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


PAC MICRONSN CORP

v.

NLRB


99-1078a

D.C. Cir. 2000


*	*	*


Ginsburg, Circuit Judge: The National Labor Relations  Board held that
Pacific Micronesia Corporation, d/b/a Dai- Ichi Hotel Saipan Beach,
violated ss 8(a)(1) & (5) of the  National Labor Relations Act, 29
U.S.C. s 151 et seq., by  refusing to bargain with or provide
information to the Com- monwealth Labor Federation and the Hotel
Employees &  Restaurant Employees, Local 5, AFL-CIO (collectively, the
 Union). Dai-Ichi claims it need not deal with the Union  because the
Board improperly defined the bargaining unit for  which it was
certified and because the election of the Union  as the employees'
bargaining representative was invalid. We  agree with Dai-Ichi that
the representation election was  invalid. Without resolving the unit
determination issue,  therefore we grant the Company's petition for
review and  deny the Board's cross-application for enforcement.


I. Background


Dai-Ichi operates a resort hotel located on the island of  Saipan in
the Commonwealth of the Northern Mariana Is- lands (CNMI). The
Covenant to Establish a Commonwealth  of the Northern Mariana Islands
in Political Union with the  United States of America, 48 U.S.C. s
1681 at 539 (West  1987), governs the relationship between the CNMI


United States. Section 502(a)(2) of the Covenant makes  certain federal
laws, including the NLRA, effective in the  CNMI, see Micronesian
Telecommunications Corp. v.  NLRB, 820 F.2d 1097, 1101 (9th Cir.
1987), while s 503(a) of  the Covenant provides that the "immigration
and naturaliza- tion laws of the United States" generally do not apply
in the  CNMI. 48 U.S.C. s 1681. Acting under its reserved authori- ty
to regulate immigration, the CNMI enacted the Nonresi- dent Workers
Act (NWA) which "provide[s] strict[ ] enforce- ment, control and
regulation of nonresident workers," NWA  s 4411(b), by severely
restricting the immigration of nonresi- dents and by limiting the
"employment of nonresident work- ers ... to the duration of the
specific job or employment for  which the alien was recruited." NWA s
4411(a). Among the  many restrictions the NWA places upon the
employment of  nonresidents, the following are most noteworthy.


An employer in the CNMI may hire a nonresident worker  only if the
Chief of Labor certifies that no resident is  available to fill the
position. See NWA s 4433. Upon such  certification, the employer and
the Chief must enter into a  "nonresident employment agreement," which
memorializes a  description of the position, the time at which the
employer  must again seek to fill the position with a resident, the 
employment contract to be offered to the nonresident, and  the
employer's commitment to secure a bond or surety for the  employee.
See id. The actual employment contract in turn  must specify the term
and location of employment, work  schedule, wage scale for regular and
overtime hours, and any  pay deductions required by law. See NWA s


The Chief of Labor may authorize a nonresident employee  to work for no
more than one year at a time, but the  employer may annually apply to
extend his employment for  an additional year. See Alien Labor Rules
and Regs. s II.D.  A nonresident may not work for anyone other than
the  employer specified in the employment contract and neither  the
employer nor the nonresident may alter the terms of their  employment
contract without approval from the Chief. See  NWA s 4437(d). Upon the
completion of the term of employ- ment or the end of the employment
relationship, a nonresi-


dent must immediately depart from the CNMI unless he has  filed a
breach of contract claim against the employer, in which  case he may
remain in the CNMI for a short time. See NWA  s 4434(g).


Approximately 77% of Dai-Ichi's employees are nonresi- dents, and
Dai-Ichi's Personnel Manager testified before the  Board that the
company routinely seeks to extend the em- ployment of any nonresident
worker who has performed well.  Indeed, a significant portion of
Dai-Ichi's nonresident work- force has been in Dai-Ichi's employ for
five or more years.


In November 1995 the Union petitioned for an election in a  bargaining
unit consisting of all Dai-Ichi's workers. Dai-Ichi  objected to the
election on various jurisdictional grounds;  alternatively it
contended that the nonresident employees  "lack a community of
interest with the resident employees,"  and therefore should be in a
separate bargaining unit. The  Regional Director overruled Dai-Ichi's
jurisdictional objec- tions, established a single bargaining unit
comprised of both  residents and nonresidents, and set the election
for March 21,  1996. The Board rejected Dai-Ichi's request for


