Opinion ID: 3065791
Heading Depth: 2
Heading Rank: 4

Heading: the merits of the injunction

Text: We now consider the injunction on its merits. Section 10(j) permits a district court to grant relief “it deems just and proper.” 29 U.S.C. § 160(j). “To decide whether granting a request for interim relief under Section 10(j) is ‘just and proper,’ district courts consider the traditional equitable criteria used in deciding whether to grant a preliminary injunction.” McDermott v. Ampersand Publ’g, LLC, 593 F.3d 950, 957 (9th Cir. 2010). Thus, when a Regional Director seeks § 10(j) relief, he “must establish that he is likely to succeed on the merits, that he is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of equities tips in his favor, and that an injunction is in the public interest.” Winter v. Nat. Res. Def. Council, 129 S. Ct. 365, 374 (2008). “ ‘[S]erious questions going to the merits’ and a balance of hardships that tips sharply towards the [Regional Director] can support issuance of a preliminary injunction, so long as the [Regional Director] also shows that there is a likelihood of irreparable harm and that the injunction is in the public interest.” Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). In all cases, however, the Regional Director “must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction.” Id. at 1131 (emphasis omitted); see Small v. Operative Plasterers’ Int’l Ass’n, Local 200, 611 F.3d 483, 491 (9th Cir. 2010) (observing that Winter abrogated Miller’s holding that a mere “possibility of irreparable harm” can be adequate); McDermott, 593 F.3d at 957 (same). “[T]he court must evaluate the traditional equitable criteria through the prism of the underlying purpose of section 10(j), which is to protect the integrity of the collective bargaining process and to preserve the Board’s remedial power.” Scott v. Stephen Dunn & Assocs., 241 F.3d 652, 661 (9th Cir. 2001) FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9911 (internal quotation marks omitted), abrogated on other grounds as recognized by McDermott, 593 F.3d at 957. 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 interest. The District Court therefore enjoined the Hotel from various activities that, in its view, the Board would likely determine, and be affirmed by the Ninth Circuit in so determining, 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 injunction “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.

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 Director occurred and that this Court would grant a petition enforcing 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. 9912 FRANKL v. HTH CORPORATION; KOA MANAGEMENT McDermott, 593 F.3d at 964; see also Small, 611 F.3d at 491 n.3 (expressing hesitation about whether according weight to the Regional Director’s decision to file a § 10(l) petition is appropriate in evaluating the likelihood of success because such petitions are filed without the Board’s approval); United Bhd. of Carpenters, 409 F.3d at 1207 n.12 (same). Because the Board did not approve the petition here, we do not accord significance to the fact of the petition’s filing in evaluating the Director’s likelihood of success. 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 policy.” 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 likelihood of success by producing some evidence to support the unfair labor practice charge, together with an arguable legal theory.” Id.; see also Scott, 241 F.3d at 662 (“[T]o satisfy the ‘likelihood of success’ prong of the traditional equitable test, [the Director] need only show a better than a negligible chance of success.” (internal quotation marks omitted)). But if the Director does not show that success is likely, and instead shows only that there are serious questions going to the merits, then he must show that the balance of hardships tilts sharply in his favor, as well as showing that there is irreparable harm and that the injunction is in the public interest. See Alliance for the Wild Rockies, 632 F.3d at 1135.
The District Court held that the Board would likely determine, and be affirmed by the Ninth Circuit in so determining, FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9913 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 discourage membership in any labor organization,” 29 U.S.C. § 158(a)(3); § 8(a)(5) makes it an unfair labor practice for an employer “to refuse to bargain collectively with the representatives of his employees,” id. § 158(a)(5); and § 8(a)(1) makes it an unfair labor practice to “to interfere with, restrain, or coerce employees in the exercise” of their rights to organize and to bargain collectively. Id. § 158(a)(1). “[A] violation by an employer of any of the four subdivisions of Section 8, other than subdivision one, is also a violation of subdivision one.” 1 HIGGINS, supra, at 87 (internal quotation marks omitted).
The Hotel is comprised of three business entities: the HTH Corporation, the Pacific Beach Corporation, and Koa Management, 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 Outrigger 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 determination that the Board will find that the three entities constitute a single employer for purposes of the Act. 9914 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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 providing: The employer 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 atwill [sic]. The Hotel also proposed a management rights clause specifying 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 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9915 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 allowing for some sort of appeal procedure in the event of an on-the-job grievance, actually sets up only an illusion . . . [as] it all end[s] up in the hands of the general 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 collective 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 management 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. 9916 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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 contract 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 management 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 indications that the majority of employees did not want to be represented 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.
