Harrell v. American Red Cross, Heart of America Blood Services Region

In the

United States Court of Appeals
For the Seventh Circuit

Nos. 12-1264 & 12-1362

C LAUDE T. H ARRELL, JR., Regional Director
of Subregion 33 of the National Labor
Relations Board, for and on behalf of the
National Labor Relations Board,
Petitioner-Appellee/
Cross-Appellant,
v.

A MERICAN R ED C ROSS, H EART OF A MERICA
B LOOD SERVICES R EGION,
Respondant-Appellant/
Cross-Appellee.

Appeals from the United States District Court
for the Central District of Illinois.
No. 1:11-cv-01284-JES-JAG—James E. Shadid, Chief Judge.

A RGUED S EPTEMBER 7, 2012—D ECIDED A PRIL 23, 2013

Before C UDAHY, R OVNER, and T INDER, Circuit Judges.
C UDAHY , Circuit Judge. This is a case about a company
charged with unilaterally changing conditions of employ-
ment in order to cripple a new union.
2 Nos. 12-1264 & 12-1362

A new union of blood collection specialists (the
Union) for the American Red Cross (ARC) was elected
in 2007 and certified in 2010. During the unionization
process, ARC filed repeated objections, thereby forcing
impoundment of the 2007 ballots and delaying certifica-
tion of the Union. These objections were later overruled
by the National Labor Relations Board (NLRB).
During the delay between the 2007 election and
the 2010 certification, ARC made several changes in
its union-represented employees’ terms and conditions
of employment. The changes were made without
notice to or bargaining with the new Union. The
many unilateral changes made by ARC included: sus-
pending employees’ merit pay increases; discontinuing
its matching contributions to the employees’ 401(k) plan;
closing its defined pension plan to new employees;
changing health insurance benefits; promoting team
leaders to team supervisors and having them continue
to perform unit work; reassigning truck loading and
unloading work outside the bargaining unit; decreasing
the number of personal time-off hours an employee
can carry over from year to year; and allowing non-unit
employees to perform bargaining unit work.
As a result of ARC’s unilateral changes, worker in-
volvement in the Union activities declined precipitously.
Employee attendance at Union meetings declined
roughly 88% from October 2010 to September 2011.
Some employees feared retaliation by ARC if they associ-
ated with the Union, and some employees were discour-
aged by the Union’s failure to prevent ARC’s suspen-
sion of the merit pay program.
Nos. 12-1264 & 12-1362 3

The Union Director and NLRB filed suit, seeking
interim injunctive relief from the unilateral ARC
working condition changes, pending completion of the
Board’s administrative proceedings against ARC. The
administrative law judge (ALJ) held that ARC violated
§ 8(a)(5) of the National Labor Relations Act (the Act),
29 U.S.C. § 158(a)(5), by making these unilateral changes.
ARC argued that it could make these changes because
the Union was not yet certified due to the pending objec-
tions that ARC itself filed. This claim is contrary to
well-established NLRB law.
The district court reviewed the testimony, arguments,
briefs, and the record in the administrative proceeding.
The court found that the NLRB had shown a likelihood
of success on the merits and that the newly formed
Union had suffered irreparable harm as a result of ARC’s
unilateral changes. In finding irreparable harm, the
court relied on evidence demonstrating that employees
were terminating their employment with ARC to obtain
better pay, and that the Union suffered a dramatic down-
turn in attendance at its meetings due to the unilateral
actions of ARC. However, the district court ordered
only a rescission of ARC’s failure to grant scheduled
merit pay increases to unit employees. It reasoned that
ordering rescission of the other unilateral changes
would create practical problems, and force the court
to “micro-manage” employment relationships. The
district court entered a subsequent temporary injunc-
tion prohibiting ARC from making further unilateral
changes to employment conditions.
4 Nos. 12-1264 & 12-1362

Both parties appealed. ARC seeks a lift of the injunction.
NLRB seeks an order for rescission of the remaining
ARC unilateral actions. The district court had jurisdic-
tion under § 10(j) of the Act, 29 U.S.C. § 160(j). This
court has jurisdiction under 28 U.S.C. § 1291. This court
reviews a district court’s decision to grant injunctive
relief for an abuse of discretion. Bloedorn v. Francisco
Foods, Inc., 276 F.3d 270, 286 (7th Cir. 2001); NLRB v. Electro-
Voice, Inc., 83 F.3d 1559, 1566 (7th Cir. 1996). A district
court’s order will be reversed if it “ ‘depends on faulty
legal premises, clearly erroneous factual findings,
or improper application of the criteria governing pre-
liminary injunctive relief.’ ” Electro-Voice, 83 F.3d at 1566
(quoting Kinney v. Pioneer Press, 881 F.2d 485, 493 (7th
Cir. 1989)).

