NLRB v. Foundry Div Alcon

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21  1/5%Y)RXQGU\'LY 1R 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

RI$OFRQ,QGXVWULHV (/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

XQGHUZKLFKLWLVLPSRVVLEOHWRGHWHUPLQHmWKH XQLQKLELWHG GHVLUHV RI WKH HPSOR\HHVl LQ WKH HOHFWLRQ E\ DSSHDOLQJ WR 81,7('67$7(6&28572)$33($/6 UDFLDOSUHMXGLFH6HH6HZHOO1/5%DW )257+(6,;7+&,5&8,7 ,QVXPZHFRQFOXGHWKDWVXEVWDQWLDOHYLGHQFHVXSSRUWVWKH BBBBBBBBBBBBBBBBB %RDUGjV ILQGLQJ WKDW WKH XVH RI UDFLDO HSLWKHWV LQ WKH FLUFXPVWDQFHVSUHVHQWHGKHUHGLGQRWFRQVWLWXWHDQDSSHDOE\ XQLRQ SURSRQHQWV WR UDFLDO SUHMXGLFH DQG ZH HQIRUFH WKH %RDUGjVRUGHU 1$7,21$/ /$%25 5(/$7,216 ; %2$5'  ,Q DGGLWLRQ ZH KDYH FDUHIXOO\ FRQVLGHUHG 5HVSRQGHQWjV 3HWLWLRQHU  DUJXPHQWVWKDWWKHODZRIWKHFDVHGRFWULQHUHTXLUHVWKDWWKH  1R HOHFWLRQEHVHWDVLGHDQGWKDWWKH%RDUGLQFRUUHFWO\UHMHFWHGLWV  REMHFWLRQEDVHGRQDOOHJHGWKUHDWVGXULQJWKHUHSUHVHQWDWLRQ Y !  FDPSDLJQ:HILQGWKHVHDUJXPHQWVWREHZLWKRXWPHULW  )281'5< ',9,6,21 2) $/&21  ,9 ,1'8675,(6 ,1&  )RU WKH IRUHJRLQJ UHDVRQV WKH %RDUGjV SHWLWLRQ IRU 5HVSRQGHQW  HQIRUFHPHQWLV*5$17('  1 2Q$SSOLFDWLRQIRU(QIRUFHPHQWRIDQ2UGHURIWKH 1DWLRQDO/DERU5HODWLRQV%RDUG 1R&$ $UJXHG0D\ 'HFLGHGDQG)LOHG$XJXVW %HIRUHs21(6DQG'$8*+75(<&LUFXLWsXGJHV (&212086'LVWULFWsXGJH

