CATHERINE D. PERRY, District Judge.
This matter is before me on petitioner's motion for a temporary injunction under § 10(j) of the National Labor Relations Act, 29 U.S.C. § 160(j). Petitioner seeks an injunction barring respondent from violating several provisions of the Act pending final disposition of unfair labor practices charges currently before the National Labor Relations Board. After the issues were fully briefed, I held a hearing on October 12, 2012 to permit the parties to present oral argument and evidence on the propriety of issuing the injunction. After carefully considering the parties' briefs, the arguments of counsel, and the testimony and evidence presented at the hearing, I will grant petitioner's motion for the following reasons.
Petitioner is the Acting Regional Director of Region 14 of the Board and filed this petition on its behalf. Respondent is
On July 21, 2011, Southside Temporaries provided respondent a rate quote for the inspectress and housemen work. At the time, Southside was already providing respondent with other workers to help restore the hotel after a fire. On October 15, 2011, the union representative Harry Moore told respondent that the union contract was about to expire and that the union would like to meet. On November 21, 2011, Moore met with respondent's managing member Naresh Patel and its general manager Bill Thompson to discuss negotiating a successive collective-bargaining agreement. At the meeting, Moore presented Patel and Thompson with the union's contract proposal. Patel responded to that proposal by stating, "Harry, we don't have any need for union employees because it is all subcontracted out." According to Patel, "The Union rep wanted us to sign a new agreement, and we refused because there was nothing for union employees to do there. There was no positions left; they had been subcontracted out to Southside." Respondent admitted that when he met with Moore that "it did not make a difference whether Moore wanted an increase or a decrease in pay because the decision had been made to subcontract out the work." The day the union contract expired, respondent fired Poetting and Wholdmann and replaced them with Southside employees who are doing Poetting and Wholdmann's jobs for a highly hourly wage. Respondent did not sign a new union contract.
The union filed an unfair labor practices charge on May 11, 2012. Following an investigation, petitioner found reasonable cause to support the charge and filed a complaint and notice of hearing. In the complaint before the Board, petitioner alleges that respondent refused to bargain with the union for a successor contract, unilaterally subcontracted all unit work, unilaterally terminated all unit employees, and unlawfully withdrew recognition from the Union in violation of 8(a)(1) and (5) of the Act, 29 U.S.C. § 158(a)(1) and (5).
Section 10(j) allows the Board to petition a district court for temporary injunctive relief pending resolution of an underlying case. The Act provides, in pertinent part:
29 U.S.C. § 160(j). In deciding whether a § 10j injunction would be "just and proper" under the Act, I must apply the preliminary injunction factors set out in Dataphase Systems, Inc. v. C L Systems, Inc., 640 F.2d 109 (8th Cir.1981). Osthus v. Whitesell Corp., 639 F.3d 841, 844-45 (8th Cir.2011) (citing Sharp v. Parents in Community Action, Inc., 172 F.3d 1034, 1038-39 (8th Cir.1999)). These are:
Dataphase, 640 F.2d at 114; see also Chester ex rel. N.L.R.B. v. Eichorn Motors, Inc., 504 F.Supp.2d 621, 626-627 (D.Minn. 2007). "In granting or refusing an injunction, the judge need only make brief, definite, pertinent findings and conclusions upon the contested matters; there is no necessity for over-elaboration of detail or particularization of facts." Osthus, 639 F.3d at 845 (internal quotation marks and citations omitted). "Merely indicating the factual basis for the ultimate conclusion will suffice in most cases." Id. (internal quotation marks and citations omitted). However, the Court is required to "specially make factual findings, detailing specific actions in the bargaining process and the facts underlying each element of the four-factor injunction test." Id.
