Frankl v. HTH Corp.Frankl v. HTH Corp.
Case Information
*2 BERZON, Circuit Judge:
This appeal of an injunction issued pursuant to § 10(j),
The somewhat more difficult question is the logically prior one of whether the District Court had the power to issue the injunction. In 2007, the Board assigned the authority to approve § 10(j) petitions to the General Counsel of the Board. See Minutes of Board Action, Dec. 20, 2007. Pursuant to this delegation, the General Counsel approved the filing of the instant § 10(j) petition. The Hotel argues that the Act requires that petitions for § 10(j) relief be individually approved by the Board before they are filed with a district court. Because the Regional Director did not obtain such approval, the Hotel argues, he did not have authority to petition for the injunction, and the District Court was without the power to grant it. Like all the federal courts of appeals to have addressed the ques- tion, we disagree. See Osthus v. Whitesell Corp. , No. 09-3209, ___ F.3d ___, 2011 WL 1517949, at *2 (8th Cir. Apr. 22, 2011); Overstreet v. El Paso Disposal, L.P. , 625 F.3d 844, 851-52 (5th Cir. 2010); Muffley v. Spartan Mining Co. , 570 F.3d 534, 539-40 (4th Cir. 2009).
I. BACKGROUND
When the General Counsel of the National Labor Relations
Board issues a complaint alleging an unfair labor practice and
commences proceedings before the Board, it takes consider-
able time—sometimes years—for the administrative process
to conclude. But “[t]ime is usually of the essence [in labor
disputes].”
Miller v. Cal. Pac. Med. Ctr.
,
To remedy this problem, Congress added § 10(j) to the
NLRA, as part of a comprehensive labor law reform in 1947.
See
Labor-Management Relations Act, 1947 (the “Taft-
Hartley Act”), Pub. L. No. 80-101, § 101, 61 Stat. 136, 149,
codified at
(j) Injunctions
The Board shall have power, upon issuance of a complaint as provided in subsection (b) of this sec- tion 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 tempo- rary 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 tempo- rary relief or restraining order as it deems just and proper.
Bargaining between the Union and the Hotel did not go well. Between January 22, 2007 and August 29, 2008, the Union filed numerous unfаir labor practice charges with the Regional Director of Region 20 of the Board (the “Regional Director” or the “Director”). The Director investigated the charges and issued an unfair labor practice complaint.
On September, 30 2009, after thirteen days of hearings, a Board Administrative Law Judge (“ALJ”) determined that the Hotel had violated § 8(a)(1), (3) and (5) of the Act and recom- mended that the Board order the Hotel to cease and desist from various unfair labor practices and to take other remedial actions. The Hotel filed extensive exceptions to the ALJ’s rul- ing with the Board, and the Director filed limited ones. The case remains pending before the Board.
On January 7, 2010, the Director filed a petition in the Dis- trict Court for injunctive relief under § 10(j) of the Act. In accordance with the Board’s 2007 delegation of litigation authority, the filing of the petition was approved by the [1] We use the term “Hotel” to refer the facility itself as well as the three business entities, appellants here, that have owned and managed it. Where the referent is not clear from context, we eschew the term. *6 9886
Board’s General Counsel but not by the members of the Board itself. The Hotel opposed the petition on its merits but also moved to dismiss the complaint for lack of subject-matter jurisdiction, contending that the Director’s failure to obtain the Board’s approval to file the § 10(j) petition deprived the District Court of jurisdiction. Siding with the Director, the District Court issued an injunction requiring the Hotel to bar- gain with the Union, to reinstate certain discharged employ- ees, to rescind unilateral changes to the bargaining unit members’ terms and conditions of employment, and to take various other remedial measures.
The Hotel appealed. On June 14, 2011, while this appeal was pending, the Board issued its decision in the underlying action. See HTH Corp. , 356 N.L.R.B. No. 182 (2011). It affirmed the ALJ’s rulings, findings, and conclusions, and it modified the ALJ’s recommended remedies in respects not relevant here.
II. MOOTNESS
[1] Before turning to the substantive issues at stake in this case, we must first address the issue of mootness. A Section 10(j) proceeding, in which the Board seeks injunctive relief to protect the lawful status quo while litigation is pending, can become moot when the NLRB issues its decision in the under- lying administrative proceeding. See Miller , 19 F.3d at 453. Here, however, the Board filed in the district court a motion for civil contempt on February 14, 2011—while the Hotel was subject to the District Court’s injunction, after this appeal was filed, and before the Board issued its order. The original con- [2] The Board modified the ALJ’s order in two respects. First, in accord with its decision in Ky. River Med. Ctr. , 356 N.L.R.B. No. 8 (2010), the Board required that back pay and other monetary awards be paid with interest compounded on a daily basis. Second, the Board modified the ALJ’s order to provide for the posting of notice in accord with J. Picini Flooring , 356 N.L.R.B. No. 9 (2010).
tempt motion sought both coercive and compensatory relief, including back pay for an employee allegedly terminated in violation of the injunction and the Board’s attorneys’ fees and costs incurred in connection with the contempt proceeding. After the Board issued its decision, the Director notified the District Court that he no longer sought coercive remedies and, receiving an extension of time to file an amended civil con- tempt motion, withdrew the original contempt motion. On July 8, 2011, the Board filed an amended civil contempt motion seeking compensatory relief.
[2] We hold that this appeal is not moot because its resolu- tion is crucial to a pending claim for retrospective monetary relief sought by the Board against the Hotel in a civil con- tempt proceeding. See Trans Int’l Airlines, Inc. v. Int’l Bhd. of Teamsters , 650 F.2d 949, 955 (9th Cir. 1980). “Despite superseding events, an issue is not moot if there are present effects that are legally significant.” Jacobus v. Alaska , 338 F.3d 1095, 1104 (9th Cir. 2003). The validity of a civil con- tempt adjudication turns on the legitimacy of the underlying injunction. See, e.g. , Kirkland v. Legion Ins. Co. , 343 F.3d 1135, 1142-43 (9th Cir. 2003); see also United States v. United Mine Workers , 330 U.S. 258, 294-95 (1947). The legitimacy of the District Court’s injunction, in turn, depends on whether the District Court abused its discretion in granting the Board’s § 10(j) petition. It also depends on the antecedent question whether the Board has authority to assign § 10(j) decisions to the General Counsel. [3] Accordingly, we hold thаt neither the delegation issue nor the merits of the injunction are moot. Cf. Trans Int’l Airlines , 650 F.2d at 957 (holding that alternative grounds for the injunction underlying a con- tempt proceeding remained live on appeal and noting a reluc- tance to fragment an appeal into “live” and “moot” issues). [3] Although a panel of three Board members issued the NLRB’s final order, this circumstance does not affect the General Counsel’s authority (or lack thereof) to commence the § 10(j) action.
III. THE BOARD’S AUTHORITY TO ASSIGN § 10(j) DECISIONS TO THE GENERAL COUNSEL The Hotel contends that each petition for relief under § 10(j) must be individually authorized by a quorum of NLRB members. Because the particular petition in this case was not so authorized, the Hotel maintains, the petition was improp- erly before the District Court and should have been dismissed for want of subject-matter jurisdiction.
A.
1. [3] The circumstances surrounding the 2007 delegation of litigation authority to the General Counsel here contested was described recently by the Supreme Court:
As 2007 came to a close, the Board found itself with four members and one vacancy. It anticipated two more vacancies at the end of the year, when the recess appointments of Members Kirsanow and Walsh were set to expire, which would leave the Board with only two members—too few to meet the Board’s quorum requirement. The four sitting mem- bers decided to take action in an effort to preserve the Board’s authority to function. On December 20, 2007, the Board made two delegations of its author- ity, effective as of midnight December 28, 2007. First, the Board delegated to the general counsel continuing authority to initiate and conduct litigation that would normally require case-by-case approval of the Board. Second, the Board delegated “to Mem- bers Liebman, Schaumber and Kirsanow, as a three- member group, all of the Board’s powers, in antici- pation of the adjournment of the 1st Session of the 110th Congress.”
. . . .
On December 31, 2007, Member Kirsanow’s recess appointment expired. Thus, starting on Janu- ary 1, 2008, Members Liebman and Schaumber became the only members of the Board.
New Process Steel, L.P. v. NLRB
, 130 S. Ct. 2635, 2638-39
(2010) (citations omitted).
New Process Steel
went on to con-
sider the second of the two described delegations, holding that
a three-member group with one vacancy could not exercise
the powers of the Board.
Id
. at 2641-42. Section 3(b) of the
Act authorizes delegations to three-member groups,
[4] At the same time, New Process Steel expressly declined to discuss the legality of the Board’s assignment of litigation authority to the General Counsel, the delegation challenged in this case. The Supreme Court explained:
Our conclusion that the delegee group ceases to exist once there are no longer three Board members to constitute the group does not cast doubt on the prior delegations of authority to nongroup members, such as the regional directors or the general counsel. The latter implicates a separate question that our decision does not address.
