UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


RENO HILTON RESORTS

v.

NLRB


98-1484a

D.C. Cir. 1999


*	*	*


Rogers, Circuit Judge: Reno Hilton Resorts ("Reno Hil- ton") appeals
the decision and order of the National Labor  Relations Board
("Board") that it had violated ss 8(a)(1) and  (3) of the National
Labor Relations Act ("Act"), 29 U.S.C.  ss 158(a)(1) and (3), by
contracting out the work of its  recently unionized security service.
See Reno Hilton Re- sorts, 326 NLRB No. 154, 1998 WL 723981, at *1
(Sept. 30,  1998). Reno Hilton contends that the Board misstated and 
misapplied the appropriate legal standard for determining  whether an
employer's discharge of an employee constitutes  an unfair labor
practice, and lacked substantial evidence to  support its finding of
discriminatory intent. Finding these  contentions unpersuasive, we
deny the petition for review and  grant the Board's cross-application
for enforcement of the  order.


I.


When Reno Hilton began operating what was formerly a  Bally's
hotel-restaurant-casino complex in 1992, it inherited  Bally's
security staff, the members of which were not repre- sented by any
labor organization. Shortly thereafter, while  implementing a
cost-savings plan, Reno Hilton considered and  rejected various
proposals to contract out a number of securi- ty positions, despite a
projected annual savings ranging from  $24,000 to $96,000.


In June 1993, International Union, United Plant Guard  Workers of
America ("Union") began a campaign to organize  Reno Hilton's security
employees. After losing an election by 


a vote of 51 to 34, the Union filed unfair labor practice  charges with
the Board. While those charges were pending,1  the Union started
another campaign in 1995 to organize Reno  Hilton's security
employees, and an election was scheduled  for September 1995. Reno
Hilton retained a labor consulting  firm, The Burk Group, to assist it
in its opposition to the  union campaign, as it had done in the first
campaign. Shortly  before the election, Gary Parillo, an "anti-union"
security  employee, was called into the office of Reno Hilton's
director  of security, Dave Bennett, to meet with a Burk Group
official.  A color-coded chart in the office listed various security
de- partment employees and their position on the Union's orga- nizing
efforts. The Burk Group official asked Parillo to help  determine
which security employees were pro- or anti-union,  advising Parillo
that if the Union came in, the hotel would  contract out the security
jobs and showing Parillo figures  purporting to represent the


The Union won the election by a vote of 44 to 33 and was  certified by
the Board on October 12, 1995, as the exclusive  collective-bargaining
representative of the full-time and regu- lar part-time security
employees at the Reno Hilton. Shortly  before and after the election,
Reno Hilton's management  indicated to rank-and-file employees that
the presence of the  Union would mean that "things would get really
rough."  Within two weeks of the Union's certification, the Hilton 
Hotel's Vice President, Jim Anderson, met with Bennett  regarding
contracting out Reno Hilton's security work. Ac- cording to Lee
Boekhout, a Reno Hilton security employee,  Bennett's impression after
that meeting was that Reno Hilton  "may have lost the battle," but it
had "won the war," and that  "they [i.e., the unit security employees]
were gone." Bennett  reassured Boekhout, however, that his job was
protected  because, Bennett claimed, he was able to save the jobs of




__________

n 1 After finding in another proceeding that Reno Hilton had  violated
sections 8(a)(3) and (1) of the Act, an administrative law  judge
recommended that the 1993 election be set aside. See Reno  Hilton,
Nos. 32-CA-13618, 32-RC-3777 (Aug. 18, 1994). The  Board substantially
affirmed the decision of the ALJ. See Reno  Hilton Resorts, 320 NLRB
197, 197 n.4, 211 (1995).


ten or eleven employees who supported Reno Hilton's posi- tion in the
election campaign.


