Eisenberg v. Lenape Products, Inc.

OPINION OF THE COURT

HUYETT, District Judge.

Petitioner Arthur Eisenberg, the Regional Director of the Twenty-second Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, filed with the court below a petition pursuant to section 10(j) of the National Labor Relations Act (NLRA), 29 U.S.C. § 160(j),¹ for a temporary injunction, requiring respondent Lenape Products, Inc. to offer certain discharged employees interim reinstatement to their former positions. Concluding that imposition of an injunction was not just and proper under all of the circumstances, the district court denied the petition for injunctive relief. Because we find that the district court did not abuse its discretion in denying the petition for an injunction, we will affirm.

I.

In his petition for injunctive relief, petitioner Eisenberg alleged that respondent Lenape engaged in “unfair labor practices” within the meaning of section 8(a)(1) of the NLRA, 29 U.S.C. § 158(a)(1), by discharging employees who had “ceased work concertedly and engaged in a lawful strike.” Pursuant to section 10(j) of the NLRA, 29 U.S.C. § 160(j), the National Labor Relations Board (NLRB or Board), through petitioner Eisenberg, sought in-junctive relief pending final disposition of the case, and, in particular, sought an order requiring respondent to reinstate those employees who had been discharged pending a final adjudication by the board.

Respondent Lenape is engaged in the manufacture of ceramic products at four New Jersey locations, each of which constitutes a “division.” This action arises from a series of events involving the day-shift employees at Division 3. At the relevant time, there were nine people employed on the day shift, and these individuals were not members of any union and therefore were not represented by a collective bargaining agent. Only the employees at Division 4 had union representation although there is some mention in the record that the employees in Division 1 are now unionized.

The events precipitating this action began on December 27,1984. On that day, at approximately 10:15 a.m., Charles Bernhardt, Sr., an employee at Lenape and the unofficial spokesman for the day shift employees, telephoned Peter Hexter, the Chief Executive Officer for Lenape and told him that the employees were concerned about the working conditions at Division 3. He then demanded to meet with Hexter at 11:00 a.m. “or else we are going to walk out.” Hexter responded that he was not available at 11:00 a.m. but that he could be there at noon. Hexter also suggested that it might be more convenient to meet after the holidays. Bernhardt rejected this suggestion claiming that Hexter was merely trying to give the employees the runaround.

Hexter arrived at the Division 3 plant at approximately 12:05 p.m. to find that the employees had left their jobs. The following day, the employees returned and were told that they were considered to have abandoned their positions and would be replaced by new employees.

Prior to the December 27th employee walk-out, dissatisfaction among the employees over working conditions was mounting. Petitioner contends that the dissatisfaction was caused, in large part, by the hiring of Herman Glinecke as “production control manager” for all four divisions. Glinecke allegedly instituted certain changes including (1) new processes for treating ashtrays which caused employees to develop skin rashes and irritations; (2) changes in hours of work without notice; (3) institution of time studies; and (4) disregard for job classifications. Furthermore, the employees were becoming increasingly concerned about health and safety problems within the Division 3 facility including an increasing rat population and exposed electrical wires. Glinecke was allegedly advised of these concerns but never took any remedial action. Moreover, Bernhardt asked Glinecke to contact Hex-ter to arrange a meeting for the employees with Hexter to discuss employee concerns. Hexter never responded, and it is unclear whether Glinecke ever communicated the concerns of the employees to Hexter.

In early December 1984, the nine employees on the first shift decided to organize a union at Division 3. To this end, they contacted a representative of the Glass, Pottery, Plastic and Allied Workers of America and obtained and signed union authorization cards.

By December 27, the employees decided that they could not accept the working conditions any longer, and Bernhardt therefore placed the telephone call to Hexter. There is a dispute between the parties as to what, if anything, Hexter or other Lenape management personnel knew about the employees’ dissatisfaction with the working conditions prior to the walkout. Even the petitioner Board does not contend, however, that Lenape knew that employee dissatisfaction had led to the beginnings of a unionization effort. At most, Hexter may have known, on December 27, 1984, that the employees were acting in concert when they threatened to leave their positions.

