Case: 17-10282 Document: 00514500509 Page: 1 Date Filed: 06/05/2018
REVISED June 5, 2018
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
No. 17-10282 May 18, 2018
Lyle W. Cayce
Clerk
MARTHA KINARD, Regional Director of the Sixteenth Region of the
National Labor Relations Board on behalf of National Labor Relations Board,
Plaintiff - Appellee Cross-Appellant
v.
DISH NETWORK CORPORATION,
Defendant - Appellant Cross-Appellee
Appeals from the United States District Court
for the Northern District of Texas
Before HIGGINBOTHAM, SOUTHWICK, and COSTA, Circuit Judges.
LESLIE H. SOUTHWICK, Circuit Judge:
The Regional Director of the National Labor Relations Board sued DISH
Network Corp., seeking an injunction against unilateral changes to employee
wages during collective bargaining. The district court granted the injunction
in part. Both DISH and the Board appealed. We AFFIRM.
FACTUAL AND PROCEDURAL BACKGROUND
DISH Network Corp. is a satellite television provider with production
facilities in Farmers Branch and North Richland Hills, both being in the
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Dallas-Fort Worth area. In 2009, DISH selected those jobsites to serve as pilots
for a new compensation program known as Quality Performance
Compensation (“QPC”). Replacing the previous hourly wage compensation
scheme, QPC provided a lower hourly rate supplemented by incentive pay
based on certain performance metrics. As of 2009 when QPC was implemented
at Farmers Branch and North Richland Hills, no DISH employees working as
technicians or warehouse workers were represented by a union. Following the
introduction of QPC, however, the employees at Farmers Branch and North
Richland Hills certified representation by the Communication Workers of
America union in 2010 and 2011, respectively. The employees allegedly
certified union representation based on their dissatisfaction with QPC. At the
time of union certification, QPC remained the status quo form of compensation
at the two facilities.
In July 2010, the parties began collective bargaining to establish an
initial contract. Bargaining continued from July 2010 to November 2014.
During this time, DISH altered and introduced alternative methods of
compensation at other facilities but left QPC in place at the unionized Farmers
Branch and North Richland Hills sites, likely because unilateral changes to
compensation in the course of collective bargaining is generally prohibited.
NLRB v. Dothan Eagle, Inc., 434 F.2d 93, 98 (5th Cir. 1970). Following
certification of the union and the initiation of collective bargaining, however,
improvements to equipment and procedures at DISH facilitated better
employee performance under QPC incentive criteria. Wages increased
substantially. Accordingly, the union and DISH reversed their respective
bargaining positions. The union now desired to keep QPC, and DISH sought
to eliminate it. According to DISH, by 2015, union technicians at Farmers
Branch and North Richland Hills were making approximately $19,000 more
annually than non-union technicians at other branches.
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By March 2013, the parties reached oral agreement on numerous issues
including benefits and union recognition, leaving wages and a few other issues
for continued negotiation. The plaintiffs allege that in the following months,
DISH repeatedly attempted to assert that negotiations had reached an
impasse, ultimately calling for a pause in November 2013 to await the outcome
of a union-decertification vote. The employees decided against decertification
and bargaining resumed in July 2014.
On November 18 and 19, 2014, DISH rejected a union proposal to keep
QPC; it countered with a “final offer” that eliminated QPC and established
lower hourly wage scales. Between November 2014 and April 2016, the parties
continued to clash over the final offer. DISH maintained that bargaining had
reached an impasse while the union maintained that they had not reached an
impasse and that further bargaining was required under the National Labor
Relations Act (“NLRA”).
In January 2016, DISH communicated that it would proceed with
implementing the final offer unless the union provided evidence that
bargaining was not at an impasse. The union quickly replied, arguing it was
entitled under the NLRA to bargain with DISH face-to-face and requesting
possible dates for negotiation. The parties continued to communicate these
positions to one another until April 23, when DISH implemented the wage
changes associated with the final offer.
Under the terms of the final offer, union technicians at both facilities
witnessed a nearly 50% reduction in wages. According to the union, 17
technicians from both facilities, including the union leader from North
Richland Hills, quit in response to the wage reduction. Warehouse employees
saw no change to their wages. The final offer also implemented a new
healthcare policy that took effect in July 2016.
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The union filed an unfair labor practice charge before the National Labor
Relations Board (“NLRB” or “the Board”) on April 7, 2016, two days after DISH
announced that it would implement the final offer terms. On June 23, Martha
Kinard, the NLRB Regional Director, issued a Notice of Hearing for the charge.
