Labor & Employment Law Daily No §10(j) injunction for NLRB; effectiveness of its remedial power was not in jeopardy
Thursday, August 30, 2018

No §10(j) injunction for NLRB; effectiveness of its remedial power was not in jeopardy

By Ronald Miller, J.D.

A district court did not abuse its discretion when it denied an NLRB regional director’s motion for preliminary injunctive relief under § 10(j) of the NLRA to preserve the Board’s ability to award relief after completion of the ongoing agency adjudication of unfair labor practice charges against two hospitals. A divided Fourth Circuit held that the Board failed to demonstrate sufficiently that the effectiveness of its remedial power was in jeopardy in this case. Chief Judge Gregory dissented (Henderson v. Bluefield Hospital Co., LLC, August 28, 2018, Niemeyer, P.).

Bargaining order. In August 2012, registered nurses at two affiliated hospitals (Bluefield and Greenbrier) voted to be represented by a union for collective bargaining purposes. The Board certified the union as the exclusive bargaining representative for each hospital’s registered nurses. Both hospitals challenged the certifications and refused to bargain, prompting the union to file unfair labor practice charges. In December 2014, the Board issued an order directing the hospitals to recognize and bargain with the union.

Negotiations stall. Bluefield began bargaining sessions with the union in March 2015, and continued until November 2015. At a November session, the hospital presented the union with a “package proposal” that lacked a grievance-arbitration provision and contained a broad management-rights clause that, among other things, reserved the hospital’s right to unilaterally discharge, suspend, or discipline any registered nurse. The union’s bargaining representative rejected the package as “completely unacceptable” and demonstrative of bad-faith bargaining.” The hospital’s bargaining representative stated that the hospital was “standing by its proposal” and would not respond to the union’s proposals because the union had not responded to the package as a whole. Negotiations thereafter broke down. Similarly, Greenbrier began bargaining sessions with the union in February 2015, and continued until October 2015, when the hospital presented a package proposal that was essentially the same as the one presented by Bluefield. That proposal also led to a breakdown to negotiations. In January 2016, the union filed unfair labor practice charges with the Board against both Bluefield and Greenbrier, alleging that they both engaged in surface bargaining and had failed to bargain in good faith with the union.

Hospital request for indemnification. When Greenbrier discharged a registered nurse for violating the hospital’s attendance policy, the union requested to bargain over the discharge and also requested that the hospital provide it with the employee’s attendance records and the attendance records of other nurses in the department. Greenbrier responded that it was willing to bargain with the union over the nurse’s discharge and to provide the requested information, but only if the union first provided it with suitable indemnification. It explained that earlier in the year, an Ohio jury had returned an $800,000 verdict against another hospital in its system on an employee’s defamation claim. The union rejected the request for indemnification, and charged Greenbrier with bad-faith bargaining with respect to the nurse’s discharge.

Injunction request denied. Roughly six months after the union filed charges, the Board filed petitions in the district court under § 10(j), requesting preliminary injunctions pending the final disposition of the matters before the Board that would direct the hospitals to bargain in good faith. In addition, the Board sought an injunction to direct Greenbrier to bargain in good faith over the employee’s discharge and to furnish the union with the requested information.

A district court denied the Board’s petition for a preliminary injunction. The district court observed that “§ 10(j) relief is extraordinary,” and that the Board failed to demonstrate, as one of the requirements necessary to obtain preliminary injunctive relief, that there was a likelihood of irreparable injury to the Board’s ability to remedy the alleged unfair labor practices in the absence of an injunction. On appeal, the Board argued that the district court erred by analyzing only the irreparable harm factor for granting a preliminary injunction; that it erred in refusing to infer harm from the nature of the violations committed by the hospitals; and that it “committed clear error” in its findings rejecting any substantial erosion of employee support for the union.

‘Irreparable harm’ factors. To obtain a § 10(j) injunction, the four factors under the Supreme Court’s decision in Winter v. National Resources Defense Council, Inc., must be established. According to the Board, before denying any petition for a preliminary injunction, a district court must first consider “all four equitable factors and their interrelatedness.” However, the Fourth Circuit determined that this argument was foreclosed by its decision in Muffley ex rel. NLRB v. Spartan Mining Co., and by the Supreme Court’s decision in Winter.

When courts considering granting injunctive relief under a statute, they exercise their “traditional equitable discretion.” In Muffley, the Fourth Circuit held that the “traditional four-part test of equitable relief” applies to petitions under § 10(j). Winter made clear that each of these four factors must be satisfied to obtain preliminary injunctive relief. Thus, the Board’s argument that “all four factors and their impact upon one another” must be examined before denying a preliminary injunction is clearly misplaced. Rather, upon finding that one of the Winter factors had not been satisfied, the district court properly concluded that the Board could not establish the necessary criteria for preliminary injunctive relief.

Refusal to infer harm. The Board next argued that the district court erred in failing to recognize that irreparable harm is “inherent in bad-faith bargaining cases.” Here, the appeals court found a fundamental tension between the Board’s theories of inherent harm and the Supreme Court’s recognition that “a preliminary injunction is an extraordinary remedy never awarded as of right.” The court concluded that as a general proposition, an employer’s alleged failure to bargain in good faith with a union regarding an initial collective bargaining agreement is not the kind of violation from which likely irreparable harm can be inferred.

Erosion of union support. Finally, the Board contended that the district court “committed clear error” in its evaluation of the record evidence, arguing that the record showed a decrease in employee confidence in the union, in employees’ willingness to participate in union activities, and in the union’s level of employee support. However, the appeals court pointed out that the evidence was far from one-sided, and fell short of showing a threat to the Board’s remedial power. It was far from clear on the record that absent interim injunctive relief, employee support for the union would likely decline to a point where the union would be unable to negotiate effectively should the Board ultimately issue a bargaining order and afford other relief. Accordingly, the judgment of the district court was affirmed.

Dissent. Chief Judge Gregory observed that in determining whether it is “just and proper” to grant a § 10(j) injunction, district courts in the Fourth Circuit must apply the four Winter factors “in light of the underlying purpose of § 10(j): preserving the Board’s remedial power pending the outcome of its administrative proceedings.” In this case, the dissent concluded that the district court’s analysis began and ended with the second Winter factor: irreparable harm. He argued that Congress enacted § 10(j) to prevent illegal practices from reaching fruition and that district courts must grant or deny a § 10(j) injunction in light of Congress’s purpose. Because the district court failed to analyze irreparable harm in the proper context—preserving the Board’s remedial power—Judge Gregory dissented.

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