Id. We now consider that “separate question,” beginning with a brief survey of the relevant history.
2.
From 1935, when the NLRA was enacted, to 1947, the
Board consisted of three members responsible for both the
prosecution and the adjudication of all cases over which the
Board had jurisdiction.
See
National Labor Relations Act,
Pub. L. No. 74-198 (the “Wagner Act”), § 3(a), 49 Stat. 449,
451 (1935);
id.
§ 10,
There shall be a General Counsel of the Board who shall be appointed by the President, by and with the advice and consent of the Senate, for a term of four years. The General Counsel of the Board shall exer- cise general supervision over all attorneys еmployed by the Board (other than administrative law judges and legal assistants to Board members) and over the officers and employees in the regional offices. He shall have final authority, on behalf of the Board, in respect of the investigation of charges and issuance of complaints undersection 160 of this title, and in respect of the prosecution of such complaints before the Board, and shall have such other duties as the Board may prescribe or as may be provided by law.
[5] As a matter of the Board’s historical practice, the Gen- eral Counsel has not always sought case-specific approval before filing a § 10(j) petition. Immediately after the Taft- Hartley Act’s passage, for instance, the General Counsel and the Board entered into a “memorandum of understanding” according to which the “General Counsel [was to] exercise full and final authority and responsibility on behalf of the Board for initiating and prosecuting injunction proceedings as provided for in Section[ ] 10(j).” Evans v. Int’l Typographical Union , 76 F. Supp. 881, 888 (S.D. Ind. 1948) (quoting the memorandum) (emphasis added); see also National Labor Relations Board—Procedures § 202.35, reprinted in 20 Labor Relations Reference Manual 3117-18 (1947) (“Whenever the Regional Director deems it advisable to seek temporary injunctive relief under Section 10(j) . . . the officer or Regional Attorney to whom the matter has been referred will make application for appropriate temporary relief . . . .”) (emphasis added).
In 1950, however, the Board published a memorandum in the Federal Register “describ[ing] the statutory authority and set[ting] forth the prescribed duties and authority of the Gen- eral Counsel of the Board.” Nat’l Lab. Rel. Bd., General Counsel—Description of Authority and Assignment of Responsibilities, 15 Fed. Reg. 6924, 6924 (Oct. 14, 1950) (the “1950 Memorandum”). That memorandum provided that “[o]n behalf of the Board, the General Counsel of the Board will[,] in full accordance with the directions of the Board, . . . initiate and prosecute injunction proceedings as provided in section 10(j) . . . Provided, however , That the General Coun- sel will initiate and conduct injunction proceedings under sec- tion 10(j) . . . only upon approval of the Board . . . .” Id . In other words, the 1950 Memorandum authorized the General Counsel to file § 10(j) petitions on the Board’s behalf, but required him to seek case-specific authorization from the Board before filing them. The Board issued a new memoran- dum in 1955 containing an assignment of litigation authority to the General Counsel identical to that in the 1950 Memoran- dum. See Nat’l Lab. Rel. Bd., Authority and Assigned Responsibilities of General Counsel of National Labor Rela- tions Board, 20 Fed. Reg. 2175, 2175 (April 6, 1955) (the “1955 Memorandum”). [4] These two memoranda set forth what [4] The 1950 Memorandum had been revoked in 1954, when the Board assigned litigation authority to its Associate General Counsel. See Nat’l Lab. Rel. Bd., Revocation of Statement of Description of Authority and Assignment of Responsibilities to the General Counsel, 19 Fed. Reg. 8830, 8831 (Dec. 21, 1954). was the Board’s standard, but not invariant, [5] practice until the 2007 delegation at issue in this case. The General Counsel’s § 10(j) Manual describes that procedure in greater detail:
After the Region [i.e., a regional office of the agency] determines that a case has merit and believes 10(j) proceedings are appropriate, the Region makes a recommendation in writing to the General Counsel, through the Injunction Litigation Branch (ILB) of the Division of Advice, as to whether it believes that Section 10(j) relief is war- ranted. . . . If the General Counsel agrees that 10(j) proceedings should be sought, the Region’s memo- randum provides the foundation for the General Counsel’s request for authorization from the Board. . . . .
After the General Counsel reviews and signs ILB’s cover memorandum to the Board, the entire case, including the Region’s memorandum and attachments, is submitted to the Board. . . . At this point, at the latest, the Region should immediately begin preparing papers to file in district court. . . . If the Board authorizes Section 10(j) proceedings, the ILB will immediately notify the Region.
[5]
The Board delegated generic § 10(j) authority to the General Counsel
for a brief period in 2001 and 2002,
see
Nat’l Lab. Rel. Bd., Order Dele-
gating Authority to the General Counsel Before Chairman Peter J. Hurt-
gen, and Members Wilma B. Liebman and Dennis P. Walsh, 66 Fed. Reg.
65998, 65998 (Dec. 21, 2001);
Kentov v. Point Blank Body Armor, Inc.
,
In addition to this 2001 order, the Board has published amendments to the 1955 Memorandum in the Federal Register, but these amendments relate to parts of the memorandum that are of no relevance here. See Nat’l Lab. Rel. Bd., General Counsel—Further Amendment to Memorandum Describing Authority and Assigned Responsibilities, 67 Fed. Reg. 62992, 62992 (Oct. 9, 2002) (citing other amending memoranda). NLRB Office of the General Counsel, Electronic Redacted § 10(j) Manual §§ 5.2, 5.3, & 5.5 at 12 & 14 (2002). [6] The § 10(j) Manual does not describe the Board’s procedure upon receipt of the General Counsel’s memorandum, but the Board’s Case Handling Manual suggests that the ordinary practice has been for the Board to vote on each petition indi- vidually:
The Regional Office, based on either the Director’s sua sponte determination or a request from the charging party, initially considers whether 10(j) relief is warranted. In contrast to 10(l) injunctive relief, where by statute interim relief must be sought whenever certain unfair labor practices have occurred and are likely to continue, the Board decides on a case-by-case basis whether to authorize the Regional Office to seek 10(j) relief.
NLRB Case Handling Manual, Part I, Unfair Labor Practice
Proceedings § 10310 (2009).
[7]
After obtaining the Board’s
approval, the Regional Director files the § 10(j) petition in
district court.
[8]
See
[6] The redacted § 10(j) Manual is available at http://www.nlrb.gov/sites/ default/files/documents/44/redacted_10j_manual_5.0_reduced.pdf (last visited June 8, 2011).
[7] The relevant section of the Case Handling Manual is available at http://www.nlrb.gov/sites/default/files/documents/44/chm_ulp_2011.pdf (last visited June 8, 2011). We later discuss the relevance of § 10(l).
[8] For whatever reason, § 10(j) petitions have historically been filed in the name of a regional director “for and on behalf of the Board.” See Gottfried v. Frankel , 818 F.2d 485, 492 (6th Cir. 1987) (noting this practice). In accord with this longstanding practice, the plaintiff in this case is “Joseph F. Frankl, for and on behalf of the Board,” not simply the “Board.” *14 9894
[6] The Direсtor and the Hotel dispute whether this proce- dure, case-by-case pre-filing approval by the Board of § 10(j) petitions, is mandated by the Act. We conclude that it is not.
B.
The parties and some of the courts to have considered the
question have assumed that if a Regional Director failed to
obtain the necessary authorization to file a § 10(j) petition,
that failure would deprive a district court of subject-matter
jurisdiction.
See Osthus
, 2011 WL 1517949, at *2 (holding
that the Board’s delegation did not deprive the district court
of “subject matter jurisdiction”);
El Paso Disposal
, 625 F.3d
at 851-52 (same);
cf. Fed. Election Comm’n v. NRA Political
Victory Fund
, 513 U.S. 88, 98-99 (1994) (dismissing a peti-
tion for certiorari for lack of jurisdiction because the FEC
lacked “statutory authority to litigate th[e] case in” the
Supreme Court without the Solicitor General’s authorization).
In support of its contention that a district court’s jurisdiction
hangs in the balance, the Hotel observes that § 10(j)’s first
sentence describes the manner and circumstances in which a
§ 10(j) petition may be filed, and its second sentence then pro-
vides that “[u]pon the filing of any
such
petition the court . . .
shall have jurisdiction.”
[9]
In
McDermott v. Ampersand Publishing
,
An alternative view of the statutory language is that as long as the petition is facially regular—that is, is filed on behalf of the Board in the appropriate court, specifies that a complaint alleging an unfair labor practice hаs been issued, and requests appropriate relief—it is “such [a] petition” and the district court has jurisdiction to consider it. On that view, issues con- cerning whether the petition was properly approved might at most be considered on the merits, but would not implicate the court’s jurisdiction. We regard it unlikely that Congress intended a district court’s jurisdiction to depend on the back- stage subtleties of how a facially proper petition came to be before it, especially as both the court and the respondent in § 10(j) proceedings will often have no reason to suspect that a petition was not properly authorized .