A little more than one week prior to the election the press  in the
CNMI began describing various legislative proposals  relating to
nonresident workers. (Although the record con- tains only newspaper
articles, the Board found that similar  reports aired on television at
about the same time.) On  March 13, the Marianas Variety News & Views
(Variety)  published a story entitled "Reyes to union: Leave us
alone,"  which contains a statement by Rep. Pete Reyes, the majority 
leader in the CNMI House of Representatives, announcing  his intention
to introduce a bill limiting to two years the time  a nonresident
worker could lawfully remain in the CNMI.  Reyes said he intended the
bill to curtail "problems with  overstaying alien workers," and to
"send[ ] a message to  union organizers that they cannot promise
workers [an] indef- inite stay in the [CNMI]." Three days later, the
Pacific Daily  News ran an article entitled "Torres opposes union,"
report- ing that Rep. Stanley Torres had announced his intention to 
"introduce legislation ... to limit aliens to two renewals of 


their employment contracts if they join labor unions." The  article
also mentions that the announcement came approxi- mately one week
prior to the election at the Dai-Ichi hotel.


In the ensuing days prior to the election, the news media  circulated
several more reports related to the legislative  proposals of Reps.
Reyes and Torres. Variety published a  story on March 18 entitled
"Reyes: Send home displaced  workers," which reported that Rep. Reyes'
proposal would  prevent a nonresident worker who had been discharged
from  remaining in the CNMI pending the outcome of his grievance. 
Rep. Reyes is reported to have stated that he made the  proposal
partially in response to a "recent demonstration  participated in by
alien workers bearing placards calling  Saipan 'the island of the
abusers.' " That same day articles in  Variety and in the Saipan
Tribune quoted Rep. Torres as  saying his proposal would "limit all
nonresident workers who  have joined a labor union to only two
contract renewals."  Variety quoted Rep. Torres as saying that the
bill "is not  about punishing those who will join the union [but
rather]  about putting union organizers on notice that they could not 
promise anything for these workers"; the paper also quoted  Elwood
Mott Jr., a union organizer, as saying that the bill  would be
inconsistent with "sections 7 and 8 of the National  Labor Relations
Act." The Tribune article, entitled "Joining  a union: Hazardous to
your health," mentioned that the  Union was attempting to organize
Dai-Ichi's workforce, noted  that some U.S. government officials had
accused the Union of  having connections to organized crime, and ended
by pointing  out that Rep. Torres' bill "would allow non-union members
to  continue to renew their employment contracts indefinitely." 
Dai-Ichi attached this article to a flyer and circulated it to the 


In the final few days before the election, the news media  reported
that the bills as introduced would in fact apply to all  nonresidents,
not just union members, but the stories contin- ued to portray Reps.
Reyes and Torres as very much opposed  to unionization. The March 19
Tribune, in an article entitled  "Torres: Union lying about dues,"
reported that Rep. Torres  had accused the Union of collecting
excessive dues from 


workers in Saipan and it quoted him as saying that "becoming  a union
member will be a lifetime employment record and  may haunt you
everywhere you go when looking for a new  job." That same day Variety
reported that the Saipan Cham- ber of Commerce strongly opposed Rep.
Torres' bill and  quoted the president of the Chamber as stating that
the bill  would "probably be unconstitutional" if applied only to non-
residents who join unions. On March 20, the Tribune report- ed that
Rep. Torres had introduced a bill "propos[ing] that  any 'nonresident'
worker who has lived and worked in the  CNMI for two or more
consecutive years be required to leave  the CNMI for at least 30 days
before the worker may be  allowed to ... continue working." The
remainder of the  report contrasts Rep. Torres' bill with an earlier
law that had  limited nonresidents to four years in the CNMI;
employers  had succeeded in having the four year limit repealed. Vari-
ety also published on March 20 a two-page advertisement  paid for by
Rep. Torres that contained clippings from news- paper articles and
letters regarding the Union; several of the  articles featured in the
advertisement were among the ones  described above.


On the day of the election Variety ran an article reporting  the
parties' predictions of victory, a statement by Dai-Ichi's  counsel
accusing the Union of charging excessive dues, re- sponses by Union
supporters claiming the Union would re- duce dues if it won, and a
statement by Rep. Torres that the  Union has a history of striking and
that strikes "would cause  civil unrest in the CNMI." Variety also
published an article  entitled "2-year, 4-year limits for workers
opposed" in which  Diego Benavente, Speaker of the CNMI House of
Represen- tatives, stated that he intended to "lobby his colleagues in
the  House against any legislation seeking to impose a limit on the 
legal stay of non-resident workers in the CNMI." Speaker  Benavente is
quoted as stating that Rep. Torres' bill "is not  only for union
members but for all non-resident workers" and  that federal law
prevents the CNMI from "treat[ing] union  members differently."
Finally, the Tribune printed an article  in which Dai-Ichi's counsel
is quoted as saying the Union lied  to employees when it told them it


and that Dai-Ichi planned to file unfair labor practice charges 
against the Union for deceptive advertising.