Following the walk-out of the nine employees, Hexter met with Helen Brown, President of Lenape to discuss the situation. They concluded that they had to “take a position that even if these people want to come back we cannot allow them back, otherwise we will have chaos with 117 employees, and people will be able to figure out that they can walk out anytime they want ...” Record at 358. Letters were sent to each of the employees advising them that they had forfeited their positions and would be replaced. Despite requests by the employees that they be permitted to return to their previous positions unconditionally, Lenape management remained firm in its position on the dismissals.²

In response to charges filed by Charles Bernhardt, Sr., the Regional Director issued a complaint and notice of hearing and scheduled a hearing for April 17, 1985. On April 17, 1985, the NLRB authorized the petitioner to petition the district court for injunctive relief pursuant to section 10(j) of the NLRA, 29 U.S.C. § 160®. Concluding that “[t]he evidence in the record, at least arguably, indicates that the employees were ‘acting conceitedly’ ” and therefore that there was reasonable cause to believe that a violation of the NLRA had occurred, the court nevertheless refused to grant in-junctive relief on the grounds that the petitioner had not met the “just and proper” standard of section 10(j).

II.

Arguing that an injunction order is necessary to restore and maintain the status quo pending a Board adjudication in order to preserve the Board’s ability to issue a meaningful remedial order, petitioner Regional Director, on behalf of the NLRB, contends that the district court abused its discretion in denying the petition for injunc-tive relief. Injunctive relief, including interim reinstatement of the discharged employees, plaintiff contends, was just and proper under all of the circumstances. Respondent, on the other hand, contends that there is an ongoing activity that must be protected in the interim.

In declining to grant the injunctive relief requested, the district court relied upon the provision in section 10(j) which states that when it is in the public interest, a court may grant “such temporary relief or restraining order as it deems just and proper.” In reviewing the district court’s determination that injunctive relief was not appropriate, we are limited to deciding whether the lower court abused its discretion. Eisenberg v. Wellington Hall Nursing Home, Inc., 651 F.2d 902, 907 (3d Cir.1981). As we have previously noted, when applying the abuse of discretion standard, we should not disturb the district court’s factual findings unless they are clearly erroneous. Moreover, we should not reverse the decision of the district court unless the undisturbed factual findings do not substantially relate to the conclusion reached. Kobell v. Suburban Lines, Inc., 731 F.2d 1076, 1092 (3d Cir.1984).

We are satisfied, after applying this standard of review, that the district court engaged in a careful analysis of the circumstances giving rise to the petition and properly took into account the policies underlying section 10(j). In fashioning this provision, Congress sought to ensure that the Board would be able to exercise effectively its ultimate remedial power. Therefore, section 10(j) was included to provide interim relief in a situation in which the Board and courts believe that it is necessary to preserve the effective exercise of such remedial power. Suburban Lines, 731 F.2d at 1091. See also S.Rep. No. 105, 80th cong., 1st Sess. 8, 27 (1947). Section 10(j), however, was never intended to become the normal method for resolving labor disputes. Suburban Lines, 731 F.2d at 1092.

As previously noted, the standard for granting a section 10(j) injunction requires, first, that the district court decide whether there is “reasonable cause” to grant the injunction. This prong of the test is satisfied when, viewing the facts most favorably to the Board, there is sufficient evidence to support the legal theory of violation presented by the Regional Director, and when that theory is substantial and not frivolous. Second, having found “reasonable cause,” the district court must find that the issuance of an injunction is “just and proper,” i.e., that it is in the public interest to grant the injunction, so as to effectuate the policies of the National Labor Relations Act or to fulfill the remedial function of the Board. See Eisenberg v. Wellington Hall Nursing Home, 651 F.2d 902, 906-07 (3d Cir.1981); Eisenberg v. Hartz Mountain Corporation, 519 F.2d 138 (3d Cir.1975).

