Chester Ex Rel. NLRB v. Grane Healthcare Co.

PRECEDENTIAL

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________

Nos. 11-2573 & 11-2978
_____________

ROBERT W. CHESTER,
Regional Director of the National Labor Relations Board for
Region Six,
for and on behalf of the National Labor Relations Board

v.

GRANE HEALTHCARE CO., and/or
EBENSBURG CARE CENTER, LLC, d/b/a CAMBRIA
CARE CENTER, Single Employer

Grane Healthcare Co., and/or Ebensburg Care Center,
LLC,d/b/a Cambria Care Center, Single Employer,
Appellant in No. 11-2573

Robert W. Chester,
Appellant in No. 11-2978
_____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Civil Nos. 3-10-cv_00225 and 3:10-cv-00244)
District Judge: Hon. Kim R. Gibson
_____________
 Argued September 21, 2011

Before: AMBRO, CHAGARES and VANASKIE, Circuit
Judges

(Filed: December 7, 2011)

Richard J. Antonelli, Esq. (Argued)
Rebecca J. Dick-Hurwitz, Esq.
John A. McCreary, Jr., Esq.
Babst, Calland, Clements & Zomnir
Two Gateway Center
6th Floor
Pittsburgh, PA 15222

Counsel for Appellants & Cross-Appellees
Grane Health Care and/or Ebensburg Care
Center, LLC

Judith I. Katz, Esq.
Steven L. Sokolow, Esq.
Laura T. Vazquez, Esq. (Argued)
National Labor Relations Board
Division of Advice, Injunction Litigation Branch
1099 14th Street, N.W.
Washington, D.C. 20570

Counsel for Appellee & Cross-Appellant Robert
W. Chester

_____________

2
 OPINION
_____________

VANASKIE, Circuit Judge.

This matter comes before us on cross-appeals from the
District Court’s ruling on a petition for interim injunctive
relief sought by the National Labor Relations Board
(“NLRB”) pursuant to § 10(j) of the National Labor Relations
Act (“NLRA”), 29 U.S.C. § 160(j). For nearly forty years,
since Eisenberg ex rel. N.L.R.B. v. Hartz Mountain Corp.,
519 F.2d 138 (3d Cir. 1975), we have held that to award
interim injunctive relief under § 10(j) “a federal district court
must merely find ‘reasonable cause’ to believe an unfair labor
practice has occurred and must determine that the relief
sought is ‘just and proper.’” Kobell v. Suburban Lines, Inc.,
731 F.2d 1076, 1078 (3d Cir. 1984). The District Court in
this case, following a thoughtful discussion of pertinent
precedents, determined that our two-prong approach was
inconsistent with pronouncements of the Supreme Court
dating back nearly thirty years, to Weinberger v. Romero-
Barcelo, 456 U.S. 305 (1982). See Chester ex rel. N.L.R.B. v.
Grane Health Care Co., ___ F. Supp. 2d ____, 2011 WL
2517037, at *5-14 (W.D. Pa. June 2, 2011). Applying the
familiar four-factor test applicable to generic preliminary
injunction motions—likelihood of success on the merits;
imminent threat of irreparable harm; balance of equities
favoring interim injunctive relief; and the public interest
being served by the interim relief—the District Court granted
the requested interim bargaining order but denied the
requested interim hiring of several aggrieved individuals.
Having carefully considered the matter, we conclude that the
Supreme Court decisions upon which the District Court

3
relied, having arisen in completely different contexts and
involving statutory schemes unrelated to the NLRA, do not
warrant abrogation of our two-prong approach to § 10(j)
petitions. Furthermore, we will affirm the interim bargaining
order issued by the District Court, as plainly compelled under
the two-prong approach. As to the requested interim hiring
orders, however, we believe that the District Court should, in
the first instance, determine whether such relief is appropriate
under our two-prong approach.

I. Facts and Proceedings

Prior to January 1, 2010, Cambria County,
Pennsylvania owned and operated Laurel Crest Nursing and
Rehabilitation Center (“Laurel Crest”), a facility located in
Ebensburg, Pennsylvania. All of the employees of Laurel
Crest were employed by Cambria County, who as a public
employer was subject to the Pennsylvania State Public
Employee Relations Act (“PERA”), 43 P.S. § 1101.301(1).
Since its certification in 1971 by the Pennsylvania Labor
Relations Board, the Professional and Public Service
Employees of Cambria County a/w Laborers’ District Council
of Western Pennsylvania, Local 1305 (“Local 1305”) was the
collective-bargaining representative of a unit of non-
professional employees employed by Cambria County at
Laurel Crest. Cambria County recognized Local 1305 as the
exclusive bargaining representative of the unit, and entered
into a series of collective-bargaining agreements with Local
1305, the most recent of which ended in December, 2008.

