Bloedorn v. Francisco Foods, Inc. , 276 F.3d 270 ( 2001 )

In the
United States Court of Appeals
for the Seventh Circuit
No. 00-1860
PHILIP E. BLOEDORN, Regional Director
of Region 30 of the National Labor Relations
Board, for and on behalf of the
NATIONAL LABOR RELATIONS BOARD,
Plaintiff-Appellant,
v.
FRANCISCO FOODS, INC.,
d/b/a PIGGLY WIGGLY,
Defendant-Appellee.
Appeal from the United States District Court
for the Eastern District of Wisconsin.
No. 99 C 1402--Rudolph T. Randa, Judge.
ARGUED SEPTEMBER 21, 2000--DECIDED DECEMBER 28, 2001
Before ROVNER, DIANE P. WOOD, and WILLIAMS, Circuit Judges.
ROVNER, Circuit Judge. Until 1999, the employees of the
Piggly Wiggly grocery store in Ripon, Wisconsin, were represented
by the United Food and Commercial Workers Union, Local No. 73A,
AFL-CIO-CLC (the "Union"). When the owner of the store announced
his intent to sell the franchise to Francisco Foods, Inc.
("FFI"), FFI invited store employees to submit applications to
work for the new owner. Fewer than half of the employees that
joined the FFI workforce had previously worked for the prior
owner, however, so that when the store reopened under FFI’s
ownership, a majority of the store’s employees were not Union
members and consequently FFI was not obliged to recognize and
bargain with the Union.
The Regional Director (the "Director") of the National Labor
Relations Board (the "NLRB" or the "Board") filed an
administrative complaint charging that FFI had deliberately
refused to hire a number of people who had worked for the store’s
previous owner in order to avoid having to bargain with the
Union, in violation of section 8(a)(1) and (3) of the National
Labor Relations Act (the "Act"), 29 U.S.C. sec. 158(a)(1), (3).
The Director also asserted that FFI’s refusal to recognize and
bargain with the Union, and its failure to adopt and enforce the
terms of the collective bargaining agreement that the Union had
entered into with FFI’s predecessor, constituted unfair labor
practices that were contrary to section 8(a)(1) and (5) of the
Act, 29 U.S.C. sec. 158(a) (1), (5). While the complaint was
pending before an administrative law judge, the Director filed
this action seeking interim injunctive relief pursuant to section
10(j) of the Act, 29 U.S.C. sec. 160(j). Specifically, the
Director asked the district court to enter an order requiring FFI
to offer employment to the employees of the prior owner that FFI
had refused to hire, to recognize and bargain with the Union, and
to restore employee working conditions (including wages and
hours) to their state prior to FFI’s takeover of the store, until
such time as the Director’s complaint was finally resolved by the
Board. The district court denied the Director’s request,
concluding that he was unlikely to prevail on the merits of the
complaint and that he had not established the prospect of
irreparable harm to the Union. R. 23.
The Director appeals the denial of his request for interim
relief. Because we conclude that the Director has a "better than
negligible" chance of prevailing on the merits of his complaint,
that the unfair labor practices charged in the complaint do pose
a threat of irreparable harm to the Union which outweighs the
harm that interim relief poses to FFI, and that interim
injunctive relief is in the public interest, we reverse the
district court’s judgment.
I.
We have derived the factual summary that follows from the
record of the evidentiary hearing conducted before the Board’s
administrative law judge ("ALJ") on the Director’s complaint. The
Director submitted the record of that hearing to the district
court in support of his petition for interim relief.
For more than twenty-five years prior to 1999, the Union
represented all non-supervisory employees of the Piggly Wiggly
store in Ripon. Ripon Supermarkets, Inc. ("RSI") owned the Piggly
Wiggly franchise in the years immediately preceding the events
underlying this action; Ron and Carol Bayer were the principals
of RSI. The final collective bargaining agreement entered into by
RSI and the Union covered the period beginning on February 1,
1996 and ending on January 31, 1999. General Counsel Exhibit ("GC
Ex.") 2. However, in the final days of January 1999, RSI and the
Union agreed to extend the term of this agreement until such time
as they entered into a new contract. GC Ex. 3. The 1996 agreement
contained no successor clause requiring anyone who purchased the
store from RSI to recognize the Union.
Pam Francisco had worked at the Ripon Piggly Wiggly for
twenty-five years and had served as the store manager for the
last six and one-half years prior to 1999. When the Bayers
decided to sell the store, Francisco and her husband Tom formed
FFI for the purpose of buying the store. (Francisco is the
president and secretary of FFI.) FFI and RSI entered into a
purchase and sale agreement on March 10, 1999. GC Ex. 11. Because
the final collective bargaining agreement between RSI and the
Union contained no successor clause, FFI would not be required to
recognize the Union if a majority of its employees were not
already members of the bargaining unit--i.e., if they had not
worked for RSI./1
On March 12, 1999, Ron Bayer informed Grant Withers, the
Union’s business representative, that he was selling the Piggly
Wiggly to Francisco. Bayer asked Withers to keep this information
under his hat for a few days until Bayer had a chance to announce
the sale to store employees. Three days later, on March 15,
Withers telephoned Francisco to follow up on Bayer’s disclosure.
According to Withers’ notes of the conversation, the following
exchange took place:
Withers: Have you and Ron informed the employees yet?
Francisco: Yes, we did.
Withers: Well Pam, the reason I’m calling is I’d like to know if
you would be available for a meeting tomorrow[.]
Francisco: No, I have two appointments already.
Withers: Well Pam, we need to know what your intentions are as far
as recognizing the Union[.]
Francisco: At this time, I don’t think we[’]re going to.
Withers: Really? Are you sure?
Francisco: I may let my new employees decide what to do.
Withers: By your statement, "my new employees," am I to assume you
won’t be keeping the current employees?
Francisco: No, I’m not going to keep the bargaining unit.
Withers: Is this for sure or would you like a few days to think
about it?
Francisco: No, at this point, I’m sure.
Withers: Well that’s unfortunate. I’m sure Ron could tell you, and
you probably recall, how much the turmoil cost Ron in business
when he bought the store [--] sales that he never recovered. That
is unfortunate[.] I’m sure you understand that we’ll have to take
whatever action we need to, to protect these jobs.
Francisco: Sigh.
Withers: Okay, Bye.
GC Ex. 4. In her own testimony, Francisco acknowledged telling
Withers that "I was taking a new direction and there would be a
lot of new faces," but she denied saying anything about whether
she would retain RSI’s employees, recognize the Union, or assume
the collective bargaining agreement. Tr. 72; see also Tr. 633-35.
According to assistant store manager Michael Ritchay,
Francisco likewise told him on March 15 that "she was going
around to the people that she wanted to hire and . . . it
wouldn’t be a union . . . ." Tr. 432-33. Joann Schrader, manager
of the bakery/deli section of the store, recalled Francisco
remarking that same day, at a meeting of store managers and other
employees, "that not everyone would be hired back." Tr. 340.
In a letter dated March 16, 1999, one day after and
apparently in reference to Withers’ conversation with Francisco,
FFI’s attorney, James Macy, wrote the following letter to
Withers:
This letter is to notify you that we represent Francisco Foods,
Inc., and are assisting them in regards to the transition and
purchase of the Piggly Wiggly store in Ripon, Wisconsin. As noted
by Ms. Francisco, they anticipate considerable changes in regards
to the operation of this store upon the completion of this asset
purchase. In that regard, the Company does not anticipate
assuming the collective bargaining agreement.
While disappointed in your initial comments to the Company, we do
anticipate a positive and professional transition. We
respectfully request that if you have any further questions in
regards to this transition, you direct them to our attention.
GC Ex. 5.
Also on March 16, Bayer and Francisco each posted notices at
the store formally advising employees of the forthcoming sale.
Bayer’s notice read as follows:
This posting is to advise you that effective May 15, 1999, the
entire assets of [the] Piggly Wiggly store operated by Ripon
Supermarket Inc. at 111 E. Fond du Lac St., Ripon, Wisconsin
54971 will be sold to another company.
Soon you will receive a letter from the Company describing any
severance benefits you may have available under the collectively
bargained labor agreement.
I would like to take this opportunity to thank you all for your
past efforts on behalf of the Company and, also wish each and
every one the best for you in the future.
If you have any questions please be sure to ask. We would like
this transition to be as smooth as possible.
GC Ex. 13. As Bayer’s reference to severance benefits suggests,
all RSI employees were to be terminated as of May 15. However,
Francisco’s notice invited the employees of RSI to apply for
employment with FFI:
Tom and I are in the process of negotiating the purchase of
Piggly Wiggly. We are both very excited about the prospect of
owning the store.
We anticipate that there will be a number of restructuring and
reorganization changes made here at the store.
Everyone who is presently employed now should please consider
reapplying for employment at our store. By law, anyone
interesting in working for Francisco Foods Inc. must fill out a
new application.
GC Ex. 12.
In the weeks following the announcement of the forthcoming
sale, Francisco had a number of conversations with store
personnel regarding her intent vis a vis the Union. According to
these individuals, although Francisco allowed for the possibility
that the new employees might opt for Union representation, she
did not plan to recognize the bargaining unit at the outset of
her tenure as store owner:
1. As we noted above, Francisco on March 15 had
purportedly told Ritchay--who was offered but did not accept a
job with FFI--that "it wouldn’t be a union . . . ." Tr. 432-33.
According to Ritchay, a couple of days later, Francisco qualified
that remark by saying that "there wouldn’t be a union, but if the
employees wanted a union--the new employees wanted a union they
could vote on it," Tr. 433. Ritchay testified that he
subsequently told Francisco "if [fellow RSI employee] Bob
Schumacher is going to be out there picketing that I wouldn’t be
able to cross the line." Tr. 434. His conversation with Francisco
"kind of went back and forth," Ritchay testified, and then "I
kind of mentioned that you know Bob really wants the Union in
here. She says that’s not going to happen." Tr. 435.
2. According to RSI utility employee Adam Simonis-- whom
FFI hired--Francisco said to him between one and two weeks after
the sale was announced that "she was going to let the employees
decide whether or not they wanted" a union rather than
recognizing the Union "right away." Tr. 497.
3. Bakery/deli manager Schrader--whom FFI also hired--
testified that Francisco likewise told her that she did not then
intend to recognize the Union, but "[f]urther down the road if
the employees wanted the union, you know, then she would go from
there." Tr. 341.