During contract negotiation sessions from November 1995  to early
August 1996, Anderson continually proposed to the  Union that Reno
Hilton would have the right to contract out  its security work. The
Union presented counter proposals to  the subcontracting plans, which
Reno Hilton rejected. Ac- cording to the Union President, Anderson
assured the Union  negotiators that Reno Hilton had no present
intention to  contract out its security work. Be that as it may, in
Febru- ary 1996, Bennett sent a memorandum to Reno Hilton's  president
advising that his investigation with two potential  subcontractors of
the costs of bringing in an outside security  service indicated that
Reno Hilton could save a considerable  amount of money. In April 1996,
several high-ranking Hilton  Corporation and Reno Hilton officials
discussed the econom- ics of contracting out the security work. During
this time the  administrative assistant to Reno Hilton's director of
security,  and its director of human resources spoke to Boekhout about
 changing the job titles of anti-Union employees to protect  their
jobs from the imminent elimination in the wake of  contracting out.


Then, in June 1996, Reno Hilton presented the Union with  a proposed
wage freeze and an unrestricted right to contract  out. When the Union
rejected the proposal, Reno Hilton  responded with a proposal for a
three-year contract with a  wage ceiling of $10.43 and a one-year bar
on contracting out  security work. The Union rejected this proposal as
well as a  third proposal for no wage adjustment and unrestricted
rights  to contract out. The security employees went on strike. The 
strike lasted from the end of July 1996 until mid-August 1996,  at
which point Reno Hilton and the Union entered into a  collective
bargaining agreement. The agreement froze  wages, prohibited
discrimination against employees on the  basis of union or non-union
status, and provided that Reno  Hilton had the right to "[c]ontract or


In October 1996, Reno Hilton conducted a financial impact  analysis of
contracting out that estimated savings of over $1.5 


million over three years. On November 1, 1996, hotel offi- cials met
with a potential subcontractor, American Protective  Services, to
discuss cost and quality issues. The same day,  Anderson wrote to the
Union President requesting a meeting  to discuss the results of the
hotel's inquiry into contracting  out. Prior to the meeting, Anderson
informed the Union that  contracting out security work at the
available base wage rate  of $7.50 per hour would save Reno Hilton
$4.23 per hour per  employee. Also, prior to the meeting, hotel
officials made the  decision to contract out its security work in
January 1997,  unless the Union would agree to a wage cut equal to the
 projected cost savings of contracting out.2 Reno Hilton's  financial
statement purported to show a decline of $10,587,156  in net revenues
in 1996 from the prior year.


Before the contracting out decision was implemented in  January 1997,
Reno Hilton made two offers to the Union to  avoid subcontracting. At
the meeting with the Union Presi- dent in late November 1996, Anderson
stated first, that Reno  Hilton would save over $500,000 annually by
contracting out  the security work of rank-and-file employees; second
that the  Union counter-proposals projecting over $400,000 annual sav-
ings were unacceptable; and third, that if the Union wanted  to avoid
contracting out, it would have to agree to a base  wage rate for Reno
Hilton's security staff of $7.75 per hour,  which included the $0.25
per hour profit margin it would have  to pay the subcontractor. In
response to the Union's protest  that the proposed wage decrease was
an attempt to drive it  out, inasmuch as Reno Hilton had not tried to
lower wages in  this manner during the contract negotiations, Anderson
 claimed that the cost saving benefits of contracting out had  only
recently become apparent. The Union rejected this  avoidance offer.




__________

n 2 In January 1997, Reno Hilton discharged all of the security 
bargaining unit employees and contracted out their work to Ameri- can
Protective Services, which has supplied Reno Hilton the same  number
of full-time security officers as those utilized prior to the 
contracting out. Approximately thirteen of Reno Hilton's former 
security employees obtained employment with American Protective 


Another avoidance offer was made the following month. In  early
December 1996, Reno Hilton informed the Union that  the hotel would
contract out its security work in January  1997. On December 20, 1996,
the Union filed unfair labor  practice charges on the ground that the
company contracted  out its security work in retaliation for the
employees' union  activity while protecting the jobs of "loyal"
employees. At an  eleventh hour meeting before Reno Hilton contracted
out,  Anderson reiterated the $7.75 offer, informing the Union that 
no amount of cost savings proposed by the Union would  substitute for
accepting that wage rate. Reno Hilton also  proposed to make severance
pay contingent upon the employ- ees' agreeing not to sue Reno Hilton.
The Union rejected the  offer.