In September, 2009, Appellant Grane Healthcare Co.
(“Grane”), a private entity that owns and manages several
Pennsylvania nursing facilities, entered into an asset purchase

4
agreement with Cambria County to purchase Laurel Crest.
On January 1, 2010, the purchase became final, and Grane
assumed operations of Laurel Crest. 1 In December, 2009,
Grane officials conducted the initial hiring, and retained most,
but not all, of the individuals who had been employed at
Laurel Crest by Cambria County and who applied to be hired
by Grane. Among the former Laurel Crest employees not
hired by Grane were several Local 1305 officers, including
Sherry Hagerich, who was the Local 1305 president, and
Mark Mulhearn, who was a business manager of Local 1305.

In December, 2009, in anticipation of the impending
sale, Local 1305 requested by email that Grane recognize
Local 1305 as the exclusive collective-bargaining
representative of the nonprofessional employees at Laurel
Crest. By letter dated January 11, 2010, Grane refused the
Local 1305 request. Local 1305 then filed an unfair labor
practice charge with the Board.

In May, 2010, following an investigation of the charge,
the Board’s General Counsel, through Robert W. Chester, the
Acting Regional Director of Region 6 (“Director”), issued a
complaint and notice of hearing against Grane, asserting
multiple unfair labor practices in violation of § 8(a)(1), (3),
and (5) of the NLRA, 29 U.S.C. § 158(a)(1), (3), and (5).

1
When Grane Healthcare Co. acquired Laurel Crest, it
established a new entity, Ebensburg Care Center, LLC d/b/a
Cambria Care Center, to manage it. In the District Court, the
parties disputed whether the two qualified as a “single
employer” under the NLRA. Since the single employer
question is not at issue here, Appellants are referred to
collectively as “Grane.”

5
The complaint contended, inter alia, that: (1) Grane’s refusal
to recognize and bargain with Local 1305 as the collective-
bargaining representative of a bargaining unit of employees
was a violation of § 8(a)(1) and (5) of the Act; and (2)
Grane’s failure to hire certain applicants, including Mark
Mulhearn and Sherry Hagerich, was a violation of § 8(a)(1)
and (3) of the Act. 2 Grane denied all of the alleged violations
of the Act. 3 In July and August of 2010, Administrative Law
Judge David I. Goldman (“ALJ Goldman”) conducted
hearings on the unfair labor practice charges.

On August 26, 2010, the Director petitioned the
District Court for temporary injunctive relief pursuant to §
10(j) of the Act. The Director requested, in pertinent part,
that the judge order Grane to: (1) recognize and bargain in
good faith with Local 1305; and (2) reinstate Hagerich and
Mulhearn.

2
The complaint also alleged that Grane and Cambria
Care constituted a single employer under the Act, and listed
three applicants in addition to Mulhearn and Hagerich whom
Grane also allegedly refused to hire in violation of the Act.
Since neither the single employer issue nor the instatement of
the other three applicants is raised on appeal, we do not
address those issues here.
3
In January and April, 2010, SEIU Healthcare
Pennsylvania, CTW, CLC (“SEIU”) also filed unfair labor
practice charges against Grane. In July, 2010, the Director
filed a second complaint against Grane based on the SEIU
charges. The Director subsequently consolidated the two
complaints.

6
 The District Court decided the petition on the basis of
the record developed by ALJ Goldman in the administrative
proceeding below—including the testimony and exhibits
produced at the hearings as well as the parties’ factual
stipulations—supplemented by testimony and arguments
adduced at an evidentiary hearing the District Court
conducted. In December, 2010, well before the Court ruled
on the § 10(j) petition, ALJ Goldman issued his decision in
the administrative proceedings. 4 The District Court observed
that it was “not bound to follow [ALJ] Goldman’s
conclusions,” and explained that “[t]his administrative record
and decision is, at best, characterized as persuasive.”
Chester, 2011 WL 2517037 at *16. Applying the four-factor
test governing preliminary injunction motions, the District
Court granted the interim bargaining order but denied the
interim instatement of Hagerich and Mulhearn.

Both parties now appeal. Grane appeals the temporary
bargaining order, contending that the District Court
committed error in concluding that the four-factor test was
satisfied. The Director cross-appeals on two grounds. First,
he contends that the District Court erred by rejecting our
established two-part test and applying the four-part test
instead. Second, he argues that the § 10(j) petition qualified
for injunctive relief under either the two-part or four-part test,
and that the District Court therefore erred by declining to
grant the interim instatement order.

4
ALJ Goldman held, inter alia, that Grane violated §
8(a)(1) and (5) of the Act by refusing to recognize and
bargain with Local 1305, and that it violated § 8(a)(1) and (3)
by refusing to hire Mulhearn and Hagerich.

7
 II. Standard for §10 (j) Injunctive Relief

A.

We begin our analysis by addressing the threshold
issue of whether the District Court erred in concluding that
Supreme Court precedent vitiates our established two-part test
for § 10(j) relief. “The issue of whether a district court
applied the correct legal standard is a legal question, which
this Court reviews de novo.” Ahearn v. Jackson Hosp. Corp.,
351 F.3d 226, 234 (6th Cir. 2003).

B.