7KH +RQRUDEOH 3HWHU & (FRQRPXV 8QLWHG 6WDWHV 'LVWULFW sXGJH IRU WKH 1RUWKHUQ 'LVWULFW RI 2KLR VLWWLQJ E\ GHVLJQDWLRQ

  1/5%Y)RXQGU\'LY 1R 1R 1/5%Y)RXQGU\'LY  RI$OFRQ,QGXVWULHV RI$OFRQ,QGXVWULHV

BBBBBBBBBBBBBBBBB WU\LQJWRDSSHDOWRUDFLDOSUHMXGLFHVKHOGE\.QLJKWRUWKDWKH ZDV WU\LQJ WR H[DFHUEDWH SUHH[LVWLQJ UDFLDO WHQVLRQ &2816(/ /LNHZLVHDOWKRXJK:LOVRQWHVWLILHGWKDWRWKHUHPSOR\HHVLQ WKH YRWLQJ OLQH ZHUH XVLQJ WKH ZRUG mQLJJHUl DORQJ ZLWK $5*8('  'DYLG +DEHQVWUHLW 1$7,21$/ /$%25 ZRUGVOLNHmELWFKlDQGmZKRUHlWKHUHLVQRHYLGHQFHWKDW 5(/$7,216 %2$5' 2)),&( 2) 7+( *(1(5$/ WKH\ZHUHGRLQJVRLQDQDWWHPSWWRJDUQHUYRWHVIRUWKHXQLRQ &2816(/:DVKLQJWRQ'&IRU3HWLWLRQHU$ODQ*5RVV EDVHGRQUDFLDODQLPRVLW\,QIDFW.QLJKWWHVWLILHGWKDWLWZDV 5266%5,77$,1 6&+21%(5*&OHYHODQG2KLRIRU MXVWDMRNHDQGWKDWWKLVNLQGRIODQJXDJHZDVXVHGVRRIWHQDW 5HVSRQGHQW21%5,()'DYLG+DEHQVWUHLW1$7,21$/ WKHIRXQGU\WKDWKHZDVQRWHYHQVXUHZKHWKHURUQRW:LOVRQ /$%25 5(/$7,216 %2$5' 2)),&( 2) 7+( KDG DFWXDOO\ XVHG WKH ZRUG mQLJJHUl DQG KH FRXOG QRW *(1(5$/ &2816(/ :DVKLQJWRQ '& $LOHHQ $ UHPHPEHUZKRHOVHZDVXVLQJWKLVODQJXDJH $UPVWURQJ 8VKD 'KHHQDQ 1$7,21$/ /$%25 5(/$7,216%2$5'$33(//$7(&2857 %5$1&+ 7KXVWKLVVLWXDWLRQLVXQOLNH6HZHOOLQZKLFKWKHHPSOR\HU :DVKLQJWRQ'&IRU3HWLWLRQHU$ODQ*5RVV'DYLG7 LQWHQWLRQDOO\ DWWHPSWHG WR DSSHDO WR HPSOR\HHVj UDFLDO $QGUHZV )UHG 1 6HOHPDQ 5266 %5,77$,1 SUHMXGLFHV VR WKDW WKH\ ZRXOG UHMHFW WKH XQLRQ RQ UDFLDO 6&+21%(5*&OHYHODQG2KLRIRU5HVSRQGHQW JURXQGV1/5%DW1RULVLWOLNH(XURGULYHLQ ZKLFK WKH XQLRQ UHSUHVHQWDWLYH UHDFKHG RXW WR ZKLWH BBBBBBBBBBBBBBBBB HPSOR\HHV E\ SURPLVLQJ WR IRUFH WKH FRPSDQ\ WR UHKLUH D ZKLWHHPSOR\HHZKRKDGEHHQILUHGIRUUDFLDOO\KDUDVVLQJD 23,1,21 EODFNHPSOR\HH%\GRLQJWKLV WKHUHSUHVHQWDWLYHmSODFHG BBBBBBBBBBBBBBBBB XQGXHHPSKDVLVRQDUDFLDOLVVXHZKLFK>KH@PXVWKDYHNQRZQ ZRXOG H[DFHUEDWH SUHH[LVWLQJ UDFLDO WHQVLRQ DPRQJ WKH 1$7+$1,(/ 5 s21(6 &LUFXLW sXGJH  7KLV FDVH LV HPSOR\HHVSULRUWRWKHHOHFWLRQl(XURGULYH)GDW EHIRUH WKH &RXUW RQ WKH DSSOLFDWLRQ RI 3HWLWLRQHU 1DWLRQDO 6LPLODUO\ WKH VLWXDWLRQ LQ WKH LQVWDQW FDVH LV XQOLNH /DERU 5HODWLRQV %RDUG m%RDUGl RU m1/5%l WR HQIRUFH D &DUULQJWRQ LQ ZKLFK WKH XQLRQ GLVWULEXWHG PDWHULDOV WKDW %RDUGRUGHULVVXHGDJDLQVW5HVSRQGHQW)RXQGU\'LYLVLRQRI FRQWDLQHGmLPDJHVRIERQGDJHRUYLROHQFHYLVLWHGXSRQUDFLDO $OFRQ ,QGXVWULHV ,QF m&RPSDQ\l  7KH &RPSDQ\ KDV PLQRULWLHV E\ D ZKLWH PDMRULW\l DQG WKHUHE\ GHSLFWHG UHIXVHGWREDUJDLQZLWKWKH8QLRQEDVHGRQREMHFWLRQVWRWKH FDPSDLJQWKHPHVVXFKDVUHVSHFWIRUHPSOR\HHVLQPDQQHU XQGHUO\LQJUHSUHVHQWDWLRQHOHFWLRQ7KLVDSSHDOUHTXLUHVXVWR WKDWmFRXOGEHVHHQDVJODULQJJUDSKLFDSSHDOVWRUDFLDO GHWHUPLQH ZKHWKHU RQ WKH IDFWV RI WKLV FDVH WKH %RDUG SUHMXGLFHl)GDW SURSHUO\FRQFOXGHGWKDWWKHHOHFWLRQVKRXOGQRWEHRYHUWXUQHG RQWKHEDVLVRIWKHXVHRIUDFLDOHSLWKHWV:HKROGWKDWWKHUH $OWKRXJK:LOVRQZDVHQFRXUDJLQJ.QLJKWWRYRWHIRUWKH ZDV QRW D GHOLEHUDWH DSSHDO WR UDFLDO SUHMXGLFH DQG ZLOO XQLRQ:LOVRQjVVWDWHPHQWGRHVQRWVXJJHVWWKDWPHPEHUVRI HQIRUFHWKH%RDUGjVEDUJDLQLQJRUGHU RQHUDFHZHUHRUFRXOGKDYHEHHQmSHUVXDGHGWRYRWHIRURU DJDLQVW D XQLRQ RQ WKH EDVLV RI LQYLGLRXV SUHMXGLFHV WKH\ , PLJKWKDYHDJDLQVWLQGLYLGXDOVRIDQRWKHUUDFHl(XURGULYH 2Q 0D\   WKH ,QWHUQDWLRQDO 8QLRQ 8QLWHG )GDWQHPSKDVLVDGGHG*RLQJWRWKHKHDUWRI $XWRPRELOH$HURVSDFHDQG$JULFXOWXUDO,PSOHPHQW:RUNHUV WKHPDWWHU.QLJKWjVVWDWHPHQWWR:LOVRQm1LJHU>VLF@6KRUW\ RI$PHULFDm8$:lRUmWKH8QLRQlILOHGDUHSUHVHQWDWLRQ ,NQRZ\RXjUHJRQQD>VLF@YRWH\HVlGLGQRWFUHDWHFRQGLWLRQV  1/5%Y)RXQGU\'LY 1R 1R 1/5%Y)RXQGU\'LY  RI$OFRQ,QGXVWULHV RI$OFRQ,QGXVWULHV