In response to the Union's December 1996 charges, the  ALJ ruled that
Reno Hilton had violated ss 8(a)(3) and (1) of  the Act by contracting
out its security employees' work and  dismissing all of its security
employees, and recommended  immediate and full reinstatement of the
employees with back  pay and benefits. The Board affirmed
substantially all of the  ALJ's rulings, findings, and conclusions,
and expanded the  remedies to include a broader cease-and-desist
order,3 rescis- sion of the subcontract with American Protective
Services,  and restoration of the status quo ante by ordering Hilton
to  re-establish an in-house security force. Reno Hilton peti- tioned
the court for review under 29 U.S.C. s 160(f), and the  Board
cross-petitioned for enforcement of its order under  s 160(e).


II.


Under s 8(a)(3) of the Act, it is an unfair labor practice for  an
employer "to encourage or discourage membership in any  labor
organization," "by discrimination in regard to hire or 




__________

n 3 The amended order provided for the expungement from the  employment
records of the terminated security employees all refer- ences to the
unlawful discharge, and required Reno Hilton to  produce employment
records necessary to calculate back pay due to  the terminated
employees.


tenure of employment or any term or condition of employ- ment." 29
U.S.C. s 158(a)(3). Such conduct also would  violate s 8(a)(1) because
it "interfere[s] with, restrain[s], or  coerce[s] employees in the
exercise of" their labor rights. 29  U.S.C. s 158(a)(1); see Power
Inc. v. NLRB, 40 F.3d 409, 417  n.3 (D.C. Cir. 1994). An employer
violates ss 8(a)(3) and (1)  if it takes adverse action against an
employee because of the  protected union activity. See 29 U.S.C. ss
158(a)(3), (1);  LCF, Inc. v. NLRB, 129 F.3d 1276, 1281 (D.C. Cir.


At the outset, Reno Hilton maintains that the General  Counsel's
decision not to pursue a s 8(a)(5) charge against  the hotel for bad
faith in bargaining for the contracting out  clause precludes an
unfair labor practice claim under  s 8(a)(3) for exercising its rights
under that clause. We  disagree. A decision not to prosecute is made
for many  reasons, sometimes for reasons unrelated to the merits of
the  charge. See, e.g., Heckler v. Chaney, 470 U.S. 821, 831, 105  S.
Ct. 1649, 1655-56, 84 L.Ed.2d 714 (1985). Reno Hilton  offers nothing
to show that the General Counsel's decision  was based on an
affirmative finding of good faith by Reno  Hilton in all its actions
under the parties' agreement. Even  assuming the General Counsel's
exercise of its prosecutorial  discretion could support an inference
that the hotel had  bargained for the contracting out clause in good
faith, Reno  Hilton proffers no persuasive authority for the
proposition  that such an inference precludes a s 8(a)(3) violation
for  discrimination in the exercise of rights under the bargained- for


In contending that its exercise of its contracting out rights  under
the parties' agreement cannot be deemed a s 8(a)(3)  violation, Reno
Hilton relies on the Sixth Circuit's decision in  "Automatic"
Sprinkler Corp. of America v. NLRB, 120 F.3d  612, 620 (6th Cir.
1997), cert. denied, 118 S. Ct. 1675, 140  L.Ed.2d 813 (1998). In that
case, the court held that the  employer's exercise of its contractual
right to subcontract did  not constitute a violation of s 8(a)(3). But
as the dissenting  judge noted, the majority did not address the
findings of the  ALJ as adopted by the Board that the employer's
conduct  was motivated by anti-union animus. See id. at 622 (Ryan, J.,


