N.L.R.B. v. Kentucky May Coal Co., Inc.

• Decision Date: 17 July 1996
• Docket Number: No. 95-5837,95-5837
• Parties: 152 L.R.R.M. (BNA) 2821, 132 Lab.Cas. P 11,610 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KENTUCKY MAY COAL COMPANY, INC., Respondent.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1235

89 F.3d 1235

152 L.R.R.M. (BNA) 2821, 132 Lab.Cas. P 11,610

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KENTUCKY MAY COAL COMPANY, INC., Respondent.

No. 95-5837.

United States Court of Appeals Sixth Circuit.

Argued May 23, 1996.

Decided July 17, 1996.

David Habenstreit (argued), National Labor Relations Board, Office of the General Counsel, Washington, DC, Aileen A. Armstrong, Deputy Associate Gen. Counsel (briefed), Linda Dreeben, National Labor Relations Board, Appellate Court Branch, Washington, DC, for Petitioner.

Barbara L. Krause (briefed), Smith, Heenan & Althen, Washington, DC, Forrest H. Roles (argued and briefed), Smith, Heenan & Althen, Charleston, WV, for Respondent.

Before: RYAN and NORRIS, Circuit Judges; DOWD, District Judge. ^*

DOWD, District Judge.

I.

This case is before the court on application of the National Labor Relations Board ("NLRB" or "Board") for enforcement of a final order against Kentucky May Coal Company, Inc.--River Division ("Kentucky May" or "Company") issued on April 27, 1995. The Board's order requires Kentucky May to cease and desist from certain specified unfair labor practices; to rescind a contract entered into with Double C Construction, Ltd. ("Double C"); to reinstate the wage rates in effect prior to the changes, if requested by the United Mine Workers of America ("Union"); to reinstate employees laid off on the date Double C began its operations; to recognize and bargain with the Union without an election; and to post a specified Notice to Employees.

II.

The relevant facts are set forth in some detail in the April 27, 1995 Decision and Order of the Board. JA, pp. 6-10, 1995 WL 250554. Only a brief summary is necessary for our purposes.

Near the end of January, 1994, several employees of respondent Kentucky May, a wholly owned subsidiary of Electric Fuels Corporation, were becoming increasingly concerned about the inadequacy of their production bonuses. The employees, convinced that their only hope was to organize, contacted the Union to make inquiry as to the process. Within a couple weeks, 20 of the 26 employees had signed union authorization cards. Almost immediately, Kentucky May managers and supervisors, along with decision-makers at Electric Fuels, became aware of the union-organizing activities and began to put pressure on the employees not to unionize. Management also entered into rapid negotiations with Double C, with an eye toward contracting out to Double C the operations at Kentucky May's River Dock facility on the Big Sandy River in Boyd County, Kentucky, and the nearby No. 5 Coal Yard and Crushing Facility. Contracts were signed on February 11, 1994 and Double C's operations were to commence on February 14, 1994.

On February 13, 1994, a union-organizing meeting was held. On February 14, 1994, when the Kentucky May employees reported for work, they were notified that the dock operations had been contracted out and that they were all permanently laid off. Within the next week most of Kentucky May's employees were hired by Double C. ¹ Shortly after, the President of Double C gave the former Kentucky May employees pre-paid envelopes addressed to the Union which contained a typewritten note that stated: "I, ____________, want to revoke my card I sent you. I want my privileges back." JA, pp. 108-109, 118, 263.

Acting on unfair labor practice charges filed by the Union, the Board's Regional Director issued an unfair labor practices complaint alleging that Kentucky May had violated Sections 8(a)(1) and (3) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(1) and (3) (the "Act"). Ultimately, an amended consolidated complaint alleged that Kentucky May interfered with its employees' rights under the Act and retaliated against its employees because of their union organizing activities. Kentucky May denied the allegations.

On May 24, 1994, pursuant to Section 10(j) of the Act, 29 U.S.C. § 160(j), the Regional Director filed in the U.S. District Court for the Eastern District of Kentucky a verified petition for temporary injunction pending final Board disposition. The issue before the district court was whether there was reasonable cause to believe that violations of the Act had occurred and, if so, whether injunctive relief was just and proper.