I.
Under § 10(j)1 of the Act, courts may grant temporary

1
Section 10(j) of the Act (29 U.S.C. § 160(j)) states:
The Board shall have power, upon issuance of a complaint
as provided in subsection (b) of this 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
(continued...)
Nos. 12-1264 & 12-1362 5

injunctions pending the Board’s resolution of unfair labor
practice cases. This temporary relief is intended to
protect a union pending the Board’s remedial action.
Section 10(j) directs district courts to grant relief that
is “just and proper.” Interim relief is “just and proper”
when four factors are present: (1) NLRB has no
adequate remedy at law; (2) the Union will be ir-
reparably harmed without interim relief, and that
potential harm to the Union outweighs potential harm
to the employer; (3) public harm would occur without
the relief; and (4) the Board has a reasonable likelihood
of prevailing. Lineback v. Irving Ready-Mix, Inc., 653 F.3d
566, 570 (7th Cir. 2011); Lineback v. Spurlino Materials,
LLC, 546 F.3d 491, 499-500 (7th Cir. 2008); Bloedorn, 276
F.3d at 286; Electro-Voice, 83 F.3d at 1566. The Director
satisfied each criterion for finding injunctive relief.

A. Likelihood of Success
A district court need only find that “the Director has
‘some chance’ of succeeding on the merits” before the
Board. Electro-Voice, 83 F.3d at 1568. The court will “give
some measure of deference to the view of the ALJ” in
determining the likelihood of success. Spurlino Materials,
546 F.3d at 502 (citing Bloedorn, 276 F.3d at 288).

(...continued)
jurisdiction to grant to the Board such temporary relief
or restraining order as it deems just and proper (emphasis
added).
6 Nos. 12-1264 & 12-1362

In the present case, the district court found that the
Director has a chance of establishing that ARC violated
§ 8(a)(5) by unilaterally changing employment condi-
tions. The ALJ’s finding that ARC violated § 8(a)(5) by
making unilateral changes supports this conclusion.
ARC defended these changes by noting that the Union
had not yet been certified. However, it is well established
that “an employer who makes unilateral changes
pending a decision on union certification objections acts
at its peril.” NLRB v. Parents & Friends of the Specialized
Living Ctr., 879 F.2d 1442, 1455 (7th Cir. 1989) (citing
Sundstrand Heat Transfer, Inc. v. NLRB, 538 F.2d 1257, 1259
(7th Cir. 1976)).

B. Likely Harm to Employees
In “appropriate circumstances, the same evidence
that establishes the Director’s likelihood of proving a
violation of the NLRA may provide evidentiary sup-
port for a finding of irreparable harm.” Bloedorn, 276
F.3d at 297-98. Therefore, this court does not require
specific proof of a causal relationship between em-
ployer violations and Union injuries; “the prospect of an
irreparable injury may be inferred” from the nature of
the violation of the Act. Id at 297.
In the present case, the Director demonstrated the
irreparable harm resulting from ARC’s unilateral changes:
unilateral changes prevent the Union from discussing
terms, and therefore “strike at the heart of the Union’s
ability to effectively represent the unit employees.”
Merrill & Ring, Inc., 262 N.L.R.B. 392, 395 (1982), enforced,
Nos. 12-1264 & 12-1362 7

731 F.2d 605 (9th Cir. 1984). The decline in employee
participation in Union activities following ARC’s uni-
lateral changes supports this finding.

C. Adequacy of a Remedy at Law
“The longer that an employer is able to . . . avoid bar-
gaining with a union, the less likely it is that the union
will be able to . . . represent employees effectively once
the NLRB issues its final order.” Spurlino Materials, 546
F.3d at 500. In § 10(j) cases, the “adequate remedy at
law” inquiry is whether, in the absence of immediate
relief, the harm flowing from the alleged violation
cannot be prevented or fully rectified by the final
Board order. Id. ARC argues that because the ALJ has
ordered back pay for the employees, there exists an
adequate remedy at law precluding injunctive relief.
This argument incorrectly focuses solely on the indi-
vidual workers, and ignores the damage flowing from
the crippling of a new union, which transcends the loss
of workers’ pay. This court has previously found that
back pay “will not remedy the adverse impact to the
Union and the employees in the interim period.” Id. at 501.