The district court was keenly aware both of its limited role in determining whether injunctive relief was appropriate and of the standards it was to apply in determining whether the “reasonable cause” and “just and proper” elements were satisfied.

The district court found that the petitioner had satisfied the “reasonableness” prong of the standard, but had not satisfied the “just and proper” requirement. Thus, it specifically concluded that the basic remedial function of the Board would not be frustrated by the denial of the injunction. In reaching this conclusion, the court found that there was no evidence that union activity would be “chilled” or that respondent had evidenced any anti-union animus.³ The court further found that the size and intimacy of the group of the employees who walked out was such that if the Board ultimately orders reinstatement, its organizational efforts could be resumed.

In appealing from the district court’s denial of injunctive relief, petitioner contends that the district court, in finding that the “just and proper” standard was not satisfied, failed to examine the effect of the discharges on the remaining employees, and in particular, failed to find that the discharges would have the effect of discouraging other employees from walking out to seek redress for their grievances.

It is well established that section 7 of the NLRA, 29 U.S.C. § 157, protects employees from discharge if they peacefully leave their jobs to protest working conditions, even if the employees have not engaged in any union activity and do not make a specific demand in advance upon their employer to the condition they find objectionable.⁴ NLRB v. Washington Aluminum Co., 370 U.S. 9, 82 S.Ct. 1099, 8 L.Ed.2d 298 (1962); Hugh H. Wilson Corp. v. NLRB, 414 F.2d 1345 (3d Cir.1969), cert. denied 397 U.S. 935, 90 S.Ct. 943, 25 L.Ed.2d 115 (1970). For instance in Wilson, we held that employees who presented to their employer grievances arising from the employer’s decision not to contribute to the profit-sharing plan were engaged in concerted activity sufficient to warrant protection from discharge.

Petitioner contends that because section 7 guarantees employees the right to seek redress of their grievances through concerted activity without union involvement, injunctive relief, including interim reinstatement, in this case was just and proper to ensure that the remaining employees would not be intimidated and discouraged from exercising their right to engage in concerted activity; the group’s right to exercise their section 7 rights must be protected in its formative stages. In support of this contention, petitioner points to the fact that Hexter, the Chief Executive Officer, immediately after the walk-out, agreed with the President of Lenape that the discharged employees would not be reinstated because their actions could not be condoned or the remaining employees would also stage a walk-out whenever they wanted. Respondent’s actions, petitioner contends, were, therefore, directly intended to have the effect of destroying “the bud of employee initiative aimed at bettering terms of employment and working conditions.” Hugh H. Wilson Co. v. NLRB, 414 F.2d at 1347.

When filing a petition for injunctive relief pursuant to section 10(j), the Board acts not in the interests of the individual employees affected by the employer’s actions but rather in the public’s interest as embodied in the National Labor Relations Act. In Eisenberg v. Wellington Hall Nursing Home, 651 F.2d 902, 907 (3d Cir.1981), we concluded that interim reinstatement of the discharged employees was just and proper to maintain the integrity of the collective bargaining process. If the employees, who were all union supported, were not reinstated pending a final Board adjudication, the bargaining representative’s ability to represent other members of the bargaining unit would be undermined, adversely affecting employee interest in unionization. In Suburban Lines, we found that reinstatement of discharged employees was not necessary to preserve the collective bargaining process because the employees constituted a small, intimate unit which would be able to reconstruct itself if the Board ultimately ordered reinstatement.

The district court here addressed the employees’ protected right to engage in concerted activity explicitly in connection with its discussion of the reasonable cause standard. The court also concluded that there was insufficient evidence to demonstrate that the employer’s conduct would “chill” union activity. Consistent with that conclusion is the conclusion that there is insufficient evidence that there will be a “chill” of basic section 7 rights to engage in concerted activity for mutual aid and protection. See District Court opinion at 13.

