Sharp Ex Rel. National Labor Relations Board v. Webco Industries, Inc.

UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
F. ROZIER SHARP, Regional Director
for Region Seventeen of the National
Labor Relations Board, for and on No. 99-5111
behalf of the NATIONAL LABOR
RELATIONS BOARD,
Petitioner-Appellee,
v.
WEBCO INDUSTRIES, INC.,
Respondent-Appellant.
ORDER
Filed September 11, 2000
Before EBEL , HOLLOWAY , and HENRY , Circuit Judges.
This matter is before the court on appellee’s motion to publish the court’s
order and judgment filed on July 11, 2000. The motion is granted. A copy of the
published opinion is attached.
Entered for the Court
PATRICK FISHER, Clerk of Court
By: Keith Nelson
Deputy Clerk
F I L E D
United States Court of Appeals
Tenth Circuit
JULY 11 2000
PUBLISH
UNITED STATES COURT OF APPEALS PATRICK FISHER
Clerk
TENTH CIRCUIT
F. ROZIER SHARP, Regional Director
for Region Seventeen of the National
Labor Relations Board, for and on No. 99-5111
behalf of the NATIONAL LABOR
RELATIONS BOARD,
Petitioner-Appellee,
v.
WEBCO INDUSTRIES, INC.,
Respondent-Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
D.C. NO. 99-CV-0352
David E. Strecker (James E. Erwin with him on the briefs) of Strecker &
Associates, P.C., Tulsa, Oklahoma for the Appellant.
Aaron N. Karsh (Frederick L. Feinstein, Mary Joyce Carlson, Barry J.
Kearney, Ellen A. Farrell, Judith I. Katz, with him on the brief) of the National
Labor Relations Board, Washington D.C.
Before EBEL , HOLLOWAY , and HENRY , Circuit Judges.
HENRY , Circuit Judge.
I. BACKGROUND
Webco Industries, Inc. (“Webco”) appeals the grant of a petition filed by F.
Rozier Sharp, a Regional Director of the National Labor Relations Board, acting
on behalf of the Board, for temporary injunctive relief sought pursuant to § 10(j)
of the National Labor Relations Act, 29 U.S.C. § 160(j) (the “Act”). 1
The
dispositive question is whether the district court abused its discretion when it
concluded that the Board had shown that the temporary injunction it sought was
based on reasonable cause and would be just and proper.
1
Section 160 provides:
The Board shall have power, upon issuance of a complaint
as provided in subsection (b) of this section charging that
any person has engaged in or is engaging in an unfair labor
practice, to petition any United States district court, within
any district wherein the unfair labor practice in question is
alleged to have occurred or wherein such person resides or
transacts business, for appropriate temporary relief or
restraining order. Upon the filing of any such petition the
court shall cause notice thereof to be served upon such
person, and thereupon shall have jurisdiction to grant to
the Board such temporary relief or restraining order as it
deems just and proper.
.
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A. Events Preceding the Filing of the § 10(j) Petition
The facility at issue is the Webco steel tubing plant in Sand Springs,
Oklahoma, Webco’s largest production facility. In January 1997, the United
Steelworkers of America, AFL-CIO, CLC (the “Union”) began an organizing
campaign at the plant. Later that year, in an action unrelated to this case, the
Board and Union alleged that in March 1997 Webco engaged in various unlawful
activities including threatening pro-Union employees and suspending or
discharging other employees thought to be pro-Union. In April 1997, the Union
sent a letter to the plant’s employees informing them of the cessation of the
Union’s drive, citing Webco’s intimidation and scare tactics as a deterrent to
Union membership.
After the Administrative Law Judge filed his conclusions regarding the
March 1997 activities, the Union resumed organizational meetings in June and
August 1998. During this time, management discussed the union activity and
identified and maintained a list of various “pro-Union” employees. Attendance at
these meetings was still relatively sparse, with approximately 31 of the plant’s
280 employees showing interest. Handbilling and other activities continued
during this time.