D. Harm Balancing Public Interest
The interest at stake in a § 10(j) proceeding is “ ‘the
public interest in the integrity of the collective bar-
gaining process.’ ” Bloedorn, 276 F.3d at 300 (quoting
Eisenberg v. Wellington Hall Nursing Home, Inc., 651 F.2d
902, 906-07 (3d Cir. 1981)). Here, the harm posed to
8 Nos. 12-1264 & 12-1362

the Union of allowing unilateral changes to stand is
apparent: the Union has already become less popular
with the employees. This court need not conduct a
more thorough analysis. The district court noted that
ARC “offered no countervailing demonstration of ir-
reparable harm that would result from the grant of in-
junctive relief.” Harrell v. Am. Red Cross, Heart of Am. Blood
Servs. Region, No. 11-1284, 2011 WL 5436264, at *4 (C.D.
Ill. Nov. 9, 2011). ARC now argues that the administra-
tive hurdles of recalculating appropriate wage rates
mean its harms outweigh the potential harm to the
Union. This argument was not presented to the district
court, so it is forfeited.
Due to the fact that all four factors favor interim in-
junctive relief, the district court did not abuse its discre-
tion in granting partial relief by ordering the rescission
of the merit pay freeze.

II.
Although the district court recognized that ARC’s
actions were potentially harmful and necessitated in-
junctive relief, the court granted only partial relief—
rescission of the unilateral cancellation of scheduled
merit pay increases. Applying the same four-factor
analysis to the other unilateral changes forced through
by ARC, we find that the district court’s limited injunc-
tion failed to fully address the harms that it recognized.
The district court noted that the unilateral changes dis-
advantaged the Union by “put[ting it] in the position
of having to bargain to get back benefits or conditions
Nos. 12-1264 & 12-1362 9

of employment that its members would already have
had in the absence of the post-election changes made
by [ARC].” Harrell, 2011 WL 5436264, at *3. However,
the district court elected not to grant rescission of the
remaining changes, finding that instituting the changes
would “create practical issues,” would require the
court to “micro-manage the employment relationship,”
and consequently, “are best addressed in collective bar-
gaining discussions and do not warrant injunctive relief
at the present time.” Id. at *6. While this court under-
stands the district court’s general concerns about micro-
managing employment relationships, the district court
cited no specific evidence of practical difficulties in re-
scinding the remaining changes, or what it meant by
“micro-managing” the employment relationship. Thus,
the district court abused its discretion in failing to
order rescission for all ARC unilateral actions.
First, the intent of Section 10(j) is to “restor[e] the status
quo as it existed before the onset of the unfair labor
practices.” Electro-Voice, 83 F.3d at 1575. The district
court found that the unilateral changes had disturbed
the status quo, and put the Union in the position of
having to bargain back benefits and conditions of em-
ployment that its members would have already had in
the absence of the post-election changes made by ARC.
The district court determined that these issues would
best be handled at the bargaining stage. However, putting
the Union in the position of needing to “bargain back”
these conditions is often the employer’s goal, thereby
changing the status quo and forcing the Union to
bargain for previously attained rights. See NLRB v.
10 Nos. 12-1264 & 12-1362

Hardesty Co., Inc., 308 F.3d 859, 865 (8th Cir. 2002) (Section
8(a)(5) forbids employer from making unilateral changes
in part to preserve the status quo). There is a long line
of cases which support rescission to restore the status
quo, in order to remedy exactly this type of unlawful
behavior. See, e.g., Kendall College, 228 N.L.R.B. 1083
(1977), enforced, 570 F.2d 216 (7th Cir. 1978); Innovative
Commc’ns Corp., 333 N.L.R.B. 665, 665 n. 6 (2001), enforced,
39 Fed. Appx. 715 (3d Cir. 2002); Cal. Pac. Med. Ctr. v.
NLRB, 87 F.3d 304, 311 (9th Cir. 1996); Herman Sausage
Co., 122 N.L.R.B. 168, 172-73 (1958), enforced, 275 F.2d
229 (5th Cir. 1960).
Second, the district court’s finding of judicial micro-
managing is misplaced. The rescission of changed terms
and conditions would merely return the parties to the
lawful status quo, before ARC began targeting the
Union for unlawful injury. The court would not then be
required to “micro-manage” the employment relation-
ship. Now that the Union is certified, ARC may make
good faith attempts to change conditions through nego-
tiations and without court interference. See Taft Broad.
Co., 163 N.L.R.B. 475, 478 (1967), enforced sub nom. AFTRA
v. NLRB, 395 F.2d 622 (D.C. Cir. 1968) (“After bargaining
to an impasse, that is, after good faith negotiations
have exhausted the prospects of concluding an agree-
ment, an employer does not violate the Act by making
unilateral changes that are reasonably comprehended
within his preimpasse proposals.” 395 F.2d at 624).
For these reasons, the district court’s order granting
restoration of merit pay is affirmed and the district
Nos. 12-1264 & 12-1362 11

court’s denial of interim relief for the other unilateral
changes is reversed. The matter is remanded to the
district court to grant the interim injunctive relief
sought by the NLRB. ARC shall bear the costs of appeal.
A FFIRMED IN PART, R EVERSED IN PART,
and R EMANDED.

4-23-13