The Board will find that an employer has violated its duty to bargain under § 8(a)(5) of the Act if the employer has FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9917 failed to bargain in good faith with a union, see Regency Serv. Carts, Inc., 345 N.L.R.B. 671, 671 (2005), or if it has engaged in a per se violation of its duty to bargain, regardless of its good faith. See, e.g., NLRB v. Katz, 369 U.S. 736, 743 (1962). 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 308 F.3d 859 (8th Cir. 2002). An employer is not required to “make concessions or yield any position fairly maintained,” NLRB v. Holmes Tuttle Broadway Ford, Inc., 465 F.2d 717, 719 (9th Cir. 1972), but is “obliged to make some reasonable effort in some direction to compose his differences with the union.” Regency Serv. Carts, Inc., 345 N.L.R.B. at 671 (internal quotation marks omitted) (emphasis in original). Thus, “mere pretense at negotiations with a completely closed mind and without a spirit of cooperation does not satisfy the requirements” of § 8(a)(5). Id. (internal quotation marks omitted). 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) committing per se violations by refusing to bargain and unilaterally 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 proposal 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 50 F. App’x 444 (D.C. Cir. 9918 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 2002). More generally, while “the mere insistence upon a management-rights clause is not a per se violation of the Act, the Board has consistently held that a violation is made out when, as here, the employer demands a contractual provision which would exclude the labor organization from any effective means of participation in important decisions affecting the terms and conditions of employment of its members.” United Contractors Inc., 244 N.L.R.B. 72, 73 (1979) (footnote omitted), enf’d 631 F.2d 735 (7th Cir. 1980). Taken together, the Hotel’s proposed recognition clause, management rights provision, and one-sided grievance procedure would exclude the Union from any meaningful representational role. As a result, the Board was likely to find that the Hotel’s insistence on these three clauses is exceedingly persuasive evidence of the Hotel’s lack of good faith in bargaining during 2006. [18] In addition, the Regional Director points to, and the ALJ and the District Court both found, other evidence of badfaith 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 employer’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 conduct preceding the election that quite possibly affected the margin of victory. Moreover, the Hotel’s objectionable conduct preceding both elections, as well as its subsequent violations 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 bargained in bad faith in 2006. FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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 adequate to support the conclusion that PBHM acted as an agent for the Hotel in collective bargaining and that the Hotel’s cancellation of the management agreement with PBHM, when a collective bargaining agreement was imminent, while continuing to keep its veto authority over a prospective agreement secret, constituted bad-faith bargaining. The Regional Director asks us to affirm that holding.16 The District Court’s reasoning as to this point was comprehensive 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 unavailing. 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 statu16 One initial point bears consideration with regard to this time period: It would seem not to matter whether the Hotel engaged in bad-faith bargaining 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 Union, and PBHM and the Union, left off negotiations on November 30, 2007.” Thus, whether it was “just and proper,” 29 U.S.C. § 160(j), to require the Hotel to resume bargaining from the tentative agreements reached by PBHM could turn on whether the Hotel was a statutory employer when PBHM reached those agreements. For that reason, we reach the latter issue. 9920 FRANKL v. HTH CORPORATION; KOA MANAGEMENT tory employer, and to be affirmed by this Court in so determining. The Hotel challenges the District Court’s agency determination on its merits only by arguing that that determination stands in tension with PBHM’s statement that the HTH Corporation 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 objections 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., 333 N.L.R.B. 717, 723-25 (2001), and, even then, withdraws recognition “at its peril,” id. at 725. “If the union contests the withdrawal of recognition in an unfair labor practice proceeding, the employer will have to prove by a preponderance of the evidence that the union had, in fact, lost majority support at the time the employer withdrew recognition. If it fails to do so, it will not have rebutted the presumption of majority status, and the withdrawal of recognition will violate Section 8(a)(5).” Id. (footnote omitted). The Hotel has not presented any objective evidence of a loss of majority support as of December 1, 2007. FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9921 [20] In any case, “employers may not withdraw recognition 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. Consequently, the Hotel could not have validly withdrawn recognition 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 support. But it was unlikely to be able to do so. The Hotel did not resume bargaining with the Union after the unfair labor practices 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 practices 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 purporting 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 thereafter. Whether the Hotel purported to withdraw recognition a 9922 FRANKL v. HTH CORPORATION; KOA MANAGEMENT second time, and whether it had a basis for doing so, simply does not matter. Additionally, if the Board found that the withdrawal of recognition was improper, it would likely also have found that the Hotel committed a per se violation of § 8(a)(5) by unilaterally changing the terms and conditions of bargaining unit employees’ employment after unlawfully withdrawing recognition from the Union. See Local Joint Exec. Bd. v. NLRB, 540 F.3d 1072, 1075 (9th Cir. 2008).