In September 1998, Webco announced a new company rule that prohibited
employees from discussing the Union on employee time or outside the breakroom.
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On October 7, 1998, Webco permanently laid off fifty-three employees from the
plant, citing economic pressures in the steel industry.
On October 8, 1998, the Union filed an unfair labor practice charge with
the Board’s Regional Director and alleged that Webco terminated several
employees in retaliation for their Union activities. The Union amended this
charge in December, alleging the unlawful termination of 25 pro-Union
employees.
On May 10, 1999, the Regional Director sought § 10(j) injunctive relief
pending the completion of Board’s administrative proceedings against Webco.
The district court found that there was reasonable cause to believe that Webco
committed numerous unfair labor practices alleged in the Board’s § 10(j) petition,
including: prohibiting employees from speaking about Union activities on
employees’ time, while permitting discussion of non-Union subjects during
worktime; interrogating and threatening Union-supporters with reprisals; and
discharging six pro-Union employees, five of whom were members of the nine-
person Union steering committee. The court found the interim relief sought by
the Board to be just and proper, and ordered Webco to cease and desist from
committing the alleged unlawful practices and to reinstate or preferentially hire
the six discharged employees.
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II. DISCUSSION
A. Standard of Review
“Under section 10(j) it is contemplated that a district court grant injunctive
relief if the Board establishes reasonable cause to believe that the Act has been
violated, and it appears that the remedial purposes of the Act would be frustrated
unless [temporary] relief . . . is granted.” NLRB v. Acker Indus., Inc. , 460 F.2d
649, 652 (10th Cir. 1972); see Angle v. Sacks , 382 F.2d 655 (10th Cir. 1967) . In
this circuit, as well as several others, rather than considering a traditional four-
part equitable test to grant a § 10(j) petition, the district court considers whether
there was (1) “reasonable cause to believe” that respondent violated the Act; and
(2) whether the relief sought is “just and proper.” Angle , 382 F.2d at 659, 660;
see e.g. , Pascarell v. Vibra Screw Inc. , 904 F.2d 874 (3d Cir. 1990) (applying
two-part test); Boire v. Pilot Freights Carriers, Inc. , 515 F.2d 1185 (5th Cir. 1975)
(same); Arlook v. S. Lichtenberg & Co. , 952 F.2d 367 (11th Cir. 1992) (same).
The granting of injunctive relief under this standard is a matter committed to
judicial discretion, which is to say that we review for “faulty legal premises,
clearly erroneous factual findings, or improper application of the criteria
governing preliminary injunctive relief.” Kinney v. Pioneer Press , 881 F.2d 485,
493 (7th Cir. 1989); see Angle , 382 F.2d at 658.
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B. Reasonable Cause
“‘Reasonable cause’ to believe that unfair labor practices have occurred is
a factual finding.” Bernstein v. Carter & Sons Freightways, Inc. , 983 F. Supp.
994, 1006 (D. Kan. 1997); see Gottfried v. Frankel , 818 F.2d 485, 493 (6th Cir.
1987). Our circuit, unlike several others, has not established what evidence
constitutes “reasonable cause” for purposes of § 10(j). See Arlook , 952 F.2d at
371 (holding district court’s inquiry “limited to evaluating whether Board’s
theories of law and facts are not insubstantial and frivolous”); Asseo v. Centro
Medico Del Turabo, Inc. , 900 F.2d 445, 450 (1st Cir. 1990) (holding that
reasonable cause exists where the Board’s “position is fairly supported by the
evidence”); Pascarell , 904 F.2d at 882 (stating “there must be a substantial, non-
frivolous, legal theory, implicit or explicit, in the Board’s argument, and second,
taking the facts favorably to the Board, there must be sufficient evidence to
support that theory”); Gottfried , 818 F.2d at 493 (noting the “relatively
insubstantial burden” to demonstrate reasonable cause); Boire , 515 F.2d at 1189
(stating that the “district court need only decide that the Board’s theories of law
and fact are not insubstantial or frivolous”); see also Kinney , 881 F.2d at 488
(noting that “there has been anything but unanimity among the circuits on the
question what it takes for the [Board] to demonstrate reasonable cause”) (citing
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cases). But cf. Miller v. California Pac. Med. Ctr. , 19 F.3d 449, 456 (9th Cir.
