Lee v. NLRB

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH   /HHY1/5% 1R (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS %HIRUH%2**6DQG&2/(&LUFXLWsXGJHVDQG %$77$1,'LVWULFWsXGJH 81,7('67$7(6&28572)$33($/6 BBBBBBBBBBBBBBBBB )257+(6,;7+&,5&8,7 &2816(/ BBBBBBBBBBBBBBBBB $5*8('*OHQQ07DXEPDQ1$7,21$/5,*+772 :25. /(*$/ '()(16( )281'$7,21 6SULQJILHOG ($5/ /(( ; 9LUJLQLD IRU 3HWLWLRQHU  sHIIUH\ +RURZLW] 1$7,21$/ 3HWLWLRQHU  /$%25 5(/$7,216 %2$5' $33(//$7( &2857  %5$1&+:DVKLQJWRQ'&IRU5HVSRQGHQW21%5,()  1R *OHQQ 0 7DXEPDQ 1$7,21$/ 5,*+7 72 :25. Y  /(*$/'()(16()281'$7,216SULQJILHOG9LUJLQLD ! IRU3HWLWLRQHUsHIIUH\+RURZLW]5REHUWs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sXGJH  (DUO /HH DQ HPSOR\HH RI WKH 1 6DWXUQ DXWRPRELOH PDQXIDFWXULQJ SODQW LQ 6SULQJ +LOO 2Q3HWLWLRQIRU5HYLHZRIDQ2UGHU 7HQQHVVHHVHHNVUHYLHZRIDGHFLVLRQE\WKH1DWLRQDO/DERU RIWKH1DWLRQDO/DERU5HODWLRQV%RDUG 5HODWLRQV%RDUGWKHm%RDUGlRUm1/5%lJUDQWLQJDPRWLRQ 1R&9 IRU VXPPDU\ MXGJPHQW ILOHG E\ WKH ,QWHUQDWLRQDO 8QLRQ 8QLWHG $XWRPRELOH $HURVSDFH  $JULFXOWXUDO ,PSOHPHQW $UJXHG6HSWHPEHU :RUNHUVRI$PHULFDDQGLWV/RFDO1RFROOHFWLYHO\WKH m8QLRQlLQWKLVFDVHEURXJKWE\/HHDJDLQVWWKH8QLRQIRUDQ 'HFLGHGDQG)LOHG$SULO DOOHJHG YLRODWLRQ RI WKH 1DWLRQDO /DERU 5HODWLRQV $FW WKH

7KH +RQRUDEOH 0DULDQQH 2 %DWWDQL 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ VLWWLQJ E\ GHVLJQDWLRQ

 1R /HHY1/5%   /HHY1/5% 1R

m$FWl  6SHFLILFDOO\ /HH DWWDFNV WKH 8QLRQjV SROLF\ WKDW mGLVKRQRUDEO\lLVDQRWKHUFRHUFLYHWDFWLFGHVLJQHGWRKDUDVV UHTXLUHVHPSOR\HHVZKRUHVLJQWKHLU8QLRQPHPEHUVKLS\HW DQG SHQDOL]H QRQPHPEHUV RU RWKHUZLVH UHVWUDLQ 8QLRQ UHPDLQZLWKLQDEDUJDLQLQJXQLWSRVLWLRQWRSD\DIHHLIWKH\ PHPEHUV IURP UHVLJQLQJ WKHLU PHPEHUVKLS  6HFRQG /HH UHMRLQWKH8QLRQHTXLYDOHQWWRWKHEDFNGXHVIRUWKHSHULRGRI FRQWHQGV WKDW WKH 8QLRQjV SROLF\ DUELWUDULO\ H[HPSWV WKHLUQRQPHPEHUVKLSZKLOHDOORZLQJHPSOR\HHVZKRKDYH