To obtain Section 10(j) injunctive relief, the Board must first show "the case presents one of those rare situations in which the delay inherent in completing the adjudicatory process will frustrate the Board's ability to remedy the alleged unfair labor practices." Sharp, 172 F.3d at 1039. The irreparable harm to be demonstrated is not harm to individual employees; the Board must show a "harm to the collective bargaining process or to other protected employee activities if a remedy must await the Board's full adjudicatory process." Id. at 1038. Should the Board fail to make this showing, I need not consider the remaining three Dataphase factors. Id. at 1039. Irreparable injury under Section 10(j) is established when the alleged unfair labor practice "so chilled on-going protected employee activity, such as collective bargaining or union organizing, that delay will frustrate the effectiveness of the Board remedies." Id. at 1040. Petitioner asserts that respondent committed unfair labor practices by refusing to bargain with the union for a successor contract, unilaterally subcontracting all unit work, unilaterally terminating all unit employees, and unlawfully withdrawing recognition from the union. Petitioner requests that I reinstate Poetting and Wholdmann and order respondent back to the negotiating table with the union. Petitioner contends that interim relief is necessary to preserve the status quo and to prevent frustration of the remedial purposes of the Act. The Court agrees. See Chester v. CMPJ Enterprises, 2007 WL 1994045, *2 (D.Minn. July 2, 2007) ("Injunctive relief has been found appropriate to either preserve the status quo or to prevent frustration of the basic remedial purposes of the Act....").
Here, respondent completely eliminated the bargaining unit and replaced the union workers with non-union members after flat-out refusing to negotiate with the union. This activity goes to the very heart of what the NLRA was enacted to protect. See id. at *3. Interim injunctive relief is necessary because it will likely be next May before the NLRB issues its final decision, and the longer respondent keeps the union at bay, the harder it will be for the
Respondent complains that it would be financially devastated if reinstatement and back pay were awarded. It is important to note, however, that petitioner is not asking me to award back pay in this proceeding. The issue of back pay is before the ALJ, not me. However, respondent's claimed inability to afford back pay actually weighs in favor of interim relief because reinstatement cuts off any continued accrual of backpay. As for respondent's claims that it cannot afford reinstatement, I find Patel's testimony at the October 12, 2012 hearing not credible on this issue. The evidence submitted by petitioner in support of the motion demonstrates that the unit members were replaced with subcontractors who are paid a higher hourly rate of pay than Poetting and Wholdmann.
Respondent argues against interim relief by claiming the request is untimely. In support of this argument, respondent points out that the union waited five months after the collective bargaining agreement expired before it filed an unfair labor practices charge, and that petitioner waited ten months to seek temporary injunctive relief. After considering the briefs and the arguments of counsel at the hearing, I do not find the request for interim relief to be untimely. Petitioner acted diligently in pursuing this case once it was filed, and the Board did not unduly delay seeking interim relief. As the district court held in CMPJ Enterprises, 2007 WL 1994045 at *3, "While the Court may take into consideration the timeliness of the petition, [it] is not required to do so. Rather ... the appropriate focus is on whether it is necessary to return the parties to status quo pending the Board's proceedings in order to protect the Board's remedial powers under the NLRA, and whether achieving status quo is possible." (internal quotation marks and citation omitted). Petitioner has met its burden of demonstrating irreparable harm in the absence of interim relief.
In addressing this factor, I must not second guess the Board's decision to commence enforcement proceedings. Sharp, 172 F.3d at 1039. This factor must not be examined in isolation, but "in the context of the relative injuries to the parties and the public." Id. (internal quotation marks and citation omitted). "The district court in a § 10j proceeding
Petitioner asserts that respondent transferred work outside the bargaining unit, which is a mandatory subject of bargaining requiring notice and an opportunity to bargain. See In re Suffield Academy, 336 NLRB 659, 671 (2001) ("[S]ubcontracting is a mandatory subject of bargaining."). When Moore met with Patel and presented him with a contract proposal, Patel responded that "we don't have any need for union employees because it is all subcontracted out." At the hearing before the ALJ, Patel testified that the union jobs had already been subcontracted out, so there were no union positions left. The day the union contract expired, respondent terminated the two union employees and replaced them with non-union subcontractors. Petitioner contends that respondent's actions violated 8(a)(1) and (5) of the Act. "An employer violates § 8(a)(5) of the NLRA when it institutes a material change in the terms and conditions of employment in an area that is a compulsory subject of collective bargaining without giving the bargaining representative both reasonable notice and an opportunity to negotiate about the proposed change." Porta-King Bldg. Systems, Division of Jay Henges Enterprises v. NLRB, 14 F.3d 1258, 1262 (8th Cir. 1994).
