UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF INDIANA 

FORT WAYNE DIVISION 

RIK LINEBACK, Regional Director of 

the Twenty-Fifth Region of the National 

Labor Relations Board, for and on behalf 

of the NATIONAL LABOR 

RELATIONS BOARD, 

 Petitioner, 

 v. 

SMI/DIVISION OF DCX-CHOL 

ENTERPRISES, INC., 

 Respondent. 

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Case No. 1:14-CV-228 JD 

OPINION, ORDER, AND TEMPORARY INJUNCTION

This matter is before the Court on a petition by the Regional Director of the National 

Labor Relations Board for a temporary injunction under section 10(j) of the National Labor 

Relations Act. The Director alleges that the Respondent, SMI/Division of DCX-Chol 

Enterprises, Inc., engaged in various unfair labor practices after it purchased the assets of a 

previous employer whose employees were unionized, most notably by refusing to bargain with 

the union after it became aware of a petition for decertification signed by over half of the 

bargaining unit members. The matter is proceeding through the administrative process before the 

Board, so the Director is seeking interim relief pending the conclusion of that process. For the 

reasons that follow, the Court grants the petition in part and denies it in part, and issues an 

injunction against the Respondent. 

I. FACTUAL BACKGROUND 

In August 2013, DCX-Chol Enterprises, Inc. purchased all of the assets of Stuart 

Manufacturing, Inc., a company located in Fort Wayne, Indiana that manufactures electronic 
2 

parts, wires, cables, and harnesses, mostly for the defense industry. For over thirty years, through 

various changes of ownership, Stuart Manufacturing’s employees were unionized, and were 

represented by the Indiana Joint Board, Retail, Wholesale, Department Store Union, United Food 

& Commercial Workers, Local 835. The bargaining unit is defined as: “[A]ll full-time and 

regular part-time Production and Maintenance employees, but excluding Guards, Professional 

employees, Technical employees, Supervisors, and all other office employees at the Company’s 

production facilities located in the City of Fort Wayne and County of Allen, Indiana.” [DE 17-5 

p. 4]. The collective bargaining agreement in effect at the time of the transfer had been executed 

in February 2011 and ran until February 2014. David Altman, President of the Indiana Joint 

Board, has represented the union members since 2000. 

On August 19, 2013, shortly after the transaction took place, Gerald Pettit, Stuart 

Manufacturing’s general manager, and Carol Goods-North, its director of human resources, held 

a meeting with Mr. Altman, and handed him a letter formally notifying him of the change in 

ownership. [DE 17-5 p. 34]. The letter stated that Lionel Tobin, Stuart Manufacturing’s owner, 

would retain ownership of Stuart Manufacturing, but that DCX was purchasing all of its assets 

and would continue operations at the facility under the name “SMI – a Division of DCX.” The 

letter further stated, “DCX understands that by purchasing the Stuart assets, they became a 

successor, therefore would request various modifications of the Bargaining Unit Agreement in 

order to effectively and successfully manage the operations at SMI.” [Id.] 

At the meeting, Ms. Goods-North stated that the only change she knew DCX would 

request of the Union was to change their pay date from every other Wednesday to the 5th and 

20th of each month, to align the facility’s pay periods with the rest of DCX. Mr. Altman said that 

he did not anticipate a problem with that request, but that he would need to submit it to the 
3 

bargaining unit for a vote. At a plant-wide meeting around the same time, Mr. Tobin and Neal 

Castleman, DCX’s president, announced the transaction to the employees. They indicated that it 

would take some time to transition to new ownership, but they had few details to offer as to how 

the transition would affect the employees. Nonetheless, the facility continued its operations, and 

with the exception of Mr. Tobin, all of the employees at the facility continued on as employees 

of DCX. 

On August 22, 2013, DCX and the Union held their monthly grievance meeting. Ms. 

Goods-North attended the meeting by phone, while Mr. Pettit and Mr. Altman were present in 

person. Following the meeting, Mr. Altman asked Mr. Pettit for permission to go to the 

employee break room to have a cup of coffee with the employees so that he could talk with them 

and answer any of their questions, as was his practice. During the seven years Mr. Goods-North 

had chaired the meetings, she had granted Mr. Altman’s request every time, except for possibly 

one occasion. However, Mr. Pettit denied Mr. Altman’s request. He said that the employees were 

busy and it would be disruptive for Mr. Altman to be in the break room. Mr. Pettit also later 

testified before the Administrative Law Judge that the company did not have a lot of information 

to give the employees about the change of ownership and transition, so he did not want them to 

be discussing the issue, which could lead to speculation and concern over their jobs. [DE 17-1 p. 

87–88]. 

Around this same time, one of the bargaining unit employees began collecting signatures 

on a petition to decertify the Union. From August 21 to 23, 2013, twenty-nine members of the 

approximately fifty-four member bargaining unit signed the petition. [DE 17-4 p. 2]. Ms. GoodsNorth also stayed in contact with Mr. Altman relative to DCX’s requested changes to the 

collective bargaining agreement. On August 29, 2013, Ms. Goods-North sent Mr. Altman an 
4 

email with the following proposal: “[DCX] accepts the existing contract with a minor change[][.] 

The Pay period changes fro[]m every other Wednesday to the 5th and the 20th of the month. As I 

mentioned before, the difference is merely 1 day. All the other Work Rules remain[] the same. If 

you can agree to this, I believe I can get the new owner to sign.” [DE 17-3 p. 89]. Mr. Altman 

responded on September 3, 2013, by proposing having the employees vote by secret ballot in the 

break room, in order to expedite the process. Later that day, however, Ms. Goods-North 

responded that DCX was notified that a petition for decertification had been filed with the Board. 

She thus proposed waiting for the Board to act on that petition before moving forward, and Mr. 

Altman did not object. [DE 17-3 p. 90]. Accordingly, all of the terms and conditions of the 

employees’ employment, including their pay dates, remained the same as they had been under 

Stuart Manufacturing. 