HPSOR\HHV ZKR MRLQ WKH 8QLRQ DIWHU KDYLQJ ZRUNHG LQ WKH UHVLJQHGWKHLU8QLRQPHPEHUVKLSWRWDNHDSRVLWLRQRXWVLGHRI EDUJDLQLQJ XQLW DV QRQPHPEHUV  $V WKHUH DUH QR WKHEDUJDLQLQJXQLWWRUHMRLQZLWKRXWKDYLQJWRSD\VXFKDIHH H[WUDRUGLQDU\FLUFXPVWDQFHVWKDWZRXOGMXVWLI\/HHjVZDLWLQJ +HFODLPVWKDWWKLVSROLF\YLRODWHVVHFWLRQVDQGERIWKH XQWLOQRZWRUDLVHWKHVHWZRREMHFWLRQV/HHLVEDUUHGIURP $FW86&††EEHFDXVHLWVHUYHVWRUHVWUDLQ UDLVLQJWKHPLQWKLVDSSHDOE\VHFWLRQH RIWKH$FW WKUHDWHQDQGFRHUFHHPSOR\HHVLQDQDWWHPSWWRSUHYHQWWKHP 86& † H  6HH :RHONH  5RPHUR )UDPLQJ ,QF Y IURPUHVLJQLQJWKHLUXQLRQPHPEHUVKLS$GGLWLRQDOO\/HH 1/5%86KROGLQJWKDWDQLVVXHQRW FRQWHQGV WKDW WKH 8QLRQjV SROLF\ DUELWUDULO\ GLVFULPLQDWHV UDLVHGGXULQJWKHSURFHHGLQJVEHIRUHWKH%RDUGLVEDUUHGIURP DJDLQVWDFODVVRIHPSOR\HHVZKRDVKHGLGH[HUFLVHWKHLU MXGLFLDO UHYLHZ E\ VHFWLRQ H RI WKH $FW  86& ULJKWWRUHVLJQZKLOHIDYRULQJWKRVHHPSOR\HHVZKROHDYHWKH †H 1/5%Y3ULFHjV3LF3DF6XSHUPDUNHWV,QF EDUJDLQLQJ XQLW IRU YDULRXV RWKHU UHDVRQV LQFOXGLQJ D )GWK&LUUHIXVLQJWRUHDFKWKHPHULWVRI WHPSRUDU\SURPRWLRQ7KH%RDUGLQLWVUHVSRQVHWR /HHjV DFODLPEHFDXVHLWZDVQHYHUSUHVHQWHGWRWKH%RDUGDQGZDV SHWLWLRQIRUUHYLHZFRQWHQGVWKDWWKHDXWKRULW\UHOLHGXSRQE\ WKHUHIRUHEDUUHGXQGHUVHFWLRQHRIWKH$FW86& /HHLVQRWDSSOLFDEOHZKHUHDQHPSOR\HHjVGHFLVLRQWRUHMRLQ †H  LVZKROO\YROXQWDU\WKDWWKH8QLRQjVSROLF\LVQRWDUELWUDULO\ GLVFULPLQDWRU\DQGWKDWWKHSROLF\LVSULYLOHJHGE\WKHSURYLVR , WRVHFWLRQE  $RIWKH$FW86&†E  $ ZKLFKJLYHVWKH8QLRQWKHULJKWmWRSUHVFULEHLWVRZQUXOHV 6LQFHWKH8QLRQKDVEHHQWKHUHFRJQL]HGFROOHFWLYH ZLWKUHVSHFWWRWKHDFTXLVLWLRQRUUHWHQWLRQRIPHPEHUVKLSl EDUJDLQLQJUHSUHVHQWDWLYHIRUDXQLWRIRSHUDWLQJDQGVNLOOHG )RUWKHUHDVRQVJLYHQEHORZZHDIILUPWKH%RDUGjVGHFLVLRQ WHFKQLFLDQHPSOR\HHVDWWKH6DWXUQ&RUSRUDWLRQjV6SULQJ+LOO 7HQQHVVHH IDFLOLW\  8QGHU 7HQQHVVHHjV mULJKWWRZRUNl /HHDOVRUDLVHVWZRQHZREMHFWLRQVWRWKH8QLRQjVSROLF\ VWDWXWHZKLFKLVSHUPLWWHGXQGHUVHFWLRQERIWKH$FW