[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, maintaining 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 latter was hiring afresh as of December 2007. The District Court found that the Hotel decided not to continue 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. Refusing 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), 331 N.L.R.B. 9, 12 (2000), enf’d 301 F.3d 83 (3d Cir. 2002); id. at 12-13 (applying the discriminatory discharge framework from Wright Line, 251 N.L.R.B. 1083 (1980), to refusal-to-hire violations). While the General Counsel must in the hiring context prove “that there was at least one available opening for the applicant,” id. at 12, the FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9923 Hotel does not contest that there were such openings here. As to union animus, the burden is on the Regional Director to demonstrate its role in motivating the employment decision with regard to either a termination or a failure to hire, and both the ALJ and District Court found that the Regional Director had met that burden for each of the five excluded employees.17
Small rejected, as inconsistent with Winter, Miller’s holding 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 labor 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 standard 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 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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 members. Consequently, the result of an unremedied refusal to bargain with a union, standing alone, is to discredit the organization in the eyes of the employees, 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) (footnote omitted). As the Seventh Circuit has likewise noted, “[a]s time passes, the benefits of unionization are lost and the spark to organize is extinguished. The deprivation to employees 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 recreate 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 employees for the loss of economic benefits that might have been obtained had the employer bargained in good faith. See 2 HIGGINS, supra, at 2775. Thus, a finding of likelihood of success as to a § 8(a)(5) bad-faith bargaining violation in particular, along with permissible inferences regarding the likely effects of that violation, can demonstrate the likelihood of irreparable injury, absent some unusual circumstance indicating that union support is not being affected or that bargaining could resume without detriment as easily later as now. FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9925 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 collective 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 retaliation after the firing of union supporters is exactly the ‘irreparable 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 finding 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. The same evidence and legal conclusions, along with permissible inferences 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 cannot 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 Director’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 9926 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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 reassurance to employees beyond that provided by a final Board order.” McDermott, 593 F.3d at 965 (internal quotation marks omitted). At the same time, McDermott recognized that “delay by itself is not a determinative factor in whether the grant of interim relief is just and proper.” Id. (internal quotation marks omitted). Rather, “[t]he factor of delay is only significant if the harm has occurred and the parties cannot be returned to the status quo or if the Board’s final order is likely to be as effective as an order for interim relief.” Id. (internal quotation marks omitted). 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 supported 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 standard. See McDermott, 593 F.3d at 958 (adopting and applying United Bhd. of Carpenters’s conclusion that “in light of the risk that protected First Amendment speech would be restrained . . . ‘only a particularly strong showing of likely success, and of harm . . . as well, could suffice’ ” (quoting United Bhd. of Carpenters, 409 F.3d at 1208 n.13) (second ellipsis in original) (emphasis added)); id. at 964 (“In light of the First Amendment issues in this case, we conclude that the district court did not abuse its discretion by declining to grant preliminary relief. The standard for such relief is a tough one, taking into account [United Bhd. of Carpenters’s] increased FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9927 demands.” (emphasis added)). As the District Court in this case noted, no First Amendment interests are here at stake, and viewed under ordinary irreparable injury standards, “[a]s more time passes, it becomes less likely that these discharged employees will return to the Hotel,” undermining the unionization effort. Norelli v. HTH Corp., 699 F. Supp. 2d 1176, 1203-04 (D. Haw. 2010). 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 ongoing 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 committee 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 preclude the District Court’s ability to restore the status quo. The Union was willing to represent the employees and to bargain on their behalf under an interim bargaining order. Recognizing 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 cannot be restored retroactively, and also could lead to the conclusion of a collective bargaining agreement, with concomitant employee benefits, during the interim period. Thus, the interim relief ordered immediately remedied statutory injuries as to which no retroactive relief is available. 9928 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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.
The District Court determined that the balance of the hardships 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 outweigh 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’ organizational 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 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 9929 Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 50 n.16 (1987). [24] More importantly, by establishing a strong likelihood of success on the merits of the alleged § 8(a)(3) and (5) violations, 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 representation by the elected union, as their expressed preferences are generally tainted by the effects of the unfair labor practices. See Lee Lumber, 322 N.L.R.B. at 177-78. In all likelihood, 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 concerning support for the Union, and so properly assessed the balance of the hardships.
“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 likelihood of irreparable harm, the Director will have established that preliminary relief is in the public interest. The Hotel contests that conclusion as applied here, objecting 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 bargaining cases, a § 10(j) remedy will be identical, or at least very similar, to the Board’s final order. This precept follows from 9930 FRANKL v. HTH CORPORATION; KOA MANAGEMENT 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, 19 F.3d at 459-60. The task of the Board in devising a final remedy is “to take measures designed to recreate the conditions and relationships that would have been had there been no unfair labor practice.” Franks v. Bowman Transp. Co., 424 U.S. 747, 769 (1976) (internal quotation marks omitted). Very often, the most effective way to protect the Board’s ability to recreate such relationships and restore the status quo will be for the court itself to order a return to the status quo. See Scott, 241 F.3d at 660 (observing that “injunctive relief under section 10(j) is intended to preserve the status quo pending final action by the Board”). So the District Court cannot have abused its discretion just because it entered an order similar to the one the Board was likely to enter in this case.18 We have thus no reason to disturb the District Court’s determination that injunctive relief was in the public interest.