4. RSI employee Cari Wittchow likewise testified that when
Francisco approached her a week or two after the sale was
announced and offered her a job with FFI, Francisco mentioned
that "she didn’t want to acknowledge [the Union] at that time,"
Tr. 490, and that it would be up to FFI employees to decide
whether they wished to be represented by the Union, Tr. 492.
5. Evonne Everson gave a written statement to the Union
(dated April 6) stating that on or about March 24, she had asked
Francisco whether FFI would hire all of RSI’s employees.
According to Everson’s statement, Francisco "stated only 50% of
the employees [would be hired,] because she wouldn’t have the
Union. Pam Francisco stated that she couldn’t have the Union
because she couldn’t afford it." GC Ex. 29. Francisco
subsequently hired Everson just days before FFI assumed ownership
of the store. At the hearing before the ALJ, Everson identified
her written statement but claimed it was inaccurate. Tr. 279-81.
"I didn’t write this right," she said. Tr. 303./2
Although Francisco denied making most of the remarks
attributed to her by store employees, e.g., Tr. 638, 640, 645,
646, 647-48, 649-50, 655-66, she concedes that she told staff
that she "would not recognize the union automatically and [she]
felt that it should be an employee decision." Tr. 646; see also
GC Ex. 33 at 1.
In mid-April 1999, FFI began to run advertisements in four
local newspapers for numerous positions at the Piggly Wiggly; and
on April 21, 1999, Francisco began to interview candidates for
hire by FFI.
Francisco made offers to many, but not all, of the RSI
employees who wished to stay on at the store. Thirty-four of
RSI’s employees sought either supervisory or non-supervisory
positions with FFI. Francisco ultimately hired three RSI
employees for supervisory roles and extended offers of employment
to another twenty RSI employees for non-supervisory positions.
As April gave way to May, however, a number of positions
with FFI remained unfilled, and a number of RSI employees who had
applied for jobs with FFI had not yet been told whether or not
FFI planned to hire them. On May 11, 1999, just five days before
FFI took over the store, the following language began to appear
in FFI’s hiring advertisements in the local papers:
No Experience Necessary
We Will Train You!!
GC Ex. 17. On the same date, Francisco telephoned the local
police and informed them that she expected there to be as many as
200 people picketing in front of the store on May 16--the first
day of store operations under FFI ownership. GC Ex. 26. Francisco
could not recall having telephoned the police, Tr. 189-91, but
when confronted with a police log documenting the fact and
substance of the conversation, she allowed that "[i]f they say I
did," she might have placed the call. Tr. 190.
Meanwhile, in the weeks immediately preceding FFI’s takeover
of the store, Francisco allegedly had a number of additional
conversations with RSI employees that again touched upon the
prospective status of the Union with FFI. The testimony of these
employees suggests that Francisco was making hiring decisions
with an eye to avoiding an obligation to recognize the Union.
(Again, Francisco denies the substance of these conversations.)
1. Valerie Clark was an RSI employee who did not apply for
work with FFI. However, her daughter Carrie--also an RSI
employee--did seek employment with FFI. On May 1, 1999, Valerie
Clark asked Francisco about her daughter’s status. She testified
as follows regarding her conversation with Francisco:
Q. Okay. And how did the conversation come about or where did it
take place?
A. I approached her because I was in the store for other reasons
and I saw her in aisle five working and I approached her and I
asked her if she knew yet if Carrie would have a job when she
took over.
Q. Did Ms. Francisco give you an answer?
A. Yeah. She said she did not know yet.
Q. Did she say anything else?
A. She said she had to be very careful and get rid of fifty
percent of the workers and she would make a decision as to Carrie
probably in the next week.
Q. When she talked about fifty percent of the workers did she say
anything else that you recall?
A. She--when she said she had to get rid of fifty percent of the
workers I made some goofy comment. I think I said, "Oh God,
that’s like about everybody." And she said this was not going to
be a unioned [sic] store."
Tr. 393-94.
2. Four days later, on May 5, Carrie Clark herself asked
Francisco about her prospects.
Well, I asked her if she knew whether or not I was going to be
rehired and she said she didn’t know. She said I wasn’t at the
top of her firing list and if I were to reapply later on down the
line that she would rehire me and she’d write me a good
recommendation. She also said that she wasn’t going to keep a lot
of the students and there was going to be a lot of new faces
because she wanted to keep the union out, but she told me that
information was not supposed to leave the office.
Tr. 362.
3. Head cashier Tina Warriner had worked at the Piggly
Wiggly for twelve and one-half years. She testified that on or
about May 8, she asked Francisco whether FFI would hire her. As
Warriner recounted the conversation, Francisco commented that
Warriner was "good in the front end" (i.e., good with customers)
and had a strong attendance record, but "[her] downfall was the
schedule." Tr. 252. (In addition to her other duties, Warriner
prepared the initial draft of the weekly employee work schedule
for Francisco’s review and revision.) Francisco then proceeded to
inquire whether Warriner, who was a Union steward, would be
willing to work in a nonunion shop:
Well, when we were talking about if I had a job or not and she
was telling me if--you know, that I did have a lot of good
qualities out there and she would ask me how I could work for--if
I could work for a nonunion store and I told her I had to get all
my priorities in order but I probably could.
Tr. 253. Francisco did not tell Warriner whether she would be
hired.
4. Shortly after the sale of the store was announced,
Francisco indicated to RSI meat wrapper Joe Curtis that if he
wanted his job "back," he would have to complete an application.
Tr. 542. Curtis testified twice on consecutive days before the
ALJ. According to Curtis’s initial testimony, Francisco went on
to remark "that she could hire back 50 percent of each--in each
department [but] if she took the union back, and which would have
been--I would have been fired." Tr. 543. FFI’s lawyer asked
Curtis on cross-examination whether it might have been Paul
Maxwell, the meat manager, who made the latter remark to him
rather than Francisco. Curtis, however, was firm: "No, it was
Pam." Tr. 545. Curtis testified that at a later date, Francisco
informed him that she was able to hire him: "She said we can--now
I’m able to work . . . ." Tr. 544. Curtis, incidentally, agreed
that he was not a fan of unions. Id.
Notwithstanding his initial confidence that it was
Francisco, and not Maxwell, who had spoken of a fifty-percent
hiring cap, Curtis was recalled to the stand by FFI on the
following day to say that he had been mistaken. Tr. 581-82.
Curtis testified that FFI’s cross-examination on this point had
started him wondering, and that after extensive reflection, he
had decided that it was actually Maxwell who had mentioned the
fifty-percent quota to him. Tr. 585. Once he came to this
realization, Curtis explained, he had telephoned FFI’s attorney
at home to alert him to the mistake. Tr. 587-88. When asked on
cross-examination how he had obtained the attorney’s home
telephone number, Curtis said that he had looked it up in the
Ripon telephone directory. Id. It turned out, however, that FFI’s
attorney, James Macy, lived in Oshkosh, Tr. 589, and when Curtis
was handed a copy of the local telephone directory and asked to
locate Macy’s number, he spent fifteen minutes trying to do so to
no avail. Tr. 594-96. When asked to spell Macy’s name, Curtis
ventured a guess that was incorrect: M-A-S-A-S-E-Y. Tr. 593.
Curtis eventually conceded that someone may have given him Macy’s
telephone number. Tr. 596./3
5. Night stocker Robert Schumacher was a longtime RSI
employee to whom Francisco had extended a job offer. As FFI’s
takeover of the store approached, however, Schumacher grew
concerned and frustrated about the fate of other RSI employees to
whom Francisco had not yet extended offers. In early May,
Schumacher summoned Francisco to the produce room of the store
and, in front of RSI employee Pat Ritchay, confronted her with a
series of questions about the impending takeover. According to
Schumacher, when he asked Francisco why FFI did not simply hire
all of RSI’s employees, she told him that "she’d hire us all back
if we would vote out the union." Tr. 412.
6. On May 1, Francisco interviewed Jamie Harttert, a
college student, for a position with FFI. Harttert was not an
employee of RSI. Harttert told Francisco that she viewed
employment with FFI as "mainly a summer job" and that once her
studies resumed in the autumn, she would only be able to work
every other weekend. Tr. 481. Harttert testified that in
response, Francisco "explained to me that under the union that
people would have to work a certain amount of hours per week and
that I wouldn’t be able to do every other weekend under the
union. But since she was changing it to a nonunion, that she, you
know I could work every other weekend." Tr. 481. Francisco hired
Harttert. According to Harttert, at a meeting for new employees
that took place at least a week before FFI took over the store,
Francisco warned them to expect picketing when they started work.
Tr. 482-83.
As of May 12, 1999, four days before the change in store
ownership took effect, seven RSI employees who had applied for
jobs with FFI still had not been told whether they would be
hired./4 Two of these people had long affiliations with the
store: Janet Simmons had worked at the Piggly Wiggly for eleven
years,/5 while Tina Warriner had worked there for twelve and one-
half years. The remaining five were employees who had worked at
the store for relatively short periods of time prior to the sale.
At approximately 4:00 p.m. on that day, Bob Schumacher led a
delegation of eight RSI employees to Francisco’s office to ask
for the return of their job applications. Two of these
individuals, Schumacher and Penny Pipping--along with Pipping’s
husband Alan, who was not present--had received offers of
employment from FFI. The other six individuals-- Tina Warriner,
Robert Birkrem, Carrie Clark, Jamie Kotlowski, Ryan Sasada, and
Janet Simmons--had not yet heard whether they would be offered a
job with FFI. "[I]t [was] a situation where no one really knew
whether they were hired or not or what kind of games [Francisco]
was playing because everybody was being told one by one,"
Schumacher testified. Tr. 414-15. Anticipating that Francisco
would not recognize the Union, Schumacher and Penny Pipping had
decided to decline the offers they had received. At the same
time, a rumor apparently had been circulating among RSI employees
that none of them would be eligible for unemployment if they
still had a job application pending with FFI. Wishing to preserve
that eligibility, the eight members of the group asked Francisco
to return their applications. Penny Pipping asked for her
husband’s application back as well. Francisco agreed to return
all of the applications save that of Alan Pipping, who was not
present, and went home to retrieve them. After unsuccessfully
trying to locate the applications, Francisco returned to the
store and promised the employees that she would bring them with
her on the following day.