ZKLFKKHGLGQRWUDLVHLQWKHRULJLQDOSURFHHGLQJEHIRUHWKH 86&†EDQHPSOR\HHFDQQRWEHFRPSHOOHGWRMRLQD %RDUG)LUVWKHFRQWHQGVWKDWWKHSXEOLFDWLRQRIKLVQDPHLQ XQLRQRUWRSD\DQ\DPRXQWLQOLHXRIXQLRQGXHV7HQQ&RGH DSHULRGLFQHZVOHWWHUVHQWRXWE\WKH8QLRQDVDSHUVRQVXEMHFW $QQ††WKURXJK$VDUHVXOWWKHFROOHFWLYH WRWKH8QLRQj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mWKH XQLRQVj GHFLVLRQ WR SXEOLFL]H 8QLRQDQQRXQFHGLWVSROLF\WRZDUGVHPSOR\HHVZKRUHVLJQ WKH QDPHV RI QRQPHPEHUV LV QRW DOOHJHG E\ WKH *HQHUDO &RXQVHO WR EH DQ LQGHSHQGHQW YLRODWLRQ RI WKH $FWl ,Q DGGLWLRQ WKH EULHI GRHV QRW UDLVH WKH WKHLUPHPEHUVKLSLQDSHULRGLFQHZVOHWWHULWSXEOLVKHVHQWLWOHG TXHVWLRQ RI GLVFULPLQDWLRQ LQ IDYRU RI HPSOR\HHV ZKR GR QRW MRLQ WKH m7KH:KHHOl7KHQHZVOHWWHUVWDWHGWKHIROORZLQJ 8QLRQ XQWLO D ODWHU GDWH LQ WKHLU HPSOR\PHQW 1R /HHY1/5%   /HHY1/5% 1R

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j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jVSROLF\LV ZLWKGUDZQVXEVHTXHQWO\UHWXUQVWRWKHEDUJDLQLQJXQLW QRW LQ YLRODWLRQ RI WKH $FW DV LW LV UHDVRQDEO\ GHVLJQHG WR WKH\EHJDQSD\LQJGXHVRQO\XSRQWKHLUUHHQWU\WKRVH SURPRWH8QLRQPHPEHUVKLSDOHJLWLPDWHSXUSRVHXQGHUWKH ZKR KDYH ZLWKGUDZQ GLVKRQRUDEO\ PXVW SD\ DOO EDFN $FW DQG OHDYHV 8QLRQ PHPEHUV IUHH WR UHVLJQ ZLWKRXW GXHVLQRUGHUWRUHWXUQWRDVWDWXVRIJRRGVWDQGLQJ FRHUFLRQ HPSKDVLVDGGHG,QUHVSRQVHWRWKLVDQQRXQFHPHQWRIWKH :HKDYHMXULVGLFWLRQWRUHYLHZWKH%RDUGjVRUGHUEHFDXVH 8QLRQjVSROLF\/HHILOHGDQXQIDLUODERUSUDFWLFHFKDUJHZLWK WKHHYHQWVZKLFKJDYHULVHWRWKHDOOHJHGXQIDLUODERUSUDFWLFH WKH%RDUGRQ1RYHPEHUWKHUHE\LQLWLDWLQJWKLVFDVH RFFXUUHGLQ6SULQJ+LOO7HQQHVVHH6HH86&†I :HUHYLHZWKH1/5%jVIDFWXDOILQGLQJVXQGHUDVXEVWDQWLDO 2Q 0DUFK   EDVHG RQ /HHjV FKDUJH WKH 1/5%jV HYLGHQFHVWDQGDUG1/5%Y)OXRU'DQLHO,QF)G *HQHUDO&RXQVHOLVVXHGDIRUPDOFRPSODLQWDJDLQVWWKH8QLRQ  WK &LU   6XEVWDQWLDO HYLGHQFH PHDQV mVXFK DQG LQ sXQH  