1994 (en banc) (holding that § 10(j) has “no ‘reasonable cause’ component”).
We agree that to establish reasonable cause, the Board does not have to
prove that an unfair labor practice has occurred, rather it must only produce some
evidence “that [its] position is fairly supported by the evidence.” Asseo , 900
F.2d at 450; see Gottfried , 818 F.2d at 493; Bernstein , 983 F. Supp. at 1006 . The
Board needs to convince the district court that its theory of liability is valid,
substantial, and not frivolous. See Pascarell , 904 F.2d at 882; Bernstein , 983 F.
Supp at 1006. The court considers only whether the Board’s evidence was
sufficient to “permit a rational factfinder, considering the evidence in the light
most favorable to the Board, to rule in favor of the Board.” Arlook , 952 F.2d at
371.
Webco argues that the Board has not met the reasonable cause standard,
citing the Board’s reliance on affidavits from former employees and Union
officials. Webco contends on appeal that the employees’ affidavits only show
that the former employees were part of the company-wide layoff caused by an
economic downturn and that these employees had little involvement with Union
activities. Our cases do not support Webco’s premises and conclusions.
In this regard, Webco does not address the particularly damaging affidavits
from its former managers. These affidavits support the Board’s contentions that
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the company was strongly anti-Union and considered Union supporters to be a
threat. The affidavits indicate that the company kept a close eye on pro-Union
employees, and that each of several attempts, over the course of more than twenty
years, to bring unions into Webco were quashed by management. As to the level
of Union support demonstrated by the six discharged employees, the district court
weighed the entirety of their affidavits in its conclusion. The ultimate
determination of whether Webco in fact committed unfair labor practices was not
before the district court, and similarly it is not for us to determine whether
unlawful activity actually occurred. See Angle , 382 F.2d at 661. It is sufficient
that we agree there was reasonable cause under Angle .
C. Just and Proper
If the court finds that there is reasonable cause to believe that unfair labor
practices have been committed, the court must next determine whether injunctive
relief is “just and proper.” Angle , 382 F.2d at 660. In making this
determination, the court considers that § 10(j) of the Act was added to give the
Board a means of preserving the status quo pending the completion of
administrative procedures. Specifically, “[t]he circumstances of the case must
demonstrate that there exists a probability that the purposes of the Act will be
frustrated unless temporary relief is granted” Id. , 382 F.2d at 660. “[T]he relief
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to be granted is only that reasonably necessary to preserve the ultimate remedial
power of the Board and is not to be a substitute for the exercise of that power.”
Kobell v. Suburban Lines, Inc. , 731 F.2d 1076, 1091 (3d Cir. 1984).
Webco argues that reinstatement of the six discharged employees was not
“just and proper” relief. The company contends that a crucial distinction between
this case and others where a § 10(j) injunction has been upheld is that in the
latter, the union had gained substantial employee support. See e.g. , NLRB v.
Electro-Voice, Inc. , 83 F.3d 1559 (7th Cir. 1996) (noting there was “some
evidence that support for the union among plant workers remained high”);
Pascarell , 904 F.2d at 877 (the Union represented a majority of the employees).
Here, Webco argues, there was no appreciable Union support at the plant, and
“where there is no evidence of appreciable support for the Union at the time of
the alleged unfair labor practices, an injunction is not necessary to maintain the
status quo.” Aplt’s Br. at 29.
We disagree. Webco has not fared well in its record of labor practices.