dissenting). Further, the decision in Automatic Sprinkler,  which has
not yet been cited with approval outside of the  Sixth Circuit, is at
odds with the general principle that a  party cannot exercise its
contractual rights in violation of the  law. Thus, the Tenth Circuit
in Capitol Steel & Iron Co. v.  NLRB, 89 F.3d 692, 696-97 (10th Cir.
1996), declined to  countenance the calculated use of waiver clauses
in a contract  to undermine the collective bargaining process,
affirming the  Board's finding of a s 8(a)(5) violation where the
employer  had announced wage increases "in such a way and at such a 
time as to sway the employees who would immediately there- after vote
on [the employer's] 'last and final offer.' " Similar- ly, the Third
Circuit in NLRB v. Joy Technologies, Inc., 990  F.2d 104, 111 n.7 (3d
Cir. 1993), noting that "contract lan- guage does not exempt the
Employer from its obligation to  act lawfully under the NLRA,"
affirmed the Board's finding  that the employer had unlawfully abused
the superseniority  clause in the parties' contract by transferring a
position so as  to "ensure that Beightol would remain union
committeeman  and obtain the higher-paying position." So too, in
Gannett  Rochester Newspapers v. NLRB, 988 F.2d 198, 203 (D.C. Cir. 
1993), this circuit observed that "[u]nder the clear-and- unmistakable
standard [for waiver], courts may 'not infer  from a general
contractual provision that the parties intended  to waive a
statutorily protected right unless the undertaking  is explicitly
stated.' " Id. (quoting Metropolitan Edison Co.  v. NLRB, 460 U.S.
693, 708 (1983) (internal quotation omit- ted)). Even when the waiver
is explicit, moreover, the waiver  is not read broadly. See id.
Because the record is devoid of  evidence to infer, much less show,
that the Union waived its  s 8(a)(3) rights by entering into the
agreement with Reno  Hilton, there is no basis for adopting either


III.


Consequently, the heart of Reno Hilton's appeal turns out  to be its
contention that the Board lacked substantial evi- dence of anti-union
animus to find a violation of ss 8(a)(3) and 


(1). First, it maintains that the General Counsel did not  establish a
violation of the Act under Wright Line,4 because  the ALJ misstated
the test, gave controlling weight to evi- dence outside the s 10(b)
period, failed to consider changed  circumstances prompting the
contracting out decision, and  made inappropriate comparisons between
Reno Hilton and  other Hilton hotels. Second, Reno Hilton maintains
that it  rebutted any evidence of anti-union animus by establishing 
that its decision to contract out was driven by economic 
considerations, and that the ALJ erred by not considering  such
evidence and by drawing negative inferences from Reno  Hilton's
failure to call certain witnesses. Neither contention  is


The court will affirm the findings of the Board unless they  are
"unsupported by substantial evidence in the record con- sidered as a
whole," General Elec. Co. v. NLRB, 117 F.3d  627, 630 (D.C. Cir.
1997), or unless the Board "acted arbitrari- ly or otherwise erred in
applying established law to the facts."  Allegheny Ludlum Corp. v.
NLRB, 104 F.3d 1354, 1358 (D.C.  Cir. 1997) (quotation and citation
omitted). The court must  "take account of anything in the record that
'fairly detracts'  from the weight of the evidence supporting the
Board's  conclusion." General Elec., 117 F.3d at 630 (quoting Univer-
sal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S. Ct. 456,  464-65,
95 L.Ed. 456 (1951)). Even if the court might have  reached a
different conclusion had the court considered the  issue de novo, the
court will uphold the Board's decision if it  is supported by
substantial evidence in the record. See  Synergy Gas Corp. v. NLRB, 19
F.3d 649, 651 (D.C. Cir.  1994). The court gives even greater
deference to the Board's  determination of questions of motive, see




__________

n 4 251 N.L.R.B. 1083, enf'd, 662 F.2d 899 (1st Cir. 1981), cert. 
denied, 455 U.S. 989, 102 S. Ct. 1612, 71 L.Ed.2d 848 (1982), which 
was upheld in NLRB v. Transportation Management Corp., 462  U.S. 393,
399-403, 103 S. Ct. 2469, 2473-75, 76 L.Ed.2d 667 (1983),  overruled
in part on other grounds by Director, Office of Workers'  Compensation
Programs, Dep't of Labor v. Greenwich Collieries,  512 U.S. 267,
276-78, 114 S. Ct. 2251, 2257-58, 129 L.Ed.2d 221  (1994).


Corp. v. NLRB, 56 F.3d 224, 229 (D.C. Cir. 1995), and  "accept[s] the
ALJ's credibility determinations that are  adopted by the Board
'unless they are patently unsupport- able.' " Schaeff Inc. v. NLRB,
113 F.3d 264, 266 (D.C. Cir.  1997) (quoting NLRB v. Creative Food
Design Ltd., 852 F.2d  1295, 1297 (D.C. Cir. 1988)); see also Capital
Cleaning Con- tractors, Inc. v. NLRB, 147 F.3d 999, 1004 (D.C. Cir.