Separately on that same day, high school student and RSI
employee Tara Manthei also asked Francisco to return her
application. Manthei testified that she had asked Francisco about
her prospects a week earlier, and that Francisco had told her she
was "not on the top of the firing list." Tr. 532. However,
Manthei’s mother, Susan, had learned from someone who had seen a
draft FFI work schedule that Manthei’s name was not on it; and
she therefore assumed that Francisco was not going to hire her
daughter. Tr. 474, 533-34. Francisco returned the application to
Manthei, who eventually discarded it./6
The Union held a meeting on the evening of May 12. Union
officials were "flabbergasted" to learn about the withdrawals.
Tr. 38. They proceeded to admonish RSI employees that it was a
mistake for them to withdraw their job applications, because a
pending application with FFI would not, in fact, disqualify them
from receiving unemployment compensation in the event they were
not hired. Officials told the employees who had withdrawn their
applications to resubmit them.
On the following day, May 13, Francisco arrived at the store
with the applications whose return had been requested. Penny
Piping, Carrie Clark, and Jamie Kotlowski accepted their
applications back and tore them up in front of Francisco. Alan
Pipping, Ryan Sasada, and Janet Simmons each indicated to
Francisco that she should keep his or her application. Tina
Warriner, after receiving her application, returned it to
Francisco’s desk. Neither Robert Birkrem nor Bob Schumacher ever
received his application from Francisco, and neither of them
asked Francisco again for its return. None of these employees
expressly told Francisco that they still wished to be considered
for employment with FFI. Francisco testified that she was under
the impression they were no longer interested: "Well, I assumed
they didn’t want jobs. They were pulling their applications." Tr.
641. None of these individuals subsequently received an offer of
employment from FFI.
RSI ceased operations and closed several hours early on
Saturday, May 15, and on the following morning, the Piggly Wiggly
reopened under FFI’s management./7 As of May 16, FFI had a
complement of forty-five employees, excluding Francisco. Six of
the forty-five employees were supervisors or managers; the
remaining thirty-nine held non-supervisory positions. Of FFI’s
thirty-nine non-supervisory workers, sixteen had worked for RSI,
whereas the other twenty-three were "new" hires. The six
supervisors included three individuals who had formerly worked
for RSI. Because the former employees of RSI constituted a
minority of FFI’s non-supervisory workforce, FFI neither
recognized the Union nor assumed RSI’s obligations under the
collective bargaining agreement with the Union. The Union
immediately commenced picketing of the Piggly Wiggly.
The fact that FFI hired most of its non-supervisory
employees from outside of the RSI labor pool give rise to
proceedings before the NLRB. On May 17, 1999, the Union filed a
charge with the Board asserting that FFI had refused to hire a
number of RSI’s employees in order to avoid an obligation to
recognize and bargain with the Union. R. 1 Ex. A. After
investigating the charge, the Director, on August 30, filed the
complaint we described at the outset of this opinion. Id. Ex. B.
An administrative law judge conducted an evidentiary hearing on
that complaint which concluded on October 1, 1999. On November
30, the Director petitioned the district court for interim
injunctive relief. R. 1. The Director’s request was submitted to
the court along with the record of the evidentiary hearing before
the ALJ.
The district court denied the Director’s petition for two
principal reasons. First, the court concluded that the Director
had not shown that the Union faced irreparable harm in the
absence of interim injunctive relief. Although the Director
argued that the Union’s status among store employees would erode
while awaiting relief from the Board, the court characterized
this as nothing more than speculation. R. 23 at 5. As the court
viewed the record, FFI had not engaged in the kinds of unfair
practices that would convey to employees an intolerance of Union
activity or that would otherwise chill support for the Union. Id.
at 5-6. The court pointed out that Francisco had invited
applications from RSI’s employees; had actively recruited several
of those individuals, including one whom she knew to be an active
Union supporter; had ultimately hired nineteen of the thirty-four
RSI employees who sought employment with FFI; and had indicated
to a number of store employees that unionization would be up to
them. These facts revealed no propensity on the part of FFI to
engage in coercive acts in order to evade an obligation to
bargain with the Union. Id. at 6. At the same time, should the
Board ultimately find in the Director’s favor, the Union would be
reinstated as the employees’ representative, giving it the
opportunity to re-establish support among store employees. Id. at
6-7.
Second, the court believed that the Director had no better
than a negligible chance of prevailing on the merits of his
complaint. In order to impose a duty on FFI to recognize and
bargain with the Union, the Director would have to show both that
FFI qualified as RSI’s successor and that FFI had made
discriminatory hiring decisions in order to avoid having a union-
dominated workforce. The court thought it likely that the
Director would succeed on the first of these points: FFI, like
RSI, operated a grocery store, sold similar products, and, like
RSI, marketed those products primarily to consumers. Id. at 8-9.
But the court did not think it likely that the Director would
convince the Board that FFI’s hiring decisions were
discriminatory. FFI had conducted an open hiring process and had
invited RSI’s employees to apply for jobs with FFI; Francisco had
recruited a known Union advocate along with several other RSI
employees; and FFI had extended offers to all but eleven of the
thirty-four RSI employees who had submitted applications. Id. at
11. All of the eleven RSI workers to whom FFI did not offer jobs,
the court explained, "had demonstrated legitimate performance or
employability concerns." Id. at 11. Four of them had problems in
their work histories. Id. at 11 n.17. The remaining seven were
among the ten RSI employees who had asked Francisco to return
their applications on May 12. Id. at 11-12. In doing so, those
seven employees had genuinely put their interest in employment
with FFI, and their desirability as prospective hires, into
doubt. Id. at 12. Consequently, even if the Director were able to
prove that anti-union animus played a role in Francisco’s hiring
decisions, the court was convinced that FFI would still be able
to show that it wouldn’t have hired the eleven individuals to
whom it did not extend offers for legitimate, non-discriminatory
reasons. Id. at 12-13.
Nearly two months after the district court denied the
Director’s petition for interim relief, the ALJ who heard the
Director’s complaint issued an order which concluded, in relevant
part, that FFI had declined to hire certain RSI employees in
order to avoid having to recognize and bargain with the Union.
Francisco Foods, Inc. and United Food & Commercial Workers Union,
Local No. 73A, AFL-CIO, No. 30-CA-14738 (N.L.R.B. Div. of Judges
Mar. 31, 2000) (hereinafter, "ALJ Decision")./8 The ALJ found
that the Director’s witnesses had credibly testified to a variety
of statements by Francisco to the effect that FFI did not plan to
recognize the Union, and that she was making hiring decisions in
such a way as to keep former RSI employees in the minority of
FFI’s workforce so as to avoid a duty to recognize and bargain
with the Union. Id. at 13-14. Consistent with those statements,
the ALJ went on to find, Francisco had purposely delayed action
on the employment applications of a number of RSI workers:
The employees of the Bayers were treated like puppets on a
string. Francisco didn’t want to recognize the union and
refrained from offering jobs to employees of the Bayers until she
was sure that less than a majority of Respondent’s employees
would be former employees of the predecessor. At the same time
employees are waiting to see if they had a job Francisco is
advertising for employees and advising prospective employees that
no experience is required.
Based on the entire record it is crystal clear to me and I
believe would be to anyone who saw and heard the witnesses in
this case that to avoid successorship status Respondent did not
hire a number of employees.
Id. at 14 (emphasis in original).
Against this backdrop, the ALJ did not find it fatal to the
Director’s case that ten RSI workers had asked Francisco to
return their applications on May 12. The ALJ concluded that FFI
was not going to hire seven of these individuals in any event.
One of them, Tara Manthei, had already learned (through her
mother) that she would not be hired. The return of her
application, therefore, was merely a nod to the inevitable. Id.
at 14, 16. Six other employees had still not been told whether
FFI planned to hire them, notwithstanding the fact that FFI’s
takeover of the store was just days away. "Again, puppets on a
string." Id. at 14. Although the applications of these six
employees nominally remained under consideration, the evidence
suggested to the ALJ that Francisco was not going to hire them.
On the day prior to the withdrawals, Francisco had telephoned the
Ripon police to inform them that she expected up to 200 picketers
when the store reopened under FFI ownership on May 16. Because
the Union would have no reason to picket the store if a majority
of FFI’s workforce were former RSI employees-- thus obligating
FFI to recognize the Union--the ALJ construed Francisco’s
telephone call as confirmation that Francisco had no intent to
extend offers to the six individuals who, as of the time they
withdrew their applications, had not yet been told whether or not
FFI would hire them. Id. at 15. Accordingly, the ALJ found it
appropriate to treat these six individuals, along with Manthei,
as victims of discrimination:
To hold it against Birkrem, Clark, Kotlowski, Manthei, Sasada,
Simmons, and Warriner that they withdrew their applications and
[to say that they] weren’t hired for that reason when they had no
chance to be hired in any event would be horribly unfair.
Id. at 15.
The ALJ also emphasized that six of the ten employees who
had asked for their applications back had effectively reversed
their requests. Id. at 15. Several individuals returned their
applications to Francisco; others never received their
applications back from Francisco and did not ask her again to
return them. Id.
Three of the employees who asked for their applications
back, however, had ripped them up in Francisco’s presence. On the
face of things, these three employees had taken themselves out of
the running for positions with FFI. Yet, in the ALJ’s view, FFI
had "forced [these employees] into an untenable position" by
making its hiring decisions in such a way as to avoid having to
recognize the Union. Id. at 16. (The same was true of Tara
Manthei, who had asked for her application back--and kept it--
only after her mother learned that Manthei would not be hired.
Id.)
Even if these three individuals were removed from analysis,
the ALJ pointed out, the evidence still supported the Director’s
claim that FFI had refused employment to a number of RSI
employees in order to avoid a union-dominated workforce. Had FFI
hired the other seven individuals who had asked for their
applications back, twenty-three of FFI’s thirty-nine non-
supervisory employees would have been former employees of RSI.
"In other words, a clear majority would [have been] employees of
[FFI’s] predecessor." Id. at 16.
 In terms of the kind of business that FFI conducted, the ALJ
had no doubt that the new company qualified as RSI’s successor:
The facts in this case show a "substantial continuity" between
the predecessor and successor employers. Respondent operates a
Piggly Wiggly franchise grocery store at the same location as the
predecessor, utilizing the same equipment and facilities;
attracts the same customers; offers basically the same product
lines; employs supervisors who worked for the predecessor; and
employs employees in the same working classifications and under
the same working conditions as the predecessor.
Id. at 16.
