Scott for and on Behalf of N.L.R.B. v. El Farra Enterprises, Inc.

• Decision Date: 19 December 1988
• Docket Number: No. 88-1821,88-1821
• Citation: 863 F.2d 670
• Parties: 130 L.R.R.M. (BNA) 2160, 110 Lab.Cas. P 10,927 James S. SCOTT, Regional Director of the Thirty-Second Region of the National Labor Relations Board, for and on Behalf of the NATIONAL LABOR RELATIONS BOARD, Petitioner-Appellant, v. EL FARRA ENTERPRISES, INC., d/b/a Bi-Fair Market, Respondent-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 670

863 F.2d 670

130 L.R.R.M. (BNA) 2160, 110 Lab.Cas. P 10,927

James S. SCOTT, Regional Director of the Thirty-Second

Region of the National Labor Relations Board, for

and on Behalf of the NATIONAL LABOR

RELATIONS BOARD, Petitioner-Appellant, v. EL FARRA ENTERPRISES, INC., d/b/a Bi-Fair Market, Respondent-Appellee.

No. 88-1821.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Aug. 9, 1988.

Decided Dec. 19, 1988.

Ellen A. Farrell, Washington, D.C., for petitioner-appellant.

Cal B. Watkins, Fresno, Cal., for respondent-appellee.

Appeal from the United States District Court for the Eastern District of California.

Before WRIGHT and POOLE, Circuit Judges, and WILLIAMS, ^* Senior District Judge.

David W. WILLIAMS, District Judge:

The Memorandum of September 2, 1988, as amended September 13, 1988, is withdrawn.

James S. Scott, Regional Director of the National Labor Relations Board (the Board), appeals on behalf of the Board the denial of its petition for interim injunctive relief under section 10(j) of the National Labor Relations Act (the Act), 29 U.S.C. Sec. 160(j), ¹ against El Farra Enterprises, Inc., d/b/a Bi-Fair Market (Bi-Fair). The Board seeks an order directing Bi-Fair to offer employment to all employees formerly employed by Mayfair Market, displacing, if necessary, any newly hired employees not previously employed by Mayfair and to recognize and bargain with the United Food and Commercial Workers Union Local No. 1288 (Local 1288 or the union).

The district court denied a portion of the petition after finding that the Board did not show the requisite necessity for interim injunctive relief. The Board contends that the district court abused its discretion by concluding that the Board had not convinced the court that "reasonable cause" existed to warrant injunctive relief. We agree, and therefore reverse the judgment and remand the action with instructions that the district court grant the relief sought by the Board.

STATEMENT OF THE FACTS

Mayfair Market operated a grocery store at 917 East Olive Street, Fresno, California, until it was purchased by Bi-Fair in the summer of 1987. Mayfair operated with 27 clerk employees. For at least twelve years prior to the sale, the clerks at Mayfair were represented by the union in collective bargaining. The most recent agreement between Mayfair and the union was effective from 1986 to 1989.

On July 20, 1987, the owners of Mayfair informed its employees that the store would be sold and that all of the employees would be laid off as of August 1, 1987. The Board alleges that attempts to ascertain from the store manager or other insiders the identity of the new owners were futile. From July 21 to July 27, a blind ad in the Fresno Bee announced that job interviews would be conducted for "cashiers, produce, meat cutters, and stock clerks." The ad did not name the employer. The Mayfair employees were not specifically informed of this opportunity to make applications.

Interviews were conducted on July 25th and 26th by Larry Fellbaum, the store manager for Bi-Fair. Fellbaum interviewed over 200 applicants, only 5 of whom were Mayfair employees. The employer's identity remained undisclosed. When one Mayfair employee inquired whether the employer was the new owner of Mayfair, Fellbaum responded that it was not. ² Fellbaum told the applicants that they would hear of his decisions by Wednesday, July 29th.

The Board contends that a bogus interview session for the receipt of applications from Mayfair clerks was scheduled (on July 31, after Bi-Fair had already hired a full complement of employees) with the foregone conclusion that no Mayfair employees would be hired. Four Mayfair employees were offered employment at positions that paid at least the equivalent of union wages. However, they were not hired either because of their written statements which expressed union loyalty and sympathy or because they requested union wages on their applications.

When entreated to hire some Mayfair employees, Fellbaum implied that the final hiring decisions were at the discretion of the owners. Several verbal skirmishes ensued concerning the hiring of Mayfair employees. At one such verbal altercation, alleges the Board, Fellbaum stated that no union members would be hired.

On August 2, 1987, Bi-Fair opened for business with a total employee complement of approximately 30 workers. None of them were former Mayfair employees. Because of this, the union began to picket the store on that day. Fellbaum threatened employees that the police would be summoned and that they would be arrested for picketing. Bi-Fair engaged in surveillance of employees' union activities by following picketers and eavesdropping on their conversations.