Congress vested primary jurisdiction over the
elaboration of labor policy and the adjudication of labor
disputes in the NLRB. See, e.g., N.L.R.B. v. Truck Drivers
Local Union No. 449, 353 U.S. 87, 96 (1957) (“The function
of striking [the] balance [between conflicting legitimate
interests] to effectuate national labor policy is often a difficult
and delicate responsibility, which the Congress committed
primarily to the National Labor Relations Board, subject to
limited judicial review.”); Phelps Dodge Corp. v. N.L.R.B.,
313 U.S. 177, 194 (1941) (“The exercise of the process [of
administering the Act] was committed to the Board, subject to
limited judicial review. Because the relation of remedy to
policy is peculiarly a matter for administrative competence,
courts must not enter the allowable area of the Board's
discretion and must guard against the danger of sliding
unconsciously from the narrow confines of law into the more
spacious domain of policy.”). The NLRA provides for the
adjudication of alleged unfair labor practices through an
administrative process that involves initial fact-finding and

8
determination of the charges by an ALJ, whose decision is
reviewable de novo by the Board. The Act vests Courts of
Appeals—and in certain circumstances the District Courts—
with judicial review of final Board decisions under a standard
that requires considerable deference to various Board
determinations. See 29 U.S.C. §§ 160(e), (f).

As originally enacted in 1935, the NLRA did not
include any provision authorizing the Board to seek to enjoin
alleged unfair labor practices pending adjudication of charges
by the Board. 5 Thus, unfair labor practices—by both unions
and employers—could persist while administrative processes
were pursued. Congress sought to remedy this problem in the
Taft-Hartley Act of 1947 by mandating that the Board seek
interim injunctive relief in an appropriate district court for
certain enumerated unfair labor practices by unions, such as
secondary boycotts, jurisdictional strikes and hot cargo
contracts, see 29 U.S.C. § 160(l), and by authorizing, but not
requiring, the Board to seek interim injunctive relief for other
unfair labor practices. See 29 U.S.C. § 160(j). Specifically §
10(j), added in 1947, provides:

The Board shall have power, upon issuance of a
complaint as provided in subsection (b) of this
5
The Board was only authorized to seek enforcement
of its final orders by petitioning the appropriate federal court
of appeals. See 29 U.S.C. § 160(e). The Board could seek
“appropriate temporary relief or restraining order,” and the
court could award such relief “as it deems just and proper.”
Id. Similarly, when an aggrieved party sought review of a
final Board order in an appropriate court of appeals, the court
could “grant to the Board such temporary relief or restraining
order as it deems just and proper . . . .” 29 U.S.C. § 160(f).

9
 section charging that any person has engaged in
or is engaging in an unfair labor practice, to
petition any United States district court, within
any district wherein the unfair labor practice in
question is alleged to have occurred or wherein
such person resides or transacts business, for
appropriate temporary relief or restraining
order. Upon the filing of any such petition the
court shall cause notice thereof to be served
upon such person, and thereupon shall have
jurisdiction to grant to the Board such
temporary relief or restraining order as it deems
just and proper.

29 U.S.C. § 160(j). The Senate Report on the bill that
became §10(j) explains the purposes of this section and the
concerns that motivated it as follows:
[T]he committee is convinced that
additional procedures must be made available
under the National Labor Relations Act in order
adequately to protect the public welfare . . .
Time is usually of the essence in [§ 10(j) cases],
and consequently the relatively slow procedure
of the Board hearing and order, followed many
months later by an enforcing decree of the
circuit court of appeals, falls short of achieving
the desired objectives of the free flow of
commerce and encouragement of the practice
and procedure of free private collective
bargaining. Hence we have provided that the
Board, acting in the public interest and not in
vindication of purely private rights, may seek
injunctive relief in the case of all types of unfair

10
 labor practices . . . . Experience under the
National Labor Relations Act has demonstrated
that by reason of lengthy hearing and litigation
enforcing its order, the Board had not been able
in some instances to correct unfair labor
practices until after some substantial injury has
been done . . . . [I]t has sometimes been
possible for persons violating the act to
accomplish their unlawful objective before
being placed under any legal restraint and
thereby to make it impossible or not feasible to
restore or preserve the status quo pending
litigation.

S. Rep. No. 105, at 8, 27 (1947).

In addressing “for the first time the proper application
of Section 10(j)” in Hartz Mountain Corp., 519 F.2d at 140,
we found guidance in Schauffler v. Highway Truck Drivers &
Helpers, Local 107, 230 F.2d 7 (3d Cir. 1956). In Schauffler,
we held that to warrant § 10(l) relief, a district court must
“find that there is reasonable cause to believe that a violation
of the [NLRA] as charged has been committed,” id. at 9, and
that “a proper exercise of judicial discretion” warrants interim
injunctive relief. Id. In Hartz Mountain, we adopted the
same two part approach for § 10(j) petitions—“reasonable
cause” to believe that the alleged unfair labor practice was
committed and relief that is “just and proper,” stressing that
deciding what relief, if any, was “just and proper” would be
of “critical importance when relief is sought under Section
10(j) . . . .” Hartz Mountain, 519 F.2d at 141.