In sum, the ALJ concluded that but for its discriminatory
hiring decisions, FFI would have been obliged to recognize and
bargain with the Union. He therefore ordered FFI, inter alia, to
offer jobs to the ten employees who had withdrawn their
applications and, on request, to recognize and bargain with the
Union. Id. at 17-18.
II.
Section 10(j) of the National Labor Relations Act authorizes
a district court to enter "just and proper" injunctive relief
pending the final disposition of an unfair labor practices claim
by the Board. 29 U.S.C. sec. 160(j). We review the district
court’s decision to grant or deny interim injunctive relief for
abuse of discretion. NLRB v. Electro-Voice, Inc., 83 F.3d 1559,
1566 (7th Cir. 1996), cert. denied, 519 U.S. 1055, 117 S. Ct. 683
(1997).
The familiar factors that courts reference in weighing the
propriety of preliminary injunctive relief in other contexts--the
lack of an adequate remedy at law, the balance of potential harms
posed by the denial or grant of interim relief, the public
interest, and the petitioner’s likelihood of success on the
merits of its complaint--apply to requests for relief pursuant to
section 10(j) as well. Kinney v. Pioneer Press, 881 F.2d 485, 490
& n.3, 493 (7th Cir. 1989); see also Electro-Voice, 83 F.3d at
1566. Thus, the Director will be entitled to interim relief when:
(1) the Director has no adequate remedy at law;
(2) the labor effort would face irreparable harm without interim
relief, and the prospect of that harm outweighs any harm posed to
the employer by the proposed injunction;
(3) "public harm" would occur in the absence of interim relief;
(4) the Director has a reasonable likelihood of prevailing on the
merits of his complaint.
Id. at 1567-68. The Director bears the burden of establishing the
first, third, and fourth of these circumstances by a
preponderance of the evidence. Id.
The strength of the Director’s case on the merits affects
the court’s assessment of the relative harms posed by the grant
or denial of injunctive relief: the greater the Director’s
prospects of prevailing are, the less compelling need be his
showing of irreparable harm in the absence of an injunction. Id.
at 1568. But, in evaluating the likelihood of success, it is not
the district court’s responsibility, nor is it ours, to rule on
the merits of the Director’s complaint; that is the Board’s
province. The court’s inquiry is confined to the probability that
the Director will prevail. See id. at 1570.
In making this assessment, we must keep in mind that the
district court rejected the Director’s petition for relief under
section 10(j) based solely on the written record of the evidence
presented before the ALJ. The district judge heard no testimony
himself, and consequently had no occasion to assess the
credibility of witnesses or to resolve conflicts in the evidence.
Under these circumstances, we owe the Director a favorable
construction of the evidence, much as we would if he were a
plaintiff appealing the grant of summary judgment in favor of the
defendant. See Kinney, 881 F.2d at 489; see also Electro-Voice,
83 F.3d at 1566 n.15. We will therefore credit the Director’s
factual averments so long as they are plausible in light of the
record evidence. See Electro-Voice, 83 F.3d at 1570./9
We must also bear in mind that it is the Board, and not this
court, which is principally charged with the administration and
enforcement of the Act. See United States v. Palumbo Bros., Inc.,
145 F.3d 850, 861 (7th Cir.), cert. denied, 525 U.S. 949, 119 S.
Ct. 375, 376 (1998). If and when we are called upon to review the
Board’s final order in this case, we will owe the Board’s
judgment considerable deference. E.g., Multi-Ad Servs., Inc. v.
NLRB, 255 F.3d 363, 370-71 (7th Cir. 2001). In view of our
limited role, and given the Board’s expertise in matters of labor
relations, we must be "hospitable" to the General Counsel’s view
of the law. Miller v. California Pacific Med. Ctr., 19 F.3d 449,
460 (9th Cir. 1994) (en banc), quoting Danielson v. Joint Bd. of
Coat, Suit & Allied Garment Workers’ Union, 494 F.2d 1230, 1245
(2d Cir. 1974) (Friendly, J.); see also Pattern Makers’ League of
N.A., AFL-CIO v. NLRB, 473 U.S. 95, 114, 105 S. Ct. 3064, 3075
(1985); Ford Motor Co. v. NLRB, 441 U.S. 488, 497, 99 S. Ct.
1842, 1849 (1979); NLRB v. Manitowoc Eng’g Co., 909 F.2d 963, 971
n.10 (7th Cir. 1990), cert. denied sub nom. Clipper City Lodge
No. 516 v. NLRB, 498 U.S. 1083, 111 S. Ct. 954 (1991).
Finally, although we do not sit in review of the ALJ’s
decision--which the parties have cross-appealed to the Board--his
opinion is nonetheless relevant to the propriety of section 10(j)
relief. Assessing the Director’s likelihood of success calls for
a predictive judgment about what the Board is likely to do with
the case. The ALJ is the Board’s first-level decisionmaker.
Having presided over the merits hearing, the ALJ’s factual and
legal determinations supply a useful benchmark against which the
Director’s prospects of success may be weighed. See, e.g.,
Hoffman v. Inn Credible Caterers, Ltd., 247 F.3d 360, 367 (2d
Cir. 2001); Silverman v. J.R.L. Food Corp., 196 F.3d 334, 337-38
(2d Cir. 1999) (per curiam); Rivera-Vega v. ConAgra, Inc., 70
F.3d 153, 161 (1st Cir. 1995); Seeler v. Trading Port, Inc., 517
F.2d 33, 37 n.7 & 40 n.11 (2d Cir. 1975).
With these principles in mind, we turn to the Director’s
case, considering each of the elements set forth above. We begin
with the Director’s likelihood of prevailing on the merits of his
complaint against FFI.
A. Likelihood of success
One of the prospects that confronted FFI when it decided to
acquire the Ripon Piggly Wiggly franchise from RSI was the
potential obligation, as RSI’s successor, to bargain with the
Union. The Supreme Court has recognized that when "[a] new
employer makes a conscious decision to maintain generally the
same business and to hire a majority of its employees from [its]
predecessor," it must bargain with the union that represented the
predecessor’s employees. Fall River Dyeing & Finishing Corp. v.
NLRB, 482 U.S. 27, 41, 107 S. Ct. 2225, 2234 (1987); see also
NLRB v. Burns Int’l Security Servs., Inc., 406 U.S. 272, 280-81,
92 S. Ct. 1571, 1578-79 (1972). When FFI opened for business,
only a minority of its non-supervisory employees (sixteen of
thirty-nine) formerly had worked for RSI./10 Nominally, then, it
had no obligation to bargain with the Union. It is the Director’s
theory, however, that FFI made its hiring decisions in a
calculated manner aimed at ensuring that the former employees of
RSI did not constitute a majority of the FFI workforce. Of
course, FFI bore no obligation to hire any of RSI’s employees.
Fall River, 482 U.S. at 40, 107 S. Ct. at 2234, citing Burns, 406
U.S. at 280 & n.5, 92 S. Ct. at 1578 & n.5. Yet, FFI was not free
to make discriminatory hiring decisions with the purpose of
avoiding a duty to bargain with the representative of RSI’s
workforce. Ibid.
Of course, it is an unfair labor practice for an employer to
discriminate in hiring or retention of employees on the basis of
union membership or activity under sec. 8(a)(3) of the National
Labor Relations Act, 29 U.S.C. sec. 158(a)(3). Thus, a new owner
could not refuse to hire the employees of his predecessor solely
because they were union members or to avoid having to recognize
the union.
Howard Johnson Co. v. Detroit Local Join Executive Bd., AFL-CIO,
417 U.S. 249, 262 n.8, 94 S. Ct. 2236, 2243 n.8 (1974). That is
precisely what the Director believes that FFI did in this case;
and in doing so, he asserts, FFI violated not only section
8(a)(3) but also section 8(a)(5) of the Act. Section 8(a)(3) bars
an employer from making discriminatory employment decisions in
order "to encourage or discourage membership in any labor
organization . . . ." 29 U.S.C. sec. 158(a)(3). Section 8(a)(5)
provides that an employer commits an unfair labor practice when
he "refuse[s] to bargain collectively with the representatives of
his employees . . . ." 29 U.S.C. sec. 158(a)(5).
To prevail on the merits of his complaint, the Director will
have to prove two key propositions. Preliminarily, he will have
to establish that FFI is RSI’s successor--that is, that FFI has
made "a conscious decision to maintain generally the same
business" as RSI. Fall River, 482 U.S. at 41, 107 S. Ct. at 2234.
Second, because only a minority of FFI’s employees formerly
worked for RSI, the Director will have to prove that FFI refused
to make job offers to a number of RSI employees in order to keep
former RSI employees in the minority and thus avoid the duty to
bargain with the Union. See id. at 40, 107 S. Ct. at 2234. For
purposes of the request for interim injunctive relief, the
Director must demonstrate that his chances of proving these
points are "better than negligible." Electro-Voice, 83 F.3d at
1568.
1.
FFI contends for a variety of reasons that there is no
substantial continuity of enterprise between RSI and FFI. First,
FFI’s organizational structure differs from RSI’s in a number of
respects: department heads have been given more supervisory
authority, including the right to hire, discipline, and terminate
employees (Tr. 83, 617); positions have been created for a
customer service manager, a maintenance manager, and a
bookkeeper, none of which existed under RSI’s ownership (Tr. 167,
629-30); new job descriptions have been written (Tr. 627-28); and
employees have been cross-trained so that they can handle a
variety of assignments (Tr. 167, 629). Second, FFI has stopped
using some of RSI’s vendors and has begun using others that RSI
had not used. Tr. 631-32. Third and finally, FFI has purchased
new equipment (including checkout equipment and thermal printers)
and changed its way of doing business to the extent that it no
longer maintains handwritten customer accounts. Tr. 630-31. The
record also reveals certain other changes: the store’s floral
department has been eliminated (Tr. 631); its offering of bakery
goods has expanded (Tr. 618-19); and in general Francisco is
attempting to update the store (Tr. 618).
These changes notwithstanding, we think it likely that the
Board will find there to be a substantial continuity between RSI
and FFI. The continuity assessment takes into account several
factors, including "whether the business of both employers is
essentially the same; whether the employees of the new company
are doing the same jobs in the same working conditions under the
same supervisors; and whether the new entity has the same
production process, produces the same products, and basically has
the same body of customers." Fall River, 482 U.S. at 43, 107 S.
