By Peter M. Panken, Steven M. Swirsky, and Adam C. Abrahms
In May, we cautioned employers that the NLRB would be increasing its aggressive pursuit of injunctions under Section 10(j) of the Act to pressure employers in a range of unfair labor practice cases. The Board’s aggression and apparent overreach is clearly revealed in one recent case in which the Board petitioned for and was granted an injunction to end a lockout, only to have the underlying unfair labor practice allegation dismissed eight days later when the Administrative Law Judge who heard the case found that the parties had indeed reached impasse as the employer claimed, and thus, that the lockout was lawful.
In NLRB v. Kellogg Company, No.14-2272, (W.D. Tenn. July 30, 2014), the General Counsel sought a Section 10(j) injunction in response to the union’s 8(a)(5) charges alleging that there was not an impasse and the employer’s lockout of its employees was an unfair labor practice. On July 30, 2014, U.S. District Judge Samuel H. Mays, Jr. in Memphis issued an injunction ordering Kellogg Company to reinstate over 200 employees at a plant who it had locked out on October 22, 2013, after their union rejected the employer’s “last, best and final offer,” in negotiations over a local supplement to the parties’ Master Agreement.
After investigating ULP charges filed by the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union, and Local Union 252-G, the NLRB’s Regional Director for Region 15 in Memphis, TN issued a Complaint alleging that the company had violated Section 8(a)(5) by declaring impasse unlawfully and then locking out the employees at the plant and by failing to provide the union with information that it had requested and needed to carry out its role as the bargaining representative. The NLRB alleged that the employer was not bargaining in good faith but was instead seeking an interim change in wages in violation of a Master Agreement which had not expired.
On April 15, 2014, after the Complaint was issued but before a hearing was conducted on the merits, at which evidence would be presented and the Union, the employer and the Board’s General Counsel would be able to argue their positions to the Administrative Law Judge who would decide whether the General Counsel had proven that Kellogg had committed ULPs as alleged in the Complaint, the Regional Director for the NLRB’s Memphis Office filed an action in the District Court for an injunction under Section 10(j) of the Act. In the petition for an injunction, the Regional Director asked the Court for an order directing Kellogg to end the lockout and to reinstate the employees, pending the outcome of the underlying ULP case. Rather than holding an evidentiary hearing on the petition, Judge Mays waited for the ULP hearing, so that he could make his decision based upon his review of the record.
A five day hearing on the ULP Complaint was conducted from May 5-9, 2014 before ALJ Ira Sandron, and Kellogg, the Union and Counsel for the Board’s General Counsel submitted briefs to the ALJ in June 2014. After the hearing closed, the record was submitted to the District Court, and on July 30, 2014, Judge Mays issued his Order, granting the Board its injunction and ordering Kellogg to end the lockout and reinstate the employees who had been out since October.
The Section 10(j) injunction was not based on findings that the employer had committed ULPs, that there was not an impasse or that the lockout was unlawful. Rather, as the Order explained it was based on his finding that the NLRB as petitioner had met an extremely low standard necessary for it to secure the injunction. Judge Mays found that the Regional Director, as the petitioner, had “reasonable cause” to believe that the company had violated the Act in the manner alleged in the charges filed by the union, and that an injunction was “just and proper” based on the facts as the Regional Director alleged.
To meet this burden, the Court noted that all the NLRB was required to do was to produce “some” evidence in support of the petition. The Court noted that in seeking an injunction, the NLRB “need not even convince the Court of the validity of the Board’s theory.” Instead, all it had to do was show that its theory was “substantial and not frivolous”.
To satisfy the requirement that issuance of an injunction was “just and proper,” the Court stated that all the Board had to show was that such relief was “necessary to return the parties to status quo pending the Board’s proceedings in order to protect the Board’s remedial powers under the Act.”
Indeed, the Judge even opined that in applying the reasonable cause/just and proper standard, “fact finding is inappropriate.” District Courts “should not resolve conflicting evidence or make credibility findings.”
Just 7 days later, the Administrative Law Judge issued his Decision and proposed order, in which he found that the allegations that Kellogg had illegally declared an impasse and locked out the employees should be dismissed. He rejected the Board’s central premise and concluded that Kellogg had bargained to impasse over a mandatory term and condition of employment and therefore had the right to lock out its Memphis employees in support of its bargaining position. (Kellogg Company and Bakery, Confectionary, Tobacco Workers & Grain Millers International Union and its Local 252. 15 CA 115259)
The Administrative Law Judge’s decision came after a full evidentiary hearing where factual evidence was presented and the NLRB’s evidence in support of the allegations could be heard and considered, and perhaps most importantly, the employer had the right to present its evidence and argue its case.
What is so unique and troubling about the Board’s pursuit of an injunction in this case is the fact that a full trial on the underlying ULP complaint was about to take place when the Board filed its petition, that trial had been completed by the time that the District Court considered the petition and granted the injunction and that the results were so diametrically opposed because of the undue deference commonly granted to the NLRB when it petitions for an injunction under Section 10(j). When the Administrative Law Judge heard the case, evaluated the evidence and considered the employer’s legal theories and not just those of the NLRB, he quickly found that there was no violation and the employer had the right to lock its employees out in support of its bargaining position. When the District Court considered the petition, it was essentially directed to simply take the Board’s word for it that ULPs had been committed and that an injunction was appropriate.
These contrasting results confirm the seriousness of the potential for an aggressive NLRB to over use and misuse discretionary injunctive relief under Section 10 (j) – a tool that has been used sparingly for most of the Board’s history. The fact that many District Judges consider applications under Section 10(j) without a full or even partial evidentiary record and afford immense deference to the NLRB’s legal theories, however novel or misdirected they may be demonstrates the risks that employers face.
For these reasons employers facing the prospect of such injunction proceedings should not hesitate to urge the courts to require evidence to back up the NLRB’s claims and should point out when the legal theories underlying such cases are not based on well recognized principles and should therefore be weighed with appropriate skepticism.