[7] Here, however, the issue of the propriety of the Board’s 2007 delegation of its authority to approve § 10(j) petitions to the General Counsel has been squarely raised before us. Because we conclude that the General Counsel’s exercise of that authority was permitted by the statute, it does not matter —except at one point in the analysis, see infra section III.D— whether the District Court’s jurisdiction turned on the issue. We shall therefore assume, without deciding, that an improp- erly authorized § 10(j) petition would have implications for a district court’s subject-matter jurisdiction.
C.
1.
The Hotel urges us to read § 10(j)’s language as requiring
that the Board approve each individual § 10(j) petition. That
section provides, “
The Board
shall have power . . . to petition
. . . for appropriate temporary relief . . . .”
[i]f, after such investigation, the officer or regional attorney to whom the matter may be referred has reasonable cause to believe such charge is true and that a complaint should issue, he shall, on behalf of the Board , petition [the appropriate] United States district court . . . for appropriate injunctive relief pending the final adjudication of the Board with respect to such matter.
We conclude that these statutory considerations are more
than counterbalanced by a number of others. As we explain,
§ 10(j) gives the Board the power to petition a court for relief,
which the Board necessarily does through counsel, but does
not specify the level of involvement that the Board must have
with each individual petition. The contrast with § 10(
l
)
reflects only that § 10(
l
) removes from the Board the author-
sight of most private-sector labor relations in the United States (and so
include the General Counsel and the regional directors), or it can refer
only to the five-member council that governs that agency. Section 10(j)’s
reference to “the Board” refers to the five-member council.
See
2.
[8]
We begin with the observation that § 10(j) provides
only that “[t]he Board shall have power . . . to petition” for
relief.
[9]
Section 10(j) is quite different in this respect from
§ 10(c), the provision of the Act discussing the Board’s power
to issue orders in unfair labor practice adjudications.
See
U.S.C.
[10]
Further, § 10(c) begins with a recognition that testi-
mony may be “taken by [a Board] member, agent, or agency”
of the Board,
see also
Another provision of the Act similarly supports through
structural comparison the view that § 10(j) does not direct the
Board to decide itself, on an individualized basis, whether to
file petitions for interim relief with district courts. Unlike
§ 10(j), § 10(b) expressly contemplates the possibility of an
“agent or agency designated by the Board for . . . purposes”
of exercising the Board’s “power” to issue complaints.
Section 10(b), including its mention of an “agent or agency designated by the Board” to exercise the Board’s “power” to issue complaints, was included in the original Wagner Act, see 49 Stat. at 453-54, and left largely unamended by the Taft-Hartley Act. See 61 Stat. at 146-47. The Taft-Hartley Act, however, added § 3(d) to the NLRA, creating the posi- tion of General Counsel, designating the General Counsel as having “final authority, on behalf of the Board,” to issue com- agent or agency designated by the Board for such purposes, shall have power to issue and cause to be served upon such person a complaint stating the charges in that respect, and containing a notice of hearing before the Board or a member thereof, or before a designated agent or agency, at a place therein fixed, not less than five days after the serving of said complaint: Provided , That no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board and the service of a copy thereof upon the person against whom such charge is made, unless the person aggrieved thereby was prevented from filing such charge by reason of ser- vice in the armed forces, in which event the six-month period shall be computed from the day of his discharge. Any such com- plaint may be amended by the member, agent, or agency conduct- ing the hearing or the Board in its discretion at any time prior to the issuance of an order based thereon. The person so complained of shall have the right to file an answer to the original or amended complaint and to appear in person or otherwise and give testimony at the place and time fixed in the complaint. In the dis- cretion of the member, agent, or agency conducting the hearing or the Board, any other person may be allowed to intervene in the said proceeding and to present testimony. Any such proceeding shall, so far as practicable, be conducted in accordance with the rules of evidence applicable in the district courts of the United States under the rules of civil procedure for the district courts of the United States, adopted by the Supreme Court of the United States pursuant to section 2072 of Title 28.
9900
plaints, and providing generally for the assignment of “other duties” to the General Counsel. 61 Stat. at 139. The new § 3(d) thus both negated the Board’s ability to make the spe- cific delegation of Board “power” to issue unfair labor prac- tice complaints contemplated by § 10(b) by assigning that “final” authority to the General Counsel, and obviated the need for any specific authorization within § 10(j) for discre- tionary delegations of the Board’s powers, by providing generically in § 3(d) for such assignments to the General Counsel. So the mention of designated agents in § 10(b), far from defeating the notion that the Board’s § 10(j) power may be exercised by an entity other than the Board, in fact sug- gests that the Board’s “powers” are not inherently nondelega- ble.
Finally, comparison between § 10(j) and § 10(
l
), does not
detract from the conclusion that nothing in § 10(j) requires the
Board to make case-by-case decisions as to § 10(j) petitions.
For a subset of unfair labor practice cases, § 10(
l
) mandates,
rather than allows, application for interim relief if “the officer
or regional attorney to whom the matter may be referred has
reasonable cause to believe [the] charge is true and that a
complaint should issue.”
for mandatory relief and as to the decisionmaking process for determining whether to do so.
Section 10(j)’s silence speaks loudly enough that we might end the matter there, concluding that the Board may exercise its § 10(j) power by having the General Counsel decide whether to petition for § 10(j) relief in an individual case. Indeed, unlike stating findings of fact or issuing orders in unfair labor practice proceedings, it is hard to delineate the precise action that constitutes an exercise of the § 10(j) power. Surely, the multi-member Board is not required to make every decision that arises in the course of litigating a § 10(j) petition. The multi-member council need not, for example, appear before the district court and recite its oral argument in unison. The Board’s lawyers do—indeed, must— make such litigation decisions and so they are necessarily involved in the exercise of the Board’s power to petition under § 10(j).
[11]
No more than it requires the Board’s involvement in
each decision relating to a § 10(j) petition does the language
of the statute require that the Board approve each individual
petition. In other words, nothing in the statute makes the indi-
vidual petition the unit of analysis for determining when the
Board is exercising its § 10(j) power. Moreover, petitioning a
court for relief is a lawyerly function and the General Counsel
is, after all, the supervisor of the Board’s legal staff.
See
3.
More generally, we have previously observed that as far as delegation to subordinates is concerned, “[e]xpress statutory authority for delegation is not required.” Loma Linda Univ. v. Schweiker , 705 F.2d 1123, 1128 (9th Cir. 1983); see U.S. Telecom Ass’n v. FCC , 359 F.3d 554, 565 (D.C. Cir. 2004) (“When a statute delegates authority to a federal officer or agency, subdelegation to a subordinate federal officer or agency is presumptively permissible absent affirmative evi- dence of a contrary congressional intent . ”); see also Inland Empire Pub. Lands Council v. Glickman , 88 F.3d 697, 702 (9th Cir. 1996) (“Without express congressional authorization for a subdelegation, we must look to the purpose of the statute to set its parameters.” (internal quotation marks omitted)).
It is true that the General Counsel’s status as the Board’s subordinate is not unequivocal. The General Counsel is an independently appointed and confirmed officer whose pro- secutorial role Congress deemed it prudent to segregate from the Board’s adjudicatory one. That fact complicates the appli- cation of the general presumption that delegations to subordi- nates are permissible in cases of statutory silence.
[12]
But the General Counsel is the Board’s subordinate at
least insofar as § 3(d) of the Act requires the General Counsel
to perform “such other duties as the Board may prescribe.”
Section 3(d) of the Act provides that the General Counsel shall have final authority, on behalf of the Board, in respect of the investigation of charges and issuance of complaints under [section 10], and in respect of the prosecution of such complaints before the Board, and shall have such other duties as the Board may prescribe or as may be provided by law.
[13]
A careful reading of § 3(d), informed by the Act as a
whole, reveals that its use of the word “duties” does not con-
template that functions elsewhere described as “powers” may
not be prescribed to the General Counsel. Section 3(d) pro-
vides that the General Counsel shall have “such
other
duties”
as the Board may prescribe; it does not simply say “such
duties.”
Other parts of the Act, however, refer to these same enu- merated functions as “powers.” Section 10 of the Act, for instance, sets forth the Board’s authority to issue complaints and is explicitly cross-referenced by § 3(d). It provides that:
the Board, or any agent or agency designated by the Board for such purposes, shall have power to issue and cause to be served upon such person a complaint . . . .
That the Act appears to use the terms “power” and “duty” as largely interchangeable is unsurprising. One can only be under a duty to do that which one has the power to do, and a duty need not be an obligation to exercise a ministerial power. Cf. Osthus , 2011 WL 1517949, at *4-5 (Colloton, J., concurring) (observing that “it is not logically inconsistent for Congress to say that a superior body (the Board) may task a subordinate official (the General Counsel) with the ‘duty’ to exercise some of the Board’s ‘power’ ” and drawing an anal- ogy to similar language in the Internal Revenue Code). The sum of the matter is that any inference from the text of the statute that the Act precludes the Board from assigning to the General Counsel the task of deciding in which individual cases § 10(j) petitions should be filed is, at best, exceedingly weak.