Ct. at 2236. These factors tilt rather strongly in favor of a
finding of substantial continuity. FFI operates the same Piggly
Wiggly grocery store that RSI did. There was virtually no hiatus
between RSI’s departure as the owner and FFI’s assumption of
control. Cf. id. at 45, 107 S. Ct. at 2237. With the exception of
the new positions that FFI has created, FFI employees appear to
be performing largely the same tasks, under comparable
conditions, and under a number of the same supervisors, as RSI
employees did; they are simply doing it under new ownership.
Obviously the basic nature of the products that the store sells
has not changed--notwithstanding the changes in FFI’s vendors--
nor has the store’s customer base. Given these material
similarities between the two enterprises, it is highly likely
that the Director will succeed in providing that FFI is RSI’s
successor. See R. 23 at 8-9.
2.
The critical question, then, is whether the hiring decisions
that FFI made with respect to RSI workers were motivated by a
desire to avoid having to bargain with the Union. See R. 23 at 9.
An employer’s motive is a factual matter which, like any other
fact, may be proven by direct or circumstantial evidence. U.S.
Marine Corp. v. NLRB, 944 F.2d 1305, 1315 (7th Cir. 1991) (en
banc), cert. denied, 503 U.S. 936, 112 S. Ct. 1474 (1992). The
Director may establish that FFI acted with an unlawful motive by
presenting substantial evidence that the company harbored an
anti-union animus; that it lacked convincing reasons not to hire
RSI’s employees; that it made inconsistent hiring decisions or
engaged in other conduct evincing a discriminatory motive; and/or
that FFI staffed its store in such a way as to preclude former
RSI employees from forming a majority of the FFI workforce. See
id. at 1316-19. If the Director succeeds in establishing that
FFI’s hiring decisions were motivated by an anti-union animus,
the burden shifts to FFI to prove that irrespective of that
animus, it would have turned away the RSI employees that it
refused to hire for legitimate reasons. Electro-Voice, 83 F.3d at
1568. The district court found that the Director’s chances of
prevailing on this aspect of its case were no more than
negligible. R. 23 at 10-13. Having reviewed the record, however,
we conclude that the Director’s prospects are much better than
that.
To begin with, reading the record favorably to the Director,
FFI signaled repeatedly during the two-month period between the
announcement and the completion of the sale that it did not plan
to bargain with the Union when it assumed ownership of the store.
According to Withers, when he and Francisco spoke on March 15,
Francisco told him that FFI did not intend to recognize the
Union, although she might "let [her] new employees decide what to
do." GC Ex. 4. When Withers asked Francisco whether the reference
to her "new employees" meant that she did not plan to retain the
employees of RSI, Francisco confirmed that she was "not going to
keep the bargaining unit." Id. That same day, Francisco allegedly
told another employee, assistant store manager Michael Ritchay,
that "it wouldn’t be a union"--a remark that Francisco later
qualified, according to Ritchay, by saying that the new employees
could vote for union representation if that was what they wanted.
Tr. 432-33. RSI employees Joann Schrader and Adam Simonis
testified that Francisco likewise remarked to them she did not
plan to recognize the Union at the outset, but that FFI employees
could always vote in favor of union representation. Tr. 340, 497.
Indeed, Francisco herself acknowledges having told store
employees that she would not recognize the Union automatically
but instead would leave the decision up to her employees. Tr.
646. Even FFI’s attorney candidly wrote to Withers on March 16
stating that "the Company does not anticipate assuming the
collective bargaining agreement." GC Ex. 5; see also GC Ex. 33 at
1. At least one week before the store changed hands, Francisco
allegedly told Jamie Harttert and other newly hired individuals
to expect picketing when they began work. Tr. 482-83. And on May
11, Francisco telephoned local police to inform them that she
expected picketing in front of the store when FFI assumed
ownership on May 16. GC Ex. 26. All of this suggests that FFI
never intended to have a workforce dominated by the union-
affiliated employees of RSI. Even Francisco’s allowance that she
might let her employees decide about union representation is
telling, for if a majority of FFI’s hires had been RSI employees,
the company would have had no choice but to recognize and bargain
with the Union. See Eldorado, Inc., 335 NLRB No. 76, 2001 WL
1083271, at *6 n.4 (Aug. 27, 2001); Bay Area Mack, 293 N.L.R.B. 125,
125 & n.5 (1989).
In addition to these signals, of course, there are other
remarks attributed to Francisco indicating that she was
determined to keep former RSI employees in the minority in the
FFI workforce. According to the written statement of RSI employee
Evonne Everson, Francisco told her that she planned to hire only
fifty percent of RSI’s employees, "because she wouldn’t have the
Union." GC Ex. 29. When Valerie Clark inquired about her
daughter’s prospects for employment with FFI, Francisco allegedly
told her "she had to be very careful and get rid of fifty percent
of the workers . . . ," Tr. 393-94, because "this was not going
to be a unioned store." Tr. 394. Carrie Clark herself later spoke
with Francisco and purportedly was told that "there was going to
be a lot of new faces because she wanted to keep the union out."
Tr. 362. When RSI cashier and Union steward Tina Warriner
inquired about the chances of FFI hiring her, Francisco,
according to Warriner, complimented her on her attendance and her
positive interaction with store customers, but asked her whether
she was willing to work "for a nonunion store." Tr. 253.
Francisco told meat wrapper Joe Curtis, according to Curtis’s
initial testimony, that she was able to take back fifty percent
of the employees from each department, but that if she "took the
union back," he would be fired. Tr. 543. And when stocker Robert
Schumacher asked Francisco why she didn’t simply hire all of
RSI’s employees, Francisco, according to Schumacher, replied that
she would be willing to do so "if we would vote out the union."
Tr. 412. If one credits this testimony (as the ALJ ultimately
did), one can readily infer that Francisco conducted the hiring
process with the paramount goal of keeping the percentage of
former RSI employees below the fifty percent mark, so that FFI
would not be obligated to deal with the Union. And if one credits
the testimony regarding Francisco’s remarks about the picketing
she expected when the store reopened under FFI ownership, one can
reasonably infer that Francisco fully intended to meet that goal.
There is, in short, ample evidence that FFI’s hiring
decisions were animated by an intent to avoid a duty to recognize
and bargain with the Union. The remarks that the Director relies
upon amount to direct, rather than circumstantial evidence of an
anti-union animus, see generally Venters v. City of Delphi, 123
F.3d 956, 972-73 (7th Cir. 1997), and in contrast to the stray
remarks we often see in employment cases, e.g., Schaffner v.
Glencoe Park Dist., 256 F.3d 616, 623 (7th Cir. 2001),
Francisco’s alleged statements reflect the thoughts of a
decisionmaker regarding the very employment decisions that the
Director has challenged. If credited, this evidence would raise a
presumption that FFI used the hiring process to stack the deck
against the Union and to avoid any obligation to bargain with it.
The district court acknowledged this evidence, R. 23 at 10,
but emphasized other facts which, in the court’s view, were
inconsistent with the notion that FFI was discriminating against
union members. Among other things, the court noted that all RSI
employees were notified of change of ownership and encouraged to
apply for employment with FFI; the hiring process in fact was
open to all RSI employees; Francisco actively recruited several
RSI employees, including one who was known to be a Union
supporter; only eleven of the thirty-four RSI employees
(including supervisors) who sought employment with FFI did not
receive job offers; and it was undisputed that four of those
eleven employees were not hired for legitimate, performance-
related reasons. See R. 23 at 11 & n.17, 13 & n.21.
Certainly those circumstances are consistent with a hiring
process untainted by discrimination, but by no means do they
foreclose the possibility that FFI was choosing its employees so
as to obviate the need to bargain with the Union when it took
over the store. It was entirely possible for FFI to encourage and
accept job applications from RSI workers, and indeed to hire a
substantial number of RSI employees, and still avoid having to
recognize the Union, so long as former RSI employees comprised
less than half of its workforce. Proceeding in that fashion was
arguably the smarter course if, indeed, FFI’s goal was to
displace the Union. Refusing to hire anyone at RSI would have
been an obvious sign of discrimination and would have deprived
FFI of employees with valuable experience. By instead following a
more selective path, FFI might appear to be conducting the hiring
process in a non-discriminatory manner, yet still achieve what
the Director believes was its illicit goal. See ALJ Decision at
15.
In fact, the testimony of the Director’s witnesses is
entirely consistent with the latter scenario. Although Francisco
invited RSI workers to apply for employment with FFI, both she
and FFI’s counsel indicated early on that FFI did not anticipate
automatic recognition of the Union--an announcement which
implicitly, but unmistakably, suggests that FFI expected most of
its employees to be new, i.e., not from RSI’s unionized
workforce. Indeed, if the testimony and notes of Union official
Grant Withers are believed, Francisco told Withers expressly that
she would not be retaining the employees of RSI. Again crediting
the Director’s witnesses, Francisco then embarked on a careful
course of picking and choosing among RSI’s employees, all the
while keeping in the forefront of her mind that RSI employees had
to remain in the minority of FFI’s workforce or FFI would have to
bargain with the Union--a criterion that she mentioned to several
RSI employees. Francisco’s fidelity to the fifty-percent cap on
RSI employees is arguably borne out by the fact that as FFI’s
takeover of the store approached in May, FFI still had not told a
number of applicants from RSI, including two longtime store
employees, whether they would be hired, even as FFI was placing
the "No Experience Necessary" ads in the local papers in an
effort to fill its remaining positions. When RSI head cashier
Tina Warriner asked Francisco, one week before FFI assumed
ownership of the store, whether she would have a job with FFI,
Francisco was largely complimentary of her skills but was curious
about whether Warriner would be willing to work "for a nonunion
store." Tr. 253. One may reasonably infer from this evidence that
Francisco was sitting on the applications of a number of RSI
applicants, rather than rejecting them outright, so as to
maintain the appearance of a non-discriminatory hiring process
while ensuring, in the end, that less than fifty percent of FFI’s
hires were RSI workers./11
An important wrinkle in the Director’s case is the fact
Francisco did make offers to twenty RSI employees for non-
supervisory positions with FFI./12 When FFI assumed ownership of
the store, it did so with a complement of thirtynine non-
supervisory employees. Had twenty of those employees been Union
members, FFI would have been obliged to recognize the Union. As
FFI sees things, then, the fact that FFI extended offers to
twenty of RSI’s non-supervisory employees is wholly inconsistent
with the notion that the new company was attempting to dodge a
duty to bargain with the Union. The Director, on the other hand,
suggests that Francisco likely was staggering her hiring
decisions, keeping careful track of how many RSI employees
accepted employment with FFI, so as to avoid the possibility of
having a union-dominated workforce. We must point out, however,
that the record does not fully disclose the chronology of the
offers that Francisco made to RSI employees./13
Like the other facts that the district court highlighted,
the fact that Francisco extended offers to twenty RSI workers for
non-supervisory posts with FFI certainly is consistent with a
hiring process untainted by any unlawful motive; but again we
believe that the record leaves ample room for a contrary
conclusion. There is, for example, evidence that Francisco was
postponing action on the applications of some RSI workers,
including two longtime employees of RSI whose credentials would
have been well known to Francisco. Francisco’s conversation with
one of those two employees, Tina Warriner, suggests that
Francisco was as concerned about her ability to work "for a
nonunion store" as she was about Warriner’s qualifications, Tr.
