Kobell v. Suburban Lines, Inc.
| Decision Date | 28 March 1984 |
| Docket Number | No. 614,No. 83-5394,614,83-5394 |
| Citation | 731 F.2d 1076 |
| Parties | 115 L.R.R.M. (BNA) 3297, 100 Lab.Cas. P 10,905 Gerald KOBELL, Regional Director for Region 6 of the National Labor Relations Board for, and on behalf of, The National Labor Relations Board, Petitioner-Appellant, v. SUBURBAN LINES, INC., Respondent-Appellee, and Shortway Airport Limousines, Inc. and/or Holland Industries, Inc. and/or Shortway Airport Limousines, Inc., Respondent-Appellee, General Drivers, Warehousemen, Helpers and Gas Station Attendants Locala/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, Party in Interest. |
| Court | U.S. Court of Appeals — Third Circuit |
Joseph P. Norelli, Margaret M. Dietz (argued), N.L.R.B., Washington, D.C., for petitioner-appellant.
Allan L. Fluke (argued), Wick, Rich, Fluke & Streiff, Pittsburgh, Pa., Sanford E. Pollack, Martin Gringer (argued), Milman, Naness & Pollack, Hewlett, N.Y., for respondents-appellees.
Before ALDISERT and BECKER, Circuit Judges, and POLLAK *, District Judge.
This case arises under section 10(j) of the National Labor Relations Act, 29 U.S.C. Sec. 10(j) (1976), which enables the National Labor Relations Board or its designated agent to seek interim injunctive relief from a federal district court pending the Board's own administrative adjudication of an unfair labor practice complaint. 1 As the jurisprudence has evolved, interim injunctive relief may be granted under section 10(j) without the showing of irreparable harm and a likelihood of success on the merits, which are the ordinary requisites for a preliminary injunction. Instead, 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."
In this case, Regional Director Gerald Kobell, as agent for the Board, contended before the district court that interim relief was required under section 10(j) to thwart a joint venture by a failing bus line and the company that took over its operations to divest themselves unlawfully of a particular union as the bargaining representative of their drivers. 2 After a three-day hearing, the district court denied the section 10(j) injunction because it found no reasonable cause to believe that a violation of the NLRA had occurred and because it concluded that it was not just and proper to grant relief. The Director appeals, and we affirm.
The appeal is complex and requires us to address difficult and important issues concerning the propriety of section 10(j) relief and the scope of appellate review over district court determinations in this field. It will therefore be helpful to sketch at the outset the manner in which the opinion will be developed.
We begin in Part II with a review of the evidence adduced at a hearing before the district court to show an alleged plot by appellee Holland Industries and its "Shortway" subsidiary to refuse discriminatorily to hire unionized employees of the operation it was assuming and thereby to evade the obligation that otherwise might well have existed to bargain collectively with the union those employees had previously elected as their representative. We then proceed in Part III to analyze whether the district court committed reversible error in finding no reasonable cause to believe that the defendants had committed unfair labor practices. This analysis shall sequentially entail (A) a discussion of the meaning of "reasonable cause" under section 10(j), (B) an examination of the scope of our review over district court determinations with respect to "reasonable cause," and (C) an application of that standard to the determination of the district court in this case. In this part we conclude that the district court's decision that no reasonable cause existed was reversible error.
We then proceed in Part IV to a similar analysis of whether the district court also erred in denying relief on grounds that it was not "just and proper." Here too our analysis begins with a discussion of the concept "just and proper," including a discussion of the broad purposes of section 10(j). We next examine the scope of our review over district court determinations that a given form of relief is not just and proper, and end this part of the opinion by applying the selected standard of review to the determination of the district court in the case.
We conclude that the district court did not abuse its discretion in finding that the relief requested by the Regional Director was not just and proper under the particular circumstances of this case. Accordingly, we will affirm the judgment.
Since 1962, under operating authority granted by the Pennsylvania Public Utility Commission ("PUC"), appellee Suburban Lines has operated a charter bus service and a commuter bus service between Washington, Pennsylvania and Pittsburgh. Since 1969, the Amalgamated Transit Union, Local 1543 ("ATU") has represented Suburban's 38 drivers and mechanics and has entered into a series of collective bargaining agreements with Suburban. 3 The most recent agreement, which expired December 31, 1982, provided for wages averaging $8.60 per hour.