When examining an allegation of a s 8(a)(3) violation, the  Board
applies the two-stage test first articulated in Wright  Line, under
which the Board's General Counsel has the  burden of persuasion to
show that union activity was a  substantial or motivating factor in
the employer's decision to  contract out. See Wright Line, 251
N.L.R.B. at 1089; South- west Merchandising Corp. v. NLRB, 53 F.3d
1334, 1339-40  (D.C. Cir. 1995); see also Laro Maintenance Corp., 56
F.3d  at 228. The employer, in turn, may rebut the inference by 
showing by a preponderance of the evidence that it would  have taken
the same action absent the union activity and the  employer's
anti-union motivation. See Wright Line, 251  N.L.R.B. at 1089.


Reno Hilton maintains that the ALJ misstated and misap- plied the
Wright Line test by referring to the General  Counsel's initial burden
as a "prima facie showing," and by  failing to consider Reno Hilton's
proffered economic justifica- tion or evidence of its cost savings
matching offers as part of  the threshold determination whether the
General Counsel  met its initial burden. Any misstatement or
misapplication of  the Wright Line test is immaterial, however, so
long as there  is substantial evidence supporting the Board's
determinations  that anti-union animus was a motivating factor in the
employ- er's decision to contract out its unit security work and that 
Reno Hilton failed to carry its burden of proof that it would  have
made the same decision regardless of such animus. Cf.  NLRB v. GATX
Logistics, Inc., 160 F.3d 353, 357 (7th Cir.  1998).


The Board relied primarily on the following factual findings  by the
ALJ in concluding that the General Counsel carried  his burden of
persuasion showing that Reno Hilton was 


motivated by anti-union animus when deciding to contract out  its
security work. First, there was the matter of timing.  The contracting
out decision came on the heels of heavy union  activity, most notably
following the strike preceding negotia- tion of the collective
bargaining agreement. The timing of  the decision to contract out is
suspect in view of evidence that  Reno Hilton knew long before the
Union's certification that  contracting out its security work could
save a significant  amount of money given Reno Hilton's above-market
wages  for its security employees. As the court pointed out in Meco 
Corp. v. NLRB, 986 F.2d 1434, 1437 (D.C. Cir. 1993), timing  is a
telling consideration in determining whether employer  action is
motivated by anti-union animus. See also General  Elec., 117 F.3d at
638 (citing Parsippany Hotel Management  Co. v. NLRB, 99 F.3d 413, 422


Second, reasonable inferences of anti-union motivation were  virtually
compelled by the statements of Reno Hilton officials  during the Union
campaign to the effect that the hotel would  strongly consider
contracting out security jobs if the Union  prevailed in the
election.5 Particularly compelling is the  evidence of comments by
security director Bennett to Boekh- out regarding his
post-unionization efforts to contract out the  security work while
preserving the jobs of the anti-union  employees.6 There was evidence




__________

n 5 Contrary to Reno Hilton's contention, the Board could prop- erly
consider evidence outside of the s 10(b) six-month-limitations  period
for purposes of illuminating the events taking place within  the
period. See Sheet Metal Workers' Int'l Ass'n. AFL-CIO, 989  F.2d 515,
519 (D.C. Cir.1993). The evidence of the hotel's unfair  labor
practices during the election was not so remote in time as to  be
unrelated to the hotel's decision to contract out, see Meco Corp., 
986 F.2d at 1437, particularly where, as here, the formulation of 
that decision began two weeks after the certification of the Union.


6 Boekhout's unrebutted affidavit stated in pertinent part:


On or about October 25 or 26, [1995], about a month or so after  the
election, I was in the security office when Director of  Security Dave
Bennett returned from a meeting upstairs....  He told me that they had
made a presentation to Jim Anderson 


of job protection for anti-union employees, including a sugges- tion by
the head of human resources at Reno Hilton that job  titles could be
manipulated to avoid termination of employer- allied employees due to
the contracting out of all security  work. Although Bennett ultimately
was unable to protect  jobs as he promised, the various statements by
hotel officials  strongly support the inference that the security
employees'  union activity was a substantial and motivating factor in
Reno  Hilton's decision to contract out its security work.