Since Hartz Mountain, we have consistently adhered
to the two-prong standard, see, e.g., Eisenberg ex rel.

11
N.L.R.B. v. Wellington Hall Nursing Home, Inc., 651 F.2d
902, 905 (3d Cir. 1981); Hirsch v. Dorsey Trailers, Inc., 147
F.3d 243, 247 (3d Cir. 1998), elaborating on the “reasonable
cause” prong in Suburban Lines, 731 F.2d at 1083-84, and the
“just and proper” prong in Pascarell ex rel. N.L.R.B. v. Vibra
Screw Inc., 904 F.2d 874, 878-79 (3d Cir. 1990). We are
joined by the Fifth, Sixth, Tenth and Eleventh Circuits in
applying this two-part test to § 10(j) petitions. See Overstreet
v. El Paso Disposal, L.P., 625 F.3d 844, 850 (5th Cir. 2010)
(upholding its “sequential, two-part[] inquiry” for § 10(j)
injunctive relief); Ahearn, 351 F.3d at 237 (“The prevailing
standard district courts in the Sixth Circuit employ when
considering a § 10(j) petition is the ‘reasonable cause/just and
proper’ standard.”); Sharp ex rel. N.L.R.B. v. Webco
Industries, Inc., 225 F.3d 1130, 1133 (10th Cir. 2000)
(recognizing the two-part test as the standard for district
courts in that circuit to apply to grant § 10(j) relief); Arlook ex
rel. N.L.R.B. v. S. Lichtenberg & Co., 952 F.2d 367, 371
(11th Cir. 1992) (same).

Other courts of appeals, including the Fourth, Seventh,
Eighth, and Ninth, have rejected the two-part approach, and
interpret § 10(j)’s just and proper clause as requiring the
traditional four-factor equitable framework that courts apply
to grant preliminary injunctions pursuant to Federal Rule of
Civil Procedure 65(a). See, e.g., Muffley ex rel. N.L.R.B. v.
Spartan Mining Co., 570 F.3d 534, 542 (4th Cir. 2009);
Kinney v. Pioneer Press, 881 F.2d 485, 490, n.3 (7th Cir.
1989); Sharp v. Parents in Cmty. Action, Inc., 172 F.3d 1034,
1037 (8th Cir. 1999); Miller v. California Pac. Med. Ctr., 19
F.3d 449, 456 (9th Cir. 1994) (en banc). The First and
Second Circuits apply a hybrid standard: they apply the two-
prong, “reasonable cause/just and proper” test, but expressly

12
incorporate the four equitable criteria into the “just and
proper” prong. See, e.g., Pye ex rel. N.L.R.B. v. Sullivan
Bros. Printers, Inc., 38 F.3d 58, 63 (1st Cir. 1994) (When
deciding whether “injunctive relief is just and proper . . . the
district court must apply the familiar, four-part test for
granting preliminary relief.”) 6; Hoffman v. Inn Credible
Caterers, Ltd., 247 F.3d 360, 368 (2d Cir. 2001) (“In this
Circuit, injunctive relief under § 10(j) is just and proper when
it is necessary to prevent irreparable harm or to preserve the
status quo. While this standard preserves the traditional
equitable principles governing injunctive relief, we are
mindful to apply them in the context of federal labor laws.”)
(citations omitted).

C.

Under our Internal Operating Procedures, a panel of
this Court cannot overrule an earlier binding panel decision;
only the entire court sitting en banc can do so. See Third
Circuit I.O.P. 9.1. 7 However, “a panel of our Court may
decline to follow a prior decision of our Court without the

6
Contrary to the District Court’s suggestion, the First
Circuit in Sullivan Bros. did not drop its “reasonable cause”
prong. Although noting that this inquiry is of “questionable
utility,” the First Circuit declined to address its applicability
because the parties did not challenge it. Sullivan Bros., 38
F.3d at 64 n.7.
7
“It is the tradition of this court that the holding of a
panel in a precedential opinion is binding on subsequent
panels. Thus, no subsequent panel overrules the holding in a
precedential opinion of a previous panel. Court en banc
consideration is required to do so.” Third Circuit I.O.P 9.1.

13
necessity of an en banc decision when the prior decision
conflicts with a Supreme Court decision.” United States v.
Tann, 577 F.3d 533, 541 (3d Cir. 2009). See also United
States v. Singletary, 268 F.3d 196, 202 (3d Cir. 2001) (“[O]ur
respect for the uniformity of decisions within this Court
yields when a prior panel’s holding conflicts with a holding
of the Supreme Court.”); Planned Parenthood of S.E. Pa. v.
Casey, 947 F.2d 682, 698 (3d Cir. 1991), aff'd in part, rev'd
in part, 505 U.S. 833 (1992) (“[A] change [by the Supreme
Court] in the legal test or standard governing a particular area
is a change binding on lower courts that makes results
reached under a repudiated legal standard no longer
binding.”); Reich v. D.M. Sabia Co., 90 F.3d 854, 858 (3d
Cir. 1996); Cox v. Dravo Corp., 517 F.2d 620, 627 (3d Cir.
1975) (“We should not countenance the continued application
in this circuit of a rule, even of our own devising, which is
patently inconsistent with the Supreme Court's
pronouncements.”).

