men International, Inc., 332 NLRB No. 107, 2000 WL
1679479, at *13 (Oct. 31, 2000) (hereinafter Tradesmen). The
ALJ also held that even if Oakes's activity was concerted, it
was not otherwise protected under section 7 because "Oakes's
lobbying efforts ... had absolutely nothing to do with the
specific terms and conditions of employment." Id. That is,
Oakes's effort to apply the Lorain Ordinance to Tradesmen
did not involve employee-employer relations, nor was it even
generally related to employees' interests. Instead, the pur-
pose of the Lorain Ordinance was to fund the city's building
department, "as opposed to having anything to do with the
employees of various contractors or subcontractors working
in the city." Id. Finally, the ALJ held that Oakes's activity


was unprotected under section 7 because "it was designed to
injure Tradesmen's business" and "posed a threat of immedi-
ate harm to Tradesmen's business operation in Lorain,"
which, if effective, would have harmed Tradesmen employees
as well. Id. at *14.

The General Counsel filed exceptions to the ALJ's findings
and the case was heard before the Board. The Board
reversed the decision of the ALJ, finding that Oakes's May 28
testimony before the Lorain Board was concerted, protected
activity. Id. at *3. In particular, the Board found "a nexus
between Oakes's activity and employees' legitimate concern
over their continued employment." Id. at *4. The Board
explained that Oakes's efforts were intended to protect local
unionized companies and the job opportunities of their em-
ployees, and was similar in that respect to area-standards
picketing, a protected activity under the Act. Id. Board
Member (now Chairman) Hurtgen dissented from the deci-
sion, finding instead that Oakes's activity, while concerted,
was nonetheless unprotected because Oakes failed to estab-
lish any relationship between the bonding ordinance and
employees' terms and conditions of employment. Id. at *8.

Tradesmen petitions for review, challenging the Board's
findings that Oakes's activity before the Lorain Board was
concerted activity for mutual aid or protection protected
under section 7 of the Act. The Board, supported by Interve-
nor Sheet Metal Workers' International Association, Local
No. 33 of Northern Ohio, AFL-CIO, cross-petitions for en-
forcement.

III. Analysis

Our review of NLRB decisions is limited. See, e.g., Pio-
neer Hotel, Inc. v. NLRB, 182 F.3d 939, 942 (D.C. Cir. 1999).
We will affirm the judgment of the Board unless, "upon
reviewing the record as a whole, [this Court] conclude[s] that
the Board's findings are not supported by substantial evi-
dence, or that the Board acted arbitrarily or otherwise erred
in applying established law to the facts of the case." Interna-
tional Union of Electronic, Elec., Salaried, Mach. & Furni-


ture Workers v. NLRB, 41 F.3d 1532, 1536 (D.C. Cir. 1994)
(internal quotations and citations omitted). We will not,
however, " 'merely rubber-stamp NLRB decisions.' " Doug-
las Foods Corp. v. NLRB, 251 F.3d 1056, 1062 (D.C. Cir.
2001) (quoting Avecor, Inc. v. NLRB, 931 F.2d 924, 928 (D.C.
Cir. 1991)). As we have said before,

this court is a reviewing court and does not function
simply as the Board's enforcement arm. It is our respon-
sibility to examine carefully both the Board's findings
and its reasoning, to assure that the Board has consid-
ered the factors which are relevant to its choice of
remedy, selected a course which is remedial rather than
punitive, and chosen a remedy which can fairly be said to
effectuate the purposes of the Act.

Peoples Gas Sys., Inc. v. NLRB, 629 F.2d 35, 42 (D.C. Cir.
1980). In that light, we review the Board's conclusion that
Oakes's testimony before the Lorain Board was protected
activity under section 7 of the Act and that Tradesmen
committed an unfair labor practice by refusing to hire him
following his testimony.

In relevant part, section 7 states: "Employees shall have
the right to self-organization, to form, join, or assist labor
organizations, to bargain collectively through representatives
of their own choosing, and to engage in other concerted
activities for the purpose of collective bargaining or other
mutual aid or protection." 29 U.S.C. s 157 (emphasis add-
ed). Defining the scope of section 7's protections "is for the
Board to perform in the first instance as it considers the wide
variety of cases that come before it." NLRB v. City Disposal
Systems, Inc., 465 U.S. 822, 829 (1984). Thus, if an issue
arises that implicates the Board's expertise in labor relations,
"a reasonable construction by the Board is entitled to consid-
erable deference." Id.