253, and that she may have been delaying action on the
application for that reason. Similarly, when Francisco first
spoke with meat wrapper Joe Curtis about his likelihood of being
hired, she indicated that she would "fire" him if she were
obligated to recognize the Union. Tr. 543. In a later
conversation, however, Francisco told Curtis that "now" she could
hire him. Tr. 544. That remark can be construed as evidence that
Francisco was carefully timing her employment decisions, as the
Director suggests. Francisco’s conversation with Carrie Clark
supports a similar inference. Francisco purportedly told Clark, a
student worker, that "she wasn’t going to keep a lot of the
students and there was going to be a lot of new faces because she
wanted to keep the union out," Tr. 362; but she also told Clark
that if "[she] were to reapply later on down the line that
[Francisco] would rehire [her]," id. Moreover, although the store
opened on May 16 with a complement of thirty-nine non-supervisory
workers, nothing in the record suggests that this number was ever
written in stone. FFI, obviously, could hire as many employees as
it wished. Indeed, for more than two months after it assumed
ownership of the store, FFI continued to advertise for additional
employees. See GC Ex. 17. Consequently, even if all twenty of the
individuals who received job offers from Francisco had accepted
them, it was not a foregone conclusion that they would have
constituted more than fifty percent of FFI’s employees./14
Francisco’s many alleged references to the need to hire less than
fifty percent union-affiliated workers suggest that she might
have avoided that eventuality by hiring additional employees not
affiliated with RSI. And Francisco’s anticipation--announced to
both Harttert (and other new hires) as well as the Ripon police--
that there likely would be large-scale picketing when the store
opened under FFI management on May 16, suggests that she never
made room for the possibility of a union-dominated workforce.
The fact that seven of the RSI applicants who had not yet
received offers asked Francisco to return their job applications
on May 12 presents a second wrinkle in the Director’s case. Had
one or more of these individuals received and accepted offers
(along with, or in addition to the three other RSI workers who
had already received offers but who likewise asked for their
applications back), Union members might have constituted a
majority of FFI’s workforce. The district court was of the belief
that the withdrawals were important for two reasons. First, the
withdrawals deprived FFI of the opportunity to actually make an
employment decision with respect to the seven individuals who had
not yet received offers. R. 23 at 11-12. This in turn rendered
any assessment as to the company’s intent vis a vis these
individuals speculative. Id. at 11. It was unlikely, the district
court added, that these individuals could show their withdrawals
were precipitated by Francisco’s allegedly discriminatory intent,
because "none state that they were aware of any anti-union
animus." Id. at 12. Second, the withdrawals in and of themselves
constituted a legitimate, non-discriminatory reason for FFI not
to hire these applicants and thus rebutted any inference of
discrimination that might arise from other evidence. Id. In
short, "[i]t was the employees’ own action which legitimately put
their interest and desirability in doubt." Id.
Although the withdrawals do complicate the Director’s case,
they do not impose an obstacle so great as to render his chances
of prevailing on the merits negligible. The district court’s
assessment that FFI was "deprived" of the opportunity to make a
decision with respect to these candidates not only overlooks the
fact that several of the employees returned their applications to
Francisco (in effect rescinding the withdrawals) but, more
importantly, assumes that FFI had not already made its decision
with respect to these employees. Perhaps FFI did have each of
these applicants under active consideration and was willing to
hire all of them even if it meant having to bargain with the
Union. Yet, as we have already emphasized, there is a wealth of
evidence permitting a contrary inference: (1) Francisco had told
RSI employees and the Union from the start that FFI did not
intend to recognize the Union automatically. (2) She allegedly
told several individuals that she was taking care not to hire a
staff comprised of more than fifty percent former RSI employees,
so that FFI would not have to recognize the Union. (3) As of May
12, the date on which the withdrawals occurred and just four days
before FFI assumed ownership of the store, FFI had still not told
these seven employees whether they would be hired, even though
two of them had worked at RSI for more than a decade. (4) On May
11, five days before FFI assumed ownership and one day prior to
the withdrawals, FFI began to include the "No Experience
Necessary--We Will Train You!" language in its newspaper
advertisements. That language reasonably suggests that FFI was
actively soliciting applications from outside of the RSI labor
pool, even as the applications of seven RSI employees nominally
were still under consideration. (5) Finally, before the
withdrawals occurred on May 12, Francisco allegedly had already
told new hires (at least one week before the takeover) and the
local police (on May 11) that she expected picketing in front of
the store on May 16. Arguably, Francisco would not have expected
picketing, and would not have alerted the police to that
possibility, unless she were confident that a majority of FFI’s
workforce would not be Union members and that she would therefore
have no obligation to recognize the Union. All of this evidence,
if credited, suggests that the rejection of some, if not all, of
these seven applicants was a foregone conclusion. One may further
infer from that same evidence that the employees who withdrew
their applications believed they were all but certain to be
rejected: (1) Francisco’s unwillingness to recognize the Union
was not only communicated to numerous RSI employees but was,
according to the Union business representative, openly discussed
at the very first Union meeting called to discuss FFI’s takeover
of the store. Tr. 36. (2) No action had been taken on the job
applications of these employees even as the reopening of the
store under FFI was just days away. (3) These individuals
withdrew their applications based on an erroneous belief that a
pending job application might disqualify them from receiving
unemployment benefits. It is at least a fair inference that they
would not have been concerned about unemployment compensation
unless they expected Francisco not to hire them. That is, in
point of fact, the precise inference that the ALJ drew from the
evidence. ALJ Decision at 8, 15.
With respect to the three individuals who had received
offers of employment from FFI, the Director has a plausible
argument that FFI constructively discharged them. Francisco had
allegedly remarked to a number of RSI employees that FFI would be
a nonunion store long before she hired a full complement of
workers. Employees throughout the store were aware of those
remarks, as we have noted. By allegedly making plain her
discriminatory intent, Francisco put the Union members to whom
she extended offers in the untenable position of forgoing
employment or foregoing their right to representation by the
Union. The Board, with our endorsement, has found similar facts
to constitute a constructive discharge. See Canteen Co., 317 N.L.R.B.
1052, 1068 (1995), enf’d, 103 F.3d 1355, 1365-66 (7th Cir.
1997).
Even if these three individuals are excluded from the
analysis, however, we are still left with the seven individuals
who had not yet received offers. Had they been hired, these seven
individuals would have been more than sufficient to place Union
members in the majority of FFI’s complement of employees. One may
readily infer, then, as the ALJ in fact did, that but for FFI’s
allegedly discriminatory hiring decisions, FFI would have been
obliged to recognize and bargain with the Union. See ALJ Decision
at 16.
We conclude, in sum, that the Director has a better than
negligible chance of establishing that FFI chose its employees so
as to avoid any obligation to bargain with the Union. Although
the evidence may permit the conclusion that FFI did not, in fact,
discriminate against RSI applicants, there is ample evidence that
FFI never intended to recognize the Union and made its hiring
decisions accordingly. Indeed, given the direct, and rather
extensive, evidence that Francisco was making hiring decisions so
as to keep Union members in the minority among her employees, we
rate the Director’s chances of succeeding as strong.
Finally, although the ALJ did not decide whether any of
Francisco’s alleged remarks about the prospective status of the
Union constituted violations of section 8(a)(1) of the Act, as
the Director asserts, because these remarks are relevant to the
asserted need for interim relief, we think it useful to point out
that the Board repeatedly has found that comparable remarks
indeed do run afoul of this provision. Section 8(a)(1) provides
that it is an unlawful labor practice for an employer "to
interfere with, restrain, or coerce employees" in the exercise of
their rights under the Act. 29 U.S.C. sec. 158(a)(1). As the
Board has recognized, until a successor employer has hired its
entire complement of employees, it does not know how many of the
unionized employees of its predecessor will be in that
complement, and so it cannot know whether it will be obligated to
recognize and bargain with the union. Thus, "[w]hen an employer
tells applicants that the company will be nonunion before it
hires its employees, the employer indicates to the applicants
that it intends to discriminate against the [predecessor’s]
employees to ensure its nonunion status." Kessel Food Mkts, Inc.,
287 N.L.R.B. 426, 429 (1987), enf’d, 868 F.2d 881 (6th Cir.), cert.
denied, 493 U.S. 820, 110 S. Ct. 76 (1989). Remarks to this
effect are deemed to be "blatantly coerc[ive]," in the sense that
they discourage union-represented employees from seeking
employment with the successor and in this way abet the
successor’s effort to avoid having to recognize and bargain with
the union. Eldorado, Inc., supra, 2001 WL 1083271, at *1, quoting
Advanced Stretchforming Int’l, Inc., 323 N.L.R.B. 529, 530 (1997),
enforced in relevant part, 233 F.3d 1176 (9th Cir. 2000), cert.
denied, 122 S. Ct. 341 (2001); see also Bay Area Mack, supra, 293
NLRB at 125 & n.5; Kessel Food Mkts., 287 N.L.R.B. at 429; State
Distributing Co., 282 N.L.R.B. 1048, 1059 (1987). So, if Francisco
told Michael Ritchay that the new store "wouldn’t be a union,"
Tr. 432-33; if she told Joann Schrader that she might recognize
the Union "down the road" but not right away, Tr. 340; if she
told Evonne Everson that "only 50 percent of the employees [would
be hired,] because she wouldn’t have the Union," GC Ex. 29; if
she told Carrie Clark that "there was going to be a lot of new
faces because she wanted to keep the union out," Tr. 362; if she
complemented Tina Warriner on her skills but queried whether
Warriner could work "for a nonunion store," Tr. 253; if she told
Joe Curtis that he would be fired if she were forced to take the
Union back, Tr. 543; and if she told Robert Schumacher that
"she’d hire us all back if we would vote out the union," Tr. 412,
then Francisco signaled to RSI employees that she did not plan to
hire enough of them to make recognition of the Union compulsory.