In August of 1994, while the Board's Section 10(j) petition was pending, an unfair labor practices hearing was conducted by an Administrative Law Judge ("ALJ"). By mutual agreement of all parties, the entire record made before the ALJ was submitted to the district court considering the petition for injunction. On December 21, 1994, the district court entered an order denying the petition for temporary injunction, finding no reasonable cause to believe that Kentucky May's subcontracting to Double C violated the Act. The court also separately concluded that an injunction would not be just and proper. Frye v. Kentucky May Coal Co. Inc., 148 L.R.R.M. 2945, 1994 WL 739464 (E.D.Ky.1994). On February 27, 1995, the Board appealed the district court's denial of the Section 10(j) injunction; however, because the appeal was not timely and the district court had denied an extension of time within which to appeal, the appeal was dismissed on April 24, 1995.

On January 9, 1995, Kentucky May filed a motion with the ALJ for leave to amend its answer to plead collateral estoppel based on the district court's findings. On January 26, 1995, the ALJ issued his decision in favor of the NLRB. The order of the ALJ also denied leave to amend the answer. Exceptions and cross-exceptions were filed and, on April 27, 1995, the Board issued a Decision and Order upholding the ALJ's decision in all respects.

III.

A. The Issue of Collateral Estoppel

Kentucky May argues on appeal that the district court's denial of the Board's Section 10(j) petition for temporary injunction and this court's order dismissing the appeal collaterally estop the Board from ruling in a subsequent unfair labor practices proceeding.

"The doctrine of collateral estoppel dictates that once a court has decided an issue of fact or law necessary to its judgment, that decision may preclude relitigation of the issue in a suit on a different cause of action involving a party to the first case." N.A.A.C.P., Detroit Branch v. Detroit Police Officers Ass'n, 821 F.2d 328, 330 (6th Cir.1987) (internal quotation marks and citations omitted). Four requirements must be met for preclusion to apply:

(1) the precise issue raised in the present case must have been raised and actually litigated in the prior proceeding;

(2) determination of the issue must have been necessary to the outcome of the prior proceeding;

(3) the prior proceeding must have resulted in a final judgment on the merits; and

(4) the party against whom estoppel is sought must have had a full and fair opportunity to litigate the issue in the prior proceeding.

Id. (footnotes omitted).

In support of its collateral estoppel argument, Kentucky May relies heavily on this court's decision in Marlene Industries Corp. v. N.L.R.B., 712 F.2d 1011 (6th Cir.1983). Marlene, however, was a case where the question of collateral estoppel came before this court under very different procedural circumstances. In Marlene, the employer had already been found by the Board to have engaged in unfair labor practices, a decision which had been made final by an enforcement order of this court, including an injunction against further unfair labor practices. See Decaturville Sportswear Co., Inc. v. N.L.R.B., 406 F.2d 886 (6th Cir.1969). When Marlene again engaged in unfair labor practices, the Board filed a contempt petition with this Court which appointed a Special Master to handle the proceedings. The Board, accepting his findings of fact but not his conclusions of law, challenged the conclusions. This court adopted the Special Master's findings, conclusions and recommendations. See N.L.R.B. v. Decaturville Sportswear Co., Inc., 518 F.2d 788 (6th Cir.), cert. denied, 423 U.S. 913, 96 S.Ct. 217, 46 L.Ed.2d 141 (1975). In 1976, the Board filed another unfair labor practices charge predicated on the same incident that had triggered the original charge. Relying on the contempt proceeding, an ALJ recommended dismissal of the charge based on res judicata and collateral estoppel. The NLRB reversed the ALJ and Marlene appealed, arguing, inter alia, that the Board was bound by the prior findings and conclusions of the Special Master. This court agreed. ²

The contempt proceeding in Marlene was an independent action brought in this court to enforce a matter already adjudged. In the case at bar, the unfair labor practices charge had not yet been adjudicated by the Board at the time the collateral proceeding for a temporary injunction under Section 10(j) was brought before the district court. The task of the district court was narrow: first, to ascertain whether there was reasonable cause to believe an unfair labor practice had occurred and, second, if there was reasonable cause, to decide whether injunctive relief would be just and proper. Fleischut v. Nixon Detroit Diesel, Inc., 859 F.2d 26, 29 (6th Cir.1988). It was not the role of the district court, in the first instance, to determine the merits of the unfair labor practices charge. In fact, the Fleischut court specifically cautioned that, when district courts are determining whether reasonable cause exists to believe that an unfair labor practice has occurred, "[they] are not to adjudicate the merits of the unfair labor practice case[ ] [because] [t]he question of whether a violation of the Act has been committed is a function reserved exclusively to the Board, subject to appellate court review of the final Board orders." Fleischut, 859 F.2d at 28 (emphasis in original) (citing Levine v. C & W Mining, Inc., 610 F.2d 432, 435 (6th Cir.1979)). As the Seventh Circuit has aptly pointed out, in a Section 10(j) proceeding "[t]he court ... must attempt to predict what the...