Hirsch v. Dorsey Trailers, Inc. , 147 F.3d 243 ( 1998 )

Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
6-5-1998
Hirsch v. Dorsey Trailers Inc
Precedential or Non-Precedential:
Docket 97-7542
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Recommended Citation
"Hirsch v. Dorsey Trailers Inc" (1998). 1998 Decisions. Paper 131.
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Filed June 5, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 97-7542
PETER W. HIRSCH, Regional Director of the Fourth
Region of the National Labor Relations Board, for and on
behalf of the National Labor Relations Board,
Appellant
v.
DORSEY TRAILERS, INC., Northumberland PA Plant
*Amended per the Clerk's Order of 12/5/97
On Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. No. 97-cv-00148)
Argued May 21, 1998
Before: SLOVITER, GREENBERG and GIBSON,*
Circuit Judges
(Filed June 5, 1998)
Ellen A. Farrell
Judith Katz
Jayme L. Sophir (Argued)
National Labor Relations Board
Washington, D.C. 20570
Attorneys for Appellant
_________________________________________________________________
* Hon. John R. Gibson, United States Senior Circuit Judge for the United
States Court of Appeals for the Eighth Circuit, sitting by designation.
Michael S. Mitchell (Argued)
Fisher & Phillips
New Orleans, LA 70170
Attorney for Appellee
Stephen A. Yokich (Argued)
United Auto Workers, International
Union
Washington, D.C. 20036
Attorney for Amicus-Appellant
International Union, United
Automobile, Aerospace and
Agricultural Implement Workers of
America
OPINION OF THE COURT
SLOVITER, Circuit Judge.
Appellant, Peter W. Hirsch, Director of Region Four, on
behalf of the National Labor Relations Board ("NLRB" or
"the Board"), appeals from the district court's order denying
a temporary injunction under S 10(j) of the National Labor
Relations Act ("NLRA"), codified at 29 U.S.C. S 160(j). The
injunction was sought pending the resolution by the NLRB
of unfair labor practice charges against appellee Dorsey
Trailers Inc. The district court concluded that a S 10(j)
injunction would not be "just and proper," the statutory
standard for an injunction under the NLRA. The Board
timely appealed. The International Union of United
Automobile, Aerospace and Agricultural Implement Workers
of America, Local 1868 ("UAW" or "the union"), which is the
bargaining representative of the workers affected by the
denial of injunctive relief, has filed a brief amicus curiae in
support of the Board's appeal.
We have jurisdiction under 28 U.S.C. S 1291, 1292(a)(1)
and 29 U.S.C. S 160(j). Our review of the denial of a S 10(j)
injunction is for abuse of discretion, see Eisenberg v.
Lenape Products, Inc., 781 F.2d 999, 1003 (3d Cir. 1986),
and we have held we may reverse the denial of a S 10(j)
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injunction if the factual findings do not "substantially relate
to the conclusion reached" by the district court. Kobell v.
Suburban Lines, Inc., 731 F.2d 1076, 1092 (3d Cir. 1984).
I.
This appeal centers on the circumstances surrounding
the December 1995 closure of a plant in Northumberland,
Pennsylvania, that once employed 200 UAW workers who
manufactured dump and flatbed trailers for Dorsey. The
facts set forth below are taken from the record and, unless
noted, are not in dispute, although the exact dates are not
always clear. In February 1995, Dorsey and the UAW began
negotiating a new Collective Bargaining Agreement (CBA)
because the prior CBA was due to expire in March 1995.
The primary issues concerned overtime and subcontracting.
Dorsey warned that if no agreement could be reached or if
the union were to strike, Dorsey would close the plant. App.
at 47-49. Negotiations were conducted between February
and May but the parties were unable to reach agreement on
a new contract.
The union began a strike on June 26, 1995, to protest
alleged unfair labor practices of Dorsey. App. at 50. On
June 30, 1995, the union filed the first of four unfair labor
practice charges against the employer. In September 1995,
Dorsey began to negotiate for the purchase of a new plant
in Cartersville, Georgia, and on October 5, 1995, reached a
basic agreement in principle to purchase the plant. App. at
145-46. It had concluded that it would be to its financial
benefit to operate the Georgia plant rather than the
Northumberland facility. App. at 138-41. On October 9,
1995, Dorsey notified the union of its impending purchase
and its intention to move the Northumberland work there.
However, it also offered to continue to bargain over the
"effects of that decision and the decision itself." App. at
189. Thereafter, the union unconditionally offered to come
back to work but by then Dorsey was seeking substantial
concessions. App. at 164. Further negotiations proved
fruitless. Dorsey described the union's concessions on
overtime as "too little too late." App. at 66; 177.
