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D ock e t 97-7542

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" H ir s ch v . D or s ey T r ai le r s I nc " (1998). 1998 D e cisio n s

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. e du/thir dc ir c uit_1998/131Filed June 5, 1998

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 97-7542

PETER W. HIRSCH, Regional Director of the Fourth Region of the National Labor Relations Board, for a nd on behalf of the National Labor Relations Board, Appellant

v.

DORSEY TRAILERS, INC., Northumberland PA Plant *Amended per the Clerk's Order of 12/5/97

On Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. No. 97-cv-00148)

Argued May 21, 1998

Before: SLOVITER, GREENBERG and GIBSON,* Circuit Judges

(Filed June 5, 1998)

Ellen A. Farrell
Judith Katz Jayme L. Sophir (Argued)
National Labor Relations Board Washington, D.C. 20570

Attorneys for Appellant

___________________________________________________ ______________

* Hon. John R. Gibson, United States Senior Circuit Judge for the United States Court of Appeals for the Eighth Circuit, sit ting by designation.Michael S. Mitchell (Argued)

Fisher & Phillips New Orleans, LA 70170

Attorney for Appellee

Stephen A. Yokich (Argued) United Auto Workers, International
Union Washington, D.C. 20036

Attorney for Amicus-Appellant International Union, United Automobile, Aerospace and Agricultural Implement Workers of
America

OPINION OF THE COURT

SLOVITER, Circuit Judge.

Appellant, Peter W. Hirsch, Director of Region Four , on behalf of the National Labor Relations Board ("NLRB " or "the Board"), appeals from the district court's ord er denying a temporary injunction under S 10(j) of the Nationa l Labor Relations Act ("NLRA"), codified at 29 U.S.C. S 160 (j). The injunction was sought pending the resolution by the NLRB of unfair labor practice charges against appellee D orsey Trailers Inc. The district court concluded that a S 10(j) injunction would not be "just and proper," the stat utory standard for an injunction under the NLRA. The Boar d timely appealed. The International Union of United Automobile, Aerospace and Agricultural Implement Wo rkers of America, Local 1868 ("UAW" or "the union"), whic h is the bargaining representative of the workers affected b y the denial of injunctive relief, has filed a brief amic us curiae in support of the Board's appeal.

We have jurisdiction under 28 U.S.C. S 1291, 1292(a )(1) and 29 U.S.C. S 160(j). Our review of the denial of a S 10(j) injunction is for abuse of discretion, see Eisenber g v. Lenape Products, Inc., 781 F.2d 999, 1003 (3d Cir. 1986), and we have held we may reverse the denial of a S 1 0(j)

2injunction if the factual findings do not "substant ially relate

to the conclusion reached" by the district court. K obell v. Suburban Lines, Inc., 731 F.2d 1076, 1092 (3d Cir. 1984).

I.

This appeal centers on the circumstances surroundin g the December 1995 closure of a plant in Northumberl and, Pennsylvania, that once employed 200 UAW workers wh o manufactured dump and flatbed trailers for Dorsey. The

facts set forth below are taken from the record and , unless noted, are not in dispute, although the exact dates are not always clear. In February 1995, Dorsey and the UAW began negotiating a new Collective Bargaining Agreement ( CBA) because the prior CBA was due to expire in March 19 95. The primary issues concerned overtime and subcontra cting. Dorsey warned that if no agreement could be reached or if the union were to strike, Dorsey would close the pl ant. App. at 47-49. Negotiations were conducted between Febru ary and May but the parties were unable to reach agreem ent on

a new contract.

The union began a strike on June 26, 1995, to prote st alleged unfair labor practices of Dorsey. App. at 5 0. On June 30, 1995, the union filed the first of four un fair labor practice charges against the employer. In September 1995, Dorsey began to negotiate for the purchase of a new plant in Cartersville, Georgia, and on October 5, 1995, r eached a basic agreement in principle to purchase the plant. App. at
145-46. It had concluded that it would be to its fi nancial benefit to operate the Georgia plant rather than th e Northumberland facility. App. at 138-41. On October 9, 1995, Dorsey notified the union of its impending pu rchase
and its intention to move the Northumberland work t here. However, it also offered to continue to bargain ove r the
"effects of that decision and the decision itself." App. at 189. Thereafter, the union unconditionally offered to come back to work but by then Dorsey was seeking substan tial concessions. App. at 164. Further negotiations prov ed fruitless. Dorsey described the union's concessions on overtime as "too little too late." App. at 66; 177.

On November 9, 1995, Dorsey formally notified the u nion of its decision to close the Northumberland plant a nd move

3its operations to Georgia. At that time, Dorsey beg an

moving the plant equipment. App. at 181. On Novembe r 16, 1995, the union filed the fourth of its unfair labo r charges against Dorsey alleging that Dorsey improperly tran sferred work to the Georgia plant. The union asked the Boar d to seek temporary injunctive relief under S 10(j), but the Board did not act on the request at that time. Dorsey shu t down the plant on December 29, 1995, and has attempted t o sell it since then. App. at 252-53.

There was a lapse in Dorsey's operations resulting from the move, and it began its Georgia operations in Ma rch
1996. When it determined that it could not manufact ure at the new plant all of the trucks that it had manufac tured at Northumberland, Dorsey decided it would limit its G eorgia plant to the manufacture of flatbed trailers. In Ju ly 1996 it purchased a South Carolina facility to build dump t railers, previously manufactured in Northumberland.

Dorsey estimates its total costs of moving the Northumberland operations to Georgia and South Caro lina exceeded $900,000, app. at 197, and the costs of maintaining the closed Northumberland plant for the first six months of 1997 to be $130,000, app. at 198, and that
continued maintenance costs continue to be a terrib le
drain.

The Board issued a consolidated complaint in August 1996 (later amended in October 1996) charging Dorse y with numerous violations of the NLRA, including threaten ing employees with closure of the plant if the workers called a strike, refusing to provide company information nec essary for bargaining, unilaterally implementing a new att endance policy, and refusing to fairly bargain regarding th e transfer of work to Georgia. Following a three-day trial in November 1996, the Administrative Law Judge issued a comprehensive fifty-six page decision on December 1 , 1997, finding in large part that Dorsey committed the all eged unfair labor practices. See ALJ Decision, at 52. Th e ALJ's decision ordered a remedy that included the restora tion of the Northumberland plant. Id. at 54-56. Dorsey file d exceptions to the decision on January 29, 1998, and the matter is currently pending before the Board. We we re advised that briefing was completed recently.

4Although the union had asked the Board to file a re quest

for a S 10(j) injunction as early as November 1995, the Board did not file such a petition with the distric t court until January 27, 1997. In its Petition for a S 10 (j) injunction, the Board sought to prevent Dorsey from selling or alienating the plant before the Board ruled on t he merits of the underlying unfair labor charges. It sought t o maintain the status quo and thereby preserve the re medy
of restoration should the Board decide to so order.

Following a hearing on July 24, 1997, the district court denied the petition request. Although the court fou nd that there was reasonable cause to believe that Dorsey h ad committed the unfair labor charges, it also found t hat S 10(j) relief would not be "just and proper" becau se: (1) the request was untimely made, noting the fourteen-mont h delay in seeking S 10(j) relief; (2) the maintenanc e of the vacant plant was a cash drain on Dorsey, especially in light of the prior expenses of relocation; (3) the worker s in Dorsey's Georgia and South Carolina plants could lo se their jobs should restoration be ordered; (4) the vast ma jority of the former Northumberland workers had found new job s; (5) the sale of the plant would bring new jobs to t he region; and (6) the Board could order Dorsey to build a new plant and employ the Northumberland workers, if the plant were sold.

II.

A district court's determination whether to issue temporary injunctive relief under S 10(j) involves a two-fold inquiry: (1) whether there is reasonable cause to b elieve that an unfair labor practice has occurred; and (2) whether an injunction would be just and proper. See Pascare ll v. Vibra Screw Inc., 904 F.2d 874, 877 (3d Cir. 1990) (citation omitted); Suburban Lines, 731 F.2d at 1078 (interim relief under S 10(j) may be granted without showing irrepa rable harm or a likelihood of success on the merits, the ordinary requisites of an injunction). Because Dorsey does n ot dispute the district court's finding that the Board has satisfied the "reasonable cause" inquiry, the only question
is whether the Board demonstrated that the issuance of an injunction would be "just and proper."

5The standard to be applied by a district court in

determining whether granting temporary relief pursu ant to S 10(j) is just and proper should be informed by th e policies underlying S 10(j). See Lenape Products, 781 F.2d a t 1003; Suburban Lines, 731 F.2d at 1090-91. "Congress soug ht to
ensure that the Board would be able to exercise eff ectively its ultimate remedial power." Lenape Products, 781 F.2d at 1003. Section 10(j) "was designed to enable the Lab or Board to vindicate its ultimate remedial power by a ffording limited interim relief in instances where the passa ge of time reasonably necessary to adjudicate the case on its merits
convinced both the Board and the federal courts tha t the failure to grant such relief might dissipate the ef fective exercise of such power." Suburban Lines, 731 F.2d a t 1091. Thus, the focus in a S 10(j) determination is on th e public interest, Vibra Screw, 904 F.2d at 876, and"the unu sual likelihood . . . of ultimate remedial failure" by t he NLRB. Suburban Lines, 731 F.2d at 1091 n.26 (emphasis in original). "The public interest at stake is the pro motion of wholesome and mutually acceptable labor relations a nd the settlement of labor disputes through collective bar gaining between employees and their employer." Vibra Screw, 904 F.2d at 876 (citation and quotation marks omitted).

In evaluating whether to issue an injunction under the "just and proper" prong, a district court"should di scuss and determine whether the failure to grant interim injunctive relief would be likely to prevent the Bo ard, acting with reasonable expedition, from effectively exerci sing its ultimate remedial powers." Suburban Lines, 731 F.2d at 1091-92. "[T]he critical determination is whether, absent an injunction, the Board's ability to facilitate peace ful management-labor negotiation will be impaired." Vib ra Screw, 904 F.2d at 879. This requires an assessment of "the likelihood of harm to the bargaining process" absent an injunction. Eisenberg v. Wellington Hall Nursing Home, Inc., 651 F.2d 902, 907 (3d Cir. 1981). "Unless the re are circumstances, like the size, intimacy and longevit y of the bargaining unit, which indicate that the bargaining process will not be harmed, courts must be deferential to t he Board's determination that the integrity of the pro cess needs interim protection." Vibra Screw, 904 F.2d at 879 n.7. The S 10(j) analysis must be guided by the par ticular

6facts in each case. See Eisenberg v. Hartz Mountain Corp.,

519 F.2d 138, 142 (3d Cir. 1975).

The Board argues that the failure to issue the inju nction in this case clearly impairs the "Board's ability t o facilitate peaceful management-labor negotiation," Vibra Screw , 904 F.2d at 879, because, absent an injunction, Dorsey could sell the plant before the Board rules upon the unfa ir labor charges. This would render the Board's ultimate rem edial powers toothless. The ALJ has already determined th at restoration of the plant is a proper remedy. Althou gh Dorsey argues that restoration is not a proper reme dy under these circumstances, but see Coronet Foods, I nc. v. NLRB, 981 F.2d 1284 (D.C. Cir. 1993) (court, per th en Judge, now Justice, Ruth Bader Ginsburg, enforced B oard order requiring employer to restore trucking depart ment), we need not decide that issue now. Instead, this ap peal
concerns the district court's exercise of its discr etion. It is
evident to us that the district court's failure to grant interim injunctive relief to ensure the availabilit y of the plant jeopardizes the Board's ability to effectivel y exercise its ultimate remedial powers. The alienation of the plant by Dorsey would eliminate that remedy entirely. Under the standards articulated in Suburban Lines, 731 F.2d a t 1091- 92, this risk is sufficient to satisfy the "just an d proper" prong for injunctive relief.

In addition, in denying injunctive relief, the dist rict court relied upon its belief that the Board has the power to order Dorsey to build a new plant if the Board determined that restoration of the Northumberland plant was the pro per remedy for the unfair labor charges. Dorsey cites n o legal support, and significantly the Board argues it does not have such wide power. It is at least plausible that had the district court recognized that it was likely that a restoration remedy would be unavailable absent an injunction, t he district court may have been persuaded to issue the interim
relief.

Another basis for the district court's opinion, tha t a vast majority of the workers from the Northumberland pla nt had found new jobs, is unsupported on this record. This conclusion was taken from a newspaper article that itself speculates as to this figure. Dorsey's counsel conc eded at

7oral argument that it neither presented nor has any

evidence of the number of its former employees who are no longer available. Even if the district court's conc lusion were accurate, there is no information whether the new j obs and pay are comparable. In any event, the possible empl oyment of the former employees does not mitigate the need for a S 10(j) injunction.

Moreover, the district court's denial of relief emp hasized
the cash drain and financial burden of maintenance of the Northumberland plant, and notes the negative impact caused by the relocation. This fails to take into a ccount that the impact was of Dorsey's making. The Board's counsel points to evidence that shows that the burd en is minor for a company of Dorsey's income and assets. Also significant in that respect is that in this circuit a S 10(j) injunction is limited to six months when a matter i s pending before the Board. See Hartz Mountain, 519 F .2d at

144.

Finally, although we recognize that the Board did n ot petition for a S 10(j) injunction as early as it mi ght have, the delay should not be dispositive in determining whet her to grant injunctive relief. The district court acknowl edged that "delay alone is not grounds for denying an injuncti on," op. at 10, but it is unclear whether its concern over t he delay influenced the court's rejection of the injunction. Dorsey moved quickly from its decision to move the operati ons in the fall of 1995, to the closure of the plant on De cember 29, 1995. Even if the Board had not delayed until Janua ry 1997 to file the S10(j) petition, it is unlikely th at it would have been able to seek the injunction and obtain a hearing before the equipment had been transferred and the p lant closed. As we noted in Vibra Screw, "The Board need s time to do a thorough investigation before it even reque sts the [S 10(j)] injunction." 904 F.2d at 881. See also Ag uayo v. Tomco Carburetor Co., 853 F.2d 744, 750 (9th Cir. 1 988) (delay is only significant if the harm has occurred and the parties cannot be returned to the status quo; the B oard needs a reasonable period of time to investigate an d deliberate before it decides to bring a section 10( j) action) overruled on other grounds, Miller v. California Pa cific Med. Ctr., 19 F.3d 449, 457 (9th Cir. 1994).

8Although the protracted delay is not entirely justi fied, it

is insufficient under these facts to overcome the p rimary consideration in evaluating the just and proper sta ndard: that of safeguarding the Board's remedial powers. U sing the Board's delay as the basis to deny the requested in junctive relief punishes the wronged employees for the Board 's belated action, an unacceptable outcome. See Gottfr ied v. Mayco Plastics, 472 F. Supp. 1161, 1168 (E.D. Mich. 1979), aff 'd, 615 F.2d 1360 (6th Cir. 1980). Cf. NLRB v. J.H. Rutter-Rex Mfg. Co., 396 U.S. 258, 264-65 (1969) (" the Board is not required to place the consequences of its own delay, even if inordinate, upon wronged employees t o the benefit of wrongdoing employers").

During the oral argument counsel for the Board advi sed this court that the issuance of a S 10(j) injunctio n invariably prompts the Board to review the ALJ deci sion on appeal because the Board is aware of the limited si x-month duration of the injunction. See Hartz Mountain , 51 9 F.2d at 144. Indeed, the Board has adopted a regulation req uiring it to hear expeditiously and give priority to a com plaint which is the subject of a S 10(j) injunction. See 2 9 C.F.R.

S 102.94.

III.

For the reasons set forth, we will remand this case and
direct the district court to order interim relief u nder S10(j).1

___________________________________________________ ______________

1. Although we do not preclude Dorsey from raising on remand the appropriate starting date of the S 10(j) injunction , it is important to

note
that it never raised that issue in its brief. Our c oncurring colleague suggests that the Board has already obtained the re lief it is seeking through the S 10(j) injunction. In fact, that has n ot occurred as the union and the former employees have not received th e benefit of the Board's expedited consideration that occurs upon is suance of a S 10(j) injunction.

9GREENBERG, Circuit Judge, concurring:

I join in the majority opinion but point out the fo llowing. The Board seeks an injunction to prevent Dorsey fro m selling or alienating the plant before the Board ru les on the merits of the unfair labor charges. If the district court had entered the injunction on August 26, 1997, when it instead denied it, the injunction already would have expire d under the six-month limitation rule we adopted in Eisenbe rg v. Hartz Mountain Corp., 519 F.2d 138, 144 (3d Cir. 19 75). Of course, in that circumstance the Board would have b een required to hear the unfair labor practices complai nt before it expeditiously on a priority basis.

In fact, it is undisputed that Dorsey shut down the plant on December 29, 1995; and while it has attempted to sell the facility, it has been unable to do so. Moreover , its inability to sell the plant has been attributable a t least in part to the Board's intervention, as the Board noti fied a potential purchaser that if it acquired the plant i t might incur successor liability for Dorsey's alleged unfa ir labor practices. The notification understandably led to t he potential sale collapsing. In reality, therefore, t he mere fact that the Board brought the unfair labor practices c harge has acted as a lis pendens on the property. Thus, e ven without an injunction having been entered, the stat us quo with respect to the alienation of the plant has bee n maintained for a period almost five-fold that which in Hartz Mountain we held could be required.

The majority indicates that its opinion does "not p reclude Dorsey from raising on remand the appropriate start ing date of the S 10(j) injunction." Slip op. at 9 n.1. I, of course, agree. I write separately merely to emphasize that as I understand the majority's opinion it does not precl ude Dorsey from arguing that the starting date should b e August 26, 1997, so that the injunction already has expired. After all, the Board in a sense already ha s obtained the relief it is seeking in these proceedings. I, h owever, do not explore the point further as the parties have n ot briefed the starting date issue on this appeal.

10A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

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