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United States Court of Appeals
Fifth Circuit
F I L E D
In the
June 21, 2004
United States Court of Appeals
Charles R. Fulbruge III
for the Fifth Circuit
Clerk
_______________
No. 03-60498
_______________
TRI-STATE HEALTH SERVICE, INC.,
DOING BUSINESS AS EDEN GARDENS NURSING HOME
Petitioner-Cross-Respondent,
VERSUS
NATIONAL LABOR RELATIONS BOARD,
Respondent-Cross-Petitioner,
_________________________
Petition for Review and Cross-Application for Enforcement
of an Order of the National Labor Relations Board
_________________________
Before GARWOOD, HIGGINBOTHAM, and
enforcement. Agreeing with Tri-State that the
SMITH, Circuit Judges.
decision violates Allentown Mack Sales &
Serv. Corp. v. NLRB, 522 U.S. 359 (1998),
JERRY E. SMITH, Circuit Judge:
we grant the petition for review and deny the
cross-petition for enforcement.
Tri-State Health Service, Inc. ("Tri-State"),
seeks review of a decision of the National
I.
Labor Relations Board ("NLRB" or "Board")
We consider whether Tri-State committed
finding that Tri-State lacked a good faith
an unfair labor practice in violation of § 8(a)-
doubt in the continued majority status of a
(1) and (5) of the National Labor Relations
union with which it refused to bargain. The
Act ("NLRA"), 29 U.S.C. § 158(a)(1), (5),
Board pursues a cross-petition for
when it refused to bargain with the incumbent

Service Employees International Union.1 Tri-
same period, some union members began to
State is the owner and currently the operator,
grow dissatisfied with the union's repre-
of Eden Gardens Nursing Home. Though Tri-
sentation.4
State has owned the facility since it opened in
1975, it has periodically leased it to other man-
Circumstantial evidence of that develop-
agement firms. It was during one such period
ment came in several different forms. For ex-
in 1996, with the nursing home under the
ample, between early 1998 and the fall of
management of Woodard Health Services, Inc.
1999, the number of employees authorizing
("Woodard"), that the union was certified as
automatic deductions of their union dues
the bargaining representative for the home's
(known as dues checkoffs) fell from eleven to
unskilled labor.2 By the time a collective
zero. None of the nursing home's employees
bargaining agreement ("CBA") was success-
served as a union steward, and the sole
fully negotiated in October 1997, Woodard
example of union activity consisted of the
had subleased operations to Camelot Health-
posting of a flyer announcing the grievance
care, L.L.C. ("Camelot").3
being pursued against Camelot.
Camelot's tenure in charge of the nursing
Anecdotal evidence paints a similar picture.
home was rocky, marked by an inability to pay
Wanda Smith, a supervisor at the nursing
contractual wages, the union's successful pur-
home, overheard three nurse's aides com-
suit of an unfair labor practice charge, and,
plaining that their union dues had not earned
eventually, an inability to pay rent. During this
them meaningful benefits.5 An assistant ad-
ministrator, Suzanne Price, similarly claims to
have been approached by four employees and
1 Section 8(a)(5) makes it an unfair labor prac-
tice for an employer "to refuse to bargain collec-
tively with the representatives of his employees."
29 U.S.C. § 158(a)(5). Generally, any such viola-
4 To the extent there is any causal connection
tion is also taken to be a violation of § 8(a)(1),
between Camelot's actions and the decline in union
which makes it an unfair labor practice for an em-
support, the Board expressly disavows the notion
ployer "to interfere with, restrain, or coerce em-
that Tri-State, as a successor entity, is thereby
ployees in the exercise of the rights guaranteed in
disqualified from asserting it possesses a good faith
section 157 of this title." 29 U.S.C. § 158(a)(1).
doubt concerning the union's continued majority
status. Cf. Raven Serv. Corp. v. NLRB, 315 F.3d
2 The bargaining unit was comprised of nurse's
499, 506 (5th Cir. 2003) (requiring employer to
aides, and maintenance, laundry, housekeeping,
show that the doubt arose "in a context free of
and food service workers. At all relevant times,
unfair labor practices that could have reasonably
there were between thirty and forty workers in the
tended to contribute to employee dissatisfaction
unit.
with the union"). We therefore express no opinion
on that question.