Throughout this time, Mr. Tobin and DCX were exploring the possibility of having Stuart 

Manufacturing reopen its operations, apart from DCX, on a limited basis at the facility. Stuart 

Manufacturing was minority-owned and qualified as a “HUB zone” entity because it was located 

in an area targeted for economic development and employed a certain percentage of employees 

who lived in that area. These designations made Stuart Manufacturing eligible to perform work 

on certain contracts for the federal government because of incentives that were tied to those 

designations. DCX, however, did not meet either of those criteria, and would not be able to retain 

that component of Stuart Manufacturing’s business. Mr. Tobin was therefore considering hiring 

back some of the employees and leasing a portion of the facility from DCX in order to service 

those contracts. DCX allowed Mr. Tobin to use his same office during this time, and with DCX’s 

permission, Mr. Tobin spoke to about 15 of the employees to gauge their interest in accepting a 

job with this newly constituted version of Stuart Manufacturing. 
5 

During the monthly grievance meeting on October 16, 2013, Mr. Altman inquired of Ms. 

Goods-North about the plans to operate the two companies at the facility. Ms. Goods-North 

answered that they were still considering having both companies operate at the plant, and she 

confirmed that Mr. Tobin had spoken with several of the employees about accepting employment 

with his company. Mr. Altman then asked if both companies would operate under the same 

existing collective bargaining agreement. Ms. Goods-North stated that DCX would operate under 

the union contract. According to Mr. Altman, Ms. Goods-North also said that Mr. Tobin’s 

company would not operate under the collective bargaining agreement because it would be nonunion. DCX denies that Ms. Goods-North made this statement, though, and Ms. Goods-North 

testified that she never said there was a plan between DCX and Mr. Tobin to operate a non-union 

company at the facility. 

Ultimately, the plan for Mr. Tobin to operate Stuart Manufacturing at the facility never 

came to fruition. Mr. Tobin and DCX encountered disagreements over their asset purchase 

agreement, and the parties have each retained counsel in the matter and may be heading towards 

litigation. That caused their relationship to sour, which put any plan for Mr. Tobin to lease 

DCX’s facility and equipment to reopen Stuart Manufacturing on hold. Mr. Tobin did not ever 

hire any employees or lease any space or equipment from DCX, and he has not been to the 

facility in some time. 

For the month of October 2013, the SMI Division shipped over $1 million of products in 

a single month. Mr. Castleman had set that mark as the facility’s production goal after DCX 

acquired it, as he viewed that as the point at which the facility would be profitable, but the 

facility had not reached that mark in several years. As the end of the month neared, the managers 

realized that they were approaching the goal, so everyone at the facility made an extra effort to 
6 

reach the $1 million mark. Once they did so, Mr. Castleman wished to express his appreciation, 

so he directed Mr. Pettit to give every employee at the facility, from the janitor to the general 

manager, “a crisp $100 bill.” [DE 17-1 p. 79, 81]. Mr. Pettit held a plant-wide meeting on 

November 4, 2013, to announce the award, and later that day, the managers handed each 

employee an envelope containing a $100 bill. All of the employees accepted the money. 

However, DCX never notified the Union of the award or bargained with it. Further, a Union 

membership meeting at which the employees were scheduled to elect their union officers was 

scheduled after the workday on November 4, 2013. After receiving the $100 bills, though, only 

three employees attended the meeting. This was a substantial decrease from the eight to fifteen 

employees who typically attended such meetings. 

Since the collective bargaining agreement was set to expire on February 8, 2014, Mr. 

Altman and Ms. Goods-North began exchanging emails to initiate the bargaining process for a 

new agreement. By an email on November 25, 2013, Mr. Altman stated that the Union would 

like to meet with DCX as soon as possible in order to negotiate a new agreement. Mr. Altman 

and Ms. Goods-North arranged for the first bargaining session to take place on January 6, 2014. 

By this time, the Board had dismissed the employees’ petition for decertification, but the 

employees refiled it on November 4, 2013. In addition, in December 2013, an employee 

anonymously left a copy of the decertification petition, containing signatures of over half of the 

bargaining unit employees, on Mr. Pettit’s chair. 

Upon receiving a copy of the petition, DCX began discussing the matter with its 

attorneys, and on January 3, 2014, on the eve of the parties’ first scheduled bargaining session, 

counsel for DCX sent Mr. Altman a letter stating that DCX was no longer willing to bargain with 

the Union. Specifically, the letter stated: 
7 

At this time, DCX-CHOL is in possession of a document signed by a majority of 

the DCX-CHOL bargaining unit employees indicating that they do not wish to be 

represented by the Union going forward. 

Importantly, we will honor the Collective Bargaining Agreement that is currently 

in effect as required by law. However, the mere fact that the Union has filed a 

blocking charge does not alter the fact that we are in possession of a document 

signed by a majority of the bargaining unit employees indicating that they do not 

wish to be represented by the R.W.D.S.U., Local 835. As such, we believe that we 

are legally obligated to honor that Petition and cannot negotiate for a contract that 

would cover a period of time within which the Union no longer represents the 

employees. 

If you believe that we are in error in our legal analysis, please do not hesitate to 

provide us immediately law which suggest that we are in error. We would 

obviously review such information and reconsider our position. However, we 

believe that we are legally bound to honor the clear directive of the majority of 

the unit employees. 

[DE 175-5 p. 36]. No bargaining has taken place between DCX and the Union since that time, 

even though the collective bargaining agreement has since expired. Thereafter, in April 2014, 

DCX changed the employees’ pay dates from every other Wednesday to the 5th and 20th of each 

month, as it had proposed previously. It did not notify or bargain over the change with the Union, 

though. 