The District Court concluded that the Supreme Court’s
decisions in Romero-Barcelo and Winter v. Natural
Resources Defense Council, Inc., 555 U.S. 7 (2008), require
application of the traditional four-part equitable test. In
Romero-Barcelo, the Governor of Puerto Rico and residents
of the island sought to enjoin the Navy’s use of an island off
the Puerto Rican coast for weapons training exercises,
claiming that the occasional discharge of weapons harmed the
water quality, and that because the Navy had not obtained a
permit, its conduct violated the permit requirements of the
Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C.
§ 1251, et seq. See 456 U.S. at 307. The First Circuit held
that the FWPCA requires a district court to immediately
enjoin conduct in violation of the permit requirements and

14
thereby preclude the exercise of traditional equitable
discretion. Id. In reversing this decision, the Court
emphasized that the judicial authority to grant injunctive
relief is fundamentally rooted in principles of equity: “The
Court has repeatedly held that the basis for injunctive relief in
the federal courts has always been irreparable injury and the
inadequacy of legal remedies.” Id. at 312. The Court
confirmed the four-factor test, which incorporates these
equitable considerations, as the applicable standard for
injunctive relief. Id. at 312-13. In this regard, it described
the high standard for overcoming the presumption that the
four-factor test applies: “Unless a statute, in so many words,
or by a necessary and inescapable inference, restricts the
court’s jurisdiction in equity, the full scope of that jurisdiction
is to be recognized and applied.” Id. at 313 (quoting Porter v.
Warner Holding Co., 328 U.S. 395, 398 (1946)).

The Court reiterated this point in Winter. In that case,
environmental groups sought to enjoin the Navy from
conducting sonar training exercises off the coast of southern
California on the ground that the sonar devices harmed
marine mammals. 555 U.S. at 12-14. Despite the absence of
any evidence that marine mammals had been harmed by the
Navy’s training exercises, id. at 12, the district court granted
the injunction and the Ninth Circuit affirmed based on a
“possibility of irreparable injury.” 518 F.3d 658, 696 (9th
Cir. 2008). In overturning the injunction, the Court
reaffirmed the four-factor equitable requirements, asserting
that plaintiffs “must” satisfy them to qualify for injunctive
relief. 555 U.S. at 20. In this respect, the Court rejected the
Ninth Circuit’s standard as “too lenient,” holding that
irreparable injury must be “likely in the absence of an
injunction,” because a lower standard of a mere possibility “is

15
inconsistent with our characterization of injunctive relief as
an extraordinary remedy that may only be awarded upon a
clear showing that the plaintiff is entitled to such relief.” Id.
at 22.

The District Court in the present matter opined that
these two cases “suggest a clear and consistent message to the
lower courts: courts are to apply the traditional four-factor
test in the absence of a ‘necessary and inescapable’
congressional intent to depart from traditional equitable
standards. § 10(j) lacks such intent.” Chester, 2011 WL
2517037 at *4 (citing Romero-Barcelo, 456 U.S. at 313). In
our view, neither Romero-Barcelo nor Winter present a
conflict with our § 10(j) rulings sufficient to enable us to
reverse nearly forty years of precedent.

First, neither Romero-Barcelo nor Winter involved
statutory schemes analogous to the NLRA. Notwithstanding
the broad language endorsing the primacy of the four-factor
test, the Court rendered its decisions in those cases on facts
that presented the standard scenario for courts granting
injunctive relief. In both cases, plaintiffs sought injunctions
from district courts that also had full jurisdiction to decide the
merits of the alleged statutory violations. See Romero-
Barcelo, 456 U.S. at 307-308; Winter, 555 U.S. at 16-17. In
the context of such generic circumstances, where the courts’
jurisdiction over the merits was not otherwise restricted, the
Court had no occasion to qualify or condition its broad
affirmation of the full scope of equity discretion.
Nothing in these cases suggests that the Court
contemplated the relatively unusual scenario of interim
injunctive relief in the context of a pending unfair labor
practice proceeding. In light of the purposes behind this

16
provision and the Act, we believe that the holdings in
Romero-Barcelo and Winter do not extend to the § 10(j)
context. Indeed, the NLRA erects a unique statutory scheme:
it authorizes district courts to grant interim injunctive relief in
labor dispute cases, an entire category over which they have
no jurisdiction to decide the merits. Instead, Congress
designated the NLRB as the entity with the requisite expertise
in unfair labor practices, and the merits of those claims are
adjudicated through an administrative process that is largely
independent of the courts.

This specialized scheme distinguishes § 10(j)
injunctive relief from the generic context, where district
courts determine whether to grant relief in cases over which
they possess both the jurisdiction and competence to decide
the merits. Congress’ clear purpose in creating § 10(j) was
not to limit the scope of the Board’s authority to decide
violations, but to preserve its powers to do so by giving the
NLRB an opportunity to seek an injunction of alleged
violations before an injury becomes permanent or the Board’s
remedial purpose becomes meaningless.