3 The CBA was effective for only two years but
was renewable through an "evergreen clause" that
5 The probative value of that assertion is lim-
required the parties to submit written notice of their
ited, however, because Smith's testimony was not
desire to terminate or amend the CBA. The
introduced for the truth of those complaints, but
evidence suggests that the agreement was renewed
only to establish the state of mind of Tri-State's
in this fashion and therefore continued in force
administrators when they subsequently refused to
through the fall of 2000.
bargain with the union. Cf. FED. R. EVID. 801(c).
2

told that they wished to cancel their dues
II.
checkoffs because they no longer wanted to be
A.
represented by the union.6
We must uphold the Board's finding that
Tri-State violated its duty to bargain if that
The present dispute arises from actions Tri-
decision is supported by substantial evidence
State failed to take on its resumption of
on the record as a whole. Fall River Dyeing
control of the nursing home in March 2000,
& Finishing Corp. v. NLRB, 482 U.S. 27, 42
when Woodard's lease expired. Tri-State
(1987); 29 U.S.C. § 160(e). If a reasonable
chose not to inform the union of the change in
jury could have reached the Board's
management or to respond to the union's
conclusion, it must be upheld. Allentown
invitations to negotiate a new CBA.
Mack Sales & Serv., Inc. v. NLRB, 522 U.S.
359, 366-67 (1998). Nevertheless, the Board
Tri-State later justified its refusal to bargain
"is not free to prescribe what inferences from
on the ground that it possessed a genuine
the evidence it will accept and reject, but must
doubt as to whether the union continued to
draw all those inferences that the evidence
command the support of a majority of the bar-
fairly demands." Id. at 378.
gaining unit. The union responded by filing a
grievance with the Board. Following a hearing
B.
before an administrative law judge ("ALJ"), it
An employer is required to bargain with the
was determined that Tri-State was a successor
representative of its employees, and its failure
to Camelot within the meaning of NLRB v.
to do so constitutes an unfair labor practice.
Burns Int'l Sec. Serv., Inc., 406 U.S. 272
See NLRA § 8(a)(5), 29 U.S.C. § 158(a)(5).
(1972), and that Tri-State lacked sufficient
That requirement, however, attaches only for
justification for refusing to bargain.
so long as the union retains the support of a
majority of employees in the bargaining unit.
Accordingly, Tri-State was found to be in
To that end, there is a conclusive presump-
violation of NLRA § 8(a)(1) and (5). In his
tion that the union retains majority support for
ruling, the ALJ assigned probative weight only
one year after its election as the representative
to Smith's claim that she had heard three em-
of a bargaining unit. Auciello Iron Works v.
ployees complain about the union. The ALJ
NLRB, 517 U.S. 781, 786 (1996). The union
dismissed, for want of credibility, Price's sim-
also is entitled to a conclusive presumption of
ilar claim and found irrelevant the evidence of
majority status during the pendency of a col-
declining dues checkoffs and low union
lective-bargaining agreement, up to a
activity. The ALJ also rejected the notion that
maximum of three years. Id.
Tri-State could rely on the union's margin of
victory during the certification elections as an
Thereafter, the union is entitled to only a
indicator of the union's low level of support.
rebuttable presumption of majority status.
The Board affirmed, taking only minor ex-
NLRB v. Curtin Matheson Scientific, Inc., 494
ceptions to the ALJ's reasoning.
U.S. 775, 778 (1990). An employer may over-
come this latter presumption and refuse to bar-
gain if it shows either that the union did not
6 That evidence, too, was admitted only for pur-
enjoy majority support within the relevant bar-
poses of establishing a state of mind, and the Board
gaining unit, or that the employer had a
ultimately discredited it.
3

"`good-faith' doubt, founded on a sufficient
by five pieces of evidence. Of these, the ALJ
objective basis, of the union's majority
and the Board credited only one and found it
support." Id; see also Raven Serv. Corp., 315
insufficient, standing alone, to excuse Tri-
F.3d at 506.7
State's refusal to bargain with the union.
