Jones & Carter, Inc./Cotton Surveying Co.

National Labor Relations Board - Board Decisions

Dec 30, 2011

16-CA-027969 (N.L.R.B. Dec. 30, 2011)

UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
JONES & CARTER, INC./
COTTON SURVEYING CO.
and Case 16-CA-27969
LYNDA TEARE
ORDER DENYING MOTION FOR RECONSIDERATION OF
THE BOARD’S ORDER DENYING PETITION TO REVOKE SUBPEONA
The Employer has filed a motion for reconsideration of the Board’s October 20,
2011 Order, in which the Board denied, based on lack of standing, the Employer’s
petition to revoke subpoenas ad testificandum that were addressed to two of its
employees.1 For the reasons stated below, we deny the motion.
The Employer argues that the Board erred in raising the issue of standing sua
sponte. This argument is without merit. The courts have long held that the issue of
standing is jurisdictional in nature and should be raised sua sponte if no party has
raised it. See, e.g., B.C. v. Plumas Unified School District, 192 F.3d 1260, 1264 (9th
Cir. 1999) (“The standing issue was not raised in the district court. Nor was it raised by
the parties before this court. But federal courts are required sua sponte to examine
jurisdictional issues such as standing."), citing Bender v. Williamsport Area Sch. Dist.,
475 U.S. 534, 541, 106 S.Ct. 1326, 89 L.Ed.2d 501 (1986)). In any event, to the extent
that the Employer is arguing that it was denied due process because of the Board’s sua
sponte consideration of the standing issue, the Employer, through its motion, has had

1 The Employer’s pleading is entitled “Motion to Vacate Order Denying Petition to
Revoke Subpoenas Ad Testificandum and Requesting Revocation of Subpoenas.” The
Board’s Rules, however, do not provide for a motion to vacate. We will treat this
pleading as a motion for reconsideration and refer to it as such in this Order.
2
the opportunity to present its arguments. Thus, the Employer has no valid due process
concern.
On the merits of the standing question, the Employer, quoting from In re Grand
Jury (Schmidt), 619 F.2d 1022, 1026 (3d Cir. 1980), argues that it has a “property
interest, contractual in nature, in the services of its employees presently under
subpoena whose time and attention would be diverted from its business for their
subpoenaed appearances” that gives it standing. We find no merit in that argument,
either, and additionally find that the Employer’s reliance on Schmidt is misplaced.
Schmidt involved subpoenas ad testificandum issued to the employer’s
employees pursuant to a federal grand jury investigation into the employer’s business.
Asserting that the grand jury process was being abused and had been undertaken in
bad faith for improper purposes, both the employer and the employees filed motions to
quash the subpoenas, which the district court denied. Id. at 1024. The employer and
the employees appealed. The court of appeals held that the lower court’s ruling was not
a final order, and that the employees were therefore precluded from appealing that
order, absent their disobedience of the order and a contempt citation. Id.
Regarding the employer’s standing to file an appeal, the appeals court reasoned
that because it was unlikely that the employees would risk being cited for contempt, the
employer’s third-party motion to quash the subpoena was the only mechanism available
to challenge the potential abuse. The court further reasoned that a balance must be
struck between, on the one hand, the grand jury’s investigation, and, on the other hand,
the employer’s right to be free of grand jury abuse and what the court deemed the
employer’s property right in the services of its employees. Id. at 1024-1027. Finally, the
3
court held that “[t]hird party standing to assert claims of grand jury abuse cannot be
determined by categorizing the claimed interest as one of property or privilege, but only
by examining the nature of the abuse, and asking whether, and in what manner, it
impinges upon the legitimate interests of the party allegedly abused.” Id. at 1027. Id. at
1027. Based on all of those considerations, the court found that the employer had
standing to seek that the subpoenas be quashed.
The instant case is distinguishable. The Respondent does not assert, nor is
there any evidence, that the General Counsel’s investigation was undertaken in bad
faith or for an improper purpose.2 Nor can the Employer argue that it must be granted
standing because there was no other avenue for review of the subpoenas; under the
Board’s rules, the employees could have filed petitions to revoke on their own behalf.3
As those key factors are absent, we decline to follow Schmidt in the circumstances
here.
Rather, we find that the facts in the instant case are markedly closer to those in
In re Subpoenas to Local 478, Int'l Union of Operating Engineers and Benefit Funds,
708 F.2d 65 (2d Cir.1983), whose reasoning we also agree with. There, an employer
appealed a district court order denying the employer’s motion to quash subpoenas
issued to its employees during a grand jury investigation. Id. at 67. The court held that
the employer did not have standing to file the motion because it failed to assert a
constitutional, statutory, or common law privilege, nor did it not raise allegations of
grand jury abuse. Id. at 72. In addition, the court stated that “[i]nsofar as C. Schmidt &

2 The Employer’s contention in its petition to revoke, that the subpoenas are
“duplicative, unnecessary, and harassing,” does not rise to the level of potential abuse
of process relied on by the court in Schmidt.
3 See Board’s Rules and Regulations, Sec. 102.31.
4
Sons may suggest third party standing to appeal denial of a motion to quash subpoenas
to testify directed to employees on the basis that the third party employer has a property
right to prevent disruption of its business affairs, the opinion seems to us to be in error.”
Id. at 73. The court observed--correctly in our view--that “[i]f a third party employer
could seek review on a showing of disruption of employees’ time and attention, or a
substantial burden to its business interests, any employer could impede a grand jury
investigation, whether or not the employer came forward with concrete assertions that
the legal and practical value of fundamental rights would be destroyed if collateral
review were withheld.” Id. (internal footnote omitted).
In the instant case, an individual filed unfair labor practice charges against her
employer. To complete its investigation of the charges, the Board issued subpoenas
requiring other employees to give sworn statements to a Board agent. Applying the
Second Circuit’s rationale here, we find that the Employer’s assertion of a contractual
property interest in the services of its employees is legally insufficient to establish that
the Employer has standing to petition for revocation of those subpoenas. Board
proceedings, including its investigations of unfair labor practices, exist for the purpose of
vindicating employee rights against employer and unions. It would be inimical to that
purpose to permit an employer to impede an investigation against it through third-party
challenges to subpoenas in the absence of “concrete assertions that the legal and
practical value of fundamental rights would be destroyed” if standing is not granted. Id.
5
Accordingly, the Employer’s motion for reconsideration is denied.4
Dated, Washington, D.C., December 30, 2011.
MARK GASTON PEARCE, CHAIRMAN
CRAIG BECKER, MEMBER
BRIAN E. HAYES, MEMBER

4 Member Hayes agrees with the denial of the Employer’s motion for reconsideration.
He joins his colleagues in rejecting the Employer’s reliance on Schmidt, supra, but finds
no need to discuss the standing issue beyond the circumstances of this particular case.