The Board concedes that Tradesmen's refusal to hire Oakes
only constitutes an unfair labor practice if Oakes's testimony
before the Lorain Board was protected by section 7. Trades-
men, 2000 WL 1679479, at *2. Our analysis of whether
Oakes's activity enjoys section 7's protections is guided by


Supreme Court precedent, which clearly provides that the
"mutual aid or protection" clause in section 7 includes em-
ployees' efforts "to improve terms and conditions of employ-
ment or otherwise improve their lot as employees through
channels outside the immediate employee-employer relation-
ship." Eastex, Inc. v. NLRB, 437 U.S. 556, 565 (1978). This
includes employees' "resort to administrative and judicial
forums" to improve their working conditions. Id. at 566 &
n.15 (collecting cases). But the "mutual aid or protection"
clause is not without bound. That is, an employee's activity
will fall outside section 7's protective reach if it fails in some
manner to relate to "legitimate employee concerns about
employment-related matters." Kysor/Cadillac, 309 NLRB
237, 237 n. 3 (1992); see Eastex, 437 U.S. at 567-68. Thus an
essential element before section 7's protections attach is a
nexus between one's allegedly protected activity and "employ-
ees' interests as employees." Eastex, 437 U.S. at 567. With
the limits of section 7's protections in mind, we turn to the
Board's decision.

We assume without deciding that Oakes's activity as a
union representative constituted concerted activity, see City
Disposal Systems, 465 U.S. at 832-33, but reject the Board's
finding that his activity was protected under section 7. Our
deferential review of Board decisions notwithstanding, the
record before us provides no evidence to support a nexus
between Oakes's efforts to impose a bond on Tradesmen and
any employee-related matters. The relationship between
Oakes's lobbying efforts and "employees' interests as employ-
ees" was "so attenuated that [it] cannot fairly be deemed to
come within the 'mutual aid or protection' clause" of section 7.
Eastex, 437 U.S. at 568. The Board's attempt to characterize
Oakes's activity as "similar to area-standards picketing" is
unsupported and unsupportable.

The Board justified its decision by claiming a nexus be-
tween Oakes's activity and union employee concerns over
continued employment. Tradesmen, 2000 WL 1679479, at *4.
The Board found that "Oakes's attempt to secure [Trades-
men's] compliance with the Lorain bonding ordinance was
designed to protect local unionized companies and, in turn,


the job opportunities of their employees, by ensuring that
[Tradesmen] did not have an undue bidding advantage in the
Lorain construction market." Id. Tradesmen argued at
length that because Oakes's activity hurt rather than benefit-
ted Tradesmen employees, it cannot be considered protected
under the Act. Protected behavior is not limited to just those
concerted activities that benefit the actor's fellow employees.
The Supreme Court has made clear that an employee may
engage in otherwise proper concerted activities to support
employees of employers other than his own. See Eastex, 437
U.S. at 564. Thus, even if he was an employee of Tradesmen
(a point on which the parties disagree and which we decline to
address), Oakes was free to engage in behavior that sup-
ported union employers and employees. Indeed, Oakes
openly admitted to the ALJ that his purpose before the
Lorain Board, "as a representative of the union and as an
organizer, [was] to level [the] playing field as much as possi-
ble" between union and non-union companies. The Board
agreed that "if the Lorain Board had found that [Tradesmen]
was subject to the bonding ordinance, then [Tradesmen's]
cost of doing business in Lorain would have increased."
Tradesmen, 2000 WL 1679479, at *5.

Despite Eastex's recognition that non-union employers may
be acceptable targets of union employees' concerted activities,
we fail to see in the first instance how a bonding ordinance
that applies equally to union and non-union entities can be
said to be a means of leveling the playing field between the
two, and we further fail to see how invoking the application of
a requirement that is wholly unrelated to employment issues
relates in any sense to "employees' interests as employees."
Eastex, 437 U.S. at 567. The Board has simply failed to
provide an adequate or persuasive explanation to us. The
explanation it does provide, that Oakes's activity was similar
to area-standards picketing and that forcing Tradesmen to
pay a bond would "protect local unionized companies," is
wholly invalid. Tradesmen, 2000 WL 1679479, at *4.