The election of March 21 resulted in a decisive defeat (157  to 91) for
the Union. The Union filed objections to the  election, including
three objections claiming, as the Regional  Director characterized
them, that "third parties interfered  with employee free choice ... by
threatening the reinstate- ment of the four year limit on non-resident
worker's [sic]  contract renewals and/or threatening to limit
non-resident  worker's [sic] contracts to two years." Finding that the
 "remarks published in the barrage of newspaper articles"  described
above "constitute third party conduct so aggravated  that they created
a general atmosphere of fear, reprisal, and  confusion rendering a
free election impossible," the Regional  Director recommended
overturning the election results. The  Board adopted the Regional
Director's findings, rejected Dai- Ichi's objections, and directed
that a second election be held.


The second election was held on February 5, 1998. This  time the Union
prevailed (131 to 121) and Dai-Ichi filed  objections to the election,
including its claim that the Board  erred by overturning the results
of the first election. The  Regional Director rejected Dai-Ichi's
objections and certified  the Union as the representative of the
bargaining unit; the  Board rejected Dai-Ichi's request for review.


In order to obtain judicial review, Dai-Ichi refused to  provide
information to or to bargain with the Union. Upon  the Union's filing
an unfair labor practice charge, the General  Counsel issued a
complaint claiming Dai-Ichi had violated  ss 8(a)(1) & (5) of the
NLRA. Finding no issues of disputed  fact, the Board granted summary
judgment in favor of the  General Counsel and directed Dai-Ichi to
bargain with the  Union. Dai-Ichi petitioned this court for review of
the  Board's order, the Board cross-applied for enforcement, and  the
Union intervened in support of the Board.


II. Analysis


Dai-Ichi argues that the Board erred by overturning the  first election
and by including within a single bargaining unit 


both resident and nonresident employees. We must uphold  the Board's
decisions unless "upon reviewing the record as a  whole, we conclude
that the Board's findings are not sup- ported by substantial evidence
or that the Board acted arbi- trarily or otherwise erred in applying
established law to the  facts of the case." Micro Pacific Development
Inc. v. NLRB,  178 F.3d 1325, 1328-29 (D.C. Cir. 1999). To meet the
re- quirement of "[s]ubstantial evidence," the Board must pro- duce
"more than a mere scintilla" of evidence; it must  present on the
record "such relevant evidence as a reasonable  mind might accept as
adequate to support a conclusion,"  Consolidated Edison Co. v. NLRB,
305 U.S. 197, 229 (1938),  taking into consideration the "record in
its entirety ...  including the body of evidence opposed to the
Board's view."  Universal Camera Corp. v. NLRB, 340 U.S. 474, 488
(1951).  Our review for substantial evidence also must ensure that the
 Board has "draw[n] all those inferences that the evidence  fairly
demands." Allentown Mack Sales & Serv., Inc. v.  NLRB, 522 U.S. 359,


We think there is serious reason to doubt the propriety of  the
bargaining unit in this case because of the inherent  conflict of
interest between resident and nonresident employ- ees, but the matter
is far from clear. See Saipan Hotel Corp.  v. NLRB, 114 F.3d 994, 998
(9th Cir. 1997). We need not  decide that issue, however, because we
agree with Dai-Ichi  that the Board erred by overturning the results
of the first  election.


The Board's precedents establish that it rarely overturns  the results
of a representation election because of misconduct  not attributable
to a party to the election, and then only if  that "misconduct was so
aggravated as to create a general  atmosphere of fear and reprisal
rendering a free election  impossible." Westwood Horizons Hotel, 270
NLRB 802, 803  (1984). In this case the Board found the statements
made by  various members of the CNMI House of Representatives, as 
reported by the news media, constituted "third party threats"  that
made it impossible for the employees freely to decide  whether to vote
for the Union. We question seriously the  idea that statements made by
lawmakers concerning legisla-


tive proposals designed to address political issues could ever  be
grounds for overturning a representation election. Cf.  NLRB v. Gissel
Packing Co., 395 U.S. 575, 617-18 (1969)  (stating employer's comments
about representation election  must be more limited than those
regarding "the enactment of  legislation ... where the independent
voter may be freer to  listen more objectively and employers as a
class freer to  talk"). Nevertheless, we need not and do not decide
that  question here because the Board's determination that the 
reports "created an atmosphere of confusion, and fear of  reprisals so
as to render impossible the rational, uncoerced  selection of a
bargaining representative" is not supported by  substantial evidence.
Indeed, there are two major deficien- cies with the evidence the Board
relies upon to support its  determination: Most of the news reports
could not have  affected in any way the employees' ability to decide
freely  whether to select the Union as their bargaining representa-
tive, and to the extent any of the reports conceivably could  have
affected the employees' ability to choose freely, the  reports are too
insignificant to have caused such fear and  confusion that free choice