On November 9, 1995, Dorsey formally notified the union
of its decision to close the Northumberland plant and move
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its operations to Georgia. At that time, Dorsey began
moving the plant equipment. App. at 181. On November 16,
1995, the union filed the fourth of its unfair labor charges
against Dorsey alleging that Dorsey improperly transferred
work to the Georgia plant. The union asked the Board to
seek temporary injunctive relief under S 10(j), but the Board
did not act on the request at that time. Dorsey shut down
the plant on December 29, 1995, and has attempted to sell
it since then. App. at 252-53.
There was a lapse in Dorsey's operations resulting from
the move, and it began its Georgia operations in March
1996. When it determined that it could not manufacture at
the new plant all of the trucks that it had manufactured at
Northumberland, Dorsey decided it would limit its Georgia
plant to the manufacture of flatbed trailers. In July 1996 it
purchased a South Carolina facility to build dump trailers,
previously manufactured in Northumberland.
Dorsey estimates its total costs of moving the
Northumberland operations to Georgia and South Carolina
exceeded $900,000, app. at 197, and the costs of
maintaining the closed Northumberland plant for the first
six months of 1997 to be $130,000, app. at 198, and that
continued maintenance costs continue to be a terrible
drain.
The Board issued a consolidated complaint in August
1996 (later amended in October 1996) charging Dorsey with
numerous violations of the NLRA, including threatening
employees with closure of the plant if the workers called a
strike, refusing to provide company information necessary
for bargaining, unilaterally implementing a new attendance
policy, and refusing to fairly bargain regarding the transfer
of work to Georgia. Following a three-day trial in November
1996, the Administrative Law Judge issued a
comprehensive fifty-six page decision on December 1, 1997,
finding in large part that Dorsey committed the alleged
unfair labor practices. See ALJ Decision, at 52. The ALJ's
decision ordered a remedy that included the restoration of
the Northumberland plant. Id. at 54-56. Dorsey filed
exceptions to the decision on January 29, 1998, and the
matter is currently pending before the Board. We were
advised that briefing was completed recently.
4
Although the union had asked the Board to file a request
for a S 10(j) injunction as early as November 1995, the
Board did not file such a petition with the district court
until January 27, 1997. In its Petition for a S 10(j)
injunction, the Board sought to prevent Dorsey from selling
or alienating the plant before the Board ruled on the merits
of the underlying unfair labor charges. It sought to
maintain the status quo and thereby preserve the remedy
of restoration should the Board decide to so order.
Following a hearing on July 24, 1997, the district court
denied the petition request. Although the court found that
there was reasonable cause to believe that Dorsey had
committed the unfair labor charges, it also found that
S 10(j) relief would not be "just and proper" because: (1) the
request was untimely made, noting the fourteen-month
delay in seeking S 10(j) relief; (2) the maintenance of the
vacant plant was a cash drain on Dorsey, especially in light
of the prior expenses of relocation; (3) the workers in
Dorsey's Georgia and South Carolina plants could lose their
jobs should restoration be ordered; (4) the vast majority of
the former Northumberland workers had found new jobs;
(5) the sale of the plant would bring new jobs to the region;
and (6) the Board could order Dorsey to build a new plant
and employ the Northumberland workers, if the plant were
sold.
II.
A district court's determination whether to issue
temporary injunctive relief under S 10(j) involves a two-fold
inquiry: (1) whether there is reasonable cause to believe
that an unfair labor practice has occurred; and (2) whether
an injunction would be just and proper. See Pascarell v.
Vibra Screw Inc., 904 F.2d 874, 877 (3d Cir. 1990) (citation
omitted); Suburban Lines, 731 F.2d at 1078 (interim relief
under S 10(j) may be granted without showing irreparable
harm or a likelihood of success on the merits, the ordinary
requisites of an injunction). Because Dorsey does not
dispute the district court's finding that the Board has
satisfied the "reasonable cause" inquiry, the only question
is whether the Board demonstrated that the issuance of an
injunction would be "just and proper."
5
The standard to be applied by a district court in
determining whether granting temporary relief pursuant to
S 10(j) is just and proper should be informed by the policies
underlying S 10(j). See Lenape Products, 781 F.2d at 1003;
Suburban Lines, 731 F.2d at 1090-91. "Congress sought to
ensure that the Board would be able to exercise effectively
its ultimate remedial power." Lenape Products, 781 F.2d at
1003. Section 10(j) "was designed to enable the Labor
Board to vindicate its ultimate remedial power by affording
limited interim relief in instances where the passage of time
reasonably necessary to adjudicate the case on its merits
convinced both the Board and the federal courts that the
failure to grant such relief might dissipate the effective
exercise of such power." Suburban Lines, 731 F.2d at 1091.