WKH *HQHUDO &RXQVHO ILOHG D PRWLRQ WR UHOHYDQW HYLGHQFH DV D UHDVRQDEOH PLQG PLJKW DFFHSW DV WUDQVIHUWKHFDVHWRWKH%RDUG6XEVHTXHQWO\FURVVPRWLRQV DGHTXDWHWRVXSSRUWDFRQFOXVLRQl'XSRQW'RZ(ODVWRPHUV IRUVXPPDU\MXGJPHQWZHUHILOHGDQGRQ)HEUXDU\ //&Y1/5%)GWK&LUFLWDWLRQV WKH %RDUG JUDQWHG WKH 8QLRQjV PRWLRQ DQG GLVPLVVHG WKH RPLWWHG  :H UHYLHZ WKH %RDUGjV FRQFOXVLRQV RI ODZ FRPSODLQWDJDLQVWWKH8QLRQKROGLQJWKDWWKH8QLRQjVSROLF\ XQUHODWHGWRWKH1DWLRQDO/DERU5HODWLRQV$FWGHQRYRDQG ZDV QHLWKHU FRHUFLYH QRU GLVFULPLQDWRU\ DQG FRQVWLWXWHG D RWKHUZLVH VKRZ GHIHUHQFH WR WKH %RDUGjV UHDVRQDEOH OHJLWLPDWHH[HUFLVHRIWKH8QLRQjVULJKWWRSUHVFULEHLWVRZQ LQWHUSUHWDWLRQRIWKH$FW$OEHUWVRQjV,QFY1/5%)G UXOHV ZLWK UHJDUG WR PHPEHUVKLS SXUVXDQW WR VHFWLRQ   WK &LU  FLWLQJ +ROO\ )DUPV &RUS Y E  $ RI WKH $FW  86& † E  $  2Q 1DWjO /DERU 5HODWLRQV %G  86    $XJXVW   /HH ILOHG D SHWLWLRQ IRU UHYLHZ RI WKH &KHYURQ86$,QFY1DWXUDO5HV'HI&RXQFLO,QF %RDUGjVGHFLVLRQWRWKLVFRXUW 866DQGXVN\0DOO&RY1/5%)G WK&LU )XUWKHUPRUHZHGRVRQRWRQO\ZLWK UHVSHFWWRLWVLQWHUSUHWDWLRQVLQSURPXOJDWHGUHJXODWLRQVVXFK DVWKRVHWKDWZHUHDWVWDNHLQ&KHYURQEXWDOVRZLWKUHVSHFW WR LWV LQWHUSUHWDWLRQV RI WKH $FW DV DSSOLHG WR YDULRXV IDFW 1R /HHY1/5%   /HHY1/5% 1R

SDWWHUQVLQSDUWLFXODUGHFLVLRQV6HH+ROO\)DUPV86DW EHmDIIHFWHGE\DQDJUHHPHQWUHTXLULQJPHPEHUVKLSlLQWKH 1/5%Y7UDQVS0JPW&RUS86 8QLRQ  PRGLILHG RQ RWKHU JURXQGV E\ 'LUHFWRU 2:&3 Y *UHHQZLFK&ROOLHULHV86,QVXPIRU 8QGHUVHFWLRQRIWKH$FW86&†LWLVDQXQIDLU WKHm%RDUGWRSUHYDLOLWQHHGQRWVKRZWKDWLWVFRQVWUXFWLRQLV ODERU SUDFWLFH IRU D XQLRQ RU RWKHU ODERU RUJDQL]DWLRQ WR WKHEHVWZD\WRUHDGWKHVWDWXWHUDWKHUFRXUWVPXVWUHVSHFWWKH mUHVWUDLQRUFRHUFHlHPSOR\HHVLQWKHH[HUFLVHRIWKHLUVHFWLRQ %RDUGjVMXGJPHQWVRORQJDVLWVUHDGLQJLVDUHDVRQDEOHRQHl ULJKWV$XQLRQPD\KRZHYHUmSUHVFULEHLWVRZQUXOHV +ROO\)DUPV86DW2QWKHRWKHUKDQGZHJLYHQR ZLWKUHVSHFWWRWKHDFTXLVLWLRQRUUHWHQWLRQRIPHPEHUVKLSl