The Board overturned the results of the first election  because it
determined that the reports in the media made it  impossible for the
employees to vote freely. In order to  support this determination,
therefore, the Board needed at a  minimum to present evidence of
events from which "it reason- ably appears that the freedom of choice
of the employees  could have been interfered with." James Lees & Sons
Co.,  130 NLRB 290, 291 n.1 (1961). Although the type of evidence 
required in this case seems self-evident, see, e.g., Westwood 
Horizons Hotel, 270 NLRB at 803 (threats of physical vio- lence if
employees voted against Union); James Lees & Sons  Co., 130 NLRB at
291 ("[N]umerous statements and conduct  by various responsible groups
and individuals in the commu- nity ... reasonably conveyed the view to
the employees that  in the event of unionization the Employer would
shut down its  plant and other employers would not locate in the
communi- ty"), the Board repeatedly attempts to justify its decision
to  overturn the first election by relying upon evidence that  simply
is not relevant to the employees' free choice.


For example, the Regional Director observed that passage  of the bills
limiting the amount of time nonresidents could  remain in the CNMI
would have meant immediate job loss  and deportation for a significant
number of Dai-Ichi's long- term employees. Noting that threats of
deportation and job  loss are quite serious, he then opined that many
of Dai-Ichi's  workers might have "reasonably conclud[ed] that it was
bet- ter to stay and work without union representation, than to be 
sent back to their homeland[s]." The gap in this reasoning is 
obvious: Passage of the proposed legislation was not in any  way
contingent upon the outcome of the election. Therefore,  the pendency
of the legislative issue (and the reports thereon)  had no bearing
upon the employees' ability to choose freely in  the election.
Although it is quite possible that news of the  legislative proposals
caused fear and confusion among Dai- Ichi's employees--perhaps causing
some of them to worry  that they would not be able to remain in the
CNMI--they  simply had no reason to fear the consequences of voting
for  the Union. Yet the Board overturned the first election on the 
ground that the employees' fear and confusion "render[ed]  impossible"
a "free expression of choice." Westwood Hori- zons Hotel, 270 NLRB at
803. From the evidence in the  record, that is a non sequitur.


In this court the Board highlights four aspects of the  record in
support of its conclusion. First, the Board points  out that some
early reports had erroneously described the  bills as limiting the
number of times nonresidents who joined  a union could renew their
employment contracts while leaving  unaffected the renewals of
nonresidents who did not join a  union. Second, the Board notes that
several articles about  the proposed legislation refer to the
impending election at  Dai-Ichi. Third, the Board points out that some
of the  reports contain statements indicating that the proposals were 
intended to deter the Union. Finally, the Board relies upon  one of
the articles that quotes Rep. Torres as stating that  joining a union
"may haunt you everywhere you go when  looking for a new job." We
consider these four points both  seriatim and cumulatively, but are


conclude they do not, even in the aggregate, constitute sub- stantial
evidence supporting the Board's determination that  the employees were
unable to vote freely in the first election.


First, although some of the early reports did refer to  (nonexistent)
legislative proposals that would have adversely  affected only
nonresidents who were union members, later  reports repeatedly
corrected those early mis-descriptions.  The last article to err in
that regard appeared on March 18;  all subsequent articles either
expressed opposition to such a  proposal or stated that the actual
proposals would apply to all  nonresident workers, union and non-union
alike. A report on  March 19 stated that the Chamber of Commerce
believed a  bill targeting union members would be unconstitutional and
 that it would strongly oppose a bill limiting the number of  times
any nonresident's contract could be renewed. Then, on  March 20, the
Tribune reported that the bills actually intro- duced applied to all
nonresidents regardless whether they  were members of a union, and
Variety published an article on  March 21 reiterating that the bills
applied to all nonresidents.  The later reports clearly dispelled any
notion that the pro- posed legislation affected only those
nonresidents who joined  a union. The Board's emphasis solely upon the