To that extent, she engaged in coercive conduct that violated
section 8(a)(1).
B. Adequate Remedy at Law and the Balance of Harms
"Section 10(j) relief is an extraordinary remedy," Szabo v.
P*I*E Nationwide, Inc., 878 F.2d 207, 209 (7th Cir. 1989)
(internal quotation marks and citation omitted), reserved for
"those situations in which the effective enforcement of the NLRA
is threatened by the delays inherent in the NLRB dispute
resolution process," id. In assessing the propriety of interim
relief in this case, we must focus on the collective bargaining
rights of the store’s employees and what belated relief may mean
to the future exercise of those rights. Hoffman v. Inn Credible
Caterers, Ltd., supra, 247 F.3d at 369; see also Electro-Voice,
83 F.3d at 1567, 1572. As summarized above, the Director has
presented evidence which, if believed, indicates that FFI refused
to hire a number of RSI employees so as to avoid a duty to
bargain with the Union. Based on that evidence, the Director has
asked for an order requiring FFI, inter alia, to offer employment
to the RSI employees that FFI failed to hire and to recognize and
bargain with the Union. We must consider whether, in the absence
of the relief that the Director has requested, the right of store
workers to organize, and to reap the benefits of collective
bargaining, will be irreparably undermined. See id. at 1572-73;
Inn Credible Caterers, 247 F.3d at 369.
The district court was not persuaded that the Union faced
the prospect of irreparable harm in the absence of interim
injunctive relief. This was not a case like Electro-Voice, the
court reasoned, in which there was "persuasive" and "egregious"
evidence that the employer had committed unfair labor practices
that had a chilling effect upon the union’s efforts to organize.
R. 23 at 5-6. On the contrary, FFI had solicited applications
from all of RSI’s employees; it had made offers to twenty non-
supervisory RSI employees and three supervisors; and Francisco
had actively recruited several RSI employees, including one who
was an active Union supporter. Id. at 6. The court also noted
that several FFI employees had acknowledged in testimony that
they would be allowed to determine the matter of unionization
themselves. Id. In short, "the alleged facts do not indicate that
Francisco Foods has a propensity for coercive acts which would
severely harm future Union efforts." Id. Even if FFI did engage
in unfair labor practices, the court concluded, the Board had the
ability to order FFI to bargain with the Union and to hire any
employees who were improperly refused employment with FFI to be
hired. Id. at 6-7.
In defense of these findings, FFI makes one point that we
must address at the outset--that the Director put on no evidence
of irreparable harm that will occur in the absence of an
injunction, and that he necessarily failed as a consequence to
carry his burden to establish such harm. We do not know why the
Director chose not to make an independent case on irreparable
harm, but we do not agree that the omission left the record
devoid of evidence from which the prospect of an irreparable
injury may be inferred. In appropriate circumstances, the same
evidence that establishes the Director’s likelihood of proving a
violation of the NLRA may provide evidentiary support for a
finding of irreparable harm. Pye v. Excel Case Ready, 238 F.3d
69, 74 (1st Cir. 2001). At the same time, as we mentioned at the
outset, a strong showing as to the Director’s likelihood of
success will permit a weaker showing as to the balance of harms
posed by the grant or denial of interim injunctive relief.
Electro-Voice, 83 F.3d at 1568.
In this case, the Director presented relatively compelling
evidence that FFI made a calculated decision to evade the
obligation to bargain with the Union as RSI’s successor by hiring
only a minority of RSI’s employees. As the Director points out,
the harms posed to a union and its members in this situation are
well-recognized. A union finds itself "in a peculiarly vulnerable
position" in the transition from predecessor to successor. Fall
River, 482 U.S. at 39, 107 S. Ct. at 2234. "It has no formal and
established bargaining relationship with the new employer, is
uncertain about the new employer’s plans, and cannot be sure if
or when the new employer must bargain with it." Ibid. The workers
represented by the union face a similar vulnerability: "If the
employees find themselves in a new enterprise that substantially
resembles the old, but without their chosen bargaining
representative, they may well feel that their choice of a union
is subject to the vagaries of an enterprises’s transformation."
Id. at 39-40, 107 S. Ct. at 2234. Given the uncertainties that
both the union and its members face during the transition, a
successor’s refusal to recognize the union or, as allegedly was
the case here, its refusal to hire a majority of the
predecessor’s employees so as to escape that obligation, inflicts
a particularly potent wound on the union and its members. "Having
the new employer refuse to bargain with the chosen representative
of the[ ] employees [who worked for the predecessor] ’disrupts
the employees’ morale, deters their organizational activities,
and discourages their membership in unions.’" Id. at 49-50, 107
S. Ct. at 2239, quoting Franks Bros. Co. v. NLRB, 321 U.S. 702,
704, 64 S. Ct. 817, 818 (1944).
There can be little doubt that these oft-cited harms are
presented here. If one credits the Director’s evidence, FFI
succeeded in displacing a union that had represented store
employees for more than twenty-five years. It made no secret of
its intent, declaring from the beginning of the transition that
it would not recognize the Union when it assumed ownership of the
store. Over the course of the hiring process, Francisco’s stated
goal of keeping RSI employees in the minority, her remark to
Schumacher that "she’d hire us all back if we would vote out the
union," Tr. 421, her remark to Curtis that he would have been
fired if she had to take the Union back, Tr. 543, and her inquiry
as to whether long-time cashier Warriner could work "for a
nonunion store," Tr. 253, conveyed an unmistakable message that
union representation jeopardized the hiring prospects of RSI
employees. True, Francisco did allow for the possibility that
FFI’s employees might, at a later date, vote for union
representation. But the successor’s duty is to recognize and
bargain with the union from the outset, not simply to permit a
new vote on the matter. See Eldorado, Inc., supra, 2001 WL
1083271, at *6 n.4; Bay Area Mack, supra, 293 NLRB at 125 & n.5.
It is difficult to construe remarks akin to "I may let my new
employees decide what to do," GC Ex. 4, as support for the Union,
when the remark simply highlights the successor’s ongoing efforts
to displace the "old" employees along with the union that
represented them. Indeed, as we discussed in the previous
section, many of Francisco’s alleged remarks predicting that the
Piggly Wiggly would not be a union store when FFI took over
constitute coercive remarks in violation of section 8(a)(1) under
Board jurisprudence. See supra at 41-42. The district court’s
finding that FFI had not engaged in coercive activity, R. 23 at
5-6, is therefore inconsistent with the record evidence.
In this setting, the remedial authority of the Board cannot
entirely cure the harms that will occur in the interim. Although
the Board can order FFI to "reinstate" any RSI employee that it
refused to hire for inappropriate reasons, the reality is that
the rejected employees are moving on to other jobs; as additional
time passes, the likelihood that they will be interested in or
able to accept a position with FFI lessens. See Electro-Voice, 83
F.3d at 1573. Meanwhile, the RSI employees whom FFI did hire are
working without the advocacy of their chosen representative.
Assuming that the Board ultimately orders FFI to bargain with the
Union, such a forward-looking order cannot fully compensate the
employees of FFI for the variety of benefits that good-faith
collective bargaining with the Union might otherwise have secured
for them in the present. Squillacote v. U.S. Marine Corp., 116
LRRM 2663, 2665 (E.D. Wis. 1984); accord Rivera-Vega v. ConAgra,
Inc., 876 F. Supp. 1350, 1371 (D. P.R.), aff’d, 70 F.3d 153 (1st
Cir. 1995). Indeed, the longer that the Union is kept out of the
store and from working on behalf of FFI’s employees, the less
likely it is to be able to organize and represent those employees
effectively if and when the Board orders the company to commence
bargaining. Electro-Voice, 83 F.3d at 1573. In sum, the district
court’s assertion that any wrong that occurred can be compensated
by way of the Board’s remedial authority "turns a blind eye to
the effect of the passage of time." Id. More than two years have
already passed since FFI assumed ownership of the store, and
years more may pass before this case is finally resolved.
The deprivation to employees from the delay in bargaining and the
diminution of union support is immeasurable. That loss, combined
with the likelihood that the Board’s ability to rectify the harm
is diminishing with time, equals a sufficient demonstration of
irreparable harm to the collective bargaining process. . . .
Id. (citation omitted).
On the other side of the ledger, a grant of interim relief
will impose obvious burdens on FFI, albeit ones that are only
cursorily noted by the company on appeal. See FFI Br. at 40.
Reinstatement of the ten RSI applicants whom FFI did not hire/15
will likely cause some displacement among FFI’s current
employees, although we note that five of those ten employees had
relatively short tenures with RSI, which makes it less likely
that they would accept jobs if offered them at this date.
Moreover, requiring FFI to bargain with the Union will
effectively unionize FFI’s workforce for the first time. This
will certainly mark a significant change for the employees who
never worked for RSI and consequently were not represented by the
Union.
However, the Director has presented a strong case on the
merits and has already secured a favorable ruling from the ALJ
who conducted the merits hearing. The Director’s case, and the
ALJ’s findings, both suggest that FFI displaced the Union as the
representative of the store’s employees by means of
discriminatory hiring decisions. In other words, FFI dramatically
shifted the status quo in its favor through illegal means. See
Inn Credible Caterers, 247 F.3d at 369 ("By its own violation of
the Act, [the successor] was able to hire a non-union workforce
and thereby threaten to weaken severely, if not destroy, the
power of the predecessor’s employees to assert their collective
bargaining rights."). The longer that the successor employer is
permitted to benefit from a state of affairs that its own
wrongdoing has brought about, the less likely it is that a final
order in the Board’s favor will be able to redress the wrongs
that have been done and to restore the status quo ante. Electro-
Voice, 83 F.3d at 1573. Restoration of that status quo is a vital
means of preserving the Board’s ultimate ability to provide
meaningful redress for the wrongs alleged.
Given the Director’s likelihood of prevailing on the merits,
coupled with the recognized gravity of the harms posed to the
collective bargaining rights of the store’s employees, we find
that the balance of the harms favors an award of interim relief.
See id.