GHIHUHQFHWRWKH%RDUGjVLQWHUSUHWDWLRQRI6XSUHPH&RXUWDQG 7KHVH SURYLVLRQV DUH LQWHQGHG WR SURWHFW DQ HPSOR\HHjV 6L[WK &LUFXLW GHFLVLRQV UHYLHZLQJ WKRVH KROGLQJVGH QRYR FKRLFHVFRQFHUQLQJXQLRQSDUWLFLSDWLRQZKLOHJLYLQJXQLRQV $OEHUWVRQjV)GDW6DQGXVN\0DOO)GDW WKH IOH[LELOLW\ WR PDQDJH WKHLU RZQ LQWHUQDO DIIDLUV  6HH 6FRILHOG Y 1/5%  86    $'RHVWKH8QLRQjVSROLF\FRHUFHRUUHVWUDLQHPSOR\HHV 1HYHUWKHOHVV WKHVH WZR SROLFLHV KDYH DW WLPHV FRPH LQWR LQFRQWUDYHQWLRQRIWKHLUULJKWWRYROXQWDULO\UHVLJQ FRQIOLFWDVXQLRQVKDYHFUHDWHGUXOHVLQWHQGHGWRHQFRXUDJH WKHUHE\YLRODWLQJ†E  $RIWKH$FW" PHPEHUVKLSZKLFKKDYHQHYHUWKHOHVVEHHQKHOGE\WKHFRXUWV WREHXQIDLUODERUSUDFWLFHV /HH DUJXHV WKDW WKH 8QLRQjV UHHQWU\ IHH ZKLFK WDUJHWV HPSOR\HHV ZKR ZHUH SULRU PHPEHUV ZKR UHVLJQHG 7KH6XSUHPH&RXUWLQ6FRILHOGLGDWSURYLGHGXVZLWK mGLVKRQRUDEO\lLVDSROLF\WKDWLPSHUPLVVLEO\LQIULQJHVRQDQ JXLGDQFHRQKRZWKHVHVRPHWLPHVFRPSHWLQJSULQFLSOHVFDQ HPSOR\HHPHPEHUjV ULJKW WR UHVLJQ XQLRQ PHPEHUVKLS EH UHFRQFLOHG E\ LQWHUSUHWLQJ WKH $FW DV SHUPLWWLQJ XQLRQ EHFDXVH LW mSXQLVKHVl HPSOR\HHV ZKR KDYH H[HUFLVHG WKHLU UXOHVWKDWUHIOHFWDOHJLWLPDWHXQLRQLQWHUHVWLPSDLUQRSROLF\ ULJKWWRUHVLJQDQGODWHUGHFLGHWRUHMRLQWKHXQLRQ7KH8QLRQ &RQJUHVVKDVHVWDEOLVKHGLQWKHODERUODZVDQGDUHUHDVRQDEO\ DQG WKH %RDUG FRQWHQG WKDW VLQFH WKH 8QLRQjV SROLF\ LV HQIRUFHGDJDLQVWPHPEHUVZKRDUHIUHHWROHDYHWKHXQLRQDQG WULJJHUHGRQO\E\DQHPSOR\HHjVGHFLVLRQWRUHMRLQWKHXQLRQ HVFDSH WKH UXOH  6LQFH 6FRILHOG WKH %RDUG DQG WKH IHGHUDO DQGGRHVQRWLPSRVHDVDQFWLRQRQHPSOR\HHVZKRGHFLGHWR FRXUWVKDYHKDGDPSOHRSSRUWXQLWLHVWRDSSO\WKLVWKUHHSDUW UHVLJQWKHLUPHPEHUVKLSLWFDQQRWEHVHHQDVLQIULQJLQJRQDQ WHVWLQDQDO\]LQJYDULRXVXQLRQUXOHVDQGWKHUHIRUHZHEHQHILW HPSOR\HHPHPEHUjVULJKWWRUHVLJQ IURPDZHDOWKRISUHFHGHQWLQWKLVDUHD 6HFWLRQ  RI WKH $FW  86& †  JXDUDQWHHV )RUH[DPSOHILQLQJIRUPHUXQLRQPHPEHUVZKRUHVLJQHG HPSOR\HHV mWKH ULJKW WR VHOIRUJDQL]DWLRQ WR