The hearing took place before an administrative law judge (“ALJ”) over seven
days in August and September of 2016.
While the NLRB continues to adjudicate the unfair labor practices claim,
Martha Kinard, on behalf of the NLRB as petitioner, filed for injunctive relief
against DISH’s implementation of the final offer in the United States District
Court for the Northern District of Texas under Section 10(j) of the NLRA. The
NLRB sought an injunction requiring DISH to (1) restore all union employees
to their pre-2016 wages and healthcare benefits, (2) offer interim
reinstatement with prior wages and benefits to the employees constructively
discharged by the implementation of the final offer, and (3) reinitiate good faith
bargaining. The district court granted the injunction with respect to pre-2016
wages but denied relief for the remaining requests. DISH appealed, and the
NLRB cross-appealed.
DISCUSSION
DISH argues that the district court went too far by granting the
injunction reinstating QPC wages. The NLRB argues on cross-appeal that the
district court did not go far enough by declining to enjoin future unilateral
changes by DISH during the pendency of Board proceedings. The NLRB does
not challenge the district court’s denial of the injunction with respect to
reinstatement of constructively discharged employees nor the resumption of
good faith bargaining.
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I. DISH’s appeal
Section 10(j) of the NLRA grants the NLRB authority to petition a
district court to enjoin unfair labor practices. See 29 U.S.C. § 160(j). We have
held that the propriety of injunctive relief under Section 10(j) is evaluated
using a two-part test: “(1) whether the Board, through its Regional Director,
has reasonable cause to believe that unfair labor practices have occurred, and
(2) whether injunctive relief is equitably necessary, or, in the words of the
statute, ‘just and proper.’” McKinney v. Creative Vision Res., LLC, 783 F.3d
293, 296–97 (5th Cir. 2015) (quoting Boire v. Pilot Freight Carriers, Inc., 515
F.2d 1185, 1188–89 (5th Cir. 1975)).
The district court assumed the NLRB had reasonable cause to believe
unfair labor practices had occurred and held injunctive relief was equitably
necessary with respect to new wage levels. DISH does not challenge the
district court’s assumption regarding reasonable cause but only its holding on
equitable necessity.
In determining whether injunctive relief is equitably necessary, we have
held that relief is appropriate when:
(1) the employer’s alleged violations of the NLRA and the harm to
the employees or to the union are concrete and egregious, or
otherwise exceptional; and (2) those harms, as a practical matter,
have not yet taken their adverse toll, such that injunctive relief
could meaningfully preserve the status quo among the employer,
the union, and the employees, that existed before the wrongful acts
occurred.
Id. at 298. DISH argues that the district court erred with respect to both
prongs of this test.
We review a district court’s decision concerning equitable necessity for
abuse of discretion. Id. “[A] district court abuses its discretion when it
misconstrues its proper role, ignores or misunderstands the relevant evidence,
and bases its decision upon considerations having little factual support.” Id.
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(quoting Arlook ex rel. NLRB v. S. Lichtenberg & Co., 952 F.2d 367, 374 (11th
Cir. 1992)).
a. Egregious harm
The proper role of injunctive relief under Section 10(j) is to remedy an
unfair labor practice that, “in the context of that particular case, has caused
identifiable and substantial harms that are unlikely to be remedied effectively
by a final administrative order from the NLRB.” Id. at 299. Even so, relief
under Section 10(j) is an “extraordinary remedy,” as “measures to short-circuit
the NLRB’s processes should be sparingly employed.” Id. (quoting Pilot Freight
Carriers, 515 F.2d at 1192). To fulfill the equitable necessity requirement, the
alleged labor practice must therefore be truly “egregious” such that it will “lead
to exceptional injury, as measured against other unfair labor practices.” Id.
The district court held that DISH’s unilateral implementation of the
final offer was exceptional and egregious. DISH challenges this holding for
two reasons. First, it argues that the district court erred as a matter of law in
failing to conduct the proper legal analysis required under Creative Vision.
According to DISH, our egregiousness test requires the court to analogize or
distinguish the labor practice at issue with other examples of fair or unfair
labor practices in case law. Second, DISH argues that the district court erred
by ignoring relevant facts, such as market wage levels.