Thus, the focus in a S 10(j) determination is on the public
interest, Vibra Screw, 904 F.2d at 876, and"the unusual
likelihood . . . of ultimate remedial failure" by the NLRB.
Suburban Lines, 731 F.2d at 1091 n.26 (emphasis in
original). "The public interest at stake is the promotion of
wholesome and mutually acceptable labor relations and the
settlement of labor disputes through collective bargaining
between employees and their employer." Vibra Screw, 904
F.2d at 876 (citation and quotation marks omitted).
In evaluating whether to issue an injunction under the
"just and proper" prong, a district court"should discuss
and determine whether the failure to grant interim
injunctive relief would be likely to prevent the Board, acting
with reasonable expedition, from effectively exercising its
ultimate remedial powers." Suburban Lines, 731 F.2d at
1091-92. "[T]he critical determination is whether, absent an
injunction, the Board's ability to facilitate peaceful
management-labor negotiation will be impaired." Vibra
Screw, 904 F.2d at 879. This requires an assessment of
"the likelihood of harm to the bargaining process" absent
an injunction. Eisenberg v. Wellington Hall Nursing Home,
Inc., 651 F.2d 902, 907 (3d Cir. 1981). "Unless there are
circumstances, like the size, intimacy and longevity of the
bargaining unit, which indicate that the bargaining process
will not be harmed, courts must be deferential to the
Board's determination that the integrity of the process
needs interim protection." Vibra Screw, 904 F.2d at 879
n.7. The S 10(j) analysis must be guided by the particular
6
facts in each case. See Eisenberg v. Hartz Mountain Corp.,
519 F.2d 138, 142 (3d Cir. 1975).
The Board argues that the failure to issue the injunction
in this case clearly impairs the "Board's ability to facilitate
peaceful management-labor negotiation," Vibra Screw, 904
F.2d at 879, because, absent an injunction, Dorsey could
sell the plant before the Board rules upon the unfair labor
charges. This would render the Board's ultimate remedial
powers toothless. The ALJ has already determined that
restoration of the plant is a proper remedy. Although
Dorsey argues that restoration is not a proper remedy
under these circumstances, but see Coronet Foods, Inc. v.
NLRB, 981 F.2d 1284 (D.C. Cir. 1993) (court, per then
Judge, now Justice, Ruth Bader Ginsburg, enforced Board
order requiring employer to restore trucking department),
we need not decide that issue now. Instead, this appeal
concerns the district court's exercise of its discretion. It is
evident to us that the district court's failure to grant
interim injunctive relief to ensure the availability of the
plant jeopardizes the Board's ability to effectively exercise
its ultimate remedial powers. The alienation of the plant by
Dorsey would eliminate that remedy entirely. Under the
standards articulated in Suburban Lines, 731 F.2d at 1091-
92, this risk is sufficient to satisfy the "just and proper"
prong for injunctive relief.
In addition, in denying injunctive relief, the district court
relied upon its belief that the Board has the power to order
Dorsey to build a new plant if the Board determined that
restoration of the Northumberland plant was the proper
remedy for the unfair labor charges. Dorsey cites no legal
support, and significantly the Board argues it does not have
such wide power. It is at least plausible that had the
district court recognized that it was likely that a restoration
remedy would be unavailable absent an injunction, the
district court may have been persuaded to issue the interim
relief.
Another basis for the district court's opinion, that a vast
majority of the workers from the Northumberland plant had
found new jobs, is unsupported on this record. This
conclusion was taken from a newspaper article that itself
speculates as to this figure. Dorsey's counsel conceded at
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oral argument that it neither presented nor has any
evidence of the number of its former employees who are no
longer available. Even if the district court's conclusion were
accurate, there is no information whether the new jobs and
pay are comparable. In any event, the possible employment
of the former employees does not mitigate the need for a
S 10(j) injunction.
Moreover, the district court's denial of relief emphasized
the cash drain and financial burden of maintenance of the
Northumberland plant, and notes the negative impact
caused by the relocation. This fails to take into account
that the impact was of Dorsey's making. The Board's
counsel points to evidence that shows that the burden is
minor for a company of Dorsey's income and assets. Also
significant in that respect is that in this circuit a S 10(j)
injunction is limited to six months when a matter is
pending before the Board. See Hartz Mountain, 519 F.2d at
144.