4.
One final consideration reinforces the conclusion that the Act permits the assignment of § 10(j) petition decisions to the General Counsel: Section 10(e) of the Act has long been inter- preted and applied to permit the General Counsel, and not the Board itself, to make the ultimate decision whether to com- mence litigation in individual cases. Section 10(e)’s structure is nearly identical to that of § 10(j). The agency’s longstand- ing practice under § 10(e) is therefore persuasive evidence of the legality of its more short-lived and episodic practice under § 10(j). See New Process Steel , 130 S. Ct. at 2641-42.
Violation of an order issued by the Board at the conclusion
of unfair labor practice proceedings does not result in any
penalties for the violator.
See
2 H IGGINS ,
supra
, at 2802. “To
secure compliance, the Board must apply to an appropriate
U.S. court of appeals” for enforcement of its order.
Id.
Section
10(e) of the Act sets forth the power of the Board to petition
for judicial enforcement of its orders, using language closely
parallel to that of § 10(j). Specifically, § 10(e) provides, in
part, that “[t]he Board shall
have power
to petition any court
of appeals of the United States . . . for the enforcement of [its]
order.”
From 1950 to 2007, the General Counsel’s litigation authority on behalf of the Board was, with rare exceptions, governed by memoranda containing the following language:
On behalf of the Board, the General Counsel of the Board will, in full accordance with the directions of the Board, petition for enforcement and resist petitions for review of Board Orders as provided in section 10(e) and (f) of the act, initiate and prosecute injunction proceedings as provided in section 10(j), seek temporary restraining orders as provided in sec- tion 10(e) and (f), and take appeals either by writ of error or on petition for certiorari to the Supreme Court: Provided, however , That the General Counsel will initiate and conduct injunction proceedings *26 9906
under section 10(j) or under section 10(e) and (f) of the act and contempt proceedings pertaining to the enforcement of or compliance with any order of the Board only upon approval of the Board, and will ini- tiate and conduct appeals to the Supreme Court by writ of error or on petition for certiorari when autho- rized by the Board.
1955 Memorandum, 20 Fed. Reg. at 2175; 1950 Memoran-
dum,
The agency’s longstanding practice of having the General
Counsel, and not the Board, exercise final authority in
approving petitions for enforcement under § 10(e) is strongly
supportive of that practice’s validity.
See New Process Steel
,
Section 10(f) of the Act allows “person[s] aggrieved” by Board orders
to petition for their review by a court and allows the court to grant tempo-
rary injunctive relief similar to that available under § 10(e).
v. Daniel , 439 U.S. 551, 566 n.20 (1979) (“[A]n administra- tive agency’s consistent, longstanding interpretation of the statute under which it operates is entitled to considerable weight.”). To conclude that the General Counsel could not exercise such authority would be to hold decades of unchal- lenged agency practice unlawful—a practice, moreover, in which courts have acquiesced thousands of times over by granting petitions for enforcement.
In
NLRB v. C&C Roofing Supply, Inc.
,
Of course, if the statute clearly precluded the generic assignment of when to exercise the Board’s § 10(e) power to the General Counsel, it would be our duty to tell the agency that it had been wrong all along. But the statute contains no such preclusion. Instead, it affirmatively suggests that the Board may exercise its power to petition for enforcement under § 10(e) by authorizing the General Counsel to decide when to petition for enforcement of Board orders in individ- ual cases, for the same reasons, already discussed, that it may do the same under § 10(j). See IBP, Inc. v. Alvarez , 546 U.S. 21, 34 (2005) (“[T]he normal rule of statutory interpretation [is] that identical words used in different parts of the same statute are generally presumed to have the same meaning.”); Overstreet v. United Bhd. of Carpenters , Local Union No. 1506 , 409 F.3d 1199, 1206-07 (9th Cir. 2005) (same). The converse is, of course, also true. As long аs the Board may grant generic authorization to the General Counsel to approve petitions for enforcement under § 10(e), the same must be the case under § 10(j).
[14] In sum, we hold that the text of the Act, reinforced by the Board’s longstanding practice under § 10(e), allows the Board to assign the General Counsel final authority in decid- ing when to petition for injunctive relief under § 10(j) in par- ticular unfair labor practice cases pending before the Board.
The three other circuits that have addressed the question
agree that district courts may entertain § 10(j) petitions
approved by the General Counsel pursuant to the authority
granted him by the Board in December 2007. See
Osthus v.
Whitesell Corp.
, No. 09-3209, ___ F.3d ___, 2011 WL
1517949 (8th Cir. Apr. 22, 2011);
Overstreet v. El Paso Dis-
posal, L.P.
,
D.
[15] Because we have assumed, without deciding, that the Regional Director’s authority to petition for § 10(j) relief may have jurisdictional implications, we consider an issue that the Hotel did not raise, but that other circuits have considered and rejected—whether the reduction of the Board’s membership to two, where it stood at the time the General Counsel approved the filing of the § 10(j) petition here at issue, affected the ability of the General Counsel to file § 10(j) peti- tions. See El Paso Disposal , 625 F.3d at 853; Osthus , 2011 WL 1517949 at * 2 (following El Paso Disposal ); see also Williams v. United Airlines, Inc ., 500 F.3d 1019, 1021 (9th Cir. 2007) (noting our duty to raise questions of the district court’s jurisdiction nostra sponte ).
In a case decided before New Process Steel , the D.C. Cir- cuit suggested that the reduction of the Board’s membership to two would have such an effect. See Laurel Baye Health- care of Lake Lanier , Inc. v. NLRB , 564 F.3d 469, 473 (D.C. Cir. 2009). Considering the 2007 delegation of adjudicatory authority also at issue in New Process Steel , Laurel Baye drew on principles of agency and corporations law, broadly reasoning that “[i]n the context of a board-like entity, a delegee’s authority . . . ceases the moment that vacancies or disqualifications on the board reduce the board’s membership below a quorum.” Id .
But New Process Steel rejected the D.C. Circuit’s underly- ing premise in Laurel Baye : The Supreme Court emphasized that a quorum requirement only specifies the “number of members who must participate for [a multi-member organiza- tion] to take an action,” not “a membership requirement that must be satisfied оr else the power of any entity to which the Board has delegated authority is suspended.” New Process Steel , 130 S. Ct. at 2642 n.4. In other words, New Process Steel instructs that the Act’s quorum requirement must be sat- isfied when the Board is acting directly through its members, but does not need to be satisfied for the Board’s earlier exer- cises and assignments of its authority, made with a proper quorum, to remain valid and in effect.
[16] Given that distinction, the Board-member quorum requirement in § 3(b) of the Act has only limited pertinence with regard to § 10(j). As we developed earlier, § 10(j) assigns the Board a “power” but does not mandate the case- by-case involvement of the Board as a multi-member organi- zation in exercising that power. Thus, with respect to the Board’s power to file petitions under § 10(j), it was sufficient that a quorum of the Board in 2007 decided to assign deci- sions as to individual petitions to the General Counsel. Under the distinction explained in New Process Steel , nothing in the Board’s quorum requirement would cause the General Coun- sel’s ability to file § 10(j) petitions to lapse after the Board’s membership fell below a quorum.
IV. THE MERITS OF THE INJUNCTION
We now consider the injunction on its merits.
Section 10(j) permits a district court to grant relief “it
deems just and proper.”
The District Court determined that the Director was likely to succeed on the merits and likely to suffer irreparable harm; that the balance of hardships tipped in the Director’s favor; and that a preliminary injunction would be in the public inter- est. The District Court therefore enjoined the Hotel from vari- ous activities that, in its view, the Board would likely determine, and be affirmed by the Ninth Circuit in so deter- mining, are unfair labor practices in violation of § 8(a)(1), (3) and (5) of the Act.
We may reverse the grant of a § 10(j) preliminary injunc- tion “only where the district court abused its discretion or based its decision on an erroneous legal standard or on clearly erroneous findings of fact.” Miller , 19 F.3d at 455. “Where the district court is alleged to have relied on erroneous legal premises, review is plenary.” Id. (internal quotation marks omitted). Applying these standards, we affirm.
A. Likelihood of Success on the Merits
1. Legal Standards
On a § 10(j) petition, likelihood of success is a function of the probability that the Board will issue an order determining that the unfair labor practices alleged by the Regional Direc- tor occurred and that this Court would grant a petition enforc- ing that order, if such enforcement were sought. [14] Cf. McDermott , 593 F.3d at 964. We have explained that when the General Counsel, and not the Board, gives final approval to file a § 10(j) petition, “we do not presume that the Regional Director’s position will ultimately be adopted by the Board.” [14] Although the Board’s June 14, 2011 decision, HTH Corp. , 356 N.L.R.B. No. 182 (2011), does not affect our analysis, its conclusions strongly support our own.
