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Bellagio, LLC v. National Labor Relations Board

United States Court of Appeals, District of Columbia Circuit

July 18, 2017

Bellagio, LLC, d/b/a Bellagio Las Vegas, et al., Petitioners
National Labor Relations Board, Respondent

          Argued March 7, 2017

         On Petitions for Review and Cross-Applications for Enforcement of Orders of the National Labor Relations Board

          Paul T. Trimmer argued the cause for the petitioners. Gary C. Moss was with him on the briefs.

          David Casserly, Attorney, National Labor Relations Board, argued the cause for the respondent. Richard F. Griffin, Jr., General Counsel, Jennifer Abruzzo, Deputy General Counsel, John H. Ferguson, Associate General Counsel, Linda Dreeben, Deputy Associate General Counsel, Usha Dheenan, Supervisory Attorney, and Marni Von Wilpert, Attorney, were with him on the brief.

          Before: Henderson and Srinivasan, Circuit Judges, and Ginsburg, Senior Circuit Judge.



         "In Vegas, everybody's gotta watch everybody else. Since the players are looking to beat the casino, the dealers are watching the players. The boxmen are watching the dealers. The floormen are watching the boxmen. The pit bosses are watching the floormen. The shift bosses are watching the pit bosses. The casino manager is watching the shift bosses. I'm watching the casino manager. And the eye in the sky is watching us all."

         -Sam "Ace" Rothstein, Casino (Universal Pictures 1995).

         Because they are luxury casino resorts, petitioners Bellagio and The Mirage (collectively, casinos) have extraordinary security needs. Each has a high-end jeweler. Bellagio boasts an art gallery that has displayed Fabergé eggs and the works of Picasso. Both casinos house an array of slot machines, gaming tables, count rooms and cages containing vast amounts of cash and cash-equivalent gaming chips. To protect all of that valuable property-not to mention the property and physical safety of guests who hope to win big or have a good time trying-each of the casinos relies on a sophisticated network of surveillance cameras, locks, alarms and computers. The equipment is essential for deterring, detecting and recording wrongdoing, including misdeeds at the hands of the casinos' own employees. And when those employees are suspected of wrongdoing, the casinos use hidden cameras to conduct targeted investigations.

         We must decide whether the surveillance technicians (techs) who control the casinos' surveillance, access and alarm systems and help to investigate errant employees are "guards" under section 9(b)(3) of the National Labor Relations Act (Act), 29 U.S.C. § 159(b)(3). Designed to avert employee conflicts of interest, section 9(b)(3) precludes the National Labor Relations Board (Board) from certifying a union to represent "guards" who "enforce, " against colleagues and other persons, "rules to protect property of the employer or to protect the safety of persons on the employer's premises[.]" Id. The Board's Regional Director found that the techs do not enforce such rules and so are not guards. Thereafter, the Board certified the International Union of Operating Engineers Local 501 (Union)-which represents several non-guard employees of the casinos-as the exclusive collective-bargaining representative for a unit of techs at each casino. The casinos refused to bargain with the Union. The Board concluded that the casinos thereby violated section 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1), (5). [1] In two materially identical decisions, it ordered each casino to recognize and bargain with the Union.

         The casinos petition for review of the Board's orders. The Board seeks enforcement. We grant the casinos' petitions, deny the Board's cross-applications for enforcement and vacate the Board's decisions and orders, which are contrary to the record evidence considered as a whole. 29 U.S.C. § 160(e), (f). On our view of the record, the techs' day-to-day duties-sensitive ones peculiar to the modern gaming industry-call for them to enforce against coworkers and others the rules that protect the casinos' property and guests. Accordingly, under section 9(b)(3), the techs are guards who can be represented only by an all-guard union.

         I. BACKGROUND

         Guard status is a "factual question[]" tied to the particulars of each case. Burns Int'l Sec. Servs., 278 NLRB 565, 569 (1986). Whether specific employees are guards "can be answered only by carefully examining their duties." Id. We therefore discuss the techs' duties in detail, drawing our descriptions from the testimony that casino personnel gave during representation hearings conducted by a Board hearing officer. We then summarize the Board proceedings.

         A. The Techs' Duties In Context

         MGM Resorts International owns and operates several casino resorts in Las Vegas, Nevada, including petitioners Bellagio and The Mirage. For the most part we do not differentiate between the two casinos because their practices, as relevant to this case, are all but identical.

         1. Surveillance and security

         Each of the two casinos has a surveillance department and a security department. As required by Nevada law-which provides that a licensed casino must have a "surveillance system . . . to assist the licensee and the state in safeguarding the licensee's assets [and] in deterring, detecting and prosecuting criminal acts, " Nev. Gaming Reg. 5.160(2)-each casino's surveillance department uses a network of high-tech cameras to oversee slot machines, gaming tables, count rooms and cashier cages. The cameras transmit live footage to a monitor room, where two to four surveillance operators per shift watch the footage in real time for suspicious activity, and to a server room, where the footage is stored on a "really fancy" "s[o]uped-up" computer system for future use. Mirage Tr. 54. Stored footage is critical because hundreds of cameras (about 1, 100 at Bellagio and 700 at The Mirage) canvass the gaming floor; the few on-duty operators cannot see everything as it happens.