To claim validly that it possesses a good
The Board erred in refusing to credit two
faith doubt regarding the union's majority stat-
further items of evidence. Once these
us, an employer need not prove that it has a
additional data points are factored into the
sincere belief that the union in fact lacks
analysis, it is apparent that the Board's finding
majority support. Allentown Mack, 522 U.S.
of an unfair labor practice is not supported by
at 367. Rather, it must only substantiate un-
substantial evidence.
certainty on that score. Id. It is therefore un-
reasonable for the Board to disregard evidence
A.
that would tend to support the inference that
The Board accepted the ALJ's determina-
workers do not support the union, even if the
tion that Smith's testimony supports Tri-
same evidence is capable of supporting other,
State's claimed good faith doubt, and we
more neutral inferences. Id. at 369.8
agree. We also concur with the Board that
this evidence is insufficient, by itself, to create
III.
a genuine good faith doubt about the union's
Tri-State argues that its good faith doubt
majority status. Although Smith's testimony
about the union's majority status is supported
supports an inference that three employees
shifted their support away from the union, that
inference is countered by the fact that the un-
ion had been certified by a much larger margin.
7 Although the record suggests the CBA was in
As a result, the substance of Smith's testimony
force and in only its third year when Tri-State re-
would not cause a reasonable employer to
sumed control of the facility in March 2000, nei-
question whether the union had lost its
ther party argues that the union is thereby entitled
majority support.
to a conclusive presumption of its majority status.
We therefore assume that the presumption relevant
to this case is the rebuttable one.
B.
The Board rejected Tri-State's contention
8 In the wake of Allentown Mack, the Board
that it could look to the decline in union dues
has adopted a more restrictive interpretation of the
checkoffs as a barometer of the union's
NLRASSone that it abjectly denied using in its ar-
support. The Board explained:
guments to the Allentown Mack Court. See Levitz
Furniture Co., 333 NLRB No. 105, 2001 WL
Employee cancellations of dues-checkoff
314139 (2001). Under the Board's current
authorizations may be attributable to many
interpretation, an employer can justify a refusal to
factors other than opposition to a union
bargain with an incumbent union only by showing
. . . . [E]mployees may prefer to pay their
that the union has in fact lost the support of a
dues only at convenient times or in person,
majority of the bargaining unit. Id. at *11-*12.
or may even be `free riders' who desire and
The Board concedes, however, that this more re-
strictive standard does not apply to the current
accept union representation without joining
case, which was pending when the Board decided
the union and paying dues.
Levitz.
4

(Internal quotations omitted.)
level of support the union enjoys.
Nevertheless, it is equally as reasonable for an
This is precisely the sort of reasoning re-
employer to witness a decline in checkoffs and
jected in Allentown Mack, 522 U.S. at 369.
infer that its current work force is less
There, the Court discussed the significance of
supportive of the union than it was just a few
an employee's statement that could have been
years before, when eleven employees
interpreted as reflecting only a desire for better
manifested support for the union by
union representation, but also could have been
authorizing direct withdrawal of dues from
interpreted as reflecting a desire to abandon
their paychecks.
the union. Id. The Board purported to re-
solve the ambiguity, concluding (as it did here
We agree with the only court of appeals to
with the dues checkoffs) that the evidence was
have considered the issue in the wake of Allen-
most reasonably interpreted in a manner that
town Mack, that "[t]he natural inference is that
did not cast doubt on the union's majority stat-
the decline reflected a loss of union support,"
us. Id. Accordingly, the Board determined
and that "[i]n some circumstances, and this is
that the evidence was not probative of the em-
certainly one of them, membership and dues
ployer's uncertainty.
checkoff data `can unquestionably be probative
to some degree' of [the employer's] doubt."
The Court reversed, reasoning that the ex-
McDonald Partners, Inc. v. NLRB, 331 F.3d
istence of two possible interpretations of the
1002, 1007 (D.C. Cir. 2003) (quoting
evidence meant only that it could not establish
Allentown Mack, 522 U.S. at 380).9 To that
the fact of a decline in majority status. Nev-
ertheless, "[t]he statement would assuredly en-
gender an uncertainty whether the speaker
9 In support of its claim that this evidence is
supported the union, and so could not be en-
irrelevant, the Board relies on a number of
tirely ignored." Id. Thus, in evaluating an em-
decisions that pre-date Allentown Mack and stand
ployer's claim of uncertainty, the Board is not
for the proposition that a decline in dues check-offs
free to choose between two reasonable in-
lacks probative value because it is susceptible to
terpretations of the evidence and prescribe the
more than one interpretation. See, e.g., People's
one that the employer should have adopted.