C. Public Interest
Congress authorized interim injunctive relief via section
10(j) as a means of protecting public rather than private
interests. Szabo v. P*I*E Nationwide, Inc., supra, 878 F.2d at
209-10. The NLRA embodies a public policy that aims to foster the
free flow of commerce by promoting the collective bargaining
process and "protecting the exercise by workers of full freedom
of association, self-organization, and designation of
representatives of their own choosing, for the purpose of
negotiating the terms and conditions of their employment or other
mutual aid or protection." 29 U.S.C. sec. 151. Thus, the interest
at stake in a section 10(j) is "the public interest in the
integrity of the collective bargaining process." Eisenberg v.
Wellington Hall Nursing Home, Inc., 651 F.2d 902, 906-07 (3d Cir.
1981); see also Hirsch v. Dorsey Trailers, Inc., 147 F.3d 243,
247 (3d Cir. 1998); Asseo v. Pan American Grain Co., 805 F.3d 23,
28 (1st Cir. 1986). That interest is placed in jeopardy when the
protracted nature of Board proceedings threatens to circumscribe
the Board’s ability to fully remediate unfair labor practices.
See Electro-Voice, 83 F.3d at 1574; see also Miller v. California
Pacific Med. Ctr., supra, 19 F.3d at 460.
Given the nature of the unfair labor practices charged in
this case and the evidence supporting the Director’s allegations,
interim relief would serve the public interest. If, as the
Director alleges, FFI deliberately displaced the Union by
refusing to hire RSI employees it otherwise would have hired, it
committed violations that strike at the heart of the collective
bargaining process. As we have discussed, while the parties await
the final resolution of the Director’s complaint, the likelihood
of the Board being able to effectuate complete relief on that
complaint is decreasing: RSI employees that FFI did not hire are
scattering to other jobs, the RSI employees who were hired are
left without the benefits of representation, and support for the
Union is no doubt eroding. By halting this progression away from
the status quo ante, interim relief will help to preserve the
Board’s remedial authority and in that way serve the collective
bargaining process.
III.
We conclude that the district court abused its discretion in
denying the Director’s petition for interim injunctive relief
pursuant to section 10(j). A thorough review of the record
reveals that the Director has a better than negligible-- indeed,
strong--likelihood of prevailing on the merits of his charge that
FFI evaded what would otherwise have been its obligation to
recognize and bargain with the Union by conducting a
discriminatory hiring process. That likelihood is borne out by
the ALJ’s decision in favor of the Director. Interim relief in
these circumstances is widely recognized as an appropriate and
necessary means of preserving the Board’s remedial authority.
Interim relief will also serve the public interest by fostering
the integrity of the collective bargaining process, which FFI’s
alleged wrongs sought to disrupt.
We therefore REVERSE the district court’s judgment and
REMAND with directions to grant the Director’s petition for
relief pursuant to section 10(j) and to enter an order requiring
FFI to (1) extend offers of interim employment to Robert Birkrem,
Carrie Clark, Jamie Kotlowski, Tara Manthei, Alan Pipping, Penny
Pipping, Ryan Sasada, Robert Schumacher, Janet Simmons, and Tina
Warriner; and (2) upon request, recognize the Union as the
bargaining representative of its employees and to engage in
collective bargaining with the Union. The Director has requested
that FFI also be ordered to rescind any changes in work
conditions that it has unilaterally imposed on store employees
since its takeover of the store. Rescission can be appropriate
when it appears that the employer has improperly circumvented the
collective bargaining process in order to alter working
conditions. See, e.g., Rivera-Vega v. ConAgra, Inc., supra, 70
F.3d at 162. The Director has only identified two such changes
here, however--a new health insurance plan and a tightening of
vacation eligibility--without discussing how those particular
changes, left in place pending a final remedial order, might
impair the Board’s ability to effectuate complete relief. See
Director’s Br. at 10, 38-40. On remand, the district court may
entertain additional evidence and argument on this point and, in
the exercise of its discretion, determine whether interim
rescission of the changes is appropriate.
FOOTNOTES
/1 Paragraph 6.2j of the purchase and sale agreement entered into
by FFI and RSI provided that, pending consummation of the sale,
RSI would not extend any existing labor agreement with the Union
or enter into any new agreement with the Union that contained a
continuation clause or that would otherwise bind FFI. GC Ex. 11
at 11, para. 6.2j.
/2 After hearing the evidence, the ALJ credited Everson’s written
statement over her testimony. Francisco Foods, Inc. and United
Food & Commercial Workers Union, Local No. 73A, AFL-CIO-CLC, No.
30-CA-14738, Decision (N.L.R.B. Div. of Judges Mar. 31, 2000)
("ALJ Decision") at 11 para. 3. "It is obvious to me, observing
the demeanor of the witness and the fact that she now works for
Respondent, that the truth is in Everson’s statement on April 6
and not in her testimony before me." Id.
/3 Based in part upon the apparent discrepancies in Curtis’s
explanation as to how he had contacted FFI’s attorney, the ALJ
credited his original testimony. "Suffice it to say I believe it
was Francisco and possibly also Maxwell who mentioned the 50%
matter to Curtis. And Curtis was trying to undo some damage from
his testimony the day before. I am convinced that the
Respondent’s counsel did nothing improper, however." ALJ Decision
at 13.
/4 Four additional individuals had applied for, but had not yet
been offered employment with FFI. However, after hearing the
evidence, the ALJ found that FFI had legitimate, performance-
related reasons not to offer these four individuals employment.
ALJ Decision at 8-10. The Director does not quarrel with that
determination here. Director’s Br. at 10 n.7. Accordingly, we
shall exclude these individuals from consideration.
/5 Simmons testified that she had asked Francisco a week or so
after the sale was announced whether she would have a job with
FFI. According to Simmons, Francisco responded simply, "I don’t
know." Tr. 456. Simmons went on: "I was going to walk away and
then [Francisco] said, no wait a minute. And I went--I said that
I had talked with other people in the store and she had told them
that they had a job and I would like to know, yes or no, whether
I had a job or not, and she said, I don’t know. And that’s where
I left it." Id.
/6 Francisco testified that she had not yet prepared a work
schedule for FFI at this point in time. Tr. 653. Penny Pipping,
however, testified that fellow employee Ryan Sasada had found the
schedule and had shown it to her. Tr. 688-89. According to
Pipping, with three exceptions, the new schedule was filled with
the names of new employees. Tr. 688.
/7 Because May 16 was a Sunday, the sale did not actually close
until the following day, May 17.
/8 We may, of course, take judicial notice of the ALJ’s decision.
See Rivera-Vega v. ConAgra, Inc., 70 F.3d 153, 157 n.3 (1st Cir.
1995); Seeler v. Trading Port, Inc., 517 F.2d 33, 37 n.7 (2d Cir.
1975).
/9 This court has declined to articulate any rule about the
appropriate way in which to view the facts when evaluating a
request for interim injunctive relief pursuant to section 10(j).
See Electro-Voice, 83 F.3d at 1567 n.16; see also Kinney, 881
F.2d at 488-89. Our sister circuits often observe that the
Director is entitled to a favorable construction of the evidence
in this context. See, e.g., Hoffman v. Inn Credible Caterers,
Ltd., 247 F.3d 360, 365 (2d Cir. 2001); Sharp v. Webco Indus.,
Inc., 225 F.3d 1130, 1134 (10th Cir. 2000); Arlook v. S.
Lichtenberg & Co., 952 F.2d 367, 371-72 (11th Cir. 1992);
Pascarell v. Vibra Screw, Inc., 904 F.2d 874, 882 (3d Cir. 1990).
That observation is usually made, however, in the context of
evaluating whether the Director has "reasonable cause" to believe
that the employer has violated the NLRA. See Kinney, 881 F.2d at
488-89 & n.1. In Kinney, this court held that "reasonable cause"
is not part of the 10(j) analysis. 881 F.2d at 488-93. "Once the
Board seeks injunctive relief under sec. 10(j)," we concluded,
"the only question for the court is whether the Board has
demonstrated that relief is ’just and proper’ under the approach
traditionally applied to equitable cases filed by public
agencies." Id. at 493 (footnote omitted). We do not decide here
whether the Director is always entitled to a favorable
construction of the evidence--even if, for example, the district
judge has conducted a full-blown evidentiary hearing on the
Director’s application and resolved certain credibility questions
or other conflicts in the evidence against him. See Kinney, 881
F.2d at 489. We decide only that when the district court decides
the Director’s request for 10(j) relief entirely on a paper
record, we owe the Director a favorable reading of that record.
See id.
/10 The successorship analysis necessarily focuses on non-
supervisory employees, given that supervisors are excluded from
the bargaining unit. See, e.g., NLRB v. Joe B. Foods, Inc., 953
F.2d 287, 294-97 (7th Cir. 1992).
/11 Indeed, the evidence supports the inference that Francisco’s
failure to tell employees whether or not FFI planned to hire them
was a signal that offers would not be extended to them. None of
the four RSI employees whom FFI rejected, according to the ALJ,
for legitimate, performance-related reasons, ALJ Decision at 8-
10, was ever actually told that he or she would not be hired. See
Tr. 246, 335, 557, 564. In fact, Francisco testified that when
FFI decided not to hire someone, "[w]e didn’t respond" to that
individual’s application. Tr. 619.
/12 Recall that sixteen of FFI’s non-supervisory employees had
formerly worked for RSI. Francisco had extended offers to four
other RSI employees. Three of these individuals--Bob Schumacher,
Penny Pipping, and Alan Pipping, were among the ten individuals
whose applications Francisco was asked to return on May 12. The
fourth employee, Peggy Koepsel, accepted a job elsewhere.
/13 The record does reveal that Francisco made job offers to a
number of RSI employees fairly soon after the sale to FFI was
announced. See Tr. 432-33 (Ritchay); Tr. 489, 492 (Wittchow); Tr.
496-97 (Simonis); see also Tr. 353-54 (Schrader). Indeed, it was
the fact that others had already been promised a job with FFI
that accounted for the frustration that Janet Simmons expressed
to Francisco about her own uncertain status. Tr. 456.
/14 We should point out that one RSI employee, Evonne Everson,
was hired just a day or two before FFI took over the store. See
Tr. 278. By this time, Penny Pipping, to whom Francisco had
extended an offer, had received her application back from
Francisco and had torn it up. Arguably, then, Francisco knew when
she hired Everson that Pipping was not going to accept a job with
FFI and that, at most, nineteen of FFI’s non-supervisory workers
(just under one-half) would have been former employees of RSI.
/15 As we noted earlier, we are excluding from consideration the
additional four applicants whom the ALJ determined were not hired
for legitimate, performance-related reasons. See supra n.4.