Moreover, the Board does not seek interim equitable
relief to vindicate private rights, but acts instead in the public
interest. 8 See Vibra Screw, 904 F.2d at 876. This factor also
8
The Board’s decision to initiate § 10(j) proceedings
follows a multi-step investigation and evaluation process. See
Office of the Gen. Counsel, U.S. Nat’l Labor Relations Bd.,
Electronic Redacted Section 10(j) Manual Users Guide 11-14
(2002). The local region of the Board first conducts an
investigation and evaluation of the unfair labor practice
charge that mirror the two-part inquiry. In its investigation,
the Board determines “whether there is evidence establishing

17
distinguishes § 10(j) petitions from ordinary preliminary
injunction motions. Section 10(j) does not so expand the
scope of the district court’s role in labor disputes as to permit
it to intrude upon the Board’s exclusive authority to decide
the merits of the cases. The legislative scheme is therefore
inconsistent with a full grant of equity jurisdiction to the
district courts, which would permit them to exercise their own
discretion in evaluating the likelihood of success on the
merits, thereby infringing on the province of the Board. We
do not believe the Court intended its decisions in Romero-
Barcelo or Winter to extend to the context of such a distinct
statutory scheme. We therefore conclude that those cases are
not conflicting authorities that require us to reverse our
established precedent.

Notably, three of our sister circuits have retained the
two-part test in spite of Romero-Barcelo and Winter. In
Overstreet, the Fifth Circuit rejected arguments advanced in
the respondent’s briefs that Romero-Barcelo required the
four-part test. 625 F.3d at 851; Brief of Appellant at 36,
Overstreet v. El Paso Disposal, L.P., 625 F.3d 844 (5th Cir.
2010) (No. 09-51006). The Court distinguished § 10(j) from

a violation of the Act” and also “whether a Board order in due
course will be inadequate to protect statutory rights.” Id. at
10. After its investigation, the Board decides “whether 10(j)
proceedings are appropriate” by considering the evidence,
threat of remedial failure, and “just and proper” theories and
evidence. Id. at 11. The region may then submit a
recommendation for § 10(j) proceedings to the Board’s
General Counsel, who reviews the evidence and may submit a
request for 10(j) injunctive relief to the Board, which makes
the final decision authorizing or denying a § 10 (j) petition.
Id. at 12-14.

18
other injunctive relief when it observed that the “‘traditional
rules of equity may not control the proper scope of § 10 (j)
relief,’” and explained: “A requirement…to make the NLRB
show ‘irreparable harm’ and ‘likelihood of success’ for §
10(j) relief would raise the factual threshold that the NLRB
must reach. Nothing in…our case law[] supports replacing
the [two-part] test we currently use with” a test that
incorporates the “traditional four-part test for equitable
relief.” 625 F.3d at 851 (quoting Boire v. Pilot Freight
Carriers, Inc., 515 F.2d 1185, 1192-93 (5th Cir. 1975). See
also Ahearn, 351 F.3d at 235 (“If the current 10(j) standard
were in clear contravention of Supreme Court precedent, it
seems unlikely that this or any other circuit would have
continued to adhere to it for two decades without concern.”);
Webco, 225 F.3d at 1137 (“[W]e will not reconsider this
circuit’s longstanding Angle two-part test in favor of a
traditional equitable analysis.”).

Indeed, even those courts of appeals that have viewed
Romero-Barcelo and Winter as requiring the four-part
equitable test for § 10(j) relief have made modifications to the
four-part test to accommodate the purposes and goals of the
NLRA. For example, the Ninth Circuit has explained that
courts must consider the four equitable criteria “through the
prism of the underlying purpose of § 10(j), which is to protect
the integrity of the collective bargaining process and to
preserve the Board’s remedial power while it processes the
charge.” Miller, 19 F.3d at 459-60. The Miller Court also
observed that 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.” Id. at 460. Accordingly, that Court holds that “the
Board can make a threshold showing of likelihood of success

19
by producing some evidence to support the unfair labor
practice charge, together with an arguable legal theory.” Id.

The Fourth Circuit, holding that Romero-Barcelo
required it to apply the four-part test to § 10(j), was careful to
note: “But, of course, district courts should apply this test in
light of the underlying purpose of § 10(j): preserving the
Board’s remedial power pending the outcome of its
administrative proceedings.” Spartan Mining, 570 F.3d at
543. See also Bloedorn v. Francisco Foods, Inc., 276 F.3d
270, 287 (7th Cir. 2001) (“But, in evaluating the likelihood of
success, it is not the district court's responsibility, nor is it
ours, to rule on the merits of the Director's complaint; that is
the Board's province. The court's inquiry is confined to the
probability that the Director will prevail.”). Similarly, the
Second Circuit, which applies a hybrid test, follows the same
considerations when applying the four-part test under its “just
and proper” prong. See, e.g., Hoffman, 247 F.3d at 368.