See e.g. , Webco Indus. v. NLRB , 2000 WL ____, __ F.3d __ (10th Cir. July __,
2000) (upholding several findings of unlawful labor practices in violation of §§
8(a)(1) and (3) of the Act). Recent Union-organizational drives were countered
with multiple unfair labor practices. It is disingenuous to argue a lack of
appreciable Union support in light of this record, which reflects the company’s
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strenuous efforts to stifle such Union support. Cf. Sharp v. Parents in Community
Action, Inc. , 172 F.3d 1034, 1040 (8th Cir. 1999) (affirming district court’s
denial of § 10(j) relief “where there was no collective bargaining in process, no
recognized or certified union, no on-going organizing activities, no showing of
strong union support among . . . employees, and only one union activist
discharged”). The reinstatement of six of potentially 25 pro-Union supporters and
the additional injunctive relief sought is “reasonably necessary to preserve the
ultimate remedial power of the Board.” Suburban Lines, 731 F.2d at 1091.
Webco also asserts that a seven month delay between the Union’s original
charge in this matter and the Regional Director’s seeking injunctive relief mooted
the need for interim relief. The undue delay arguably reduces the credibility of
the Board’s argument that injunctive relief is necessary. Conceivably, as a result
of the Board’s tardiness, “any harm that might [have] occur[red] in the absence of
the requested injunction, namely the erosion of employee support for the union,
has already occurred.” Sharp v. La Siesta Foods, Inc. , 859 F. Supp. 1370. 1375
(D. Kan. 1994) (considering three to four month delay). Webco also challenges
the Board’s decision to request § 10(j) relief one day before the commencement
of the unfair labor practices trial.
As to the delayed petition filing, we observed in Angle :
The more time that elapses between the time the
incidents occur the less effective injunctive relief
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becomes, and it becomes increasingly difficulty to show
it to be a “just and proper” remedy. This could, of
course, reach a point where relief should be denied on
that ground alone.
382 F.2d at 661; see also Boire v. Pilot Freight Carriers, Inc. , 515 F.2d 1185,
1193 (5th Cir. 1975) (considering three month delay in filing of petition). We
agree that “[d]elay is only significant if the harm has occurred and the parties
cannot be returned to the status quo or if the Board’s final order is likely to be as
effective as an order for interim relief.” Aguayo v. Tomco Carburetor Co. , 853
F.2d 744, 750 (9th Cir. 1988), overruled on other grounds by Miller v. California
Pac. Med. Ctr. , 19 F.3d 449 (9th Cir. 1994) (en banc); see Solien v. Merchants
Home Delivery Service, Inc. , 557 F.2d 622, 627 (8th Cir.1977). But see Gottfried
v. Frankel , 818 F.2d 485, 495 (6th Cir. 1987) (stating “we find no authority for
the proposition that district courts are required to consider the delay in filing a
section 10(j) petition, or that a failure to consider the delay is a basis for
overturning the grant of injunctive relief).
“Although the amount of time that may elapse before the Board's action can
be considered unreasonable is, to a large extent, case-specific, there is a certain
leniency that the Board must be afforded, stemming from the deference to the
Board that is built into the statutory scheme.” Pascarell , 904 F.2d 874, 881. We
note that several factors are relevant: (1) the Board’s historical progress has been
lumbering at best, and the resultant backlog necessitates some delay, see United
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States v. International Bhd. of Teamsters , 948 F.2d 98, 111 (2d Cir.) (Winter, J.,
dissenting) (noting Board procedures are notorious for their “glacial speed in
adjudicating unfair labor practices”); vacated as moot sub nom , Yellow Freight
Sys. Inc. v. United States , 506 U.S. 802 (1992), (2) the Board needs a reasonable
period of time to investigate, deliberate, and authorize the filing of a § 10(j)
action, see Pascarell , 904 F.2d at 881 (noting, in conjunction with a six-month
delay, that “[t]he Board needs time to do a thorough investigation before it even
requests the injunction.”), and (3) in this case, the Board filed a substantially
amended complaint, so that the unfair labor charges were finalized just four and a
half months before the filing the § 10(j) petition.
