Cornele Overstreet v. Np Red Rock, LLC ( 2021 )

NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS NOV 26 2021
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
CORNELE A. OVERSTREET, No. 21-16220
Petitioner-Appellee, D.C. No.
2:20-cv-02351-GMN-VCF
v.
NP RED ROCK, LLC, DBA Red Rock MEMORANDUM*
Casino Resort & Spa,
Respondent-Appellant.
CORNELE A. OVERSTREET, No. 21-16355
Petitioner-Appellant, D.C. No.
2:20-cv-02351-GMN-VCF
v.
NP RED ROCK, LLC, DBA Red Rock
Casino Resort & Spa,
Respondent-Appellee.
Appeal from the United States District Court
for the District of Nevada
Gloria M. Navarro, District Judge, Presiding
Argued and Submitted October 14, 2021
Honolulu, Hawaii
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: O’SCANNLAIN, MILLER, and LEE, Circuit Judges.
Concurrence by Judge MILLER
NP Red Rock, LLC, appeals the district court’s entry of an injunction under
section 10(j) of the National Labor Relations Act (NLRA), 29 U.S.C. § 160(j),
requiring it to recognize and bargain with a union. Cornele Overstreet, Regional
Director of the National Labor Relations Board, cross-appeals the district court’s
denial of an injunction requiring Red Rock to reinstate two terminated employees.
We have jurisdiction under 28 U.S.C § 1292(a)(1), and we affirm.
1. The district court did not abuse its discretion by granting preliminary
injunctive relief based on violations of sections 8(a)(1) and 8(a)(5) of the NLRA,
29 U.S.C. § 158(a)(1) and (5). An employer violates section 8(a)(1) by conferring
benefits “shortly before a representation election” if “the employer’s purpose is to
affect the outcome of the election.” NLRB v. Exchange Parts Co., 375 U.S. 405,
406 (1964). Here, new employee benefits were announced just days before the
union election, and there was extensive evidence that those benefits were designed
to discourage union support—or, as described in a document proposing new
healthcare benefits, to “[t]ake[] away union power and major emotional draw to
team members.” The district court did not abuse its discretion in determining that
Red Rock’s grant of benefits was likely an unlawful labor practice rather than a
permissible effort to stay “one step ahead” of union activity. See Hampton Inn NY-
JFK Airport, 348 N.L.R.B. 16, 18 (2006). (The Regional Director also claimed that
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Red Rock violated section 8(a)(1) by making threats to employees, but because the
district court did not rely on that theory, we do not reach the issue.)
To establish a section 8(a)(5) violation, the union must have previously
attained majority support. Scott ex rel. NLRB v. Stephen Dunn & Assocs., 241 F.3d
652, 661 (9th Cir. 2001). The evidence supports the district court’s conclusion that
the union had likely attained majority status because it produced authorization
cards representing more than half of the employee bargaining unit, notwithstanding
the union’s ultimate election loss. See NLRB v. Gissel Packing Co., 395 U.S. 575,
601–09 (1969). And the district court did not err by relying on evidence that
employees changed their votes for fear of losing the newly announced benefits.
Based on those findings, the district court did not abuse its discretion in
issuing an interim Gissel bargaining order. Gissel, 395 U.S. at 610–15 (providing
for collective bargaining orders where unfair labor practices are so disruptive that a
fair union election cannot be held). It is true that “a bargaining order is an
extraordinary and disfavored remedy,” Scott, 241 F.3d at 664, and that “minor or
less extensive unfair labor practices” with only “minimal impact on the election
machinery” do not warrant a bargaining order, Gissel, 395 U.S. at 615. But Gissel
“approve[d] the Board’s use of the bargaining order in less extraordinary cases
marked by less pervasive practices which nonetheless still have the tendency to
undermine majority strength and impede the election processes.” Id. at 614. And
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the analogous facts of Scott compel our conclusion that the district court did not
abuse its discretion by issuing an interim bargaining order based on a well-timed
grant of benefits. 241 F.3d at 665–66. That the bargaining unit is large does not
necessarily make a bargaining order inappropriate, particularly where the benefits
offering affected all voters’ deliberations. See id. at 665.