McDermott
,
Nonetheless, in evaluating the likelihood of success, “it is
necessary to factor in the district court’s lack of jurisdiction
over unfair labor practices, and the deference accorded to
NLRB determinations by the courts of appeals.”
Miller
, 19
F.3d at 460. It is, after all, the Board and not the courts, which
“has primary responsibility for declaring federal labor poli-
cy.”
Id.
Additionally, and for similar reasons, “even on an
issue of law, the district court should be hospitable to the
views of the General Counsel, however novel.”
Id.
(internal
quotation marks omitted). Given these considerations, it
remains the case—whether or not the Board itself approved
the filing of the § 10(j) petition—that the regional director in
a § 10(j) proceeding “can make a threshold showing of likeli-
hood of success by producing some evidence to support the
unfair labor practice charge, together with an arguable legal
theory.”
Id.
;
see also Scott
,
2. Statutory provisions
The District Court held that the Board would likely deter-
mine, and be affirmed by the Ninth Circuit in so determining,
that the Hotel committed violations of § 8(a)(1), (3) and (5)
of the Act. Section 8(a)(3) makes it an unfair labor practice
to “discriminat[e] in regard to hire or tenure of employment
or any term or condition of employment to encourage or dis-
courage membership in any labor organization,”
3. Underlying facts
The Hotel is comprised of three business entities: the HTH Corporation, the Pacific Beach Corporation, and Koa Man- agement, LLC. The three entities are owned by the Hayashi family and have officers and managers in common. All three entities are named respondents on the § 10(j) petition and are a single employer. [15]
From January 1, 2007 until December 1, 2007, a fourth entity, Pacific Beach Hotel Management, LLC (“PBHM”), a subsidiary of an otherwise unrelated hotel chain, the Outrig- ger Group, managed the Hotel. Neither the Outrigger Group nor PBHM is a respondent in this case or in the proceedings before the Board.
Initially, Robert Minicola and David Mori played the lead roles in collective bargaining. Minicola, the Regional Vice [15] The Hotel has not challenged on appeal the District Court’s determi- nation that the Board will find that the three entities constitute a single employer for purposes of the Act.
President of Operations of the HTH Corporation and the Pacific Beach Corporation had decision-making authority as to all labor-related issues for the Hotel and represented the Hotel in the negotiations. David Mori served as the chief spokesperson for the Union.
As previously noted, the Union was certified on August 15, 2005. Between November 29, 2005 and December 14, 2006, the Union and the Hotel engaged in thirty-seven bargaining sessions. Throughout these sessions, the Hotel insisted on three contractual provisions that the Union charged were so objectionable as to evidence the Hotel’s refusal to bargain in good faith.
First, the Hotel insisted on a union recognition clause pro- viding:
The emplоyer has and shall maintain at any and all times its sole and exclusive right to unilaterally and arbitrarily change, amend, and modify the certified bargaining unit . . . and any and all hours, wages, and/or other terms and conditions of employment at- will [sic].
The Hotel also proposed a management rights clause specify- ing that all terms and conditions of employment, including the right “to select, hire, discipline and discharge employees at will,” “shall remain vested exclusively in the Hotel.” The third objected-to provision set forth the Hotel’s proposed grievance procedure: The Hotel insisted that all employee or Union complaints be adjudicated by the relevant department manager, with appeals to the director of human resources and ultimately to the general manager of the Hotel.
As the ALJ remarked,
these three proposals [were] all of a piece. The first is a demand for [cession] of any control whatsoever over the bargaining unit itself. The second sets parameters which allow the Union virtually no say in the nature of the jobs held by employees which the Union represents. The third, [while] facially allow- ing for some sort of appeal procedure in the event of an on-the-job grievance, actually sets up only an illu- sion . . . [as] it all end[s] up in the hands of the gen- eral manager . . . .
In large part because of the Hotel’s insistence on these three provisions, the parties had not reached an agreement on an initial contract by January 1, 2007. On that date, PBHM assumed management of the facility and workforce.
PBHM, a newly formed subsidiary of the Outrigger Group, had entered into a management agreement with the Pacific Beach Corporation on September 6, 2006, well after collec- tive bargaining with the Union had begun. The management agreement required PBHM to hire all current Hotel employees at the same jobs, with the same rates of pay and benefits and the same seniority dates. PBHM was also to be responsible for bargaining with the Union. Under the terms of the man- agement agreement, however, the approval of the Hotel’s owner was required before PBHM could agree to any contract “if the cost to the Hotel under that [contract] exceeds . . . $350,000,” or if the contract exceeded one year in duration and could not be terminated upon thirty days’ notice. Because, as PBHM’s lead negotiator testified, a collective bargaining agreement lasting less than a year or terminable upon thirty days’ notice would be of limited value and also because any plausible agreement lasting longer than a year would cost more than $350,000, the management agreement effectively gave the Hotel veto power with regard to PBHM’s negotiations with the Union. The management agreement also required that its terms be kept confidential, so PBHM could not inform the Union of the Hotel’s broad reservation of the right to reject contracts.
The Union and PBHM reached tentative accord on most items and, by the end of June, 2007, were on the verge of reaching an overall agreement. PBHM requested Hotel approval to propose a contract which it believed the Union would accept. PBHM also requested that the Hotel permit it to disclose to the Union the Hotel’s reservation of the right to reject contracts. When the Hotel did not consent to the con- tract or to disclosure, PBHM informed the Hotel that if the Hotel continued to refuse to grant its two requests for consent, PBHM would believe itself unable to fulfill its obligation to bargain in good faith under the Act, and the Hotel would be in violation of its covenant to “reasonably consent to . . . requests” under its management agreement with PBHM. Four days later, the Hotel exercised its right to terminate the man- agement agreement with PBHM.
Effective December 1, 2007, Pacific Beach Corporation resumed its management of the facility. The Hotel required all employees to reapply for their jobs, and then reinstated most, but not all, employees. The District Court found that, out of union animus, the Hotel did not continue the employment of five bargaining committee members. Also effective December 1, 2007, the Hotel withdrew recognition from the Union, based on Minicola’s observations that attendance at Union rallies had declined and unspecified “verbal and written indi- cations that the majority of employees did not want to be rep- resented by the Union.” From then on, the Hotel refused to bargain with the Union. The Hotel also unilaterally granted wage increases to certain employees and changed employees’ work schedules and responsibilities. In July, 2008, the Hotel determined that it had received signatures from a majority of bargaining unit employees on a petition stating that the employees did not desire Union representation and thereupon purported to withdraw recognition a second time.
4.
Likelihood of success: § 8(a)(5)
The Board will find that an employer has violated its duty
to bargain under § 8(a)(5) of the Act if the employer has
failed to bargain in good faith with a union,
see Regency Serv.
Carts, Inc.
,
To determine a party’s good faith, the Board looks to the
“totality of the [r]espondent’s conduct, both at and away from
the bargaining table.”
Hardesty Co.
, 336 N.L.R.B. 258, 259
(2001) (internal quotation marks omitted),
enf’d
Here, the ALJ determined that the Hotel violated § 8(a)(5) by (1) engaging in bad faith bargaining in 2006; (2) engaging in bad-faith bargaining through PBHM in 2007; and (3) com- mitting per se violations by refusing to bargain and unilater- ally changing terms and conditions of employment after it withdrew recognition from the Union in December 2007. The Regional Director argues, and the District Court concurred, that the Board was likely to agree with the ALJ’s § 8(a)(5) conclusions and is likely to be upheld in that respect upon judicial review. We agree.
[17] (i)
“[T]he Board has held that a рroposal that vested
exclusive control in the employer on the setting of wages,
while offering little more than the status quo in return, was
significant evidence of an intent to frustrate agreement, and in
conjunction with other indicia of bad faith, violated of Section
8(a)(5) of the Act.”
In re Liquor Indus. Bargaining Grp.
, 333
N.L.R.B. 1219, 1220 (2001),
enf’d
[18] In addition, the Regional Director points to, and the ALJ and the District Court both found, other evidence of bad- faith bargaining. See A-1 King Size Sandwiches, Inc. , 265 N.L.R.B. 850, 858 (1982) (adopting the ALJ’s conclusion that an employer bargained in bad faith “primarily” based on the employer’s “bargaining proposals and positions,” especially “viewed in the light of statements indicative of [the employ- er’s] attitude toward collective bargaining”). That evidence included Minicola’s repeated reminders that the Union had won by a one-vote margin, notwithstanding the fact that the Board found that the Hotel had engaged in objectionable con- duct preceding the election that quite possibly affected the margin of victory. Moreover, the Hotel’s objectionable con- duct preceding both elections, as well as its subsequent viola- tions of § 8(a)(3) and (5), discussed below, constitute further evidence from which the Board could have inferred that the Hotel had no intent to resolve its differences with the Union in 2006. In light of this evidence and the Hotel’s bargaining position, the Director has established a sufficient likelihood that the Board would reasonably determine that the Hotel bar- gained in bad faith in 2006. 9919
[19] (ii) The Hotel also challenges the District Court’s finding that the Board was likely to determine that the Hotel bargained in bad faith from January 1, 2007 to December 1, 2007, the period during which PBHM was responsible for bargaining with the Union. The Court held the record ade- quate to support the conclusion that PBHM acted as an agent for the Hotel in collective bargaining and that the Hotel’s can- cellation of the management agreement with PBHM, when a collective bargaining agreement was imminent, while contin- uing to keep its veto authority over a prospective agreement secret, constituted bad-faith bargaining. The Regional Direc- tor asks us to affirm that holding.