Here, respondent argues that petitioner is unlikely to succeed on the merits because subcontracting is not a mandatory subject of bargaining if it involves a substantial capital commitment or change in the nature, scope, or direction of the business. It also contends that it was not required to bargain with the unit because it has changed the scope of its business, with the hotel becoming more apartment-like. Finally, respondent maintains that it was permitted to subcontract out the unit work under the terms of the expired collective bargaining agreement, which provides that "[f]rom time to time the Company shall hire outside contractors and employees of such contractors shall not be under the jurisdiction of the Union." The agreement also contains a management rights clause which gives respondent the right to "relieve employees from duty because of lack of work or for other legitimate reasons...." Respondent argues that this language amounts to a waiver by the union to bargain this issue and points to the ALJ'S request at the hearing that the parties focus their briefs on this issue.
Waiver of bargaining rights can occur by express provision in the collective bargaining agreement, by the conduct of the parties, or by a combination of the two. American Diamond Tool, Inc., 306 NLRB 570 (1992). In support of its position, respondent points to the fact that the union never filed a grievance when it reduced the bargaining unit from eight employees to two back in 2010 and when it hired a subcontractor to perform laundry services.
As for the allegation that it refused to bargain, respondent argues that the union waived its right to do so by failing to promptly request bargaining after
It is not for me to decide whether respondent violated labor laws. Here, the contractual language and the union's conduct do not amount to a "clear and unmistakable showing that the Union waived it right to bargain over" the termination of the union employees in favor of subcontractors. Id. at 1263 (waiver of rights requires "clear and unmistakable showing"). When this factor is considered in the appropriate context of whether to grant a 10(j) injunction, petitioner has presented sufficient evidence to support its allegations that respondent transferred work outside the bargaining unit without giving the union notice and the opportunity to bargain. Before the expiration of the collective bargaining agreement, respondent told the union that they were not renewing the contract because the union positions had already been taken by subcontractors. The day the union contract expired, the union employees were fired and replaced by subcontractors. No bargaining unit members remain at the hotel. Although Patel now equivocates about his prior statements to Moore and tries to soften their impact with after-the-fact assurances that he remains willing to negotiate with the union, it is clear that he flatly refused to do so. As for the union's prior conduct, petitioner has presented evidence that the union had no knowledge of respondent's prior use of subcontracting services or the reduction in bargaining unit members until it was too late to grieve these actions. Finally, the language of the collective bargaining agreement does not, as respondent claims, give it the right to unilaterally eliminate the bargaining unit in favor of subcontractors. For these reasons, the Court finds that petitioner has presented sufficient evidence to establish a likelihood of success on the merits, so this factor weighs in favor of the requested injunctive relief.
Petitioner argues this factor weighs in favor of injunctive relief because, if relief is granted, respondent will have competent, experienced employees who can perform the job successfully and respondent admits that it can terminate its subcontract at any time without notice or cost. Moreover, petitioner argues that any alleged increased cost to rehiring displaced workers is minimal and only temporary. I have already addressed respondent's arguments that an award of interim relief would cause grave financial harm to respondent, so I do not repeat those findings and conclusions here. I find that the balance of harms weighs in favor of issuing interim injunctive relief, where respondent incurs no costs to terminate the subcontractors and reinstate the unit members. Respondent maintains its managerial rights to discipline and supervise these employees, and reinstatement effectuates the purposes of the Act because respondent will not continue to accrue back pay. Moreover, any interim bargaining order would not require respondent to agree to
Finally, petitioner argues the public interest is served by protecting the underlying remedial purposes of the Act. Although it would certainly not be in the public interest if respondent was forced to close its hotel, I do not find that to be a potential harm if interim injunctive relief is awarded in this case. The Court finds that the public interest in protecting employees' rights, preserving the remedial power of the Board, and safeguarding the collective bargaining process weighs in favor of issuing interim injunctive relief.
For all these reasons, after careful consideration of all the evidence and briefs, I find that petition is entitled to injunctive relief.
Accordingly,
1. Respondent, its officers, agents, servants, employees, attorneys, and all persons acting in concert or participation with it or them, pending the final disposition of the matters involved herein pending before the Board, are enjoined and restrained from engaging in the following acts and conduct:
2. Respondent is hereby ordered to:
