Pratte v. N. L. R. B.

• Decision Date: 08 July 1982
• Docket Number: No. 82-1064,82-1064
• Citation: 683 F.2d 1038
• Parties: Lorraine PRATTE, Plaintiff-Appellee, v. NATIONAL LABOR RELATIONS BOARD, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1038

683 F.2d 1038

73 A.L.R.Fed. 389

Lorraine PRATTE, Plaintiff-Appellee, v. NATIONAL LABOR RELATIONS BOARD, et al., Defendants-Appellants.

No. 82-1064.

United States Court of Appeals,

Seventh Circuit.

Argued May 13, 1982.

Decided July 8, 1982.

Richard F. Watt, Chicago, Ill., for plaintiff-appellee.

Terry G. Harn, Asst. U. S. Atty., Peoria, Ill., for defendants-appellants.

Before PELL, Circuit Judge, DAVIS, Judge, ^* and WOOD, Circuit Judge.

PELL, Circuit Judge.

The Government challenges the district court's grant of a preliminary injunction ordering the National Labor Relations Board (NLRB) to hire Lorraine Pratte as a law clerk-trainee in its Chicago Regional Office. The propriety of the injunction turns on whether the plaintiff showed a likelihood of success on the merits of her claim that the Government should be estopped from revoking her appointment.

I. FACTS

Lorraine Pratte is a 1981 graduate of Harvard Law School. She decided to pursue a career in labor law and, in September, 1980, sought a position with the NLRB. She believed that working for the agency would be the best way to gain experience and early responsibility in her chosen area of legal specialization.

The plaintiff's choice was to work for the NLRB in Washington, D. C. On January 15, 1981, the NLRB offered Pratte a position in the Chicago Regional Office, assuring her that she might have the opportunity to transfer to the Appellate Division in Washington, D. C. after working two or three years in Chicago. Pratte was given one day to accept or reject the NLRB's offer. She accepted, turning down another firm offer of employment and ceasing to pursue other job prospects.

One week later, the NLRB informed Pratte that it could not honor its firm hiring commitment because of President Reagan's hiring freeze. Forty-seven persons other than Pratte received similar notification. The plaintiff resumed the job-hunting process. On March 10, 1981, an NLRB official phoned Pratte and told her that the Office of Management and Budget had informed the agency that the money required to hire Pratte and others in her situation would be forthcoming. This conversation was confirmed by a letter dated March 17, 1981, in which the NLRB again offered Pratte employment and indicated that she might be able to report for work before October 5, 1981 if the budget so permitted.

Pratte subsequently took and passed the District of Columbia bar examination, believing that this gave her maximum flexibility in working for the NLRB at any location and was consistent with her desire eventually to work in the Washington, D. C. area. The NLRB confirmed Pratte's appointment in two letters dated August 5 and August 31, 1981. Neither letter made any reference to the NLRB's budget. On September 11, 1981, the plaintiff purchased an automobile and drove to Chicago.

Several relevant events occurred on September 29, 1981. First, the NLRB told Pratte to report for work on October 5, 1981. Second, the plaintiff signed a lease for an apartment in Chicago. Third, that evening an NLRB official phoned the plaintiff and told her that her appointment had again been revoked because of President Reagan's announcement on September 24, 1981, that he would seek new budget reductions for selected federal agencies. The revocation was confirmed by a letter Pratte received the following day.

Pratte found herself in Chicago with a lease and a car and no job. Because she had not taken the Illinois bar examination, her employment prospects in Chicago were limited. Pratte obtained temporary employment as a legal assistant in October, 1981, and subsequently, a full-time job doing legal research. She filed the instant suit on November 10, 1981. Following the district court's grant of a preliminary injunction, Pratte terminated her research job and reported to work at the NLRB.

II. DISCUSSION

At the outset, we recognize with sympathy the situation in which Lorraine Pratte was placed as a result of the uncertainties of the federal budget and the attempts of the NLRB to anticipate and meet the proposed funding cuts even though the factors which caused the situation were brought about largely by events beyond the control of the hiring agency.

Turning to the legal issue before this court, we note that the grant of a preliminary injunction is generally reviewable only for an abuse of discretion. E.g., Reinders Brothers, Inc. v. Rain Bird Eastern Sales Corp., 627 F.2d 44, 49 (7th Cir. 1980); Sangmeister v. Woodard, 565 F.2d 460, 464-65 (7th Cir. 1977), cert. denied, 435 U.S. 939, 98 S.Ct. 1516, 55 L.Ed.2d 535 (1978). As Judge Aldisert stated in United States Steel Corp. v. Fraternal Association of Steelhaulers, 431 F.2d 1046 (3d Cir. 1970):

This limited review is necessitated because the grant or denial of a preliminary injunction is almost always based on an abbreviated set of facts, requiring a delicate balancing of the probabilities of ultimate success at final hearing with the consequences of immediate irreparable injury which could possibly flow from the denial of preliminary relief. Weighing these considerations is the responsibility of the district judge; only a clear abuse of his discretion will justify appellate reversal.

Id. at 1048, quoted in 11 C. Wright & A. Miller, Federal Practice and Procedure § 2962, at 636 (1973). Consistent with this reasoning is the rule recognized by several courts, that when the availability of preliminary relief turns on interpretation of the law rather than on the facts, the appellate court is free to review de novo the district court's judgment. E.g., California ex rel. Younger v. Tahoe Regional Planning Agency, 516 F.2d 215 (9th Cir. 1975), cert. denied, 423 U.S. 868, 96 S.Ct. 131, 46 L.Ed.2d 97; Delaware and Hudson Railway Co. v. United Transportation Union, 450 F.2d 603, 620-21 (D.C.Cir.1971), cert. denied, 403 U.S. 911 91 S.Ct. 2209, 29 L.Ed.2d 689; Societe Comptoir De L'Industrie Cotonniere Etablissements Boussac v. Alexander's Department Stores, Inc., 299 F.2d 33, 35-36 (2d Cir. 1962); see 11 C. Wright & A. Miller, supra, § 2962, at 637.

A preliminary injunction should be granted only if the plaintiff shows that: (1) he or she had at least a reasonable likelihood of success on the merits; (2) there is no adequate remedy at law, and the plaintiff will otherwise be irreparably harmed; (3) the threatened injury to the plaintiff outweighs the threatened harm the preliminary injunction may cause the defendants; and (4) granting the preliminary injunction is not contrary to the public interest. E.g., Machlett Laboratories, Inc. v. Techny Industries, Inc., 665 F.2d 795, 796-97 (7th Cir. 1981). The dispositive criterion in this case is the first enumerated by the Machlett court: the likelihood of success on the merits.

In order to succeed on the merits, Pratte would have to prove a claim of equitable estoppel against the Government. This court recently articulated the considerations relevant to such a claim in Portmann v. United States, 674 F.2d 1155 (7th Cir. 1982). Judge Cudahy, writing for the court, adopted the standard for estoppel articulated by the Ninth Circuit in TRW, Inc. v. Federal Trade Commission, 647 F.2d 942 (9th Cir. 1981). ¹ Estoppel will be applicable if the Governmental actions amount to "affirmative misconduct" and if four other requirements are met:

First, the party to be estopped must know the facts. Second, this party must intend that his conduct shall be acted upon, or must so act that the party asserting estoppel has a right to believe it is so intended. Third, the party asserting estoppel must have been ignorant of the facts. Finally, the party asserting estoppel must reasonably rely on the other's conduct to his substantial injury.

674 F.2d at 1167 (quoting TRW, Inc. v. Federal Trade Commission, 647 F.2d 942, 950-51 (9th Cir. 1981) (citations omitted)). The fourth requirement, that of reasonable reliance, is critical to this appeal. Two recent cases, which reached different conclusions as to the appropriateness of estoppel, are relevant to what constitutes justified reliance. See National Treasury Employees Union v. Reagan, 663 F.2d 239 (D.C.Cir.1981) (NTEU); Beacom v. EEOC, 500 F.Supp. 428 (D.Ariz.1980). These two cases also discuss "affirmative misconduct" which Pratte claims is present in the instant case.

The district court in Beacom found that the Government had engaged in affirmative misconduct and, therefore, a claim of estoppel was cognizable. Plaintiff Beacom had applied for a position as an EEOC staff attorney. He was offered the position, told by a letter received March 13, 1980, to conclude his private practice in Colorado, and directed to report for work in Phoenix on April 7, 1980. On March 14, 1980, Beacom telephoned the EEOC Hiring Officer to inquire whether President Carter's freeze on hiring by federal agencies would affect his proffered employment. He was assured that it would not. One week later, the Personnel Manager of the Phoenix EEOC office informed Beacom that, as a result of the freeze, his appointment was "on hold." She told him that this did not mean he was not hired. The agency then attempted to telephone Beacom on April 3, 1980, to tell him that his position with the agency could not be filled but was unable to reach him. Beacom reported for work on April 7th and was then informed that he did not have a job.

The Beacom court found that the actions of the EEOC constituted affirmative misconduct, ² stating that there was "little justification for the Government's failure to inform Mr. Beacom that his appointment would not be considered until his paperwork was approved and he had commenced his duties, or for its delay in informing Mr. Beacom that the President's freeze would affect his job." Id. at 438 (footnotes omitted). The Government was estopped from denying Beacom his position as staff attorney.

In contrast to the result reached by the Beacom court, the District of Columbia Circuit...