         Ultimately, the surveillance department's job is to protect the casino's property and guests "according to policy and procedure, " especially by ensuring that dealers and players do not cheat the games. Mirage Tr. 32. The security department has the same job but with an additional focus on non-gaming areas such as the jewelers and art gallery, retail and recreational areas, hotel towers, parking garages and employee-only locations. In other words, security officers patrol the entire resort for potential threats to the "security of the guests, the employees and the property itself." Id. at 172. A second camera system, not subject to gaming regulations, covers the non-gaming areas. The security officers monitor non-gaming video feeds in their own monitor room. The officers on patrol respond to reports from that room and from the surveillance department's monitor room. In the event of cheating or a safety threat, the officers take appropriate action such as restraining a patron or escorting him off the property.

         2. The techs

         The techs work with both the surveillance and security departments and have wide-ranging duties. They are charged with designing, installing and maintaining the surveillance department's gaming-floor camera system in a manner that complies with Nevada gaming regulations. Maintenance does not mean merely fixing broken equipment. The gaming-floor setup is often in flux. On the frequent occasions when slot machines and table games are moved, the techs must adjust the camera coverage so that it still captures all of the legally required information, including the identity of dealers and players, card ranks and suits, bets, payouts and the like. By law, the coverage must be adequate to prevent cheating. Thus, the techs are in frequent and direct contact with both the surveillance monitor room and Nevada's Gaming Control Board, proposing coverage, taking pictures, making submissions on deadline and obtaining the necessary regulatory approvals.[2]

         The techs also oversee the server room and are solely responsible for the elaborate computer system that manages "[b]asically every aspect of . . . digital surveillance, " including not only the surveillance department's cameras but the security department's as well. Bellagio Tr. 58. No one except the techs and the surveillance director work on that computer system or on the cameras and related equipment maintained throughout the casino. And because the techs and the surveillance director are "the keepers of the system, " id. at 101, only they can unilaterally turn video feeds on and off; add and delete cameras and users; restrict a user's access to particular views and footage; stop cameras from recording; and delete footage from the server. The surveillance operators and security officers have no such authority. In practical terms, then, a tech can significantly affect what an operator or officer sees on video at any given moment.

         The surveillance operators and security officers rely on and communicate daily with the techs. The operators and officers report any problem with coverage or equipment so that the techs can correct it. The techs train the operators and officers on how to use the computers, change camera views and archive video files. The techs also help the operators and officers extract footage from the server for evidentiary use. And if tampering with a camera is suspected, the techs, not the operators or officers, are the ones who investigate.[3]

         Moreover, the techs' duties reach well beyond everyday camera coverage. The techs maintain each casino's electronic access system. The access system consists of code-activated magnetic locks that control access to "sensitive area[s]" like the server room, the monitor rooms, the art gallery, executive offices, count rooms and the main casino cage - the last of which is subject to especially restrictive controls because it is "the hub of all gaming funds" and is much "like [a] bank" in the amount of money it houses. Mirage Tr. 58; Bellagio Tr. 89, 93. Only the techs and the surveillance director have electronic control over the access system. Accordingly, and although they act at the direction of human resources and other supervisory personnel, only the techs and the surveillance director can program the codes that limit each employee's access to specific locations within the casino. The techs themselves have full access to all areas because they must tend to cameras and equipment "almost everywhere." Bellagio Tr. 145.

         As with the access system, the techs install and maintain computerized alarm systems for jewelry, art displays, count rooms and cages. No other employees do such work. The techs have the ability to arm and disarm the alarms. And if a miscreant defeats an alarm, the techs investigate how he did so.

         Finally, and perhaps most importantly for our purpose, techs often participate in targeted investigations of fellow employees suspected of wrongdoing. In the typical investigation-known as an "integrity check, " a "special operation[]" or simply a "special[], " Bellagio Tr. 105, 177, 183-the tech either installs a purpose-built covert camera somewhere in the target employee's work area or "lock[s]" an existing camera onto the area without the employee's knowledge. [4] Mirage Tr. 110-11. Special operations are conducted, on average, about once or twice per month. Because the tech has to devise coverage that will capture the suspected misconduct, he is usually given "[s]pecifics" like the "nature" of the misconduct and "what kind of employee" is suspected of it. Id. at 105-06; see id. at 164, 190, 195 (tech typically knows why he is setting up coverage in specific area); but see id. at 106 (tech typically is not given target employee's name).

         Although a tech's role in a special operation is limited to ensuring proper coverage and retrieving footage afterward, his participation is essential: no other employees devise and install secret cameras. Also, the surveillance and security personnel conducting the investigation count on the tech to coordinate with them, especially to maintain secrecy. Just as "what happens in Vegas stays in Vegas, " see History of Las Vegas, Las Vegas Convention and Visitors Authority, (noting tagline coined in 2003), the casinos have a "policy" that "whatever happens in surveillance doesn't leave, " Bellagio Tr. 139-40. During a special operation, a tech is not to disclose its existence to personnel who do not need to know about it. Indeed, to ensure that the operation is not compromised, the ...

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