Kavanaugh Sided With Trump Casino in 2012 to Thwart Union Drive

(Bloomberg) -- Six years before President Donald Trump nominated him for the Supreme Court, Judge Brett Kavanaugh sided with Trump Entertainment Resorts’ successful effort to thwart a unionization drive at one of its casinos.

Kavanaugh was one of three Republican-appointed judges who in 2012 voted unanimously to set aside an order by the National Labor Relations Board that would have required the Trump Plaza Hotel and Casino in Atlantic City, New Jersey, to bargain with the United Auto Workers.

The casino has since shut down. But labor advocates point to the case -- as well as ones where he backed management at Sheldon Adelson’s Las Vegas Venetian hotel and at SeaWorld after an orca killed a worker -- as evidence that Kavanaugh may hobble enforcement of workplace laws and the already-embattled union movement.

"Kavanaugh, along with Thomas, Alito, Gorsuch -- and Roberts along for the ride -- will comprise the most radical, anti-labor-law Supreme Court in my lifetime," said University of Wyoming law professor Michael Duff, a former attorney for the NLRB, ticking off the names of current members of the high court.

Kerri Kupec, a White House spokeswoman for Kavanaugh’s confirmation effort, said, “Judge Kavanaugh’s 12-year-record in labor cases reflects his reputation as a fair and independent arbiter of the law, based on text and precedent, who has ruled for both employers and employees alike.”

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The dispute at the Atlantic City casino dates to 2007, when the UAW held a media event with a group of supportive federal and state lawmakers who asserted that they had counted union cards collected from dealers and confirmed that the union had majority support. Six days later, the workers voted 324 to 149 in favor of joining the UAW.

Trump Plaza asked the labor board to throw out the election, saying it had been tainted by the pre-election press conference and other shows of support from politicians that the company said could make workers think the labor board wanted them to unionize. Labor law doesn’t prohibit politicians from supporting or opposing union campaigns, or unions from announcing that they have majority support. But under NLRB precedent, conduct that makes the NLRB itself seem biased can be grounds for invalidating an election.

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An NLRB judge rejected the company’s arguments. So did a panel of two NLRB members, including a Republican appointed by President George W. Bush. They wrote that regardless of whether there was anything improper about the UAW’s pre-election event, given the lack of evidence that many employees knew about the event, as well as the UAW’s wide margin of victory, the company hadn’t shown the proof required to overturn an election.

In 2010, after a panel of three Democratic NLRB members ruled that the Trump Plaza was violating federal law by refusing to negotiate with the UAW, the company brought its case to the D.C.-based federal appeals court where Kavanaugh has been a judge since 2006.

At arguments in 2012, an attorney for the company accused the UAW of mounting an “elaborate hoax” that could create a "bandwagon effect" where workers don’t vote against the union because they think it will win anyway.

Kavanaugh pushed back on claims from both sides but directed his harshest comments at the NLRB’s attorney, saying it “defies common sense” to argue that news of the pre-election press conference wouldn’t be widespread, and suggesting that could be a reason to send the case back to the agency for reconsideration.

Circumstantial Evidence

“If we’re skeptical, if we find unreasonable the conclusion that only a few people knew, we should send it back, shouldn’t we?” he asked. Kavanaugh joined a colleague’s opinion in the case saying the NLRB had wrongly “ignored the substantial circumstantial evidence,” throwing out the labor board’s order against the Trump Plaza, and ordering the agency to reconsider the case.

The case remains open although the Trump Plaza closed in 2014, according to the NLRB, which declined further comment. The UAW declined to comment.

In 2012, the year of the appeals court ruling, the Trump Plaza was owned and operated by Trump Entertainment Resorts Inc., of which the future president owned 9.5 percent, according to securities filings.

Former NLRB chair Wilma Liebman, one of the members whose decision in the Trump Plaza case was thrown out, said it was frustrating to have Kavanaugh and his colleagues quash the workers’ unionization victory because of a pre-election stunt that local media had made clear was not the actual unionization vote.

“To upset the results of this election over theatrics like this, really just defeats the purposes of the labor law,” said Liebman, who after departing the board in 2011 did legal work for the UAW on an unrelated matter.

Traditional Deference

Kavanaugh, she said, seems disinclined to grant traditional deference to agencies like the labor board. “He doesn’t appear to be friendly to the NLRB,” she said.

Steven Swirsky, a management-side attorney and former NLRB lawyer, said the court’s ruling in the Trump Plaza case was consistent with precedents on the importance of an uncoerced vote. “If your goal is to protect the processes, it’s important to protect them no matter what,” he said.

In a 2015 case, Kavanaugh voted with the court’s majority against the NLRB in a dispute with Adelson’s hotel, writing that management had a First Amendment right to petition the police to issue citations against pro-union activists on its property.

In a 2014 dissent, he argued that the Occupational Safety and Health Administration had overstepped its statutory authority in punishing SeaWorld of Florida LLC when a killer whale pulled a trainer by her hair into a pool where she drowned.

Paternalism

“When should we as a society paternalistically decide that the participants in these sports and entertainment activities must be protected from themselves — that the risk of significant physical injury is simply too great even for eager and willing participants?” Kavanaugh wrote.

By a 2-1 vote, the court upheld OSHA’s citation.

Former NLRB member Marshall Babson, who now represents employers as an attorney, said Kavanaugh’s skepticism about quasi-legislative moves by agencies could benefit both liberals and conservatives.

“To the extent he provides another vote for limiting the reach of agency authority, maybe it’ll cause Congress to wake up and do some of this stuff they should be doing,” Babson said.

--With assistance from Greg Stohr and Shahien Nasiripour.

To contact the reporter on this story: Josh Eidelson in San Francisco at jeidelson@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Laurie Asséo

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