Thus, even the courts that follow Romero-Barcelo
account for the relatively unique context and purposes of §
10(j), and none interprets the Court’s precedent as permitting
the district courts to have full equity jurisdiction in this
context. If even the courts of appeals that apply the
traditional four factors for preliminary injunctions to this
context do not do so strictly, we comfortably conclude that
the Supreme Court rulings do not so clearly conflict with our
precedent as to mandate our abrogation of that precedent.

Even assuming arguendo that the Court’s decisions
apply to § 10(j) relief, we do not believe that our two-part
standard is necessarily incompatible with the requirements of
the traditional four-part test. The District Court opined that
our two-prong approach to § 10(j) petitions fails to

20
encompass the quartet of considerations ordinarily governing
preliminary injunction motions. The Court explicated: “The
Third Circuit’s § 10(j) standard does not even require a
showing of a ‘possibility’ of harm; only a showing of
‘reasonable cause’ that a labor violation occurred.” Chester,
2011 WL 2517037 at *9. It also asserted that the two-part
test does not take into account the public interest or a
balancing of harms: “The Third Circuit standard, other than
references to ‘just and proper’ remedies, does not explicitly
countenance these two crucial equitable factors.” Id. It
further claimed, “[u]nder the Third Circuit’s precedents, no
showing of harm is required,” id. at 12, and “merely a
showing of ‘reasonable cause’ that a labor violation occurred
is sufficient to issue an injunction, if said relief is ‘just and
proper.’” Id.

The District Court’s conclusions about the test
misapprehend our guidance with respect to district court
consideration of § 10(j) petitions. In this regard, it is simply
not true that the two-part test only requires “reasonable
cause” to believe the Director will prevail before the Board.
Quite to the contrary, the test incorporates various
considerations that correspond to each of the Winter factors.

As an initial matter, it bears explaining that the
“reasonable cause” analysis is not the deferential rubber
stamp that the District Court and Grane characterize it to be.
To establish reasonable cause in the Third Circuit, “there
must be a substantial, non-frivolous, legal theory, implicit or
explicit, in the Board’s argument, and second, taking the facts
favorably to the Board, there must be sufficient evidence to
support that theory.” Vibra Screw, 904 F.2d at 882.
Significantly, the circuits that apply the four-part test use a

21
substantially similar standard. See, e.g., Miller, 19 F.3d at
460.

Moreover, “[t]he Chancellor does not abdicate his
powers merely upon a showing that the Regional Director's
theories surpass frivolity. He maintains some power to do
equity and mold each decree to the necessities of the case.”
Pilot Freight Carriers, 515 F.2d at 1192-93 (citation
omitted). In other words, the § 10(j) inquiry “necessarily
subsumes equitable considerations.” Webco, 225 F.3d at
1137, n.3.

The standard we use to determine whether injunctive
relief would be just and proper is “informed by the policies
underlying § 10(j),” Dorsey Trailers, 147 F.3d at 247, looking
in particular to “the general communication the law-making
bodies were attempting to send to the courts and the public in
passing the relevant act.” Suburban Lines, 731 F.2d at 1090.
“In fashioning this provision, Congress sought to ensure that
the Board would be able to exercise effectively its ultimate
remedial power.” Eisenberg ex rel. N.L.R.B. v. Lenape
Products, Inc., 781 F.2d 999, 1003 (3d Cir. 1986). “[T]he
focus in a § 10(j) determination is on the public interest, and
‘the unusual likelihood . . . of ultimate remedial failure’ by
the NLRB.” Dorsey Trailers, 147 F.3d at 247 (citation
omitted) (quoting Suburban Lines, 731 F.2d at 1091 n.26).
See also Vibra Screw, 904 F.2d at 879 (“[T]he critical
determination is whether, absent an injunction, the Board’s
ability to facilitate peaceful management-labor negotiation
will be impaired.”); Lenape Products, 781 F.2d at 1003
(“[T]he district court must find that the issuance of an
injunction is ‘just and proper,’ i.e., that it is in the public
interest to grant the injunction, so as to effectuate the policies

22
of the National Labor Relations Act or to fulfill the remedial
function of the Board.”) (citing Wellington Hall, 651 F.2d at
906-07).

Therefore, the goal of preserving the Board’s ultimate
remedial power guides the courts to focus on whether the
ongoing practices would create “irreparable” harms, i.e.,
injuries that could not be remedied by the Board’s final
decision. In conducting this inquiry, the courts weigh the
same kinds of harms that factor into the traditional equitable
test. They consider the “likelihood of harm to the bargaining
process,” Dorsey Trailers, 147 F.3d at 247 (citation omitted),
and the overall public interest in “the promot[ion] of
wholesome and mutually acceptable labor relations and the
settlement of labor disputes through collective bargaining
between employees and their employer.” Vibra Screw, 904
F.2d at 876 (citation omitted). In evaluating the net benefits
of injunctive relief, the courts also weigh the relative harms it
may prevent against the harms it may produce. Id. at 878-79
(evaluating how “the chilling effect of management
retaliation may outlast the curative effects of any remedial
action the Board might take . . . .”). The Courts do not only
weigh the harms to the Board, but also the harms injunctive
relief poses to the employer. See, e.g., Wellington Hall, 651
F.2d at 907.

