Opinion ID: 618455
Heading Depth: 3
Heading Rank: 1

Heading: Interim Bargaining Order

Text: Having concluded that the district court applied the incorrect legal standard to the Director's § 10(j) petition, we turn now to consider whether the court erred in granting the interim bargaining order. Although the district court applied the incorrect four-part standard in evaluating the Director's § 10(j) petition, we find it unnecessary to remand this issue for analysis under the two-part test, which involves analysis of similar factors under a less strict standard. [9] We think the undisputed facts on the record show that the interim bargaining order is plainly warranted under the two-part test.
To establish reasonable cause to believe that the Director is likely to prevail on his claim, we must find that this claim is based on a legal theory that is substantial and not frivolous and that the facts, when taken in a favorable light to the Board, are sufficient to support that theory. Vibra Screw, 904 F.2d at 882. In evaluating reasonable cause, we are mindful that it is not our role to adjudicate the merits of the underlying claim. Under § 8(a)(5) of the Act, an employer has a duty to bargain collectively with the representatives of his employees, subject to the provisions of [section 9(a)] of this title. 29 U.S.C. § 158(a)(5). A new employer has a duty under § 8(a)(5) to bargain with the incumbent union that represented the predecessor's employees when there is a substantial continuity between the predecessor and successor enterprises. Fall River Dyeing & Finishing Corp. v. N.L.R.B., 482 U.S. 27, 43, 107 S.Ct. 2225, 96 L.Ed.2d 22 (1987). [10] This includes such continuity of the workforce that the new employer would confront the same union representing most of the same employees in the same unit. N.L.R.B. v. Burns Int'l Sec. Servs., Inc., 406 U.S. 272, 280 n. 4, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972). The question of whether there is reasonable cause to believe that Grane's conduct constitutes an unfair labor practice depends on whether there is reasonable cause to believe that the Director will prevail on his claim that Grane is a legal successor to Cambria County, and therefore had a duty to recognize and bargain with Local 1305. Grane does not dispute that the facts on the record satisfy the standard for substantial continuity: it did hire a majority of the Laurel Crest employees and continues the operations of Laurel Crest as a nursing home. However, notwithstanding that it qualifies as a successor employer under the substantial continuity test, Grane contends that successorship principles do not apply in the context of a transition from a public to private employer. In this respect, Grane observes that because Cambria County was a public employer under the terms of state labor law, PERA, 43 P.S. § 1101.301(1), and was expressly excluded from coverage under the NLRA, Grane therefore cannot be a predecessor employer under the Act. Likewise, it argues that because Local 1305 was certified under state labor laws rather than the Act, it too cannot qualify as an incumbent Union within the terms of the Act. The gravamen of Grane's arguments is that the successorship principle has no application in the context of a transition from public to private employers. In this regard, it explains that Local 1305 is not a labor organization within the terms of section 9(a) of the Act because it has never been `selected' by `employees' of an `employer' under Section 9(a). (Grane's Br. at 25.) [11] As a result, Grane observes that neither Local 1305 nor Cambria County had any status under the Act before January 1, 2010, and that Grane therefore has been placed into the metaphysical quandary of being the successor employer to a non-existent predecessor. ( Id. at 26). It is not our task to decide the merits of Grane's arguments that successorship principles should be applied in the context of public to private transitions. Rather, our reasonable cause inquiry directs us to examine whether the Director's legal theory is substantial and non-frivolous. We have little difficulty concluding that standard is met, and there is reasonable cause to believe that the Director will prevail in establishing that Grane is a successor employer. The Director's successorship theory is hardly a novel legal position. In several cases, the courts and the Board have applied successorship principles in the context of the public to private transition. In Dean Transp., Inc., 350 NLRB 48 (2007), enf'd, 551 F.3d 1055 (D.C.Cir.2009), the Board held that a union certified by a state agency was a labor organization under the Act, and the fact that the predecessor was a public employer did not prevent the court from imposing a successorship obligation on the private employer. Id. at 50-51. In applying the Fall River substantial continuity test, the Board noted that it has applied this test even where, as here, the predecessor is a public entity. 350 NLRB at 58. See also Cmt'y Hospitals of Cent. Cal. v. N.L.R.B., 335 F.3d 1079, 1084 (D.C.Cir.2003) (The change from public to private ownership of the hospital does not undermine the Board's finding that Community was a successor.); Lineback v. Irving Ready-Mix, Inc., 653 F.3d 566, 573 (7th Cir.2011) (noting [t]he solid line of cases ... support[ing] the district court's conclusion that the Director is likely to succeed on the merits of his successorship claim in the context of a public to private transition); Van Lear Equip., Inc., 336 NLRB 1059, 1064 (2001) ([T]he successorship doctrine continues to apply even though the predecessor ... is a public employer.); Lincoln Park Zoological Soc., 322 NLRB 263, 264-65 (1996), enf'd 116 F.3d 216, 220 (7th Cir.1997) (applying the successorship principle in the context of a public to private transition). In light of this case law it is evident that there is reasonable cause for the charge that Grane's refusal to recognize and bargain with the incumbent union, Local 1305, is a violation of the Act.