&RQWUDU\WRWKH&RPSDQ\jVDUJXPHQW6HZHOOGRHVQRWUHTXLUH SHWLWLRQZLWKWKH1/5%VHHNLQJFHUWLILFDWLRQDVWKHFROOHFWLYH WKDWWKH&RXUWVHWDVLGHWKHHOHFWLRQLQWKLVFDVH EDUJDLQLQJ UHSUHVHQWDWLYH RI SURGXFWLRQ DQG PDLQWHQDQFH HPSOR\HHV DW )RXQGU\ 'LYLVLRQ RI $OFRQ ,QGXVWULHV ,QF (YHQ ZKHQ ZH FRQVLGHU mWKH FRQWH[W LQ ZKLFK WKH 3XUVXDQW WR D VWLSXODWHG HOHFWLRQ DJUHHPHQW WKH %RDUG VWDWHPHQWVZHUHPDGHDQGWKHWRWDOFRQGXFWRIWKHSHUVRQZKR FRQGXFWHGDVHFUHWEDOORWHOHFWLRQRQsXO\6HYHQW\ PDGHWKHVWDWHPHQWVl(XURGULYH)GDWLQWHUQDO RQHRXWRIVHYHQW\ILYHHOLJLEOHYRWHUVFDVWEDOORWV7KLUW\VL[ FLWDWLRQVRPLWWHGZHDUHXQDEOHWRILQGDQ\WKLQJWRVXJJHVW YRWHVZHUHFDVWIRUWKH8QLRQDQGWKLUW\WZRZHUHFDVWDJDLQVW WKDWZKHQ(UYLQ:LOVRQVDLGWR(QULTXH.QLJKWm1LJHU>VLF@ WKH8QLRQ7KUHHEDOORWVDQXPEHULQVXIILFLHQWWRDIIHFWWKH 6KRUW\ , NQRZ \RXjUH JRQQD >VLF@ YRWH \HVl :LOVRQ ZDV RXWFRPHZHUHFKDOOHQJHG7KH&RPSDQ\ILOHGREMHFWLRQVWR FRQGXFWDIIHFWLQJWKHUHVXOWVRIWKHHOHFWLRQ7KH5HJLRQDO 'LUHFWRU LVVXHG D UHSRUW UHFRPPHQGLQJ WKDW WKH %RDUG RYHUUXOH WKH &RPSDQ\jV REMHFWLRQV  7KH &RPSDQ\ ILOHG :H  UHFRJQL]H WKDW WKH FDVH DW EDU LV GLIIHUHQW IURP WKH FDVHV ([FHSWLRQVWRWKH5HJLRQDO'LUHFWRUjVUHSRUWDQGWKH1/5% GLVFXVVHG DERYH LQ WKDW D WKLUG SDUW\ PDGH WKH FRPPHQWV DW LVVXH KHUH :KHQ GHWHUPLQLQJ ZKHWKHU WR VHW DVLGH DQ HOHFWLRQ FRXUWV SODFH PRUH LVVXHGDGHFLVLRQDQGRUGHUGLUHFWLQJWKH5HJLRQDO'LUHFWRUWR ZHLJKW RQ PLVFRQGXFW E\ WKH HPSOR\HU RU WKH XQLRQ WKDQ RQ FRQGXFW E\ FRQGXFWDKHDULQJUHJDUGLQJWKH&RPSDQ\jVREMHFWLRQV WKLUG SDUWLHV *HQHUDOO\ ZKHQ WKH FRQGXFW RI WKLUG SDUWLHV LV WKH EDVLV RI DQ HOHFWLRQ FKDOOHQJH WKH DSSURSULDWH WHVW LV mZKHWKHU WKH DFWLRQV RI D PHUH $ +HDULQJ 2IILFHU KHOG D WZRGD\ KHDULQJ DQG LVVXHG D 8QLRQ µDGKHUHQWj ZHUH µVXIILFLHQWO\ VXEVWDQWLDO LQ QDWXUH WR FUHDWH D UHSRUWUHFRPPHQGLQJWKDWWKHREMHFWLRQVEHRYHUUXOHGDQGWKDW JHQHUDO HQYLURQPHQW RI IHDU DQG UHSULVDO VXFK DV WR UHQGHU D IUHH FKRLFH D&HUWLILFDWLRQRI5HSUHVHQWDWLYHLVVXHLQIDYRURIWKH8QLRQ RI UHSUHVHQWDWLRQ LPSRVVLEOH    j 1/5% Y 6XSHULRU &RDWLQJV ,QF  )G   Q WK &LU  TXRWLQJ +LFNPDQ +DUERU 6HUY Y $JDLQWKH&RPSDQ\ILOHG([FHSWLRQV$WKUHHPHPEHUSDQHO 1/5%  )G   WK &LU  :KHUHDV ZKHQ WKH FRQGXFW LV RIWKH%RDUGLVVXHGDVXSSOHPHQWDOGHFLVLRQDQG&HUWLILFDWLRQ DWWULEXWDEOH WR WKH XQLRQ RU WKH HPSOR\HU WKH WHVW LV ZKHWKHU WKH FRQGXFW RI5HSUHVHQWDWLYHDGRSWLQJWKHKHDULQJRIILFHUjVILQGLQJVDQG mUHDVRQDEO\ WHQG>HG@ WR LQWHUIHUH ZLWK WKH HPSOR\HHjV IUHH DQG XQFRHUFHG UHFRPPHQGDWLRQV  7KH %RDUG DJUHHG ZLWK WKH +HDULQJ FKRLFH LQ WKH HOHFWLRQl 6XSHULRU &RDWLQJV  )G DW  TXRWLQJ 2IILFHUWKDWWKHHPSOR\HHVjDOOHJHGXVHRIUDFLDOHSLWKHWVDV %DMDjV 3ODFH  1/5%   DOWHUDWLRQ LQ 6XSHULRU &RDWLQJV  ,W GRHV QRW DSSHDU WKDW WKH 6L[WK &LUFXLW KDV DSSOLHG WKH 6HZHOO WHVW WR WKH WKH\ZHUHZDLWLQJLQOLQHWRYRWHZDVQRWREMHFWLRQDEOHEXW FRQGXFW RI D WKLUG SDUW\ 2WKHU FLUFXLWV KDYH GRQH VR DQG WKHUH KDV EHHQ VDLGm,QVRILQGLQJZHUHO\VROHO\RQWKHIDFWWKDWWKHXVHRI VRPH GLVDJUHHPHQW DV WKH DSSURSULDWH VWDQGDUG 6HH HJ 1/5% Y .DW] VXFK HSLWKHWV LQ WKH FLUFXPVWDQFHV SUHVHQW KHUH GLG QRW  )G   WK &LU  DSSO\LQJ IROORZLQJ WHVW WR UHPDUNV E\ FRQVWLWXWHDQDSSHDOWRUDFLDOSUHMXGLFHls$DW WKLUGSDUW\ mZKHWKHU WKH LQIODPPDWRU\ UHPDUNV FRXOG KDYH LPSDLUHG WKH HPSOR\HHVj IUHHGRP RI FKRLFH LQ WKH VXEVHTXHQW HOHFWLRQl 'LG %OGJ 7KHUHDIWHUWKH8QLRQUHTXHVWHGWREDUJDLQFROOHFWLYHO\ZLWK 6HUYV ,QF Y 1/5%  )G   WK &LU  UHMHFWLQJ .DW] WKH &RPSDQ\ DQG WKH &RPSDQ\ UHIXVHG  $V D UHVXOW WKH VWDQGDUG DV WRR LQFOXVLYH DQG LQVWHDG KROGLQJ WKDW mDQ HPSOR\HHjV DSSHDO WR SUHMXGLFH PXVW VR WDLQW WKH HOHFWLRQ DWPRVSKHUH DV WR UHQGHU IUHH FKRLFH 8QLRQ ILOHG DQ XQIDLU ODERU SUDFWLFH FKDUJH  7KH 1/5% RI UHSUHVHQWDWLRQ LPSRVVLEOHl DFFRUG0 06XSHUPDUNHWV,QFY1/5%  5HJLRQDO'LUHFWRULVVXHGD&RPSODLQW7KH&RPSDQ\ILOHGDQ  )G   WK &LU  VWDWLQJ WHVW DV ZKHWKHU WKH DQVZHU WR WKH &RPSODLQW LQ ZKLFK WKH &RPSDQ\ DGPLWWHG HPSOR\HHjV DFWV mGHVWUR\HG WKH DWPRVSKHUH QHFHVVDU\ WR WKH H[HUFLVH RI UHIXVLQJWKHUHTXHVWWREDUJDLQEXWFKDOOHQJHGWKHYDOLGLW\RI D IUHH FKRLFH LQ WKH UHSUHVHQWDWLRQ HOHFWLRQl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