Finally, although we recognize that the Board did not
petition for a S 10(j) injunction as early as it might have, the
delay should not be dispositive in determining whether to
grant injunctive relief. The district court acknowledged that
"delay alone is not grounds for denying an injunction," op.
at 10, but it is unclear whether its concern over the delay
influenced the court's rejection of the injunction. Dorsey
moved quickly from its decision to move the operations in
the fall of 1995, to the closure of the plant on December 29,
1995. Even if the Board had not delayed until January
1997 to file the S10(j) petition, it is unlikely that it would
have been able to seek the injunction and obtain a hearing
before the equipment had been transferred and the plant
closed. As we noted in Vibra Screw, "The Board needs time
to do a thorough investigation before it even requests the
[S 10(j)] injunction." 904 F.2d at 881. See also Aguayo v.
Tomco Carburetor Co., 853 F.2d 744, 750 (9th Cir. 1988)
(delay is only significant if the harm has occurred and the
parties cannot be returned to the status quo; the Board
needs a reasonable period of time to investigate and
deliberate before it decides to bring a section 10(j) action)
overruled on other grounds, Miller v. California Pacific Med.
Ctr., 19 F.3d 449, 457 (9th Cir. 1994).
8
Although the protracted delay is not entirely justified, it
is insufficient under these facts to overcome the primary
consideration in evaluating the just and proper standard:
that of safeguarding the Board's remedial powers. Using the
Board's delay as the basis to deny the requested injunctive
relief punishes the wronged employees for the Board's
belated action, an unacceptable outcome. See Gottfried v.
Mayco Plastics, 472 F. Supp. 1161, 1168 (E.D. Mich. 1979),
aff 'd, 615 F.2d 1360 (6th Cir. 1980). Cf. NLRB v. J.H.
Rutter-Rex Mfg. Co., 396 U.S. 258, 264-65 (1969) ("the
Board is not required to place the consequences of its own
delay, even if inordinate, upon wronged employees to the
benefit of wrongdoing employers").
During the oral argument counsel for the Board advised
this court that the issuance of a S 10(j) injunction
invariably prompts the Board to review the ALJ decision on
appeal because the Board is aware of the limited six-month
duration of the injunction. See Hartz Mountain , 519 F.2d at
144. Indeed, the Board has adopted a regulation requiring
it to hear expeditiously and give priority to a complaint
which is the subject of a S 10(j) injunction. See 29 C.F.R.
S 102.94.
III.
For the reasons set forth, we will remand this case and
direct the district court to order interim relief under S10(j).1
_________________________________________________________________
1. Although we do not preclude Dorsey from raising on remand the
appropriate starting date of the S 10(j) injunction, it is important to
note
that it never raised that issue in its brief. Our concurring colleague
suggests that the Board has already obtained the relief it is seeking
through the S 10(j) injunction. In fact, that has not occurred as the
union and the former employees have not received the benefit of the
Board's expedited consideration that occurs upon issuance of a S 10(j)
injunction.
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GREENBERG, Circuit Judge, concurring:
I join in the majority opinion but point out the following.
The Board seeks an injunction to prevent Dorsey from
selling or alienating the plant before the Board rules on the
merits of the unfair labor charges. If the district court had
entered the injunction on August 26, 1997, when it instead
denied it, the injunction already would have expired under
the six-month limitation rule we adopted in Eisenberg v.
Hartz Mountain Corp., 519 F.2d 138, 144 (3d Cir. 1975). Of
course, in that circumstance the Board would have been
required to hear the unfair labor practices complaint before
it expeditiously on a priority basis.
In fact, it is undisputed that Dorsey shut down the plant
on December 29, 1995; and while it has attempted to sell
the facility, it has been unable to do so. Moreover, its
inability to sell the plant has been attributable at least in
part to the Board's intervention, as the Board notified a
potential purchaser that if it acquired the plant it might
incur successor liability for Dorsey's alleged unfair labor
practices. The notification understandably led to the
potential sale collapsing. In reality, therefore, the mere fact
that the Board brought the unfair labor practices charge
has acted as a lis pendens on the property. Thus, even
without an injunction having been entered, the status quo
with respect to the alienation of the plant has been
maintained for a period almost five-fold that which in Hartz
Mountain we held could be required.
The majority indicates that its opinion does "not preclude
Dorsey from raising on remand the appropriate starting
date of the S 10(j) injunction." Slip op. at 9 n.1. I, of course,
agree. I write separately merely to emphasize that as I
understand the majority's opinion it does not preclude
Dorsey from arguing that the starting date should be
August 26, 1997, so that the injunction already has
expired. After all, the Board in a sense already has obtained
the relief it is seeking in these proceedings. I, however, do
not explore the point further as the parties have not briefed
the starting date issue on this appeal.
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A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
11