To determine whether injunctive relief is just and proper, we consider the policies underlying § 10(j), Dorsey Trailers, 147 F.3d at 247, including the public interest in the settlement of labor disputes through collective bargaining, Vibra Screw, 904 F.2d at 876 (quoting Hartz Mountain, 519 F.2d at 142), and whether the failure to grant interim injunctive relief would be likely to prevent the Board, acting with reasonable expedition, from effectively exercising its ultimate remedial powers. Suburban Lines, 731 F.2d at 1091-92. The Director argues that the interim bargaining order is just and proper because Grane's current refusal to recognize or bargain with Local 1305 is depriving employees of the benefits of collective bargaining and causing irreparable erosion of Union support. The Director argues that this damage will render the Board's ultimate remedial order ineffective. Grane contends that the Director's evidence is inadequate to substantiate these claims, disputing several factual claims made by the Director and arguing that the lack of adequate evidence to establish a threat to the Board's remedial authority forecloses a finding that the bargaining order is just and proper. To establish the chilling effect that Grane's conduct has had on the employees, the Director cites testimony adduced at the ALJ hearings from current and former Laurel Crest employees and Local 1305 officers. Their testimony cited conversations with five identified employees, who had reportedly said that they felt that they were being watched by Grane officials; were scared to support the Union; were constantly reminded that there was no union; and expressed concerns about the Union's status and future. The testimony also establishes that other public Union activities, including regular meetings and pre-takeover picketing, have ceased since Grane's refusal to recognize Local 1305. Grane contends that this evidence is insufficient to prove that the Union's loss of support will cause irreparable harm, and argues that Union support was tepid to begin with. In this respect, Grane cites the attendance records of the Union meetings. Because the parties dispute the total number of Local 1305 members, the parties also dispute the relevance of these records as a measure of Union support. It is well-recognized that when a successor employer refuses to recognize an incumbent union, it inflicts a particularly potent wound on the union and its members. Bloedorn, 276 F.3d at 298. Indeed, [g]iven the uncertainties that both the union and its members face during the transition, a successor's denial of recognition disrupts the employees' morale, deters their organizational activities, and discourages their membership in unions. Id. (quoting Fall River, 482 U.S. at 49-50, 107 S.Ct. 2225). An ultimate Board order that Grane recognize the Union may be ineffective if the Union has lost significant support. Moreover, a bargaining order is also necessary to preserve the fruits of the collective bargaining process that otherwise would have been available to the employees prior to such an order. Suburban Lines, 731 F.2d at 1093. The courts have recognized this harm as a basis for injunctive relief even under the stringent four-factor test. See, e.g., Bloedorn, 276 F.3d at 299 (Meanwhile, the RSI employees whom FFI did hire are working without the advocacy of their chosen representative. Assuming that the Board ultimately orders FFI to bargain with the Union, such a forward-looking order cannot fully compensate the employees of FFI for the variety of benefits that good-faith collective bargaining with the Union might otherwise have secured for them in the present.). For these reasons, we find that the interim bargaining order is necessary to preserve the Board's remedial powers, and therefore is just and proper.