PHPRUDQGXP LQ RSSRVLWLRQ WR WKH PRWLRQ IRU VXPPDU\ VKRXOG KDYH FRQGXFWHG D KHDULQJ RQ WKH HPSOR\HUjV MXGJPHQW LQ ZKLFK LW UHDVVHUWHG LWV FRQWHQWLRQV WKDW REMHFWLRQV,GDW PLVFRQGXFW GHVWUR\HG WKH FRQGLWLRQV QHFHVVDU\ IRU DQ HOHFWLRQ %HIRUHSURFHHGLQJIXUWKHUZHIHHOFRPSHOOHGWRIRUWKULJKWO\ DGGUHVV WKH RIIHQVLYH ODQJXDJH LQ TXHVWLRQ  7KH ZRUG 2Q sXO\   WKH %RDUG LVVXHG D GHFLVLRQ DQG RUGHU mQLJJHUlRUmQLJHUlDVVHWRXWLQWKHUHFRUGLVDUDFLDOVOXU JUDQWLQJVXPPDU\MXGJPHQWDQGIRXQGWKDWWKH&RPSDQ\KDG 7KLV LV VR LUUHVSHFWLYH RI LWV FRPPRQ XVDJH DQG ZLWKRXW YLRODWHG 6HFWLRQ D  DQG  RI WKH 1DWLRQDO /DERU UHJDUGIRUWKHUDFHRIWKRVHZKRXVHLW1RHPSOR\HUVKRXOG 5HODWLRQV$FW86&†D DQG 7KH%RDUG WROHUDWHXVHRIWKHODQJXDJHWKDWLVDSSDUHQWO\FRPPRQSODFH VDLGWKDWWKHmUHSUHVHQWDWLRQLVVXHVUDLVHGE\5HVSRQGHQWZHUH DW5HVSRQGHQWjVZRUNSODFHLHmQLJJHUlmELWFKlmZKRUHl RU FRXOG KDYH EHHQ OLWLJDWHG LQ WKH SULRU UHSUHVHQWDWLRQ HWF  ,W ZRXOG EHKRRYH D SUXGHQW HPSOR\HU DQG XQLRQ SURFHHGLQJlDQGWKDWWKH&RPSDQ\GLGQRWRIIHUWRSURGXFH FRQFHUQHGZLWKWKHFOLPDWHLQWKHZRUNSODFHDQGUHFRJQL]LQJ HYLGHQFH RU DOOHJH VSHFLDO FLUFXPVWDQFHV WR PHULW WKH GLYHUVLW\ RI WRGD\jV ZRUNIRUFH WR FRQGHPQ DOO VXFK UHFRQVLGHUDWLRQ  s$ DW  7KH %RDUG RUGHUHG WKH ODQJXDJHDQGFRXQVHOHPSOR\HHVDQGPHPEHUVDJDLQVWWKHXVH &RPSDQ\WREDUJDLQXSRQUHTXHVWIURPWKH8QLRQDQGWRSRVW RIDQ\WHUPVWKDWGHQLJUDWHDQGVOXU1RQHWKHOHVVWKHIDFWV FRSLHVRIDUHPHGLDOQRWLFH2Qs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mGHWHUPLQH ZKHWKHU D HPSOR\HH(UYLQ:LOVRQDOVR$IULFDQ$PHULFDQVDLGWRKLP VXEVWDQWLDO DQG PDWHULDO IDFWXDO LVVXH H[LVWHG ZLWK UHVSHFW WR WKH m1LJHU>VLF@6KRUW\,NQRZ\RXjUHJRQQD>VLF@YRWH\HVl >HPSOR\HUjV@ FRPSODLQWl  )G   WK &LU  ,Q WKH LQVWDQW s$DW.QLJKWDOVRWHVWLILHGWKDW:LOVRQPD\RUPD\ FDVH WKH %RDUG DOUHDG\ FRQGXFWHG D KHDULQJ 1RQHWKHOHVV WKH &RXUWjV

QRWKDYHXVHGWKHZRUGmQLJJHUl:KHQDVNHGDERXWWKHXVH GLVFXVVLRQ DQG DSSOLFDWLRQ RI 6HZHOO LV SHUWLQHQW DQG LQVWUXFWLYH

RIUDFLDOWHUPV.QLJKWVDLGWKDWLWZDVMXVWDMRNH)XUWKHU  ZKHQDVNHGLIRWKHUSHRSOHZHUHXVLQJUDFLDOWHUPV.QLJKW 7KDW WKH ZRUG mQLJJHUl LV D VOXU LV QRW GHEDWDEOH 7KH UHFHQW HGLWLRQ RI WKH $PHULFDQ +HULWDJH 'LFWLRQDU\ RI WKH (QJOLVK /DQJXDJH GHILQHV UHVSRQGHGm$W$OFRQWKDWjVDOOWKH\GRls$DW+H mQLJJHUl DV IROORZV VDLG WKDW LQ WKH YRWLQJ OLQH SHRSOH ZHUH VD\LQJ WKLQJV OLNH 2IIHQVLYH 6ODQJ , 8VHG DV D GLVSDUDJLQJ WHUP IRU D %ODFN m1LJHU>VLF@ELWFKZKRUHDOOWKDWls$DW+HVDLGKH SHUVRQ m

\RXNQRZ,KHDULWDQG,GRQjWKHDULW,jPXVHWRKHDULQJLW 8VHG DV D GLVSDUDJLQJ WHUP IRU D PHPEHU RI DQ\ GDUNVNLQQHG SHRSOH  8VHG DV D GLVSDUDJLQJ WHUP IRU D PHPEHU RI DQ\ HYHU\GD\IURPWKHPls$DW.QLJKWVDLGWKDW$IULFDQ VRFLDOO\ HFRQRPLFDOO\ RU SROLWLFDOO\ GHSULYHG JURXS RI SHRSOH m*XQ RZQHUV DUH WKH QHZ QLJJHUV    RI VRFLHW\l sRKQ $TXLOLQR

 7+( 0(5,&$1 (5,7$*( ,&7,21$5< 2) 7+( 1*/,6+ $1*8$*( $ + ' ( / WK .QLJKW H[SODLQHG WKDW KH LV FDOOHG m6KRUW\l s$ DW  HG   1/5%Y)RXQGU\'LY 1R 1R 1/5%Y)RXQGU\'LY  RI$OFRQ,QGXVWULHV RI$OFRQ,QGXVWULHV

VWDWHPHQWVLQWKHFRQWH[WRIWKHUDFLDOWHQVLRQDOUHDG\H[LVWLQJ $PHULFDQVDWWKH&RPSDQ\RIWHQXVHGWKHZRUGmQLJJHUlDQG DWWKHWLPHWKHDOOHJHGVWDWHPHQWVZHUHPDGHDQGXOWLPDWHO\ WKDWKHGLGQRWFRQVLGHULWDUDFLDOVOXUs$DW,Q UHIXVHGWRHQIRUFHWKH%RDUGjVEDUJDLQLQJRUGHU,GDW IDFW ODWHU LQ WKH KHDULQJ .QLJKW WHVWLILHG WKDW KH FRXOG QRW    7KH &RXUW KHOG WKDW WKH XQLRQ UHSUHVHQWDWLYH KDG UHPHPEHU ZKHWKHU :LOVRQ KDG XVHG WKH ZRUG mQLJJHUl HQJDJHGLQDmGHOLEHUDWHDWWHPSWWRH[DFHUEDWHUDFLDOIHHOLQJV .QLJKW VDLG mKH PLJKW KDYH ,jP QRW IRU VXUH LWjV EHHQ VR DPRQJWKHHPSOR\HHVSULRUWRWKHHOHFWLRQlDQGWKDWXQGHUWKH ORQJ:HXVHLWHYHU\GD\ls$DW IDFWXDO FLUFXPVWDQFHV VXUURXQGLQJ WKH FRQGXFW WKLV mZDV OLNHO\WRKDYHKDGDQDSSUHFLDEOHDIIHFWXSRQWKHHPSOR\HHVj ,QDGGLWLRQDQHPSOR\HHRIWKH&RPSDQ\jVKXPDQUHVRXUFH IUHHGRPRIFKRLFHl,GDW GHSDUWPHQWWHVWLILHGEHIRUHWKH+HDULQJ2IILFHUWKDWVHYHUDO \HDUVEHIRUHWKHYRWHVKHKDGUHFHLYHGDIHZFRPSODLQWVE\ ,Q&DUULQJWRQ6RXWK+HDOWK&DUH&HQWHU,QFY1/5%WKH HPSOR\HHVUHJDUGLQJWKHXVHRIUDFLVWWHUPVDWWKHZRUNSODFH &RXUWIRXQGWKDWWKHLPDJHU\XVHGLQFDUWRRQVGLVWULEXWHGE\ s$DW WKHXQLRQm>FRXOG@EHFRQVWUXHGDWDJODQFHDVLQYRNLQJWRNHQV RIVODYHU\DQGUDFLDORSSUHVVLRQDQGWKDWWKHFDUWRRQVFRXOG ,, WKHUHIRUHEHFRQVWUXHGDVDGHOLEHUDWHH[DFHUEDWLRQRIUDFLDO IHHOLQJVE\LUUHOHYDQWDQGLQIODPPDWRU\DSSHDOVl)G m7KHLVVXHEHIRUHXVLVZKHWKHUWKH%RDUGLQRYHUUXOLQJWKH WK&LU,QGLVFXVVLQJWKHDSSOLFDEOHFDVH &RPSDQ\jVREMHFWLRQVDQGFHUWLI\LQJWKH8QLRQDFWHGZLWKLQ ODZWKH&RXUWQRWHGWKDW WKHµZLGHGHJUHHRIGLVFUHWLRQjHQWUXVWHGWRLWE\&RQJUHVVLQ UHVROYLQJTXHVWLRQVDULVLQJGXULQJWKHFRXUVHRIUHSUHVHQWDWLRQ >W@KHUHKDYHEHHQWZRPDLQOLQHVRIFDVHVVWHPPLQJIURP SURFHHGLQJVl7RQ\6FRWW7UXFNLQJ,QFY1/5%)G 6HZHOO  7KH ILUVW LV UHSUHVHQWHG E\ FDVHV LQ ZKLFK D WK&LUTXRWLQJ1/5%Y$s7RZHU&R SUHMXGLFLDOUHPDUNLVGLUHFWHGWRZDUGDVSHFLILFSHUVRQRU 86 $VORQJDVWKH%RDUGjVILQGLQJV JURXS  ,Q WKHVH FDVHV WKH 1/5% JHQHUDOO\ UHTXLUHV D RIIDFWDUHVXSSRUWHGE\VXEVWDQWLDOHYLGHQFHRQWKHUHFRUG KHDULQJEHFDXVHWKHUHLVQRTXHVWLRQEXWWKDWDQDSSHDO FRQVLGHUHGDVDZKROHZHZLOOQRWGLVWXUEWKHP86& ZDVPDGHWRUDFLDOSUHMXGLFHLQDPDQQHUXQUHODWHGWRDQ\ †HVHHDOVR1/5%Y6HDZLQ,QF)G OHJLWLPDWHFDPSDLJQWKHPH  WK &LU   m6XEVWDQWLDO HYLGHQFH FRQVLVWV RI VXFKUHOHYDQWHYLGHQFHWKDWDUHDVRQDEOHPLQGPLJKWDFFHSWDV ,GDW(XURGULYHLVLQFOXGHGLQWKLVJURXS,Gm7KH DGHTXDWHWRVXSSRUWDFRQFOXVLRQ.HQWXFN\*HQHUDO,QFY VHFRQGOLQHRIWKH6HZHOOSURJHQ\FRPSULVHVFDVHVLQZKLFK 1/5%)GWK&LULQWHUQDOTXRWDWLRQ FRXUWVJHQHUDOO\KDYHQRWUHTXLUHGDKHDULQJDQGHPEUDFHV RPLWWHG  m7KH %RDUG V UHDVRQDEOH LQIHUHQFHV PD\ QRW EH FLUFXPVWDQFHV LQ ZKLFK DQ XQLRQ KDV DWWULEXWHG UDFLDO GLVSODFHGRQUHYLHZHYHQWKRXJKWKHFRXUWPLJKWMXVWLILDEO\ GLVFULPLQDWLRQWRWKHHPSOR\HURULQZKLFKWKHUHDSSHDUVDQ KDYH UHDFKHG D GLIIHUHQW FRQFOXVLRQ KDG WKH PDWWHU EHHQ LVRODWHGUDFLDOVOXUl,GDW7KH&RXUWSODFHGWKHIDFWV EHIRUH LWGH QRYRl  7RQ\ 6FRWW 7UXFNLQJ  )G DW  RI &DUULQJWRQ LQ WKH ILUVW JURXS DQG KHOG WKDW WKH %RDUG FLWLQJ8QLYHUVDO&DPHUD&RUSY1/5%86 0RUHRYHUm>W@KH%RDUG VFRQFOXVLRQVRIODZPXVWEH