Mr. Altman filed seven separate unfair labor practice charges against DCX relative to 

these events on behalf of the Union. The charges alleged that DCX violated the Act by denying 

Mr. Altman access to the break room, by stating that Mr. Tobin’s company would operate at 

their facility non-union but with current union employees, by awarding $100 bonuses to each 

employee without bargaining over them, by refusing to bargain with the Union as the collective 

bargaining representative of the employees, and by unilaterally changing the employees’ pay 

dates without bargaining with the Union, among other reasons. On April 30, 2014, the Director 

filed a consolidated complaint against DCX before the Board. An administrative law judge held 

a hearing on the matter on July 15 and 16, 2014, at which DCX and the Board were each 
8 

represented by counsel and presented witnesses and exhibits. In a decision dated September 23, 

2014, the ALJ found in the Director’s favor as to five of the seven charges—each of the charges 

described above. The ALJ ordered DCX to cease and desist from each of the unfair labor 

practices, and also ordered DCX to bargain with the Union as the exclusive collective-bargaining 

representative of the employees, among other relief. 

On July 31, 2014, after the administrative hearing but before the ALJ issued his decision, 

the Director initiated this action by filing a petition for a temporary injunction against DCX. The 

petition seeks injunctive relief as to each of the seven charges pending the Board’s final 

resolution of this matter, as it could still be some time before the Board reaches a final decision 

and is able to enforce its orders. The Director also moved to try this petition on the record made 

before the administrative law judge, which Magistrate Judge Cosbey granted without objection 

on September 5, 2014. This matter is now fully briefed, and both parties have also had the 

opportunity to address the effect of ALJ’s decision on this matter. 

II. STANDARD OF REVIEW 

Section 10(j) of the National Labor Relations Act authorizes a district court to “order 

injunctive relief pending the Board’s final disposition of an unfair labor practice claim if such 

relief would be ‘just and proper.’” Lineback v. Irving Ready-Mix, Inc., 653 F.3d 566, 569 (7th 

Cir. 2011); 29 U.S.C. § 160(j). An injunction granted under § 10(j) is an “extraordinary remedy” 

and should only be granted in those situations in which effective enforcement of the Act is 

threatened by the delays inherent in the NLRB dispute resolution process. Irving Ready-Mix, 653 

F.3d at 570; Lineback v. Spurlino Materials, LLC, 546 F.3d 491, 500 (7th Cir. 2008). 

The Director is entitled to interim relief when: (1) the Director has no adequate remedy at 

law; (2) the labor effort would face irreparable harm without interim relief, and the prospect of 

that harm outweighs any harm posed to the employer by the proposed injunction; (3) “public 
9 

harm” would occur in the absence of interim relief; and (4) the Director has a reasonable 

likelihood of prevailing on the merits of his complaint. Spurlino Materials, LLC, 546 F.3d at 

500; Bloedorn v. Francisco Foods, Inc., 276 F.3d 270, 286 (7th Cir. 2001). The Director bears 

the burden of establishing the first, third, and fourth of these circumstances by a preponderance 

of the evidence. Spurlino Materials, LLC, 546 F.3d at 500. 

As to the likelihood of prevailing on the merits, the fourth prong “does not ask the district 

court to pass on the merits of the underlying case; rather, the court evaluates only on a 

preliminary basis the Director’s probability of success before the Board.” Irving Ready-Mix, Inc., 

653 F.3d at 570. Specifically, it must be decided whether the Director has a “better than 

negligible” chance of success; whether the Director has “some chance” of succeeding on the 

merits. Spurlino Materials, LLC, 546 F.3d at 502 (7th Cir. 2008); Francisco Foods, Inc., 276 

F.3d at 289; NLRB v. Electro-Voice, Inc., 83 F.3d 1559, 1568 (7th Cir. 1996). In conducting this 

analysis, a district court may also consider the ALJ’s decision: 

[T]he ALJ’s decision . . is [] relevant to the propriety of section 10(j) relief. 

Assessing the Director’s likelihood of success calls for a predictive judgment 

about what the Board is likely to do with the case. The ALJ is the Board’s firstlevel decisionmaker. Having presided over the merits hearing, the ALJ’s factual 

and legal determinations supply a useful benchmark against which the Director’s 

prospects of success may be weighed.

Francisco Foods, 276 F.3d at 288, 300–01 (holding that the Director had a strong-likelihood of 

success on the merits, based, in large part, upon the ALJ’s decision in favor of the Director). In 

addition, the strength of the Director’s case on the merits affects this Court’s prong-two 

assessment of the relative harms posed by the grant or denial of injunctive relief: the better the 

Director’s case on the merits, the less compelling his showing of irreparable harm in the absence 

of an injunction must be. Spurlino Materials, LLC, 546 F.3d at 500; Francisco Foods, Inc., 276 
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F.3d at 286–87; Lineback v. Printpack, Inc., 979 F. Supp. 831, 839 (S.D. Ind. 1997) (“[A] strong 

showing by the Director of likely success on the merits can offset a weak showing of harm.”). 

III. DISCUSSION 

In its opening brief, the Director cited seven separate unfair labor practices that it 

contends require interim injunctive relief. The ALJ subsequently found in the Director’s favor as 

to five of those seven claims, so the Director withdrew its request for injunctive relief as to the 

other two. Thus, the alleged unfair labor practices that remain at issue are: (1) refusing to 

recognize and bargain with the Union; (2) unilaterally changing the employees’ pay date in April 

2014; (3) awarding a $100 bonus to all employees without bargaining with the Union; 

(4) denying a union official access to DCX’s employee break room on August 22, 2013; and 

(5) stating that Stuart Manufacturing would be non-union. The Court addresses the propriety of 

injunctive relief as to each of these in turn. 

A. Refusing to Recognize and Bargain with the Union 

The central dispute in this matter is whether DCX was required to recognize and bargain 

with the Union despite the Union’s loss of majority support among the employees, as indicated 

by the petition for decertification. In arguing that DCX committed an unfair labor practice in 

refusing to bargain with the Union, the Director primarily argues that DCX violated the 

“successor bar,” given that DCX had become a successor to Stuart Manufacturing by purchasing 

its assets and taking over its operations. “A new employer is a successor to the old . . . when 

there is ‘substantial continuity’ between the two business operations and when a majority of the 

new company’s employees had been employed by the predecessor.” UGL-UNICCO Serv. Co., 

357 N.L.R.B. No. 76, at *1 (Aug. 26, 2011); Fall River Dyeing & Finishing Corp. v. N.L.R.B., 

482 U.S. 27, 43 (1987). In those circumstances, the successor employer is typically free to set its 

initial terms and conditions of employment unilaterally, prior to bargaining. N.L.R.B. v. Burns 
11 

Int’l Sec. Servs., Inc., 406 U.S. 272 (1972). However, the employer is obligated thereafter to 

recognize and bargain with union. Id.

The Board has recognized that the uncertainty and destabilizing effects inherent in such 

circumstances may upset the existing collective-bargaining relationship, and that employees 

“‘might be inclined to shun support for their former union’” where the successor can effectively 

undo what the union had worked to achieve for its members. UGL-UNICCO, 357 N.L.R.B. No. 

76, at *8–9 (quoting Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 39 (1987)). In 

order to inject a degree of stability into that scenario, the Board in UGL-UNICCO re-adopted the 

successor bar doctrine. Under that doctrine, once an employer becomes a successor, 

the union is entitled to a reasonable period of bargaining, during which no 

question concerning representation that challenges its majority status may be 

raised through a petition for an election filed by employees, by the employer, or 

by a rival union; nor, during this period, may the employer unilaterally withdraw 

recognition from the union based on a claimed loss of majority support, whether 

arising before or during the period. 

UGL-UNICCO, 357 N.L.R.B. No. 76, at *11. In other words, the successor bar “creates a 

conclusive presumption of majority support for a defined period of time, preventing any 

challenge to the union’s status . . . .” Id. at *4. The Board has adopted a bright-line rule that, in 

cases such as this where the successor adopts the existing terms and conditions of employment, 

this bar runs for a period of 6 months, measured from the date of the first bargaining meeting 

between the union and the successor employer. Id. at *12. 

Here, DCX acknowledged at the outset that it qualifies as a successor. Therefore, as the 

ALJ concluded, “the Union was entitled to a six month period of bargaining, during which 

[DCX] was precluded (under the successor bar) from unilaterally withdrawing recognition from 

the Union based on a claimed loss of majority support.” [DE 19-1 p. 22]. However, DCX never 

participated in any bargaining sessions with the Union, and it expressly stated on January 3, 2014 
12 

that it would not bargain with the Union due to its loss of majority support. Under the successor 

bar, DCX was not permitted to refuse to bargain with the Union based on a claim of a lack of 

majority support, as the Union’s majority support could not be challenged by anyone during this 

time. Therefore, the Director has a strong likelihood of establishing that DCX violated the 

successor bar and committed an unfair labor practice by refusing to bargain with the Union. 

DCX attempts to distinguish UGL-UNICCO on the basis that it was in actual possession 

of a petition for decertification, whereas UGL-UNICCO involved a petition for representation by 

a rival union, but that distinction is immaterial—UGL-UNICCO expressly stated that the 

successor bar applies regardless of who files a petition challenging majority support for the 

incumbent union. 357 N.L.R.B. No. 76, at *11 (stating that the successor bar prohibits a 

challenge to the union’s majority support “through a petition for an election filed by employees, 

by the employer, or by a rival union” (emphasis added)); see id. (“Perhaps the strongest 

argument against a ‘successor bar’ is the burden that it places on the Section 7 rights of 

employees, particularly when the bar prevents employees from filing an election petition with the 

Board.” (emphasis added)). DCX also expresses its discomfort with negotiating with a Union 

that no longer had the support of a majority of its bargaining unit employees, but while that 

discomfort is understandable, it is legally irrelevant. UGL-UNICCO acknowledged and discussed 

at length the cost that the successor bar imposes on employee choice, but concluded that the 

stabilizing effects of the successor bar outweighed such concerns. Thus, the Court concludes that 

the Director has a high likelihood of success on the merits on this issue. 

Turning to the equitable factors, the Court also finds that the Director has no adequate 

remedy at law; that the labor effort would face irreparable harm without interim relief and the 

prospect of that harm outweighs any harm posed to the employer by the proposed injunction; and 
13 

that public harm would occur in the absence of interim relief. In the section 10(j) context, “the 

‘adequate remedy at law’ inquiry is whether, in the absence of immediate relief, the harm 

flowing from the alleged violation cannot be prevented or fully rectified by the final Board 

order.” Harrell ex rel. NLRB v. Am. Red Cross, 714 F.3d 553, 557 (7th Cir. 2013). Here, DCX is 

not bargaining with the Union, and the Board’s eventual order will not be able to repair harm that 

the Union will have suffered by being unable to bargain on behalf of its employees between now 

and then. As the Seventh Circuit stated in Spurlino Materials, “[t]he longer that an employer is 

able to . . . avoid bargaining with a union, the less likely it is that the union will be able to 

organize and to represent employees effectively on the NLRB issues its final order.” 546 F.3d at 

500. Therefore, the Director has met its burden of establishing an inadequate remedy at law. 

For similar reasons, the Union would face irreparable harm without interim relief. “[T]he 

same evidence that establishes the Director’s likelihood of proving a violation on the NLRA may 

provide evidentiary support for a finding of irreparable harm,” and “‘the prospect of an 

irreparable harm may be inferred’ from the nature of the violation of the Act.” Harrell, 714 F.3d 

at 557. Where an employer fails to bargain with a union, “‘[t]he deprivation to employees from 

the delay in bargaining and the diminution of union support is immeasurable. That loss, 

combined with the likelihood that the Board’s ability to rectify the harm is diminishing with 

time, equals a sufficient demonstration of irreparable harm to the collective bargaining process.’” 

Spurlino Materials, 546 F.3d at 501 (quoting Electro-Voice, 83 F.3d at 1573); Francisco Foods, 

276 F.3d at 298–99 (noting that a “union finds itself ‘in a peculiarly vulnerable position’ in the 

transition from predecessor to successor,” and that a delay in bargaining can cause irreparable 

harm). This harm to the labor effort outweighs any harm to DCX. While DCX must bargain in 

good faith with the Union, it need not agree to any particular term of condition of employment 
14 

for the employees, and its own distaste for bargaining with a union that its employees do not 

support does not outweigh the harm to the Union. 

Finally, public harm would occur in the absence of interim relief. “[T]he public interest is 

furthered, in part, by ensuring that an unfair labor practice will not succeed because the Board 

takes too long to investigate and adjudicate the charge.” Spurlino, 546 F.3d at 502; Francisco 

Foods, 276 F.3d at 300 (“[T]he interest at stake in a section 10(j) proceeding is ‘the public 

interest in the integrity of the collective bargaining process.”). DCX’s refusal to bargain with the 

Union during the pendency of the proceedings before the Board, which could take considerable 

time, would harm the public’s interest in the integrity of the collective bargaining process, and 

DCX has not offered any argument on this element, so the Court finds that the Director has 

satisfied its burden on this issue as well. 

Therefore, injunctive relief is appropriate in response to DCX’s refusal to bargain with 

the Union. The Court will order DCX to recognize and, upon request, bargain with the Union as 

the exclusive collective-bargaining representative of the bargaining unit employees. In 

accordance with UGL-UNICCO, this obligation will commence immediately, and will last until 

at least 6 months after the date of the first collective bargaining meeting between the parties. 

B. Unilaterally Changing the Employees’ Pay Date 

The Director next argues that DCX committed an unfair labor practice by unilaterally 

changing the employees’ pay date. Employees’ wages, hours, and other terms and conditions of 

employment are mandatory subjects of bargaining, and an employer may not unilaterally change 

them without first notifying the union and giving the union an opportunity to bargain over those 

changes. Employees’ paydays are among the terms and conditions of employment that are 

mandatory subjects of bargaining. Abernathy Excavating, Inc., 313 N.L.R.B. 68, 69 (1993); Am. 

Ambulance, 255 N.L.R.B. 417, 421 (1981). Here, there is no dispute that DCX changed its 
15 

employees’ pay dates from every other Wednesday to the 5th and 15th of every month, and that 

it did not bargain with the Union over the change. The ALJ also found in the Director’s favor on 

this issue. DCX all but concedes that it was improper for it to have unilaterally changed the pay 

dates, and offers no substantive argument to the contrary, so the Court concludes that the 

Director is likely to succeed on the merits of this issue. 

DCX’s primary argument against injunctive relief for this violation is that the employees 

were not harmed by the change in their pay dates, as the interest for any delay in receiving their 

checks would measure in the pennies. The Court agrees that an injunction is inappropriate as to 

any monetary harm from this violation, as that aspect of the harm is likely minimal and can be 

fully redressed by the Board’s eventual order, but that is only half the story. See Harrell ex rel. 

NLRB v. Am. Red Cross, 714 F.3d 553, 557 (7th Cir. 2013) (stating, in response to the 

employer’s argument that the availability of back pay provides an adequate remedy at law, that 

the argument “incorrectly focuses solely on the individual workers, and ignores the damages 

flowing from the crippling of a new union, which transcends the loss of workers’ pay”). Where 

an employer makes unilateral changes, it puts “the Union in the position of having to bargain 

back benefits and conditions of employment that its members would have already had in the 

absence of” those changes. Id. at 558. 

In those circumstances, rescission of the unilateral changes to restore the status quo is an 

appropriate section 10(j) injunction. Id. (collecting “a long line of cases which support rescission 

to restore the status quo”). Leaving the unilateral change in place pending the Board’s resolution 

of this matter would continue to leave the Union at a disadvantage relative to the status quo and 

could impair its bargaining position in the meantime. Granted, it is not clear here whether the pay 

dates were particularly important to the employees, such that they would be interested in 
16 

bargaining back for them. But changing the pay dates was important for DCX, so even if the 

employees were indifferent as to when they were paid, they may have been able to extract other 

value from DCX in return for their concession on this issue. DCX’s unilateral change deprived 

them of that opportunity, thus establishing irreparable harm and an inadequate remedy at law. Id. 

Such changes also establish public harm by impairing the integrity of the bargaining process. 

DCX relatedly argues that the Court should not rescind the change in pay dates because 

changing the pay dates back again may inconvenience the employees more than not doing so, 

and that the employees may prefer that the pay dates remain as they are. DCX is correct that that 

is a possibility. However, rather than denying relief altogether, the appropriate course in these 

circumstances is to condition the rescission on the employees’ choice. See, e.g., Innovative 

Commc’ns Corp. v. N.L.R.B., 39 F. App’x 715, 718 (3d Cir. 2002) (affirming an order by the 

NLRB that conditioned rescission of the unilateral changes on the “affirmative desires of the 

[employees] as expressed through their bargaining representative”). Last, DCX argues that it will 

be harmed if it has to change the pay dates back, as it will have to pay its payroll contractor to 

process a separate pay date for the Fort Wayne facility only. However, DCX has not indicated 

how much that would cost it, so the Court cannot evaluate the extent of that harm. In addition, if 

DCX wants the entire company’s payroll to be on the same schedule, it could do so by moving 

the rest of the company’s pay dates to every other Wednesday instead of by moving the Fort 

Wayne facility’s pay dates. Thus, the Court cannot conclude that the balance of harms favor 

DCX. Accordingly, the Court will enter an injunction requiring DCX to rescind the change in 

pay dates and move the union members’ pay date back to every other Wednesday, should the 

employees request such rescission within 30 days of this Order. 
17 

C. Awarding a $100 Bonus without Bargaining with the Union 

The Director next argues that DCX committed an unfair labor practice by unilaterally 

awarding all of its employees, including the union members, a $100 bonus. DCX did not notify 

the Union or bargain with it over this award, so the Director contends that this constituted an 

improper unilateral change to the employees’ wages, in violation of section 8(a)(1) and (a)(5) of 

the Act. While DCX acknowledges that it gave each of the employees the award without 

bargaining with the Union, it argues that the award was merely a gift, which is not a mandatory 

subject of bargaining, so that the award did not constitute an unfair labor practice. 

The Second Circuit has summarized the standard for determining when awards constitute 

wages as opposed to gifts as follows: 

The question of whether an award constitutes wages and therefore is the subject 

of mandatory bargaining turns upon whether the award is “so tied to the 

remuneration which employees received for their work that [it was] in fact a part 

of it.” NLRB v. Niles-Bement-Pond Co., 199 F.2d 713, 714 (2d Cir.1952). In 

ascertaining whether a stock award is so tied to remuneration that it must be the 

subject of bargaining, the Board looks to the relationship of the award to other 

employment-related factors, including work performance, wages, hours worked, 

seniority, and production. See Benchmark Indus., 270 N.L.R.B. at 22. An award 

that is sufficiently tied to these work-related factors is considered part of the 

overall compensation that an employee receives and is therefore mandatorily 

bargainable. For example, a bonus has been considered “employment-related” 

when it was tied to the company’s profits, Waxie Sanitary Supply, 337 N.L.R.B. 

303, 304 (2001), or when it was paid based on supervisory recommendations and 

work performance, Radio Television Technical Sch., Inc. v. NLRB, 488 F.2d 457, 

460 (3d Cir.1973). An additional consideration in the analysis is the regularity 

with which similar awards or payments have been made in the past. Bonuses that 

are not tied to other employment-related factors have been found to be the subject 

of mandatory bargaining when they were “paid over a sufficient length of time to 

have become a reasonable expectation of the employees and, therefore, part of 

their anticipated remuneration.” NLRB v. Electro Vector, Inc., 539 F.2d 35, 37 

(9th Cir.1976) (citation and internal quotation marks omitted); accord United 

Shoe Mach. Corp., 96 N.L.R.B. 1309, 1314-15 (1951). 

Unite Here v. NLRB, 546 F.3d 239, 243 (2d Cir. 2008) (affirming the Board’s decision in N. Am. 

Pipe Corp., 347 N.L.R.B. 836 (2006)). 
18 

Applying this standard, the ALJ found in the Director’s favor and determined that the 

$100 award was a mandatory subject of bargaining. The ALJ reasoned that even though the 

award was given to all employees, regardless of their wages, hours worked, or seniority, the 

award was tied to a production goal, which in turn tied it to the employees’ performance as well, 

and that DCX had promised additional bonuses if employees reached the production goal in the 

future. Thus, the ALJ found that the award constituted wages, and that DCX acted improperly by 

failing to bargain with the Union over the award. 

The ALJ’s conclusion is far from inevitable under these circumstances. The fact that the 

award was given to all employees without regard for their wages, hours, or seniority weighs 

against finding the award to be wages. N. Am. Pipe, 347 N.L.R.B. at 837–38. Further, although, 

as the ALJ noted, DCX’s reason for giving the award was based on a production goal, the 

amount of the award was unaffected by any individual employees’ production or performance—

it was exactly the same for every employee. Id. at 838 (noting, in finding an award to be a gift, 

that “[t]he size of the award was established without regard to any employment-related factors, 

including work performance, wages, hours worked, seniority, or productivity,” where every 

eligible employee “received the same amount of stock whether they were the highest paid 

managers or the lowest-paid hourly employees”). In addition, the fact that the award was given 

because the company reached a particular achievement is not itself dispositive. Id. (finding that 

an award of stock given because of the employer’s successful IPO was a gift, not wages). 

Nonetheless, the Court finds that the Director has established at least the minimum 

likelihood of success on the merits to meet its burden on this issue. DCX’s reason for giving the 

award was to reward employees for having met a particular production standard, which points at 

least somewhat in favor of considering the award wages. In addition, unlike Unite Here, where 
19 

the award “was related to a one-time event—the parent corporation’s IPO—with no promise of 

prospect of repetition,” 347 N.L.R.B. at 838, Mr. Castleman stated that he would give this same 

award any time the facility reaches its $1 million per month production goal, which further 

supports the Director’s position. Finally, although the ALJ’s findings on this issue are not 

dispositive, they still inform the Court’s inquiry, and the ALJ found in favor of the Director. It is 

possible that the Board will weigh these factors in a similar manner, so the Court concludes that 

the Director has a “better than negligible” chance of success, and has met its burden on this 

issue. 

The Director seeks two forms of injunctive relief to address this alleged violation. The 

Director first seeks rescission of the unilateral change upon request from the Union.1

 However, 

the employees were not themselves harmed, irreparably or otherwise, by having received $100. 

And to the extent any employee believes that DCX should not have given them the money, it is 

already entirely within the employees’ power to remedy that—the employees do not need 

permission from this Court in order to return the $100 to DCX. Rather, any harm from the bonus 

would have been sustained by the Union, but rescission would do nothing to cure that harm. In 

fact, if the problem with the bonus was that it tended to diminish employee support for the 

Union, it is hard to imagine what would further erode that support more than requiring, at the 

request of the Union, all of the union employees to return their bonuses. Finally, ordering 

rescission at the option of the employees would be useless, as the Director has offered no reason 

that any employee would exercise that option. To the contrary, all of the DCX employees who 

testified before the ALJ, including even its union leaders, believed that the bonus was wholly 

 

1

 The ALJ did not order rescission, but ordered DCX to make the employees whole for any 

losses they incurred as a result of this unilateral change. The Court declines to consider such a 

remedy here, as the employees are already more than “whole,” having each received a $100 bill. 
20 

proper and appreciated, so it is clear that they would not. Accordingly, the Court denies the 

Director’s request in this respect. 

The Director also requests an order prohibiting DCX from awarding such bonuses in the 

future, and its case for this form of injunctive relief is stronger. It is uncertain whether or when 

DCX will reach the $1 million per month production goal again, but Mr. Castleman stated that if 

it did, he would award the same bonuses, so there is some prospect that this alleged violation will 

recur. If it does, the Union could face irreparable harm, as the unilateral payments would 

circumvent the Union’s bargaining role and could reduce the employees’ incentive to support it. 

This harm may have already been felt to some extent, as the union meeting that took place 

immediately after the $100 bills were distributed, at which the employees were scheduled to 

elect their union officers, was attended by only three employees, a far lower turnout than normal. 

If this situation repeats, the harm could be particularly damaging given the Union’s precarious 

situation in dealing with a successor employer and given that employee support for the Union 

may have further diminished during the time period in which DCX has failed to bargain with the 

Union. An eventual order from the Board would not necessarily cure this harm, as the Board 

cannot restore employee support that has dissipated, and a rescission or make-whole order would 

be inappropriate where the employer has only conferred benefits on the employees. Conversely, 

DCX would face almost zero harm through an injunction requiring it to bargain with the Union 

prior to awarding any further bonuses. Since all of the union members very much appreciated the 

bonuses, they will almost certainly approve them if offered in the future, so bargaining over the 

bonuses will likely have little effect on DCX. 

Therefore, the Court finds that the Director has no adequate remedy at law to address 

future improper awards, that the labor effort would face irreparable harm without interim relief, 
21 

that such harm outweighs any harm posed to DCX, and that public harm would occur absent 

interim relief. Accordingly, the Court will enjoin DCX from granting this or similar awards to 

the bargaining unit employees in the future without first bargaining with the Union. 

D. Denying Access to the Break Room 

The Director next argues that DCX improperly denied Mr. Altman access to its employee 

break room following the August 22, 2013 grievance meeting, in violation of section 8(a)(1) and 

(a)(5) of the Act. The Director contends that denying Mr. Altman access to the break room on 

this occasion was an unfair labor practice because it constituted a unilateral change on a 

mandatory subject of collective bargaining. While the CBA does not expressly require DCX to 

permit union officials access to the break room following grievance meetings, the Director 

asserts that DCX and its predecessor permitted such access so consistently that it became a term 

and condition of employment. 

“An employer’s regular and longstanding practices that are neither random nor 

intermittent become terms and conditions of employment even if these practices are not required 

by a collective-bargaining agreement.” Prime Healthcare Servs.-Garden Grove, LLC, 357 

N.L.R.B. No. 63, at *8 (Aug. 26, 2011). “The party asserting the existence of a past practice 

bears the burden of proof on the issue and the evidence must show that the practice occurred 

with such regularity and frequency that employees could reasonably expect the practice to 

continue or reoccur on a regular and consistent basis.” Palm Beach Metro Transp., LLC, 357 

N.L.R.B. No. 26, at *7 (July 26, 2011). Once the practice becomes a term or condition of 

employment, the employer can only unilaterally change the practice if the change is not 

“material, substantial, and significant.” Frontier Hotel & Casino, 323 N.L.R.B. 815, 818 (1997); 

Palm Beach Metro Transp., 357 N.L.R.B. No. 26, at *7 (“An employer’s duty to bargain only 
22 

arises, however, if the changes are material, substantial, and significant ones affecting terms and 

conditions of employment.”). 

The ALJ found that DCX and Stuart Manufacturing “had a seven-year past practice of 

allowing union representatives to access the employee break room at its facility upon request 

after grievance meetings.” [DE 19-1 p. 15]. Seven years is a sufficient period of time to establish 

a practice, see Prime Healthcare, 357 N.L.R.B. No. 63, at *10 (finding that a 9-month long 

practice of permitting sick leave to accrue became a binding condition of employment), and 

since the ALJ found that DCX had permitted Mr. Altman access to the break room following a 

grievance every single time he asked, the practice occurred with sufficient regularity that the 

Board could reasonably conclude that it became a term and condition of employment. 

DCX argues that a past practice cannot create a term or condition of employment here 

because the Union’s access to DCX’s facilities was expressly addressed in the CBA. Citing to 

cases involving disputes over collective bargaining agreements, DCX argues that past practices 

can only be considered where there are ambiguities or gaps in the CBA as to a particular issue, 

and that where the CBA is clear and unambiguous, past practices that differ from the CBA 

cannot create binding terms and conditions of employment. Anheuser-Busch, Inc. v. Local Union 

No. 744, 280 F.3d 1133 (7th Cir. 2004). DCX did not cite any case in which the Board applied 

this principal, but even assuming it applies here, it would not compel a different outcome, since 

the CBA does contain an ambiguity on this point. The CBA states that an “International 

representative of the Union shall be granted admission in the facility during work hours after his 

request has been granted by the senior manager.” [DE 17-5 p. 26]. This provision is silent as to 

under what circumstances the senior manager shall grant the permission, so even under DCX’s 
23 

argument, the past practices could be considered in filling that gap and determining that one such 

circumstance is after monthly grievance meetings. 

Since there is a reasonable probability that the Director will prevail in establishing that 

this past practice constituted a term and condition of employment, the next question is whether 

denying Mr. Altman access to the break room on this particular occasion was a material, 

substantial, and significant change, such that DCX violated its duty to bargain by making the 

change unilaterally. The Board’s decision in Frontier Hotel & Casino, on which the ALJ relied, 

strongly supports the Director’s position on this issue. There, the employer implemented a policy 

limiting access to its facility that was only applicable to union representatives, and the policy 

“actually resulted in denying employee access to the representatives on the day the restriction 

was imposed.” 323 N.L.R.B. at 818. Noting that “[a]ny change that actually interferes with 

contractually agreed employee access to the unit collective-bargaining representatives for 

representational purposes is a material change,” the Board found that it was improper for the 

employer to have denied access to the officials on that occasion. Id.

Both of those factors were present here as well, as Mr. Altman was prevented from 

meeting with employees on this occasion, and Mr. Pettit’s reason for denying access was, at least 

in part, specific to the union, as he did not want Mr. Altman discussing matters with the 

employees that might cause them to engage in speculation about the change in ownership. The 

fact that Mr. Altman was only denied access on one occasion is not dispositive. See id.; Cherry 

Hill Textiles, Inc., 309 N.L.R.B. 268, 271 (1992) (finding an unfair labor practice where the 

employer denied the union access to the employer’s facility on one occasion). Therefore, the 

Court finds that there is a reasonable probability that the Director will find this change to be 
24 

material, substantial, and significant, in which case DCX will have committed an unfair labor 

practice, so the Director has satisfied his burden at this element. 

The equitable factors also favor the Director. Denying access to the break room would 

hamper the union’s ability to engage with the employees, which could diminish the Union’s 

ability to maintain support among its members. See Spurlino, 546 F.3d at 501; Electro-Voice, 83 

F.3d at 1573. Given the successorship context and DCX’s current refusal to bargain with the 

Union, the Union’s access to bargaining unit employees is particularly important at this time to 

allow the Union to restore the support of its members. Like the $100 bonuses, the harm from 

further violations would not be fully repairable by the time the Board finally issues its decision, 

since while the Board can order DCX to bargain with the Union, it cannot order employees to 

restore their support for the Union. Meanwhile, DCX has not identified any type of harm it 

would suffer from permitting Mr. Altman to access its break room following the monthly 

grievance meetings, so the balance of harms also favors the Director. And finally, the public 

interest favors an injunction, as a diminution of support for the Union would impair the 

collective bargaining process. Therefore, the Court grants the Director’s request for an injunction 

in this respect, and will enter an injunction requiring DCX to permit a Union official access to 

the employee break room for reasonable periods following the parties’ monthly grievance 

meetings. 

E. Stating that Stuart Manufacturing Would Be Non-Union 

Finally, the Director argues that DCX committed an unfair labor practice when Ms. 

Goods-North stated that DCX would operate under the collective bargaining agreement but that 

Stuart Manufacturing, which was planning to operate at DCX’s facility, would be non-union. 

The Director asserts that this statement violated section 8(a)(1) of the Act because it had a 

reasonable tendency to interfere with, restrain, or coerce employees in the exercise of their right 
25 

to unionize. The Court need not address the merits of this argument, however, though they are 

not particularly strong, because the Director has failed to establish any possibility of irreparable 

harm absent an injunction. 

Ms. Goods-North’s statement that Stuart Manufacturing would be non-union was an 

isolated statement even under the Director’s version of events. In addition, since the time of that 

statement, Stuart Manufacturing has not reopened, nor does there appear to be any plan for it to 

do so. [See DE 19-1 p. 15 (“[T]he relationship between [DCX] and Tobin soured . . . . [DCX] 

accordingly stopped allowing Tobin access to the facility unless he obtained permission in 

advance, and any discussions about Stuart Manufacturing leasing [DCX’s] equipment or facility 

space came to a halt.”); DE 17-1 p. 18–23, 40–41]. To the contrary, the parties appear closer to 

litigation than to forming an amicable business relationship, and with little prospect of Stuart 

Manufacturing restarting its operations, there is no reason to believe Ms. Goods-North will have 

occasion to make such a statement again or that such a statement would be perceived as 

threatening. [DE 17-1 p. 40; see DE 19-1 p. 14 (noting, in finding the statement to be an 

improper threat, that “[t]he context for Goods-North’s statement is significant,” and that her 

statement could have had a threatening effect “[i]n light of the close connection between [DCX] 

and Stuart Manufacturing at the time (i.e., before the relationship went sour)”)]. Thus, the Court 

concludes that the Director has failed to establish any possibility of irreparable harm, so the 

Court denies the Director’s request for injunctive relief as to this issue. 

IV. CONCLUSION 

The Regional Director’s petition for a temporary injunction is GRANTED in part and 

DENIED in part. The Court ENJOINS the Respondent, SMI/Division of DCX-Chol Enterprises, 

Inc. (“DCX”), as follows: 
26 

1. DCX shall recognize and, upon request, bargain in good faith with the Union as 

the exclusive collective-bargaining representative of the bargaining unit employees, until at least 

six months after the date of the first bargaining meeting between the Union and DCX; 

2. Upon a request from the bargaining unit employees, through the Union, made 

within 30 days of this Order, DCX shall restore the employees’ pay dates to every other 

Wednesday, and shall not thereafter change the pay dates without first bargaining with the 

Union; 

3. DCX shall refrain from giving awards to bargaining unit employees for meeting 

production standards, including but not limited to awarding a $100 bill to each employee, 

without first bargaining with the Union over such awards; 

4. Upon a request from the Union, DCX shall permit an official from the Union 

access to the employee break room at its Fort Wayne facility for reasonable periods following 

the parties’ monthly grievance meetings; 

5. DCX shall post a copy of this order at its 1615 East Wallace Street, Fort Wayne, 

Indiana facility at all locations where notices to employees customarily are posted, and shall 

maintain said postings, free from all obstructions and defacements, during the pendency of the 

Board’s administrative proceedings; and 

6. DCX shall file a sworn affidavit of compliance with this Order within 45 days of 

this Order. 

This injunction shall terminate once the National Labor Relations Board has rendered a 

final decision in this matter. 
27 

 SO ORDERED. 

 ENTERED: November 7, 2014 

 /s/ JON E. DEGUILIO 

 Judge 

 United States District Court