Second, mention of the election at Dai-Ichi in some articles  lends no
support to the Board's determination. To begin,  only three of the
articles even mention the then-impending  first election in relation
to the proposed legislation. The rest  of the articles either do not
mention the election at all or  mention it in a way that does not
relate to the proposed  legislation. For example, an article appearing
in the Tribune  on March 19 begins by mentioning that "[w]ith an
election set  this week at the Dai-Ichi Hotel ... Rep. Stanley T.
Torres  has renewed his criticism" of the Union, but that article does
 not mention any of the legislative proposals. Even assuming, 
however, that some of the articles did lead employees to  believe that
the legislation was introduced because of the  Union's efforts to
organize Dai-Ichi's workforce, those arti- cles cannot reasonably be
seen as constraining the employees'  ability to vote freely in the
election. Not one of the articles 


ever intimates that the results of the election could affect the 
legislative outlook in any way. Although it may have been  reasonable
for an employee to speculate that the Union's  efforts to organize
Dai-Ichi's workforce at least partially  precipitated the proposals,
it would not have been reasonable  for an employee to conclude that
the results of the election  could do anything to defeat or otherwise
derail the proposals,  which dealt with larger issues of immigration
and employ- ment policy.


Nor does the Board's third point, that some news reports  indicated the
legislative proposals were designed to deter the  Union's organizers,
suggest that the employees were unable  to vote freely in the first
election. Only by quoting fragments  of the articles out of context
can the Board argue otherwise.  For example, the Board argues that
several of the articles  "quoted the legislators as saying they wanted
to 'send a  message to union organizers,' " implying that the
proposals  were designed to deter unionization. Read in context,
howev- er, the reports are much less ominous. In fact, the articles 
containing the phrase "send a message" state in substance  that Reps.
Torres and Reyes "wanted to send a political  message to union
organizers 'that they could not promise  alien workers permanent


Some of the articles cited by the Board do indicate that  some
legislators were adverse to unionization in general and  to the Union
in particular but those articles simply do not  support the Board's
conclusion that the employees were  unable to vote freely. The Supreme
Court has held that in an  election contest even the employer, who has
some direct  control over his employees' economic well-being, "is free
to  communicate to his employees any of his general views about 
unionism or any of his specific views about a particular union,  so
long as the communications do not contain a 'threat of  reprisal or
force or promise of benefit' " for voting respective- ly against or
for unionization. Gissel Packing Co., 395 U.S.  at 618. Overturning an
election based upon statements made  by legislators requires more
reason to believe that employees'  freedom of choice was compromised:
The Board will overturn  an election if conduct attributable to the


an environment of tension and coercion as to have had a  probable
effect upon the employees' actions at the polls," but  will overturn
an election based upon third party conduct only  if the misconduct is
"so aggravated as to create a general  atmosphere of fear and reprisal
rendering a free election  impossible." Overnite Transp. Co. v. NLRB,
140 F.3d 259,  264-65 (D.C. Cir. 1998). Applying this standard, the
state- ments made in the present case by various legislators op- posed
to unionization in general and accusing the Union in  particular of
corruption cannot possibly be a ground for  overturning the first
election. If the rule were otherwise, the  electoral process would be
subject to endless manipulation by  politicians and their allies in
labor or management.


With respect to the Board's last point, the statement  attributed to
Rep. Torres appeared in an article in which he  accused the Union of
charging excessive dues and of engaging  in "sneaky" and potentially
illegal campaigning. The article  ends with the following passage: "In
closing his statement,  Torres said that although workers have a right
to choose  whether or not to join a union, 'becoming a union member
will  be a lifetime employment record and may haunt you every- where
you go when looking for a new job.' " This statement,  like the
statements just discussed, is nothing more than Rep.  Torres'
expression of general dislike of unions and cannot be  a ground for
overturning an election. Therefore, this portion  of the record also
fails to provide meaningful evidence for the  Board's finding that the
employees were unable to vote freely  in the first election.


Considering the Board's evidence as a whole, we think it  falls well
short of being substantial. None of the individual  points is
probative, and taken as a whole they do not add up  to any more than
the sum of the parts. We are therefore  constrained to conclude that
the Board has failed to support  with substantial evidence its
decision to overturn the first  election.


III. Conclusion


The Board's finding that news reports "created an atmo- sphere of
confusion, and fear of reprisals so as to render 


impossible the rational, uncoerced selection of a bargaining 
representative" in the first election is not supported by  substantial
evidence. Consequently, we grant Dai-Ichi's peti- tion for review and
deny the Board's cross-application for  enforcement.


It is so ordered.