As to the first argument, we see no requirement that a district court must
find prior unfair labor practice cases, then contrast or compare the current
case. Instead, the court should decide whether “the unfair labor practice, in
the context of that particular case, has caused identifiable and substantial
harms.” See id. (emphasis added). In Creative Vision, the district court had
failed to “explain, for example, how Creative Vision’s work force or the union
suffered egregious or otherwise exceptional harm within the context of the
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usual NLRA cases as a result of Creative Vision’s failure to bargain.” Id. at
300. Although we cited other NLRA cases, the purpose was to contrast the
district court’s failure to “articulate specifically how this particular conduct
created an egregious case of refusal to bargain.” Id. In other words, “a district
court reviewing a petition for § 10(j) injunctive relief should provide only relief
that is necessary and must issue specific findings of fact that suggest harm
requiring § 10(j) injunctive relief.” Id. at 299. There is no requirement that a
court analogize or distinguish prior cases in the process.
The district court here made the requisite findings in determining
egregiousness: (1) the 50% wage reduction was exceptional, (2) the new wage
levels compensated certain union employees $5 less per hour than non-union
employees at neighboring branches, (3) union membership would continue to
erode as employees continue to resign, and (4) loss of membership and morale
presented a concrete possibility of union dissolution. Such findings are unlike
the “broad and general assumption” in Creative Vision that failed to “consider[]
the specific impact on the union or its employees.” Id. at 298. Indeed, the
district court calculated and compared the decrease in wages, considered the
testimony of affected employees, and gauged the requisite effects on union
participation and morale.
Under an abuse of discretion standard, DISH does not demonstrate that
the district court “base[d] its decision upon considerations having little factual
support.” Id. For example, DISH argues that the district court failed to
recognize that the unilateral wage reduction brought union employee wages in
line with market levels “and therefore did not properly exercise its discretion.”
DISH argues that “[t]he percentage by which someone’s pay was decreased
does not define the ‘egregiousness’ of the pay cut,” but it cited no support for
that statement. We have no difficulty in concluding that the percentage
decrease in pay has relevance when it has a demonstrated effect on union
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support. Further, DISH’s argument that market wage levels for similarly
skilled workers were comparable to the final offer appears wrong factually, as
the district court found the new wage levels were up to $5 lower per hour for
union employees compared to non-union employees at neighboring branches.
DISH’s response to this key portion of the district court’s holding is that such
a wage disparity between union and non-union employees goes to the
“reasonable cause” prong of our Section 10(j) analysis, not equitable necessity.
We will examine that premise.
In articulating our test for egregiousness in Creative Vision, we stated
that “most, if not all, conduct that is prohibited by the NLRA has the potential
to, and often does, cause serious harm to competing unions, to the work force,
and/or to employers.” Id. at 299. This is why our Section 10(j) test not only
determines whether there is reasonable cause to believe an unfair labor
practice has occurred but also whether the practice was egregious or otherwise
exceptional. See id. at 296–97. Improper retaliation is relevant not only to
reasonable cause but also to the evaluation of egregiousness. See id. at 299.
The district court did not err in recognizing the nearly 25% disparity
between union wages and non-union wages. Such a basis provides sufficient
factual support to survive an abuse of discretion standard of review.
b. Preservation of the NLRB’s remedial powers
DISH argues that the district court otherwise erred with respect to the
second equitable necessity element: whether “injunctive relief could
meaningfully preserve the status quo among the employer, the union, and the
employees, that existed before the wrongful acts occurred.” Id. at 298. As with
egregiousness, DISH argues that the district court applied an incorrect legal
standard and, in the alternative, lacked sufficient evidence to meet that
standard.
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In Creative Vision, we held that “injunctive relief should issue when
harms are ongoing, yet incomplete and likely further to harm the union or its
supporters in the workforce.” Id. at 299. DISH argues that such language
precludes Section 10(j) relief “unless the district court finds a likelihood — not
just a mere possibility — that an allegedly unfair labor practice will cause
harm that the Board cannot redress through its own procedures.” Accordingly,
DISH argues that the district court therefore applied an erroneous legal
standard when it approved injunctive relief based on the “concrete possibility
of Union dissolution” rather than a likelihood of dissolution.
The district court’s full opinion indicates its conclusion that future harm
to the union was likely. The district court held that the union had presented
sufficient testimony to “credit the claim that Union membership will continue
to erode without the restoration of QPC.” (emphasis added). It similarly held
that employee “perception that the Union failed to prevent a 50% reduction in
their wages is clearly the but-for cause of unit employees’ disillusionment with
the Union.” This language sufficiently reveals the district court’s reliance on
a likelihood standard as required by Creative Vision. See id.