Gas Sys., Inc. v. NLRB, 629 F.2d 35, 40 n.9 (D.C.
So long as the employer's interpretation is rea-
Cir. 1980) (averring that although a high level of
sonable, and the evidence so interpreted tends
dues checkoffs indicates support for the union, the
to engender uncertainty as to whether the un-
converse is not true); NLRB v. Wallkill Valley
ion still commands majority support, the evi-
Gen. Hosp., 866 F.2d 632, 637 (3d Cir. 1989)
dence is probative and must be considered.
(accepting Board's conclusion that low number of
dues checkoffs is not probative of a decline in
The same principle governs our consid-
union support). After Allentown Mack, such
reasoning is faulty, for it overstates the Board's
eration of the decline in dues checkoffs. The
objective in assessing doubt. The existence of two
Board is, of course, correct to note that a de-
possible interpretations is the very essence of
cline in checkoffs may be attributable to some
uncertainty, not a rebuttal of it.
innocent explanation, and an employer
reasonably could conclude that such evidence
Further, in Allentown Mack, 522 U.S. at 379,
does not engender any uncertainty about the
the Court stressed that the issue of assessing good
(continued...)
5

end, it is inescapable that one of first things an
union.10 In other words, the evidence tends to
employee would do, on resolving to leave the
create some uncertainty, but on the facts of
union, is ask the employer to stop taking union
this case it is nevertheless an insufficient basis
dues out of his paycheck. Although this might
for Tri-State's refusal to negotiate.
not be the only reasonSSor even the most
common reasonSSan employee asks to cease
C.
participation in the checkoff program, it is
The ALJ and the Board discredited the tes-
nonetheless a realistic possibility that can
timony of Price, who claimed to have had con-
engender some degree of uncertainty in the
versations with four employees who had ex-
mind of the employer. The board erred in
pressed their dissatisfaction with the union and
disregarding this evidence altogether.
requested cancellation of their dues checkoffs.
The ALJ apparently discredited Price solely on
In considering the weight accorded this evi-
the ground that her memory of those
dence, however, we are mindful that some of
conversations was insufficiently detailed to
the decline in dues checkoffs is the product of
convince him that they took place. The Board
employee terminations. Indeed, according to
deferred to the ALJ's credibility assessment
an affidavit submitted by one of Tri-State's su-
and asks us to do the same.
pervisors, the final two employees enrolled in
the program had their checkoff authorizations
Ordinarily, we defer to an ALJ's finding
canceled unilaterally by Camelot in 1999.
that turns on an evaluation of a witness's cred-
ibility. Brown & Root, Inc. v. NLRB, 333 F.3d
At best, therefore, the evidence would lead
628, 635 (5th Cir. 2003). Nevertheless, no
a reasonable employer only to believe that un-
deference is owed the ALJ or the Board in
ion supporters who lost their job were
their interpretations of the law, J. Vallery
replaced by employees who did not manifest
Elec., Inc. v. NLRB, 337 F.3d 446, 450 (5th
the same degree of outward support for the
Cir. 2003), and the error here is a legal one.
In dismissing the probative impact of
Price's testimony, the ALJ focused only on
9(...continued)
whether it was convincing evidence that the
faith doubt "is a matter of logic and sound
conversations occurred sometime in 1998.
inference from all the circumstances, not an
That is not the relevant inquiry. To the
arbitrary rule of disregard to be extracted from
contrary, since it was neither Price nor the ALJ
prior board decisions." When reason counsels that
who formed the conclusion that Tri-State need
a category of evidence has a logical connection to
not bargain with the union, it is ultimately ir-
the matter in dispute, it is not enough for the Board
relevant whether the ALJ believed Price was
merely to string-cite a list of cases in which similar
evidence was found to have no bearing on a dispute
involving different parties and a different set of
operative facts. Rather, the Board is justified in
10 The employer is not entitled automatically to
dismissing evidence outright only if it can show
assume that all replacement workers oppose the
that it isSSas a matter of logic and
union, Curtin Matheson., 494 U.S. at 778-79, but
reasonSSunhelpful to the position in support of
it may rely on objective evidence tending to show
which it is proffered. The Board has not done that
that this is the case, Allentown Mack, 522 U.S. at
here.
369-70.