Not only must the Regional Director demonstrate a likelihood of success on
the merits, but he must also establish “that he is likely to suffer irreparable harm in
the absence of preliminary relief, that the balance of equities tips in his favor, and
that an injunction is in the public interest.” Frankl v. HTH Corp., 650 F.3d 1334,
1355 (9th Cir. 2011) (quoting Winter v. Natural Res. Def. Council, Inc., 555 U.S.
7, 20 (2008)). The district court did not abuse its discretion in determining that
those factors favored the grant of an injunction. “In the context of the NLRA,
‘permit[ting an] alleged unfair labor practice to reach fruition and thereby render
meaningless the Board’s remedial authority is irreparable harm.’” Id. at 1362
(alteration in original) (quoting Miller v. California Pac. Med. Ctr., 19 F.3d 449,
460 (9th Cir. 1994) (en banc)). And the Regional Director’s delay in seeking relief
does not preclude the grant of an injunction. See id. at 1363–64.
2. The district court did not abuse its discretion by denying injunctive
relief based on the Regional Director’s claim under section 8(a)(3), which prohibits
discrimination against employees on the basis of their union activity. 29 U.S.C.
4
§ 158(a)(3). The district court found that Red Rock likely had legitimate, non-
pretextual reasons for laying off and failing to recall certain employees. There is
conflicting evidence as to whether those decisions were made due to employees’
union support or merely in accord with the company’s return-to-work policy.
Given that ambiguity, the court’s finding was not clearly erroneous.
3. The district court did not violate Red Rock’s due-process rights.
While the district court ruled on the basis of an incomplete administrative record,
Red Rock’s own failure to supplement the record—particularly given its inability
to articulate what evidence it was prevented from introducing—does not constitute
a due-process violation. Likewise, the district court was not required to give Red
Rock an opportunity to present and cross-examine live witnesses. Red Rock had
such an opportunity in front of the Board, and the district court correctly noted that
its conclusions were “largely based on evidence whose character is not genuinely
in dispute.” Affidavits in place of a hearing are admissible in preliminary
injunction proceedings. See Herb Reed Enters., LLC v. Florida Ent. Mgmt., Inc.,
736 F.3d 1239, 1250 n.5 (9th Cir. 2013); Scott, 241 F.3d at 662–63.
All pending motions are denied as moot.
AFFIRMED.
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FILED
NOV 26 2021
Overstreet v. NP Red Rock, LLC, No. 21-16220 MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
MILLER, Circuit Judge, with whom O’SCANNLAIN and LEE, Circuit Judges,
join, concurring:
A judicially imposed bargaining order constitutes “an extraordinary and
disfavored remedy for violations of the NLRA.” Scott ex rel. NLRB v. Stephen
Dunn & Assocs., 241 F.3d 652, 664 (9th Cir. 2001). Were we writing on a blank
slate, I would agree with the District of Columbia Circuit that such an order is
rarely, if ever, appropriate “based solely on the grant of economic benefits,” and I
would hold that it was not appropriate here. Skyline Distribs. v. NLRB, 99 F.3d
403, 411 (D.C. Cir. 1996); see also id. at 407–09 (questioning the reasoning of
NLRB v. Exchange Parts Co., 375 U.S. 405 (1964)). But we are not writing on a
blank slate. In Scott, we held that the district court abused its discretion in denying
a bargaining order after the employer had granted benefits “designed to impact the
outcome of a representation election,” an action we characterized as “a ‘hallmark’
violation of the NLRA” that was “‘highly coercive’ in its effect.” 241 F.3d at 666
(quoting NLRB v. Jamaica Towing Inc., 632 F.2d 208, 213 (2d Cir. 1980)).
Although the employer in Scott had committed other violations besides the grant of
benefits, the court did not discuss any of them in justifying the bargaining order. I
therefore see no basis on which this case can be distinguished from Scott. Because
we are bound by Scott—and only because we are bound by Scott—I agree that we
must affirm the judgment of the district court.