DISH argues in the alternative that there was insufficient evidence to
find a likelihood of ongoing harm requiring injunctive relief. DISH accurately
summarizes the two categories of evidence relied upon by the district court: (1)
diminishing support of the union due to resignations and (2) diminishing
support among remaining members.
First, DISH argues that the number of resignations in response to the
unilateral wage reduction fails to show harm to the union because resignations
were artificially low during the time QPC was in effect. Further, DISH hired
replacements to fill the vacancies, none of whom were precluded from union
membership. In response, the NLRB argues that DISH “confuses raw numbers
of union ‘membership’ with union ‘support.’” See, e.g., Overstreet v. El Paso
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Disposal, LP, 625 F.3d 844, 856 (5th Cir. 2010). In Overstreet, for example, we
upheld an injunction requiring reinstatement of discharged strikers because
“a ‘large nucleus’ of union support had been replaced.” Id. We are therefore
concerned with the union’s support during the pendency of the NLRB
proceedings and whether continued injury is likely as a result of the unilateral
changes. See id.
Here, DISH fails to demonstrate that the district court abused its
discretion regarding its findings about diminishing union support based on
resignations and decreased morale. Despite replacement of departing
employees, the court found that even more veteran employees “intend to quit
if QPC is not restored in the near future.” Similarly, the court cited employee
testimony and text message conversations in concluding that union morale was
diminishing as a result of the wage reduction. Additional communications
indicated that the union was “on the brink” of losing all support. The court
cautiously noted that the weight of the testimony was lessened by the
“speculative and hearsay nature of some of the testimony” but nonetheless
found it credible and indicative of diminishing union morale and support.
DISH challenges the district court’s reliance on such testimony, arguing
that it was erroneous for the district court to conclude that additional
employees would quit in response to the unilateral wage reduction because
those employees are unreasonably clinging to “above-market wages that DISH
was obligated to pay.” This argument, though, fails to address a core basis for
the district court’s opinion. It was the inequity between union and non-union
employee wages, not inequity with market-wage levels, that created a
“concrete possibility of union dissolution.” According to the court, the
testimony presented was sufficiently credible to conclude that employees were
motivated to decertify the union in response to the union’s apparent inability
to secure pay at a level “the same as everyone else.”
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Such facts correlate with the usual types of NLRA unfair labor practices
warranting an injunction. One justification for an injunction is when there is
“a pervasive fear among the work force that they would be retaliated against
for providing any support for the union.” Creative Vision, 783 F.3d at 300
(citing Arlook, 952 F.2d at 373). Injunctive relief may also be justified “when
unfair labor practices cause severe anti-union sentiment to emerge.” Id. at
301. DISH would weigh the testimony differently, but it fails to demonstrate
error in the determination ultimately reached.
We affirm the district court’s determination that exceptional
circumstances are present. The district court did not abuse its discretion in
granting Section 10(j) relief in these circumstances. The high bar recently
articulated in Creative Vision remains high, but it was met here.
II. The cross-appeal
On cross-appeal, the NLRB argues that the district court erred in failing
to enjoin DISH from future unilateral changes during the pendency of the
remaining proceedings.
DISH argues the NLRB waived entitlement to such relief by failing to
sufficiently request it from the district court. The NLRB limited its request for
a cease and desist order against future unilateral changes to the introduction
of its petition and its prayer for relief. The NLRB counters that the “most
important” indicator against waiver is that the district court recounted in the
first paragraph of its opinion that “Petitioner seeks an injunction prohibiting
the alleged unfair labor practices of [DISH], pending the final disposition of
these matters.” The problem with this argument, however, is that the district
court was referencing the “alleged” or existing unfair labor practices, not future
unknown practices.
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“[I]f a litigant desires to preserve an argument for appeal, the litigant
must press and not merely intimate the argument during the proceedings
before the district court.” New York Life Ins. v. Brown, 84 F.3d 137, 141 n.4
(5th Cir. 1996) (citation omitted). The NLRB did not advance an argument
against future unilateral changes when it presented arguments for injunctive
relief for past unilateral changes. Therefore, we do not evaluate the district
court’s failure to issue a cease and desist order against other future unilateral
changes by DISH.
AFFIRMED.
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