The District Court’s reasoning as to this point was compre- hensive and persuasive. Rather than repeat and summarize it, we append that portion of the District Court’s opinion, with some clarifying redactions. See infra Appendix A .
The Hotel’s three objections to that reasoning are unavail-
ing. It is true that the ALJ did not hold that PBHM was the
Hotel’s agent, but he did nonetheless hold that the Hotel was
the statutory employer during the period of the management
agreement. The District Court was under no obligation to
adopt the ALJ’s reasoning wholesale to issue § 10(j) relief.
The District Court instead needed only to determine whether
the Board was likely to determine that the Hotel was the statu-
[16]
One initial point bears consideration with regard to this time period:
It would seem not to matter whether the Hotel engaged in bad-faith bar-
gaining while the PBHM management agreement was in effect, if it did
so both before and afterward, as we would affirm the interim bargaining
order no matter whether the Hotel bargained in bad faith during the PBHM
management agreement period. The District Court, however, ordered the
Hotel to “resume contract negotiations and honor all tentative agreements
entered into from the point [the Hotel] and the Uniоn, and PBHM and the
Union, left off negotiations on November 30, 2007.” Thus, whether it was
“just and proper,”
tory employer, and to be affirmed by this Court in so deter- mining.
The Hotel challenges the District Court’s agency determi- nation on its merits only by arguing that that determination stands in tension with PBHM’s statement that the HTH Cor- poration was no longer the employer and that the District Court based its agency finding “simply” on the Hotel’s power to cancel the management agreement. Neither of these objec- tions bears weight. PBHM’s statements about who the employer was did not prevent the Board from answering that legal question itself. And the District Court based its agency determination on the fact that the Hotel reserved the right, in secret, to veto any likely collective bargaining agreement, not simply on its power to cancel the management agreement.
(iii) Finally, as the District Court determined, the Regional Director has a strong likelihood of establishing that the Hotel violated § 8(a)(5) after December 1, 2007, the date as of which the management agreement with PBHM ended. It is undisputed that the employer from that date on was the Hotel. The Hotel did not resume bargaining at that point. Instead, it withdrew recognition from the Union.
An employer may only withdraw recognition from a union
based on “objective evidence” of a loss of majority support,
see Levitz Furniture Co. of the Pac., Inc.
,
[20] In any case, “employers may not withdraw recogni- tion in a context of serious unremedied unfair labor practices tending to cause employees to become disaffected from the union.” Id. at 717 n.1. The Board was likely to find that the Hotel’s bad-faith bargaining in 2006 and 2007, as well the § 8(a)(3) violations discussed below, constituted pervasive unfair labor practices sufficient to taint any evidence showing that the Union had lost the support of employees. Conse- quently, the Hotel could not have validly withdrawn recogni- tion in December 2007, even if it had had objective evidence of the Union’s loss of majority support.
The Hotel argues that it was able to rebut the presumption that the unfair labor practices caused the loss of majority sup- port. But it was unlikely to be able to do so. The Hotel did not resume bargaining with the Union after the unfair labor prac- tices in 2006 and 2007. See Lee Lumber & Bldg. Material Corp. , 322 N.L.R.B. 175, 178 (1996) (“In the absence of unusual circumstances, . . . [the] presumption of unlawful taint can be rebutted only by an employer’s showing that employee disaffection arose after the employer resumed its recognition of the union and bargained for a reasonable period of time without committing any additional unfair labor prac- tices that would detrimentally affect the bargaining.”). The Board was therefore likely to determine, and to be affirmed by this Court in so determining, that the Hotel committed a violation of § 8(a)(5) when it withdrew recognition on December 1, 2007.
The July 2008 petition submitted by the Hotel and purport- ing to show a loss of majority support for the Union is, as the District Court found, irrelevant, both because of the effect of the prolonged unfair labor practices on employee support for the Union and because the Hotel withdrew recognition on December 1, 2007, without any objective evidence of the loss of union support, and refused to bargain with the Union there- after. Whether the Hotel purported to withdraw recognition a second time, and whether it had a basis for doing so, simply does not matter.
Additionally, if the Board found that the withdrawal of rec-
ognition was improper, it would likely also have found that
the Hotel committed a per se violation of § 8(a)(5) by unilat-
erally changing the terms and conditions of bargaining unit
employees’ employment after unlawfully withdrawing recog-
nition from the Union.
See Local Joint Exec. Bd. v. NLRB
,
5. Likelihood of success: § 8(a)(3) [21] The District Court determined that the Director was likely to succeed in showing that the Hotel violated § 8(a)(3) by terminating five Union leaders, all long-term Hotel employees and all members of the Union’s negotiation team, when it reclaimed management responsibilities from PBHM. The Hotel limits its challenge to this determination to arguing that the District Court applied the wrong legal standard, main- taining the Hotel did not terminate but only refused to rehire the employees on December 1, 2007. The theory is that PBHM was a distinct employer from the Hotel, so that the lat- ter was hiring afresh as of December 2007.
The District Court found that the Hotel decided not to con-
tinue the employment of the five long-term employees
because of their leadership roles in the Union. The Hotel does
not now argue that this finding was clearly erroneous. Refus-
ing to hire new employees because of their prior union
involvement is as much an unfair labor practice as is firing
current employees for that reason.
See FES (A Division of
Thermo Power)
,
B. Likelihood of Irreparable Harm Small rejected, as inconsistent with Winter , Miller ’s hold- ing that a court may presume irreparable harm in § 10(j) and § 10( l ) cases if a likelihood of success on the merits in the unfair labоr practice proceeding is established. 611 F.3d at 490, 494. At the same time, Small retained from Miller , as consistent with Winter , the underlying irreparable injury stan- dard applicable in cases such as this one: 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 494 (quoting Miller , 19 F.3d at 460) (alteration in original). In other words, while a district court may not presume irreparable injury with regard to likely unfair labor practices generally, irreparable injury is established if a likely unfair labor practice is shown along with a present or impending deleterious effect of the likely unfair labor practice that would likely not be cured by later relief. In making the latter determination, inferences from the nature of the particular unfair labor practice at issue remain available.
For instance, with regard to the central statutory violations [17] As the above discussion of PBHM’s status as an agent suggests, we do not mean to indicate that the Hotel did not remain the statutory employer throughout. If it did remain the employer, then the District Court was correct to apply the test for terminations, not refusals to hire. Our point in the text is only that this consideration does not matter for purposes of the § 8(a)(3) analysis.
9924
likely established here, violations of § 8(a)(5), continuation of that unfair labor practice, failure to bargain in good faith, has long been understood as likely causing an irreparable injury to union representation. The Board long ago observed that:
Employees join unions in order to secure collective bargaining. Whether or not the employer bargains with a union chosen by his employees is normally decisive of its ability to secure and retain its mem- bers. Consequently, the result of an unremedied refusal to bargain with a union, standing alone, is to discredit the organization in the eyes of the employ- ees, to drive them to a second choice, or to persuade them to abandon collective bargaining altogether.
Karp Metal Prods. Co. , 51 N.L.R.B. 621, 624 (1943) (foot- note omitted). As the Seventh Circuit has likewise noted, “[a]s timе passes, the benefits of unionization are lost and the spark to organize is extinguished. The deprivation to employ- ees from the delay in bargaining and the diminution of union support is immeasurable.” NLRB v. Electro-Voice, Inc. , 83 F.3d 1559, 1573 (7th Cir. 1996). Consequently, even if the Board subsequently orders a bargaining remedy, the union is likely weakened in the interim, and it will be difficult to recre- ate the original status quo with the same relative position of the bargaining parties. That difficulty will increase as time goes on. And the Board generally does not order retroactive relief, such as back pay or damages, to rank-and-file employ- ees for the loss of economic benefits that might have been obtained had the employer bargained in good faith. See H IGGINS , supra , at 2775. Thus, a finding of likelihood of suc- cess as to a § 8(a)(5) bad-faith bargaining violation in particu- lar, along with permissible inferences regarding the likely effects of that violation, can demonstrate the likelihood of irreparable injury, absent some unusual circumstance indicat- ing that union support is not being affected or that bargaining could resume without detriment as easily later as now. In a similar vein, “the discharge of active and open union supporters risks a serious adverse impact on employee interest in unionization and can create irreparable harm to the collec- tive bargaining process.” Pye v. Excel Case Ready , 238 F.3d 69, 74 (1st Cir. 2001) (internal quotation marks omitted); see id. (observing that other employees’ “fear of employer retalia- tion after the firing of union supporters is exactly the ‘irrepa- rable harm’ contemplated by § 10(j)”). For these reasons, a likelihood of success as to a § 8(a)(3) violation with regard to union activists that occurred during contract negotiations or an organizing drive largely establishes likely irreparable harm, absent unusual circumstances.