That evidence notwithstanding, Reno Hilton contends that  the Board
erred by failing to consider evidence at each step  of analysis under
Wright Line. Reno Hilton points to the  evidence that on two occasions
it offered to refrain from  contracting out its security work if the
Union would match  the subcontractor's wages. The ALJ did not refer to
these  two avoidance offers in his decision. On a different evidentia-
ry record, the Board might view evidence of two avoidance  offers as
successfully rebutting the evidence of anti-union  animus. Here,
however, there was evidence that Reno Hilton  was engaged in a
pervasive, continuing effort to undermine  union organizing efforts
prior to certification and afterwards,  when it limited the Union's
knowledge of the contracting out  plans and frustrated the Union's
efforts by offering an unrea- sonable $7.75 wage rate, which not only




__________

n and the others (he didn't name who) at the meeting concerning  going
to contract security and they had bought it. He said that  they had
told them that they could save more than $500,000.  He told me that
they had said do it. He then told me that they  may have lost the
battle but that they had won the war. He  said that they were gone. I
believe I said oh, s[* * *].  Bennett told me not to worry about it,
that my job was  protected, that he had managed to save the 10 or 11
of us.  Bennett did not actually say the word subcontracting [i.e., 
contracting out], but I knew what he meant. When he said  "they were
gone" I knew he meant the [employees in the]  Union. When he referred
to the 10 to 11 of us he meant those  security officers who supported
the Company and not the  Union.


prevailing average wage rate in the area, but represented a  severe
wage cut for most Reno Hilton security employees.7  Under the
circumstances, the two avoidance offers could  hardly rebut the
pervasive and stark evidence of anti-union  animus. Because the
evidence was legally irrelevant, the  ALJ's failure to address it is
of no moment. The relevant  comparison, in analyzing the s 8(a)(3)
charge that Reno Hil- ton discriminated against its security employees
because of  their protected union activity, is between the unionized
secu- rity employees and their non-union predecessors. It follows, 
therefore, that the General Counsel satisfied the first step of  the
Wright Line test: there is substantial evidence in the  record to
support the Board's finding that Reno Hilton was  motivated by
anti-union animus when it decided to contract  out its security


As to the second step of Wright Line, Reno Hilton con- tends that its
financial statement for 1996 and other evidence  established that it
would have contracted out its security  work absent anti-union animus.
Specifically, Reno Hilton  relies on evidence that the decision to
subcontract was being  considered prior to its security employees'
union activity as  part of an ongoing cost reduction plan, and was
prompted, in  1996, primarily by falling revenues and profits. Reno
Hilton  produced evidence that it and its sister hotel, the Flamingo 
Hilton-Reno, had been engaged in cost-cutting programs,  including
closing, combining, or consolidating certain opera- tions and laying
off employees.8 The ALJ concluded, and the 




__________

n 7 A 1995 Reno Hilton wage survey indicated that Reno Hilton's 
maximum wage rate of $12.62 per hour for security employees was 
almost three dollars higher than the $9.64 average maximum wage  rate
paid by nine competing hotels. Seventy percent of Reno  Hilton's
security employees were paid at or near the top rate.


8 No other Hilton Hotel casino has a unionized security staff,  nor has
any Hilton Hotel casino contracted out the work of its  security
force. Reno Hilton relies on evidence that it engaged in  joint
cost-cutting measures with the Flamingo Hilton-Reno, yet  maintains
that consideration of the Flamingo Hilton-Reno's com- parative
treatment of its security employees is irrelevant. We  decline, in any
event, to draw any inference from the fact that the  Flamingo
Hilton-Reno, which is in the same wage market as the 