Area-standards picketing is a protected activity under the
Act. See, e.g., O'Neil's Markets v. NLRB, 95 F.3d 733, 737
(8th Cir. 1996) (area-standards hand billing by non-employees


protected); NLRB v. Browning-Ferris Industries, 700 F.2d
385, 387-88 (7th Cir. 1983) (employees' refusal to cross picket
line at customer's property protected); Yellow Cab, Inc., 210
NLRB 568, 569 (1974) (employee's distribution of handbills
supporting other employer's employees protected). It is an
effective means "by which unions attempt to protect their
constituents' jobs by generating public and economic pressure
on nonunion employers to pay higher wages and benefits to
their employees, thereby ending unfair competitive advan-
tage." Tradesmen, 2000 WL 1679479, at *4. That is, union
employees may effectively protect their job security by seek-
ing to raise non-union employment wages and benefits (or
"standards") to the levels of union standards, thereby increas-
ing non-union employers' costs and succeeding, albeit indi-
rectly, in "leveling the playing field." Here, however, the
bonding requirement is not a "union standard." It applied to
all subcontractors, whether they employed union workers,
non-union workers, or both. Moreover, in the traditional
area-standards picketing scenario, benefits flow to both union
and non-union employees. When effective, union employees
receive increased job security and non-union employees re-
ceive, for example, increased employee benefits, or at least
that is the theory, and a plausible outcome in many cases. In
the present case, Oakes's activity was not an effort to improve
any employees' (union or non-union) working conditions. So
far as the record shows, it was solely an effort to raise
Tradesmen's costs. Paying the bond would not place Trades-
men on a more level playing field with union companies, it
would instead subject leasing companies to one discreet ele-
ment of construction costs required of contractors and sub-
contractors, regardless of whether either the leasing compa-
nies or contractors employed union or non-union employees.
Moreover, neither the Board nor the intervening union has
suggested any meaningful sense in which the bond related to
employees' interests as employees. The half-hearted sugges-
tion at oral argument that because the proceeds of the bond
funded city inspection departments the bond related to em-
ployees' interest in the safety of working conditions is uncon-
vincing. There is no showing, nor is it likely that there could


be any, that there would have been more or better inspections
if the bonds paid by contractors and subcontractors had been
supplemented by other entities supplying them labor, or by
any other suppliers with whom they might deal.

The Board's decision suggests a new standard that any
activity that raises a non-union employer's costs "levels the
playing field" between union and non-union employers, even if
unrelated to working conditions or union/non-union status,
and is therefore protected under the Act. This standard, it
seems, would apply whether the activity resulted in a benefit
to non-union employees, as in area-standards picketing, or
resulted in harm to non-union employees, as was the case
here. But such a standard effectively erases any line be-
tween acceptable and unacceptable activity directed toward
an employer's economic health. We reject this sweeping and
unprecedented expansion of "concerted activity for mutual aid
or protection." As the Supreme Court has stated, and as the
Board has previously agreed, for an employee's concerted
activities to be protected under the Act, the activity must
bear an identifiable relationship or nexus to legitimate em-
ployee concerns about employment-related matters. See
Eastex, 437 U.S. at 565-68; Kysor/Cadillac, 309 NLRB, at
238 n.3. Because Oakes's lobbying efforts did not, we reject
the Board's conclusion that they were protected under the
Act.

We need not and do not decide whether the Act requires
that an employee's concerted activities result in an actual,
measurable benefit to a targeted employer's employees. We
note, however, that our research has failed to produce any
case where, if the targeted employer had acquiesced to the
demands of the picketing employees, the targeted employees
would directly suffer, rather than benefit.1 At oral argument,
the Union urged us to recognize that, because only licensed
applicants are approved for the bond, Tradesmen employees'
benefit would be to operate under a state license that guaran-

__________
1 An arguable exception, NLRB v. Circle Bindery, 536 F.2d 447
(1st Cir. 1976), is distinguishable from the present case for reasons
set forth later in this opinion.


teed their qualifications, experience, and training. See Lo-
rain, Ohio, Ordinance 118-96, s III(d) (July 25, 1996). This
argument is a difficult one to follow. By definition, employ-
ees who are leased from a labor leasing company will always
be operating under the license of the subcontractor or con-
tractor leasing them, regardless of whether their leasing
company held a license independently. In any event, we do
not address whatever merit this argument might (or might
not) have, as the Board did not rely on the benefits of
licensing as the basis for its opinion. We cannot consider
such justification now, because "[a]gency decisions must gen-
erally be affirmed on the grounds stated in them." Associa-
tion of Civilian Technicians v. FLRA, 269 F.3d 1112, 1117
(D.C. Cir. 2001); see also, Burlington Truck Lines, Inc. v.
United States, 371 U.S. 156, 168 (1962) ("The courts may not
accept appellate counsel's post hoc rationalizations for agency
action....").