Indeed, we have denied injunctive relief where we
found insufficient evidence of irreparable harm, making
interim equitable relief not “just and proper.” See, e.g.,
Suburban Lines, 731 F.2d at 1095; Hartz Mountain, 519 F.2d
at 143. For instance, we affirmed the denial of § 10 (j) relief
in Suburban Lines because “failure to grant interim
reinstatement relief could not produce irreparable injury” and

23
“erroneously granted interim relief would irreparably injure”
certain employees and the respondent in that case. 731 F.2d
at 1092. In Lenape Products, 781 F.2d at 1003-04, we held
that § 10 (j) relief was not warranted because “there was no
evidence that union activity would be ‘chilled’” and because
“the size and intimacy of the group of the employees who
walked out was such that if the Board ultimately orders
reinstatement, its organizational efforts could be resumed.”

In summary, the two-part test does incorporate
equitable factors into its analysis that other circuits consider
when applying the four-part test to § 10(j) relief. The
reasonable cause prong has substantial overlap with the
likelihood-of-success inquiry. Likewise, the “just and
proper” prong collapses the other three equitable factors into
one comprehensive analysis. Under this inquiry, the court
determines whether an injunction is necessary to preserve the
Board’s remedial powers, which incorporates a weighing of
relative harms to the bargaining process, employees’ rights,
and the likelihood of restoring the status quo absent injunctive
relief, along with the public interests implicated by the labor
disputes. In light of these substantial similarities, we think
that even if the Court’s decisions in Romero-Barcelo and
Winter apply to the context of § 10(j) relief, our two-part test
substantially complies with the requirements insofar as it does
analyze each of the equitable factors.

The primary difference is that the two-part test
accommodates the purposes of § 10(j) by granting a sufficient
measure of deference to the Board to prevent the district court
from overstepping its bounds and deciding the merits of
alleged unfair labor practices. As this Court has explained,
the “just and proper” standard in § 10(j) is intended to limit

24
the district court’s role: “the phrase ‘just and proper’ [is] a
method of cabining the otherwise unfettered discretion of the
district court to fashion labor law under section 10(j) wholly
according to its own notions of fairness and efficiency.”
Suburban Lines, 731 F.2d at 1089. See also Ahearn, 351 F.3d
at 237 (“A district court also must be mindful that
‘[p]roceedings pursuant to § 10(j) are subordinate to the
unfair labor practice proceedings to be heard before the
Board.’. . . Consequently, it is not the job of the district court,
in considering a § 10(j) petition, ‘to adjudicate the merits of
the unfair labor practice case.’”) (citation omitted) (quoting
Fleischut v. Nixon Detroit Diesel, Inc., 859 F.2d 26, 28 (6th
Cir. 1988)). Accordingly, the District Court erred in rejecting
our two-prong test for § 10(j) petitions.

III. Merits of § 10(j) Petition

A. Interim Bargaining Order

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
9
See, e.g., Vibra Screw, 904 F.2d at 878, 879, 882
(where the district court based its “just and proper” analysis
on the wrong standard, and did not address the “reasonable
cause” prong, the Third Circuit declined to remand, and
instead made the “exceedingly simple” reasonable cause
determination itself, found that the injunction was “just and

25
undisputed facts on the record show that the interim
bargaining order is plainly warranted under the two-part test.

1. Reasonable Cause

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 (1987). 10 This includes such

proper,” and remanded the case with directions to grant
injunction); Frye ex rel. N.L.R.B. v. Specialty Envelope, Inc.,
10 F.3d 1221, 1225 (6th Cir. 1993) (where the district court
did not apply the correct standard for § 10(j) relief, the Sixth
Circuit declined to remand and decided the question itself).
10
Other factors reflective of continuity include
similarity between, inter alia, the business operations,
services provided, customers, jobs performed by employees,
and working conditions. Fall River, 482 U.S. at 43.

26
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 (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

27
‘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.

11
Section 9(a) states: “Representatives designated or
selected for the purposes of collective bargaining by the
majority of the employees in a unit appropriate for such
purposes, shall be the exclusive representatives of all the
employees in such unit for the purposes of collective
bargaining.” 29 U.S.C. § 159(a).

28
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 Cmty 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, 364-65 (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.

2. Just and Proper

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

29
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.

30
 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). 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.”

B. Interim Instatement Order

Finally, we turn to the district court’s denial of the
interim instatement order for Hagerich and Mulhearn. The
District Court denied this order under the more demanding

31
standard of the four-part test. Unlike the interim bargaining
order, however, we do not think there are sufficient
undisputed facts on the record for this Court to evaluate
whether the order should be granted under the two-part test.
We therefore remand this aspect of the Director’s petition to
the District Court to conduct an analysis of the facts under the
two-part test.

IV. Conclusion

For the reasons stated above, we affirm the District
Court’s grant of the interim bargaining order, but remand the
Director’s request for an interim instatement order to the
District Court to determine whether relief is appropriate under
the two-part test.

32