Board agreed, that the evidence supporting Reno Hilton's  contention
that it was motivated by lawful business consider- ations "is sorely
wanting, as not one individual who was  instrumental in making such a
decision was called by [Reno  Hilton] as a witness in this
proceeding." The Board correctly  noted that the ALJ had improperly
drawn adverse inferences  from Reno Hilton's failure to produce
testimony from rele- vant witnesses who were no longer in its employ
at the time  of the hearing. See Reno Hilton Resorts, 326 NLRB No.
154,  1998 WL 723981, *2 n.1 (citing Irwin Industries, Inc., 325  NLRB
No. 149, 1998 WL 261141, *35 n.12 (May 19, 1998);  Goldsmith Motors
Corp., 310 NLRB 1279, 1280 n.1 (1993));  see also Property Resources
Corp., 285 NLRB 1105, 1105 n.2  (1987), enf'd 863 F.2d 964 (D.C. Cir.
1988). But, the record  also contained potentially damaging evidence
from Bennett,  who remained Reno Hilton's director of security and had
 written a crucial memorandum in February 1996 on contract- ing out,
the only remaining copy of which was missing a key  portion.9 The
absence of Bennett's testimony, therefore,  represents a glaring
omission in Reno Hilton's case, especially  as it relates to Bennett's




__________

n Reno Hilton, has not reduced the wage rates of its security staff as 
Reno Hilton proposed to the Union as an alternative to subcontract-
ing because there is insufficient information in the record about 
Flamingo Hilton-Reno's financial condition during the relevant 


9 The omitted portion of Bennett's memorandum was relevant  to whether
Reno Hilton had a legitimate business justification for  contracting
out its security service; it purported to set forth  Bennett's "ideas
as to why a contract security company can better  service us than
in-house security." Memorandum of February 26,  1996, from Bennett to
the president of Reno Hilton.


10 Reno Hilton's challenge to the ALJ's refusal to reopen the 
administrative record is meritless. Reno Hilton sought to admit 
evidence that, nearly three weeks after the hearing, Reno Hilton 
contracted out one of its restaurant operations, resulting in the 
termination of 132 non-union employees. Although the ALJ did not 
elaborate on his ruling denying the motion to reopen the record, the 
court will not find an abuse of discretion unless it "clearly


No more availing is Reno Hilton's contention that its  economic defense
rebutted the evidence of anti-union motiva- tion. In LCF, Inc. v.
NLRB, 129 F.3d 1276 (D.C. Cir. 1997),  on which Reno Hilton relies,
the employer presented over- whelming evidence of its grim economic
situation that out- weighed the inference arising from the otherwise
suspect  timing of its decision to contract out. See id. at 1282-83.
By  contrast, the persuasive force of Reno Hilton's evidence that 
falling revenues and profits in 1996 were the impetus for the 
contracting out decision is severely weakened by the evidence  that it
proposed contracting out two weeks after the Union's  certification.
This occurred despite the claim of Hilton's Vice  President when
bargaining began that it had no present  intentions to contract out
Reno Hilton's security work. Nor  did Reno Hilton present any evidence
to explain why it chose  to contract out all of its security service
in response to the  revenue decline. It presented no testimony from
any deci- sion maker linking the decision to contract out to the
revenue  decline. It presented no testimony even as to when the 
revenue decline became apparent to management; the only  testimony on
the revenue decline is from Mike Caryl, who by  his own testimony, was
not a decision maker. Given the  totality of the circumstances, the
Board could find that evi- dence of changed circumstances in the form
of a financial  statement suggesting a decline in earnings fails to
demon- strate that the decision to contract out was prompted by that 


Accordingly, because there is substantial evidence in the  record to
support the Board's finding of anti-union animus  and its rejection of
Reno Hilton's defense that the contracting  out of the entire security
service would have occurred for  economic reasons absent anti-union
animus, we deny the 




__________

n that the new evidence would compel or persuade to a contrary 
result." Cooley v. FERC, 843 F.2d 1464, 1473 (D.C. Cir. 1988) 
(alteration in original) (quotation and citation omitted). The prof-
fered evidence does not meet this standard, and hence we find no 
abuse of discretion. See Thomas-Davis Medical Ctrs. v. NLRB,  157 F.3d
909, 912 (D.C. Cir. 1998) (citing Road Sprinkler Fitters  Local Union
No. 669 v. NLRB, 789 F.2d 9, 14 (D.C. Cir. 1986)).


petition for review and grant the Board's petition for enforce- ment of
its order.