6

telling the truth when she claimed to have
one of good faith doubt than of strict liability.
heard four employees express a desire to aban-
Any time an employer acted on an uncertainty
don the union. All that matters is whether the
that was later resolved against it, it would be
ALJ had reason to believe that Tollie
subject to a finding of an unfair labor practice
Bordeaux, the owner and President of Tri-
merely because it lacked the prescience to an-
State ultimately responsible for the refusal to
ticipate subsequent developments.
bargain, either did not believe, or should not
have believed Price's claims when she related
It would be a different matter altogether if
them to him.
the evidence relied on was so lacking in indicia
of reliability that any reasonable employer
It is Bordeaux's mind set, and the level of
would doubt its veracity. We know that is not
doubt and uncertainty lingering therein, that is
the case here, however, because the type of
of ultimate consequence. Indeed, the ALJ ad-
evidence Tri-State relied on is nearly identical
mitted Price's testimony over a hearsay
to that the Court sanctioned in Allentown
objection only because it was offered to prove
Mack. There, the Court required the Board to
not the truth of her assertions, but Bordeaux's
credit, as supporting a good faith doubt,
state of mind when he decided not to bargain.
statements by individual employees claiming to
Accordingly, the ALJ based his credibility de-
speak for a larger group of employees, even
termination on an irrelevant ground, and we do
where the larger group's views were not sub-
not defer to it.
stantiated in any other form:
At oral argument, the Board conceded that
Unsubstantiated assertions that other
the evidence shows Price communicated the
employees do not support the union
substance of her testimony to Bordeaux before
certainly do not establish the fact of that
he charted a course of refusing to negotiate.
disfavor with the degree of reliability
Rather than contest that fact, the Board took
ordinarily demanded in legal proceedings.
the untenable position that even if Price told
But under the Board's enunciated test . . .
Bordeaux that these conversations occurred,
it is not the fact of disfavor that is at issue
and he acted in reliance on that representation,
. . . but rather the existence of a reasonable
the ALJ was free to disregard the evidence if
uncertainty on the part of the employer
Price's assertions later proved to be untrue.
regarding that fact. On that issue, absent
That is to say, even if Price genuinely
some reason for the employer to know that
convinced Bordeaux that employees were
[the declarant] had no basis for his
dissatisfied with the union, and he had no
information, or that [the declarant] was
reason to doubt her veracity, he could rely on
lying, reason demands that the statement be
that evidence only at his peril, because a
given considerable weight.
subsequent showing that Price lacked
credibility worked to undermine his use of the
Allentown Mack, 522 U.S. at 369-70. There
evidence, too.
is nothing in the record even tending to show
that Bordeaux should have believed Price was
That position is unsound as both a logical
lying to him. The Board therefore erred in
and a doctrinal matter. If adopted, the
failing to consider this evidence.
position advanced by the Board would be less
7

Once Price's testimony is factored into the
analysis, Tri-State's showing of a good faith
doubt is more than sufficient to justify its re-
fusal to bargain with the union. This is
because Price's testimony amplifies and
reinforces the inference that the decline in dues
checkoffs corresponds with a decline in union
support. Because Bordeaux was entitled to
draw a connection between the two events,
and to combine those two factors with Smith's
claim that an additional three employees ex-
pressed their dissatisfaction with the union, he
had good cause to be uncertain whether the
union continued to have majority support.11
We therefore GRANT the petition for re-
view, VACATE the Board's opinion,
DISMISS the charges against Tri-State, and
DENY the cross-petition for enforcement.
11 The Board also erred in ignoring altogether
evidence of the union's margin of victory in the
most recent election. This court's decision in
NLRB v. A.W. Thompson, Inc., 651 F.2d 1141,
1145 (5th Cir. Unit A Sept. 1981), does not stand
for the proposition that election results are
categorically irrelevant to an assessment of the
employer's doubt, but only that such evidence has
no tendency to show a decline in union support fol-
lowing the election.
Even so, election results can give the employer
an indication of the extent to which union support
needs to erode before there is any uncertainty as to
whether it continues to possess majority support.
Surely the Board would not dispute that an
employer needs more substantial evidence of a de-
cline in support before it refuses to bargain with a
union that had recently been certified by a margin
of 99 to 1, than it does if the union only won by a
measure of 51 to 49. Substantial evidence does
support, however, the Board's determination that
there was not a notable absence of union activity at
the plant.
8