IRUP MRLQ RU IURPDXQLRQGXULQJWKHFRXUVHRIDVWULNHFRQVWLWXWHVDQXQIDLU DVVLVWODERURUJDQL]DWLRQVDQGWKHULJKWWRUHIUDLQIURP ODERU SUDFWLFH EHFDXVH LW LPSHUPLVVLEO\ LQIULQJHV RQ DQ DQ\RUDOORIVXFKDFWLYLWLHVH[FHSWWRWKHH[WHQWWKDWVXFKULJKW HPSOR\HHjVULJKWWRUHVLJQDVLWOHDYHVQRZD\WRHVFDSHWKH PD\EHDIIHFWHGE\DQDJUHHPHQWUHTXLULQJPHPEHUVKLSLQD UXOH  6HH 1/5% Y 7H[WLOH :RUNHUV  86   ODERURUJDQL]DWLRQDVDFRQGLWLRQRIHPSOR\PHQWl,Q 6LPLODUO\ D XQLRQ FRQVWLWXWLRQ WKDW SURKLELWV UHVLJQDWLRQV 7HQQHVVHHWKHOHJLVODWXUHKDVHQDFWHGDVWDWXWHXQGHUZKLFK GXULQJDVWULNHRUZKHQDVWULNHLVLPPLQHQWDQGOHYLHVKHDY\ DQHPSOR\HHFDQQRWEHFRPSHOOHGWRMRLQDXQLRQRUWRSD\ ILQHV DJDLQVW WKRVH PHPEHUV ZKR GR UHVLJQ XQGHU VXFK DQ\DPRXQWLQOLHXRIXQLRQGXHV7HQQ&RGH$QQ†† FRQGLWLRQV LV DOVR DQ XQIDLU ODERU SUDFWLFH  6HH 3DWWHUQ WKURXJK7KLVVWDWXWHSUHFOXGHVWKHSRVVLELOLW\RID 0DNHUVj/HDJXHY1/5%86 XQLRQVHFXULW\FODXVHLQWKHFROOHFWLYHEDUJDLQLQJDJUHHPHQW ,QRWKHUZRUGV/HHjVULJKWWRUHIUDLQIURPPHPEHUVKLSFDQQRW 1HYHUWKHOHVV ILQLQJ D XQLRQ PHPEHU LV QRW SHU VH D YLRODWLRQRIWKH$FW,Q1/5%Y$OOLV&KDOPHUV0IJ&R 1R /HHY1/5%   /HHY1/5% 1R

86WKH&RXUWKHOGWKDWDXQLRQKDV KDG WDNHQ D MRE ZLWK D FRPSDQ\ WKDW KDG D FROOHFWLYH WKHULJKWWRSUHVFULEHLWVRZQUXOHVUHVSHFWLQJWKHDFTXLVLWLRQ EDUJDLQLQJDJUHHPHQWFRQWDLQLQJDXQLRQVHFXULW\FODXVHZLWK RU UHWHQWLRQ RI PHPEHUVKLS LQFOXGLQJ WKH ULJKW WR LPSRVH WKH6DQ3HGUR,QGHSHQGHQW)LVKHUPHQjV8QLRQ&LROLQROHIW ILQHVWKDWFDUU\DQH[SOLFLWRULPSOLFLWWKUHDWRIH[SXOVLRQIRU WKDW MRE DIWHU VHYHQ PRQWKV  6L[ \HDUV ODWHU DIWHU EHLQJ QRQSD\PHQW  ,Q 6FRILHOG  86 DW  WKH &RXUW HPSOR\HG ZLWK FRPSDQLHV WKDW GLG QRW KDYH DQ DJUHHPHQW XSKHOGDXQLRQUXOHDVVHVVLQJILQHVHQIRUFHDEOHE\WKUHDWRI ZLWK WKH )LVKHUPHQj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sDQHW/RYHZDVDQHPSOR\HHZKRKDGUHVLJQHG (QJLQHHUV/RFDO)GWK&LU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j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&LROLQRDILVKHUPDQ HPSOR\HHZDVXQDEOHWRHVFDSHWKHUXOHEHFDXVHHPSOR\PHQW 1R /HHY1/5%   /HHY1/5% 1R