On September 30, 1988, the Board issued a Complaint against Bi-Fair alleging that it was violating section 8(a)(1), (3), and (5) ³ of the National Labor Relations Act, as amended, 29 U.S.C. Secs. 151 et seq. (NLRA or the Act). The Complaint alleged that Bi-Fair purchased Mayfair as a continuing enterprise, ⁴ but discriminatorily refused to hire Mayfair's clerk employees because they were represented by the union for the purpose of collective bargaining. The Complaint also alleged that Mayfair refused to recognize and bargain with the union as the representative of the clerk employees and unilaterally changed the clerks' preexisting employment conditions without bargaining with the union. The Complaint alleged finally that Mayfair had interfered with employees' rights to engage in lawful, peaceful picketing.

On December 16, 1987, the district court issued an order which mandated that Bi-Fair cease and desist from (a) discriminating against the Mayfair clerks and (b) interfering "in any manner" with employees' rights to picket Bi-Fair. It required Bi-Fair to give former Mayfair clerks preference in future hiring. (The order also required a posting of a copy of the court's

                order and restriction on the interference in any manner with the rights of employees to peacefully picket--neither of which are at issue in this appeal.)    The Board appeals from that order
                

DISCUSSION

Although it is clear that the purpose of section 10(j) is to further effectuate the purposes of the Act, no distinct guidelines for its use are provided in its legislative history. However, case law development shows a distinct reliance on the "reasonable cause" and "just and proper" standards that are used for section 10(1 ). ⁵

The standard that has evolved for determining whether section 10(j) injunctive relief is appropriate is a two part inquiry:

1. whether there is "reasonable cause" to believe that the unfair labor practices for which interim relief is sought have occurred [reasonable belief of the Regional Director, not the court]; ⁶

2. whether the relief sought is "just and proper" to preserve the Board's ability effectively to remedy the violations alleged.

See Aguayo v. Tomco Carburetor Co., 853 F.2d 744, 747 (9th Cir.1988). The court is not to decide the merits of the case in the underlying labor charges or insist that the Regional Director persuade the court of the validity of the Board's theory of liability, as long as the theory is substantial and not frivolous.

a. Determining "Reasonable Cause"

In Kennedy v. Sheet Metal Workers Int'l Ass'n Local, 289 F.Supp. 65 (C.D.Cal.1968), the court held:

The court's role is confined to determining whether the Regional Director has reasonable cause to believe that the Act has been violated, as alleged in his petition, and all that requires is the prima facie establishment of the allegations of such petition. [Citing Kennedy v. Los Angeles Joint Executive Board, 192 F.Supp. 339, 341 (S.D.Cal.1961).] The statutory standard of "reasonable cause" is satisfied if there is a showing of factual issues which must be resolved by the Board. Section 10(l) commands the courts to disregard their traditional reluctance to issue preliminary injunctions when there is a substantial conflict in the evidence.

Kennedy v. Sheet Metal Workers, at 91 (emphasis added).

This circuit has articulated the policy to be followed to set aside an order granting a temporary injunction under the Act: "It must appear that the district court's finding that there was reasonable cause to believe the Act was being violated was clearly erroneous." Local No. 83, Construction, Building Materials and Miscellaneous Drivers Union v. Jenkins, 308 F.2d 516 (9th Cir.1962). The court held:

The statutory standard of "reasonable cause" is satisfied if there is a showing of factual issues which must be resolved by the Board. Section 10(1 ) commands the courts to disregard their traditional reluctance to issue preliminary injunctions when there is a substantial conflict in the evidence. As the Court of Appeals for the Ninth Circuit stated, Section 10(l) embodies a "[c]ongressional policy favoring the granting of temporary injunctions." Id. at 517.

In a footnote, the court stated that because of congressional policy favoring temporary injunctions under Section 10(l) of the Act, "we do not do limit our scope of review when an injunction is denied." Id. at 517 n. 1 (citing Brown v. Pacific Telephone and Telegraph Co., 218 F.2d 542 (9th Cir.1954)).

In Brown, we pointed out that the district court erred in denying an injunction and in holding that it was "unable to find that there is reasonable cause to believe that a violation of the Act has occurred and for that reason the application for an injunction is denied and the petition is dismissed" because that decision would, in effect,

hold that the Board's as yet untried complaint ... does not state a cause of action in its charge ... This although the Act provides that the determination of a charge of violation of the Act is for the Board itself to decide.

Id.

In Kennedy v. Los Angeles Typographical Union No. 174, 418 F.2d 6 (9th Cir.1969), we held that a preliminary injunction should be granted if the court...