Congress enacted § 10(j) in part to counteract “‘the relatively slow
procedure of [the] Board hearing and order, followed many months later by an
enforcing decree of the circuit court of appeals, [which] falls short of achieving
the desired objectives [of the Act].’” Miller , 19 F.3d at 455 n.3 (quoting S. Rep.
No. 105, 80th Cong., 1st Sess. 8,27 (1947)). Congress intended a grant of § 10(j)
relief to preclude “persons violating the act to accomplish their unlawful
objective before being placed under any legal restraint.” Id. “Although interim
reinstatement may not precisely restore the status quo in the case before us,”
Aguayo , 853 F.2d at 750, it might revitalize the Union’s sagging organizational
campaign at Webco. Although we cannot excuse the Board for a “decelerat[ion]
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from its usual snail’s pace,” Suburban Lines, Inc. , 731 F.2d at 1102 (Aldisert, J.,
concurring), we hold that the delay and timing of the filing in this case were not
unreasonable. See Aguayo , 853 F.2d at 750 (affirming grant of § 10(j) relief
reinstating discharged employees after four-month Board delay).
Webco suggests that the commencement of the ALJ hearing on the
underlying action also obviated the need for interim relief. We note that the ALJ
has completed its findings, and the Board is reviewing these findings. Webco is
well aware that the ALJ decision on its own is not self-enforcing, and that a §
10(j) injunction will continue until the Board issues its final order in the
underlying action. See Boire , 515 F.2d at 1193. Webco’s argument is, therefore,
without merit.
We also reject Webco’s remaining arguments: (1) that the Board did not
follow its own casehandling manual guidelines; and (2) that an injunction would
not be proper under the four-part equitable test, which we should consider
adopting. 2
As to the first contention, the Board’s guidelines specifically state that
2
Under the “traditional” equitable approach, a court would consider: (1)
the likelihood of success on the merits; (2) the potential for irreparable injury in
the absence of relief; (3) whether the injury to employees outweighs the harm
that the injunction would cause the company; and (4) whether the injunctive
relief is in the public interest. See Parents in Community Action , 172 F.3d at
1038 n.2; Pye v. Sullivan Bros. Printers, Inc. , 38 F.3d 58, 63 (1st Cir. 1994) ;
Miller v. California Pac. Med. Ctr. , 19 F.3d at 456; Kinney , 881 F.2d at 490 n.3.
See also, 2 The Developing Labor Law Ch. 32 § III (Patrick Hardin, ed., 3d ed.
(continued...)
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there “is no statutory delineation of criteria governing the use of Section 10(j),
nor has case law developed a definitive, governing formula.” Aplt’s App. at 228
§ 10310.2 (NLRB Casehandling Manual (Part One) Unfair Labor Practice
Proceedings). Furthermore, the guidelines suggested “are not all inclusive.” Id.
at 229. Also, we disagree with Webco’s contention that this case fell outside the
Board’s guidelines as a whole. Factors to consider when filing a § 10(j) petition
include whether the alleged unfair labor practice “is of a continuing or repetitious
pattern” and whether without § 10(j) relief, it would be impossible to “restore the
status quo or dissipate the consequences of the unfair labor practices,” both of
which appear to be at issue here. Aplt’s App. at 229.
Finally, as to the second contention, we will not reconsider this circuit’s
longstanding Angle two-part test in favor of a traditional equitable analysis.
Webco is aware that we cannot overrule another panel of this court, absent en
banc review. 3
See In re Smith , 10 F.3d 723, 724 (10th Cir. 1993).
III. CONCLUSION
(...continued)
2
1992 & 1998 Supp.).
3
We note that perhaps under certain factual scenarios, the outcome under
the two tests will differ. An Angle inquiry necessarily subsumes various
equitable considerations, and, given the facts of this case, were we to apply the
four-part equitable approach, we would hold that the district court did not abuse
its discretion when its granted injunctive relief to the petitioner.
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For the reasons stated above, we DENY Webco’s appeal and we AFFIRM
the district court’s grant of injunctive relief under § 10(j) of the Act.
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