During 1981 and 1982, Suburban Lines did not fare well financially. 4 In April of 1982, J.C. Hilty, the president and general manager of Suburban (and owner of 77 of the 737 shares of its stock), answered a job advertisement in Bus Rider magazine placed by appellee Holland Industries. Holland is a New York and Toledo-based firm, which through several subsidiaries operates a number of bus lines throughout the nation. Many of these subsidiaries had collective bargaining agreements with local affiliates of the Teamster's Union at wage rates then averaging less than five dollars per hour. The record does not disclose what response, if any, Holland gave to Hilty's submission. It is apparent from the record, however, that prior to July 15, 1982, Holland must have communicated at least something to some responsible official of Suburban. On that date, at a meeting presided over by Hilty, the Suburban board of directors discussed an offer by Holland to purchase Suburban. While the minutes of that meeting, which are a matter of record, do not disclose the board's opinion of the Holland offer, there was at least discussion of a counteroffer being made to Holland and an estimate made of the liquidation value of Suburban's assets.
On August 9, 1982, several significant events occurred. First, an attorney for Suburban, acting as incorporator, filed articles of incorporation for "Short Way Suburban Lines, Inc.," a wholly owned subsidiary of Holland Industries. Second, the Suburban stockholders held a special meeting and voted to accept a plan of liquidation approved earlier that day by the Suburban board of directors. According to Francis Olczak, a union driver for Suburban and owner of 10 shares of its 737 shares of stock, Hilty stated at the shareholders' meeting that Shortway had agreed to hire him (Hilty) as manager but that Holland, the acquiring company, would not be hiring any of the Suburban drivers. 5
There was also evidence produced at the evidentiary hearing before the district court from which it might be inferred that, while all of this was happening at the shareholder and director level of Suburban, Hilty began an effort to persuade or coerce the Suburban drivers into accepting the Teamsters as their bargaining representatives. According to testimony and an affidavit of Suburban driver Paul Phillips, Hilty told him that the new company would deal only with Teamsters. 6 Moreover, according to Olczak, Hilty told him on August 13 that Holland Industries "would deal only with the Teamsters Union," and that Holland would hire the Suburban drivers only if they would "go Teamsters." Olczak further testified that Hilty asked him to poll the other drivers to see if they would agree to changing their bargaining representative. Olczak testified that he complied with Hilty's request and that a week later he told Hilty that none of the other drivers would agree to switching their bargaining representative.
Evidence was also adduced that Holland Industries then decided that none of its Shortway employees would come from Suburban. 7 According to the testimony of Karl Thomas Wegerbauer, president of Holland Industries and of Shortway, this decision, which was reached sometime in early September, not to hire Suburban employees was not caused by any lack of applications from Suburban drivers.
On September 8 the Suburban board of directors met again. The directors approved sale of the company to Shortway for approximately one million dollars, twice the liquidation value estimated at the earlier July 15 meeting. 8 On September 14 the deal was finalized. Sale of the company, which was to take place on October 30, was contingent, however, on approval by the PUC of permanent transfer of Suburban's routes to Shortway. On September 15, the appropriate filings were made to the PUC in support of this transfer.
Between September 14 and October 30, Suburban and Shortway continued what the Regional Director regards as a clandestine and illegal venture to evade the obligations created by NLRB v. Burns International Security Services, Inc., 406 U.S. 272, 92 S.Ct. 1571, 32 L.Ed.2d 61 (1972) and Howard Johnson Co. v. Detroit Joint Executive Board, 417 U.S. 249, 94 S.Ct. 2236, 41 L.Ed.2d 46 (1974). Those cases impose a duty upon an employer who takes over a unionized operation and who conducts essentially the same business there as its predecessor to bargain collectively with the representative elected by the workers of the predecessor, provided that those workers constitute a majority of the successor's workforce. The Regional Director argues, in essence, that by discriminatorily refusing to hire...
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