[22] We have already determined that the District Court did not abuse its discretion or make any errors of law in find- ing that the Director had established a likelihood of success with regard to the bad-faith bargaining and the exclusion of union leaders from the workforce violations. Thе same evi- dence and legal conclusions, along with permissible infer- ences regarding the likely interim and long-run impact of the unfair labor practices that were likely to be found, preclude the conclusion that the District Court abused its discretion in finding a likelihood of irreparable harm.
The Hotel’s primary argument as to why the Director can- not show irreparable harm is the contention that the Director’s delay in filing the § 10(j) petition is fatal to his claim that interim relief is necessary to prevent irreparable harm. The first unfair labor practice charge was filed on January 22, 2007; the Director issued an administrative complaint on August 29, 2008, covering many incidents, including the withdrawal of recognition and the exclusion of the five union leaders from the workplace, that occurred long after the initial charge was filed. The Director filed the § 10(j) petition on January 7, 2010, after the ALJ decision upholding the Direc- tor’s various unfair labor practice allegations. By awaiting the ALJ decision, the Director made the District Court’s task in evaluating the propriety of interim relief much easier, and much more likely to be carried out accurately, as the Court had the benefit of a record developed over thirteen days of hearings and also of the ALJ’s legal analysis and conclusions.
For its excessive delay contention, the Hotel relies on
McDermott
, in which this Court held that a district court did
not abuse its discretion in ruling that, given a thirteen- to
seventeen-month delay between the alleged occurrence of
unfair labor practices and the filing of a § 10(j) petition, “an
interim order . . . [was unlikely to] provide any genuine reas-
surance to employees beyond that provided by a final Board
order.”
McDermott
,
McDermott
’s observation regarding the effect of delay in
that case is inapposite for several reasons. First, with respect
to its conclusion that the delay in seeking relief properly sup-
ported the finding of a lack of irreparable harm, because of
the First Amendment interests the employer in that case
invoked,
McDermott
was applying a special, heightened stan-
dard.
See McDermott
,
Second, in this case, the record provided specific support for the conclusions that there would likely be irreparable harm beyond that which could be remedied once the Board had ruled, and that interim relief was more likely to curb the ongo- ing unfair labor practices than subsequent relief. For one thing, the former employees whose interim reinstatement the Regional Director sought were members of the bargaining committee. Having current employees on the bargaining com- mittee in daily contact with the other employees and therefore able to judge the impact of various bargaining proposals on their constituencies is likely to affect not only the other employees’ willingness to adhere to union support, but also the interim bargaining process itself. For that reason, the § 8(a)(3) relief in this case is intimately tied up with the interim bargaining order.
Moreover, here, the passage of time did not entirely pre- clude the District Court’s ability to restore the status quo. The Union was willing to represent the employees and to bаrgain on their behalf under an interim bargaining order. Recogniz- ing and bargaining in good faith during the period the Board is considering the exceptions to the ALJ’s ruling both would directly restore to the employees the advantages of day-to-day union representation during that period, advantages that can- not be restored retroactively, and also could lead to the con- clusion of a collective bargaining agreement, with concomitant employee benefits, during the interim period. Thus, the interim relief ordered immediately remedied statu- tory injuries as to which no retroactive relief is available. Finally, of course, there is the fact that McDermott was reviewing denial of interim relief under an abuse-of-discretion standard, while we are reviewing the grant of relief under that same standard.
[23] For each of these independent reasons, we conclude that the District Court was not required to deny relief because the Regional Director awaited the ALJ’s decision before filing the § 10(j) petition.
C. Balance of the Hardships
The District Court determined that the balance of the hard- ships weighed in the Director’s favor. The primary hardship the Hotel had advanced was the protection of its employees from the Union, which, the Hotel claims, the employees did not want to represent them. The Hotel renews that hardship argument before us. We also reject it.
“[I]n considering the balance of hardships, the district court must take into account the probability that declining to issue the injunction will permit the alleged[ ] unfair labor practices to reach fruition and thereby render meaningless the Board’s remedial authority.” Miller , 19 F.3d at 460. For that reason, the District Court’s determination that the Regional Director had shown likely irreparable harm to the collective bargaining process meant that there was also considerable weight on his side of the balance of the hardships.
The Hotel’s asserted countervailing interest, its employees’
alleged desire not to be represented by the Union, fails to out-
weigh the hardships advanced by the Regional Director. As an
initial matter, there is “nothing unreasonable in giving a short
leash to the employer as vindicator of its employees’ organi-
zational freedom.”
Auciello Iron Works, Inc. v. NLRB
, 517
U.S. 781, 790 (1996). For that reason, courts generally are
skeptical about an employer’s claimed “benevolence as its
workers’ champion against their certified union.”
Id
.;
see also
Fall River Dyeing & Finishing Corp. v. NLRB
,
[24] More importantly, by establishing a strong likelihood of success on the merits of the alleged § 8(a)(3) and (5) viola- tions, the Regional Director showed that it was more likely than not that the Hotel had committed pervasive unfair labor practices. As the Board’s case law indicates, in the context of pervasive unremedied unfair labor practices, it becomes impossible to know if employees truly no longer want repre- sentation by the elected union, as their expressed preferences are generally tainted by the effects of the unfair labor prac- tices. See Lee Lumber , 322 N.L.R.B. at 177-78. In all likeli- hood, it will only be possible accurately to gauge union support after the Hotel ceases and desists from its allegedly unfair labor practices and resumes bargaining with the Union —precisely the relief the Regional Director sought and the District Court granted. The District Court, therefore, had no reason to give significant weight to the Hotel’s assertions con- cerning support for the Union, and so properly assessed the balance of the hardships.
D. Public Interest
“In § 10(j) cases, the public interest is to ensure that an unfair labor practice will not succeed because the Board takes too long to investigate and adjudicate the charge.” Miller , 19 F.3d at 460. Ordinarily then, when, as here, the Director makes a strong showing of likelihood of success and of likeli- hood of irreparable harm, the Director will have established that preliminary relief is in the public interest.
The Hotel contests that conclusion as applied here, object- ing that the Director “was literally asking the District Court to grant the Board’s remedy, before the Board itself even has a chance to decide the case.” But, in most bad-faith bargain- ing cases, a § 10(j) remedy will be identical, or at least very similar, to the Board’s final order. This precept follows from the nature of interim § 10(j) relief and of the Board’s final remedial power.
[25]
The purpose of § 10(j) relief is “to preserve the
Board’s remedial power.”
Miller
,
CONCLUSION
For the foregoing reasons, the District Court’s injunction is AFFIRMED.
[18]
We also decline the Hotel’s invitation to follow
Eisenberg v. Hartz
Mountain Corp
.,
c. Whether Respondents engaged in bad faith bargaining from January 2007 through November 2007 In September 2006, Koa and PBHM signed the [Manage- ment Agreement (the “MA”)] for PBHM to take over “the marketing, operation, direction, Hillsborough maintenance, management, and supervision of all portions of the Hotel,” effective January 2007. Both Respondents and PBHM told the Union that in light of the MA, PBHM and not Respondents was the employer of the Hotel employees. Despite these assertions, thе ALJ found that “although Respondents con- tractually delegated PBHM to run the Hotel and to bargain collectively with the Union on Respondents’ behalf [during this time], at no time were Respondents relieved of the obliga- tion to bargain in good faith with the Union” and that Respon- dents engaged in bad faith bargaining during this time period.
The ALJ came to this conclusion by finding that Respon- dents were the “true employer” of the Hotel staff during this time. Petitioner has filed a limited cross-appeal requesting that the Board make an explicit finding of agency. As explained below, the court does not reach whether the Board will determine that Respondents were the “true employer,” but rather concludes that the Board will find and the Ninth Circuit will affirm that PBHM was an agent of Respondents for purposes of negotiating a [collective bargaining agreement (“CBA”)], and that Respondents never intended to permit PBHM to enter into a CBA with the Union.
i. Respondents’ and PBHM’s principal/agent relationship as to CBA negotiations
An “employer” for purposes of the NLRA “includes any
person acting as an agent of an employer, directly or indirect-
ly.”
The Board applies common law agency principles to deter- mine the existence of an agency relationship. See, e.g. , Tyson Fresh Meats, Inc. , 343 N.L.R.B. 1335, 1336 (2004). An agency relationship may therefore exist between a purported agent and principal where the agent possesses either actual or apparent authority to act on the principal’s behalf: “actual authority refers to the power of an agent to act on his princi- pal’s behalf when that power is created by the principal’s manifestation to him. That manifestation may be either express or implied.” Id . (quoting Commc’n Workers Local 9431 (Pacific Bell) , 304 N.L.R.B. 446 n.4 (1991)).