 .QLJKW WHVWLILHG WKDW WKH IRXQGU\ ZRUNIRUFH ZDV SULPDULO\ $IULFDQ $PHULFDQ s$ DW   1/5%Y)RXQGU\'LY 1R 1R 1/5%Y)RXQGU\'LY  RI$OFRQ,QGXVWULHV RI$OFRQ,QGXVWULHV

DIILUPHG LI WKH\ DUH EDVHG XSRQ D UHDVRQDEOH GHIHQVLEOH :KDWZHKDYHVDLGLQGLFDWHVRXUEHOLHIWKDWDSSHDOVWR FRQVWUXFWLRQ RI WKH $FWl /RUDO 'HIHQVH 6\VWHPV$NURQ Y UDFLDO SUHMXGLFH RQ PDWWHUV XQUHODWHG WR WKH HOHFWLRQ 1/5%)GWK&LUVHHDOVR1/5%Y LVVXHVRUWRWKHXQLRQ VDFWLYLWLHVDUHQRWPHUHSUDWWOHRU 'LFNLQVRQ 3UHVV ,QF  )G   WK &LU  SXIILQJ 7KH\ KDYH QR SODFH LQ %RDUG HOHFWRUDO m7KHFRXUWVPXVWUHVSHFWWKH%RDUG VOHJDOLQWHUSUHWDWLRQVLI FDPSDLJQV7KH\LQMHFWDQHOHPHQWZKLFKLVGHVWUXFWLYH UHDVRQDEOHl RIWKHYHU\SXUSRVHRIDQHOHFWLRQ7KH\FUHDWHFRQGLWLRQV ZKLFKPDNHLPSRVVLEOHDVREHULQIRUPHGH[HUFLVHRIWKH ,,, IUDQFKLVH 7KH %RDUG GRHV QRW LQWHQG WR WROHUDWH DV HOHFWRUDOSURSDJDQGDDSSHDOVRUDUJXPHQWVZKLFKFDQ 7KHVHPLQDOFDVHLQWKHDUHDRIUDFHDQGXQLRQHOHFWLRQVLV KDYHQRSXUSRVHH[FHSWWRLQIODPHWKHUDFLDOIHHOLQJVRI 6HZHOO 0DQXIDFWXULQJ &R  1/5%    ,Q WKDW YRWHUVLQWKHHOHFWLRQ FDVHGXULQJDUHSUHVHQWDWLRQHOHFWLRQDWSODQWVLQ*HRUJLDWKH HPSOR\HUGLVWULEXWHGWRLWVHPSOR\HHVYDULRXVLWHPVUHODWLQJ ,GDW7KH%RDUGIXUWKHUVWDWHGKRZHYHUWKDWLImDSDUW\ WRUDFHLQFOXGLQJDSLFWXUHRIDZKLWHZRPDQGDQFLQJZLWKD OLPLWVLWVHOIWRWUXWKIXOO\VHWWLQJIRUWKDQRWKHUSDUW\jVSRVLWLRQ EODFNPDQDSLFWXUHRIDEODFNZRPDQGDQFLQJZLWKDZKLWH RQPDWWHUVRIUDFLDOLQWHUHVWDQGGRHVQRWGHOLEHUDWHO\VHHNWR PDQ LGHQWLILHG DV D XQLRQ OHDGHU DQG DUWLFOHV DQG OHWWHUV RYHUVWUHVV DQG H[DFHUEDWH UDFLDO IHHOLQJV E\ LUUHOHYDQW VWDWLQJ WKDW WKH XQLRQ GRQDWHG PRQH\ WR WKH 1DWLRQDO LQIODPPDWRU\DSSHDOVZHVKDOOQRWVHWDVLGHDQHOHFWLRQRQ $VVRFLDWLRQIRUWKH$GYDQFHPHQWRI&RORUHG3HRSOHDQGWKH WKLVJURXQGl,GDW$SSO\LQJWKHVHUXOHVWRWKHIDFWV &RQJUHVVRI5DFLDO(TXDOLW\LQFOXGLQJDOHWWHUH[SODLQLQJWKDW RI WKDW FDVH WKH %RDUG GHWHUPLQHG WKDW mWKH (PSOR\HU V WKHSUHVLGHQWRIWKHHPSOR\HUFRPSDQ\ZRXOGYRWHDJDLQVWWKH SURSDJDQGDGLUHFWHGWRUDFHH[FHHGHGSHUPLVVLRQOLPLWVDQG XQLRQEHFDXVHRILWVFRQWULEXWLRQVWRWKHVHRUJDQL]DWLRQV,G VRLQIODPHGDQGWDLQWHGWKHDWPRVSKHUHLQZKLFKWKHHOHFWLRQ DW7KH%RDUGUHFRJQL]HGWKDWLWVIXQFWLRQLVWR ZDV KHOG WKDW D UHDVRQHG EDVLV IRU FKRRVLQJ RU UHMHFWLQJ D EDUJDLQLQJUHSUHVHQWDWLYHZDVDQLPSRVVLELOLW\l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7KH UHDVRQHGFKRLFH UHSUHVHQWDWLYH FLWHG DV DQ H[DPSOH D VLWXDWLRQ LQYROYLQJ D ZKLWH HPSOR\HH ZKR KDG UHFHQWO\ EHHQ ILUHG IRU UDFLDO ,GDW,Q6HZHOOWKH%RDUGKHOGWKDWDQDSSHDOWRUDFLDO KDUDVVPHQWDQGLQVLVWHGWKDWWKHXQLRQZRXOGJHWKLPUHKLUHG SUHMXGLFH FRXOG SUHYHQW UHDVRQHG FKRLFH 7KH %RDUG ,G DW   7KH &RXUW FRQVLGHUHG LW QHFHVVDU\ WR YLHZ WKH H[SODLQHG :HWDNHLWDVGDWXPWKDWSUHMXGLFHEDVHGRQFRORULVD  SRZHUIXOHPRWLRQDOIRUFH:HWKLQNLWDOVRLQGLVSXWDEOH 7KH %RDUG IXUWKHU H[SODLQHG WKDW mWKH EXUGHQ ZLOO EH RQ WKH SDUW\ PDNLQJ XVH RI D UDFLDO PHVVDJH WR HVWDEOLVK WKDW LW ZDV WUXWKIXO DQG WKDWDGHOLEHUDWHDSSHDOWRVXFKSUHMXGLFHLVQRWLQWHQGHG JHUPDQH DQG ZKHUH WKHUH LV GRXEW DV WR ZKHWKHU WKH WRWDO FRQGXFW RI VXFK RUFDOFXODWHGWRHQFRXUDJHWKHUHDVRQLQJIDFXOW\ SDUW\ LV ZLWKLQ WKH GHVFULEHG ERXQGV WKH GRXEW ZLOO EH UHVROYHG DJDLQVW KLPl 6HZHOO 0IJ &R  1/5%