At oral argument, the Board's counsel asserted that Petro-
chem Insulation, Inc. v. NLRB, 240 F.3d 26 (D.C. Cir. 2001),
supports its decision in this case. We disagree. In that case,
we upheld the Board's finding that unions who filed environ-
mental objections to zoning and construction permits sought
by non-union contractors were protected activities. The
Board, we noted, relied on the unions' statement that they
sought to "force construction companies to pay their employ-
ees a living wage, including health and other benefits." Id.
at 30 (emphasis added) (citation omitted). If the unions were
successful, the Board reasoned, they would expand union
members' job opportunities while improving their bargaining
power for higher wages. See id. Thus it is clear that even
though union members were actively opposing the hiring of
non-union contractors, the union's stated purpose was to force
non-union employers to conform to area wage and benefit
standards--a goal that, if accepted by the non-union employ-
ers, would benefit non-union employees. Such activity, unlike
a bond requirement, relates to "employees' interests as em-
ployees." Eastex, 437 U.S. at 567.

The Board also relied on the Ninth Circuit's decision in
Kaiser Engineers v. NLRB, 538 F.2d 1379, 1385 (9th Cir.


1976), holding that lobbying members of Congress in an effort
to change the national immigration policy was action taken
for "mutual aid or protection" under section 7 because the
policy could affect the engineers' job security. The facts of
that case, though, are distinguishable from ours. The Kaiser
court was considering whether protected activity could occur
"outside the strict confines of the employment relationship."
Id. No one argues before us that employees may not peti-
tion, lobby, picket or otherwise direct their concerted activi-
ties toward entities other than their employers or other
employees' employers. Specifically, the Ninth Circuit held
that "lobbying legislators" for policy changes affecting em-
ployee "job security" was protected activity. Id. The policy
at issue involved easing restrictions on the importation of
foreign engineers who would compete directly with American
engineers for jobs. In our case, we are not concerned with a
policy that would flood the labor market and affect workers'
job security. We are concerned with whether the application
of a bonding ordinance that applies equally to union and non-
union subcontractors affects the job security of union employ-
ees. It does not.

While unable to identify a case supporting its position at
oral argument, the Board came closer to success in its brief,
although not close enough, in citing NLRB v. Circle Bindery,
536 F.2d 447 (1st Cir. 1976). The question before the First
Circuit in Circle Bindery was whether a union employee's
"policing" of a non-union employer's adherence to specific
contract terms was protected under section 7. In that case, a
union employee notified the union that his employer was
labeling books with a union "bug" (a mark indicating that the
book was bound by union employees) in violation of its
customer's contract. See id. at 449. The union then sought
and caused the non-union company to lose the binding con-
tract. As here, the employer argued that because the em-
ployee's actions were detrimental to the company and did not
benefit its own employees, the actions were unprotected
under section 7. The Board, however, ruled that the employ-
ee's actions, although harmful to the employer's business,
were nonetheless protected because they were "directed sole-


ly to protect[ ] himself and his fellow members of the Union
by preventing misuse of the union label which could undercut
the Union's standards." Id. at 451. The court, in upholding
the Board's decision, found that the non-union employer's
obtaining of the work "was a direct violation of its customer's
union contract," so any harm the employer sustained "was
merely to lose work which ... it should not have received in
the first place." Id. at 452-53.

The Board cites Circle Bindery for the proposition that
"promoting the employment of union members under union
conditions" is protected by the Act. Id. at 452. We do not
disagree. That proposition simply has nothing to do with the
alleged unfair labor practice by Tradesmen found by the
Board. Oakes's activity did not involve union conditions. It
did not involve non-union conditions. Indeed it did not
involve any employee-related conditions at all. It involved a
bond. Rather than raise the level of employee terms or
conditions of employment, the bond raises funds for the city.
Such city fund raising, however, bears too attenuated a
relationship to employees' interests as employees. As such,
Oakes's actions to enforce the bond against Tradesmen can-
not enjoy section 7's protections.

IV. Conclusion

For the reasons stated, we grant the petition for review,
vacate the decision and order of the Board, and deny the
Board's cross-petition for enforcement.