Petitioner has presented evidence frоm which the Board will likely conclude and the Ninth Circuit will affirm that PBHM was simply acting as Respondents’ agent for purposes of negotiating the CBA. Respondents, through the MA, gave PBHM express authority to negotiate a CBA with the Union. Despite the MA’s assertion that PBHM “is an independent contractor, and nothing in this Agreement or in the relation- ship of [Respondents and PBHM] shall constitute a partner- ship, joint venture, agency, or other similar relationship,” Respondents retained ultimate control over the negotiations. Specifically, the MA required PBHM to obtain Respondents’ approval prior to entering into any CBA:
Operator shall obtain Owner’s approval of any agreement affecting the Hotel (i) the term of which is more than one (1) year in length and that cannot be terminated upon thirty (30) days’ notice by Oper- ator, or (ii) if the cost to the Hotel under that agree- ment exceeds Three Hundred Fifty Thousand Dollars ($350,000.00), or (iii) that extends beyond the Initial Term and cannot be terminated upon thirty (30) days’ notice by Operator.
Section 3.2.c of the MA effectively gave Respondents veto power of any proposed CBA between PBHM and the Union- given the long term negotiations with the Union, PBHM was not interested in a CBA for less than one year because it “would hardly give [PBHM] . . . a[ ] stable period to develop relationships with the employees and [ ] to operate the busi- ness.” Additionally, a one-year collective bargaining agree- ment would cost the Hotel more than $350,000, requiring Respondents’ approval.
Indeed, despite Minicola’s and PBHM’s outward state- ments to the Union that HTH was no longer operating the Hotel, PBHM worked under the assumption that Koa—as the Hotel’s “owner”—must approve any CBA between PBHM and the Union. For example, both Wilinsky and Rand sent let- ters to Respondents, seeking Koa’s approval on proposals to the Union, which PBHM believed would result in a CBA. Wilinsky explained to [the Hotel’s owner] that “[PBHM] can- not bargain in good faith with the Union until and unless [it] receive[s] [Koa’s] consent.” [3]
In opposition, Respondents suggest that the MA was a “typical management agreement” under which PBHM oper- ated as the owner and employer at the Hotel. The court rejects this argument. While Respondents may have hoped to create the appearance that PBHM was . . . the . . . employer, the MA was not “typical” but rather allowed Respondents to retain control over the Union negotiations, creating the principal- agent relationship described above.
[3] The court’s conclusion is confirmed by Respondents’ decision to can- cel the MA only four days after PBHM sought their approval of contract terms that would have resulted in a CBA. As explained below, it appears that Respondents canceled the MA to prevent the Union from learning of its role in negotiations.
In sum, the record supports that while Respondents cer- tainly attempted to distance themselves from the Union nego- tiations by using PBHM as the “official” operator of the Hotel, PBHM’s control was illusory because Respondents held the ultimate authority over Union negotiations. Accord- ingly, the Board will likely find and the Ninth Circuit will affirm that the MA did not vest to PBHM Respondents’ employer status but instead merely made PBHM Respon- dents’ agent.
The court recognizes that the ALJ did not make an agency
determination and instead found that Respondents were the
“true” employers of the Hotel employees. The ALJ’s “true
employer” language does not change the court’s analysis.
Petitioner alleged in its Conformed Complaint that PBHM
served as Respondents’ agent within the meaning of
On August 3, 2007—four days after PBHM sought its approval of contract terms which would have resulted in a CBA—Respondents сanceled the MA with PBHM. Based upon the record presented, Petitioner asserts that Respondents never had any intention of allowing PBHM to enter into a CBA with the Union and canceled the MA to prevent Respon- dents from having to reject the proposed CBA and/or disclose its veto power over the CBA to the Union. The court agrees that the Board will find and the Ninth Circuit will affirm that Respondents engaged in bad faith bargaining over this time period by having PBHM negotiate with the Union while at the same time knowing that it would never approve any CBA.
The evidence establishes that Minicola clearly did not want a CBA with the Union, much less any Union presence at the Hotel. During initial negotiations, Minicola told PBHM that [the Hotel’s owner] was upset with the employees for voting for the Union, and that Respondents would move to decertify the Union at the end of the certification year in 2006. Rather than move to decertify the Union, Respondents entered into the MA with PBHM, who was well aware that Minicola was “very unhappy” with the concept of a CBA.
The terms of the MA required that it be kept confidential, and the Union was not aware of its language giving Respon- dents veto power over a CBA. PBHM nonetheless negotiated with the Union and by June 29, 2007, the parties were close to entering into an agreement with only “a few issues out- standing.” Respondents were aware that a CBA was imminent —PBHM told Respondents of this progress and even requested direction given its understanding that Respondents did not want a finalized CBA. By letter dated July 30, 2007, PBHM asked Koa, as “owner” under the MA, to consent to PBHM providing the MA’s contract approval provision to the Union (along with other provisions as well), and that Koa approve 11 specific proposals for the CBA. PBHM explained that if it made these 11 proposals, the Union would accept them and the parties would likely enter into a CBA. PBHM further asserted that if Respondents refused to consent, Respondents would be in breach of the MA and that PBHM would no longer be able to bargain in good faith with the Union. PBHM received no response from Respоndents. Instead, on August 3, 2007, Respondents terminated the MA, effective December 30, 2007.
At the time Respondents canceled the MA, they were faced with some hard decisions regarding PBHM and the Union. They could reject PBHM’s proposals and allow PBHM to dis- close the MA’s contract approval provision to the Union, but then the Union would know of Respondents’ involvement and authority on Union negotiations. Alternatively, Respondents could have approved the proposals, but then the Union would be on the verge of a CBA—the very result Respondents had been trying to avoid since negotiations began in 2006. The third alternative—to cancel the MA and purport to take over the Hotel operations as a new employer—avoided both of these results. Given the facts presented, it appears that Respondents canceled the MA simply to derail the final stages of the Union negotiations and prevent the Union from learn- ing of its role in negotiations over this time period. Accord- ingly, the Board will likely find and the Ninth Circuit will affirm that Respondents engaged in bad faith bargaining dur- ing this time period.
In opposition, Respondents provide no explanation why they terminated the MA except for a vague reference to “per- formance issues,” which, from the record, may refer to PBHM’s delay in installing Stellex, PBHM’s failure to keep occupancy rates up, PBHM’s changes to projected perfor- mance figures, disputes over fees and commissions, and the fish deaths in the aquarium. The record does not support that these excuses are valid reasons for terminating the MA.
As to the delay in installing Stellex, Outrigger’s proprietary property management and reservation system, it was eventu- ally installed and properly operating within the Hotel by May 2007. Further, Minicola had worked at Outrigger for 15 years and was familiar with the Stellex system, such that he should have anticipated that installing Stellex takes significant effort.
As to PBHM’s projected occupancy rate and performance figures, Respondents asserted before the ALJ that PBHM did not pеrform up to par with its projections, yet Minicola testi- fied that the decline in the Hotel’s occupancy was in part due to the decline in the tourism economy. Moreover, Wallace explained during the time PBHM was managing the Hotel, profits “were in excess of [PBHM’s] projections and consid- erably in excess of the prior year’s operations.”
As for PBHM’s changes to projected performance figures, the MA required PBHM to submit a formal budget to Respon- dents within 90 days of the start of its management of the Hotel. PBHM submitted a preliminary budget in a timely fashion, and Respondents approved PBHM’s request to extend the time allotted to PBHM to prepare a formal budget, allowing PBHM enough time to acquire knowledge of how the property operates. Once PBHM finished its formal budget, PBHM revised its projected performance figures to take into account the formal budget. These changes were therefore in line with basic budgeting principles and not a basis for termi- nation.
Regarding the fees and commissions, Respondents and PBHM had disagreements regarding the 1.5% chain service fee PBHM proposed to charge Respondents for providing ser- vices to the Hotel and the 2.5% commission Respondents wanted to charge PBHM on all Japanese wholesale business. The parties resolved these disputes, however, with Respon- dents accepting the 1.5% charged to the Hotel after PBHM explained the basis for this charge, and PBHM continuing to pay the 2.5% commission to Respondents.
Finally, as for the dead fish in the aquarium, it is unclear whether Respondents truly assert this problem as a reason for terminating the MA because Minicola did not identify it as a reason in his affidavit before the ALJ. In any event, PBHM apparently addressed this issue by meeting with the chief engineer to stabilize the oxygen in the tank and replacing the dead fish.
In sum, Respondents’ alleged reasons for terminating the MA are unsupported. The Board will likely find and the Ninth Circuit will affirm that Respondents engaged in bad faith bar- gaining by allowing PBHM to negotiate with the Union while at the same time knowing that they would never approve a CBA, and then canceling the MA simply to derail the negotia- tions between the Union and PBHM and hide their position as Hotel employer.