ZDV FRQGLWLRQHG XSRQ UHMRLQLQJ WKH XQLRQ  ,Q /HHjV FDVH XQLRQLVPDQGILWVZLWKLQWKHSURYLVRWRVHFWLRQE  $ VLQFH 7HQQHVVHH LV D ULJKWWRZRUN VWDWH KH IDFHV QR ZKLFKDOORZVDXQLRQWRmSURVFULEHLWVRZQUXOHVZLWKUHVSHFW HPSOR\PHQWVDQFWLRQLIKHGRHVQRWUHMRLQWKHXQLRQ WRWKHDFTXLVLWLRQRUUHWHQWLRQRIPHPEHUVKLSWKHUHLQl 7KH%RDUGjVGHWHUPLQDWLRQWKDWWKH8QLRQUXOHLQWKLVFDVH %'RHVWKH8QLRQjVSROLF\LPSHUPLVVLEO\DQG SDVVHV6FRILHOGjVWKUHHSDUWWHVWLVQRWXQUHDVRQDEOH)LUVWWKH DUELWUDULO\GLVFULPLQDWHDJDLQVWHPSOR\HHVZKRUHVLJQ 8QLRQjVSROLF\UHIOHFWVWKHOHJLWLPDWHLQWHUHVWRIWKH8QLRQLQ DQGUHPDLQZLWKLQWKHVDPHEDUJDLQLQJXQLW" WKHUHWHQWLRQRILWVPHPEHUVKLSE\SUHYHQWLQJHPSOR\HHVIURP VLPSO\MRLQLQJWKH8QLRQIRUVKRUWVWLQWVLQRUGHUWRSDUWLFLSDWH 7KHUH LV QR TXHVWLRQ WKDW D XQLRQ PD\ DVVHVV D LQFULWLFDOGHFLVLRQVZKLOHQHYHUWKHOHVVHQMR\LQJWKHEHQHILWV UHLQVWDWHPHQWIHHKRZHYHUWKDWIHHPXVWEHUHDVRQDEOHDQG RIWKH8QLRQjVUHSUHVHQWDWLRQWKURXJKRXWWKHLUHPSOR\PHQWLQ FDQQRWEHGLVFULPLQDWRU\RQDQDUELWUDU\EDVLV6HHHJ,QWjO WKH EDUJDLQLQJ XQLW  6HFRQG WKH 8QLRQjV SROLF\ GRHV QRW 8QLRQRI2SHUDWLQJ(QJjUV/RFDO)GDW6HH DGYHUVHO\DIIHFWWKHFRQJUHVVLRQDOSROLF\LQIDYRURIYROXQWDU\ DOVR)RRG0DFK &KHP&RUS1/5% XQLRQLVP DV LW LV QRW WULJJHUHG E\ DQ HPSOR\HHPHPEHUjV /HHDUJXHVWKDWWKH8QLRQjVSROLF\LPSHUPLVVLEO\DQG GHFLVLRQWRUHVLJQDQGWKXVGRHVQRWLPSDLUDQHPSOR\HHjV DUELWUDULO\GLVWLQJXLVKHVEHWZHHQWKRVHHPSOR\HHVZKRKDYH ULJKW WR IUHHO\ UHVLJQ IURP WKH 8QLRQ  7KLUG WKH 8QLRQjV ZLWKGUDZQ mKRQRUDEO\l DQG WKRVH ZKR KDYH ZLWKGUDZQ SROLF\LVRQO\ WULJJHUHGZKHQDPHPEHUZKRUHVLJQHGDQG mGLVKRQRUDEO\l

SROLF\ LV QHLWKHU GLVFULPLQDWRU\ QRU UHVWUDLQV RU FRHUFHV PHPEHUV LQ WKH H[HUFLVH RI WKHLU ULJKW WR UHVLJQ IURP WKH XQLRQDQGLVSULYLOHJHGE\WKHSURYLVRWRVHFWLRQE  $ 86&†E  $LVDUHDVRQDEOHLQWHUSUHWDWLRQRIWKH $FW