In this case, we agree with the district court’s conclusion that injunctive relief is not necessary to prevent harm to the employees’ right to engage in concerted activity pending any delayed final relief. If the Board ultimately orders reinstatement, the individual employees will be able to return to their previous positions in the day shift at Division 3 and recommence their organization activities as well as any concerted activities contesting their working conditions. The district court’s finding that the size and intimacy of this group, like the group in Suburban Lines, will enable them to start up where they left off is not clearly erroneous.

More important to our present analysis however, is the fact that there is no evidence in the record to establish that other employees will be discouraged from engaging in concerted activity in the interim. There is no evidence that management was aware of the employees’ embryonic efforts to unionize their division, nor does the Board even contend that they were. This court has recently reiterated that the illicit intent of the employer is a necessary element of a section 8(a)(1) violation, and that knowledge of employee activity is necessary for such intent to exist. Tri-State Truck Service, Inc. v. NLRB, 616 F.2d 65, 69 (3d Cir.1980). Brown and Hexter clearly had knowledge, at the time they dismissed the employees if not at the time the employees walked out, that concerted activity was involved. But it is equally clear that Brown and Hexter did not know anything of the unionization drive in Division 3. Absent such knowledge, it cannot be said that this case is about “employer retaliation [intended to] destroy the bud of employee initiative aimed at bettering terms of employment and working conditions.” Hugh H. Wilson Corporation v. NLRB, 414 F.2d 1345, 1347 (3d Cir.1969), cert. denied, 397 U.S. 935, 90 S.Ct. 943, 25 L.Ed.2d 115 (1970). For this reason, the public interest in safeguarding the collective bargaining process, both in its formative stages and subsequently, is not at stake here.

At least one, if not two, of the other divisions are presently unionized (divisions four and one). Moreover, despite Hexter’s comments, the discharges were an isolated event in response to a particular action by the employees. Finally, we cannot agree with petitioner’s contention that ultimate reinstatement would not eliminate any intimidation of present employees.

In considering a section 10(j) injunction petition, a district court must determine, on a case by case basis, what judicial action will be in the public interest and whether it is “just and proper” given the public interest, that an injunction issue pending the NLRB’s resolution of the underlying unfair labor practice. Because the district court’s factual findings in this case are not clearly erroneous and substantially relate to the conclusion that injunc-tive relief was not just and proper in this instance, we conclude that the district court did not abuse its discretion in denying the requested injunctive relief. The judgment of the district court will be affirmed.

1 . Section 10(j) of the NLRA, 29 U.S.C. § 160(j) provides in pertinent part:

Injunctions

(j) 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.

2 . At oral argument we asked counsel for petitioner to address in written form the reinstatement offer made by respondent and what effect, if any, that offer had on the need for injunctive relief. In response to this request, we received from counsel a letter dated October 31, 1985. As outlined in that letter, the reinstatement offer made by respondent was in response to the district court’s efforts to achieve an informal settlement of the case. The reinstatement offer was extended to those employees who were unemployed at the time of the hearing. These employees would be reinstated to any available vacancies which existed at that time or which might arise later at any of the respondent's four divisions and for which the discharged employees were eligible. After review of the letter, we agreed with the Board’s position that because the reinstatement offer was extended only to those employees who remained unemployed and was good only for positions which might be available and not for the positions from which the employees were discharged, it is not relevant to our present inquiry and does not address the concerns raised by the Board’s petition.

3 . Petitioner contends that the district court did not permit it adequate opportunity to develop the record as to the issue of the potential "chill” to union activity caused by respondent’s actions. In response, Lenape notes that the district court precluded petitioner from introducing evidence as to the organizational drive at the hearing because respondent had never been charged with interfering with union activity. Moreover, petitioner had specifically requested that the district court rely upon the administrative proceeding as the record before it. We find that the district court’s actions were justified.

4 . Section 7 of the NLRA, 29 U.S.C. § 157, provides in pertinent part:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.