Small v. Operative Plasterers' And Cement Masons' Int'l Ass'n Local 200

• Decision Date: 08 July 2010
• Docket Number: 08-56942.,No. 08-56668,08-56668
• Parties: James F. SMALL, Regional Director of Region 21 of the National Labor Relations Board for and on behalf of the National Labor Relations Board; National Labor Relations Board, Plaintiffs-Appellees,v.OPERATIVE PLASTERERS' AND CEMENT MASONS' INTERNATIONAL ASSOCIATION LOCAL 200, AFL-CIO, Defendant-Appellant.James F. Small, Regional Director of Region 21 of the National Labor Relations Board for and on behalf of the National Labor Relations Board, Plaintiff,andNational Labor Relations Board, Plaintiff-Appellant,v.Operative Plasterers' and Cement Masons' International Association Local 200, AFL-CIO, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

611 F.3d 483

James F. SMALL, Regional Director of Region 21 of the National Labor Relations Board for and on behalf of the National Labor Relations Board; National Labor Relations Board, Plaintiffs-Appellees,

v.OPERATIVE PLASTERERS' AND CEMENT MASONS' INTERNATIONAL ASSOCIATION LOCAL 200, AFL-CIO, Defendant-Appellant.

James F. Small, Regional Director of Region 21 of the National Labor Relations Board for and on behalf of the National Labor Relations Board, Plaintiff,

and

National Labor Relations Board, Plaintiff-Appellant,

v.Operative Plasterers' and Cement Masons' International Association Local 200, AFL-CIO, Defendant-Appellee.

Nos. 08-56668, 08-56942.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted Feb. 4, 2009.

Filed July 8, 2010.¹

COPYRIGHT MATERIAL OMITTED

John J. Davis, Jr., Paul L. More, Davis, Cowell & Bowe LLP, San Francisco, CA, for the defendant-appellants.

Ronald Meisburg, John E. Higgins, JR., Barry J. Kearney, Judith I. Katz, Steven L. Sokolow, Richard J. Lussier, National Labor Relations Board, Washington, D.C., for the appellee.

Stephen J. Schultz, Mark T. Bennett, Marks, Golia & Finch LLP, San Diego, CA, for the amicus curiae.

Appeals from the United States District Court for the Central District of California, Stephen G. Larson, District Judge, Presiding. D.C. No. 5:08-cv-01039-SGL-OP.

Before HARRY PREGERSON, SUSAN P. GRABER, and KIM McLANE WARDLAW, Circuit Judges.

WARDLAW, Circuit Judge:

This appeal arises from a dispute between two unions over the right to perform certain plastering work as subcontractors for contractor Standard Drywall, Inc. (“SDI”). The National Labor Relations Board (the “Board”) awarded the work to the Southwest Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America (“the Carpenters”), whereupon the other union, Operative Plasterers' and Cement Masons' International Association, Local 200, AFL-CIO (“Local 200”), filed two state court lawsuits against SDI, alleging (1) violation of wage and hour laws; and (2) tortious interference with contract. James F. Small, the Regional Director of Region 21 of the Board (“Regional Director”) lodged a complaint with the Board, charging that the two state lawsuits are unlawful under the National Labor Relations Act (“NLRA” or the “Act”) because they seek to coerce SDI to reassign the plastering work to Local 200. The Regional Director then sought and was awarded a preliminary injunction against Local 200 to halt the state court proceedings pending the Board's final determination as to their legality under the Act. We must decide whether the district court abused its discretion in enjoining the state court proceedings and, if not, whether the district court had subject matter jurisdiction to modify the injunction after the notice of appeal was filed. We affirm the entry of the preliminary injunction, but reverse the district court's order modifying the injunction.

I. Factual and Procedural Background

In the early 1930s, Congress declared that “the individual unorganized worker is commonly helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment.” 29 U.S.C. § 102. Our nation's labor laws protect employees' rights to organize in unions and to bargain collectively. See NLRB v. Am. Nat'l Ins. Co., 343 U.S. 395, 401-02, 72 S.Ct. 824, 96 L.Ed. 1027 (1952); see also 29 U.S.C. §§ 157, 158. And although the “National Labor Relations Act is designed to promote industrial peace by encouraging the making of voluntary agreements governing relations between unions and employers,” Am. Nat'l Ins. Co., 343 U.S. at 401-02, 72 S.Ct. 824, sometimes, unions must disturb the peace to fight for their members' interests see NLRB v. Ins. Agents' Int'l Union, 361 U.S. 477, 489, 80 S.Ct. 419, 4 L.Ed.2d 454 (1960) ( “The presence of economic weapons in reserve, and their actual exercise on occasion by the parties, is part and parcel of the system....”). After all, the very purpose of labor unions is to advocate zealously for their members. This appeal marks the latest round in a long and protracted fight between two unions over plastering work in Southern California.

In March 2004, SDI, a construction contractor, was retained to oversee the plastering work on a Fine Arts Project at the California State University campus in Fullerton, California. There was much work to be done, including all interior and exterior plastering, bonding of all the ceilings and walls, waterproofing of all the plaster, adhering ornamentation to the walls, and installing insulation. SDI needed a subcontractor to do the work, and two competing labor unions wanted the job: the Carpenters and Local 200. In March 2004, SDI entered into a subcontract with the Carpenters, with whom SDI had enjoyed a collective bargaining relationship since the mid-1990s. At that point, the gloves came off, and the unions' fight for their members' rights to the work was on.

A. State Court Litigation and 10(k) Hearings

Local 200 threw the first punch. At the time, Local 200 operated the only state-approved apprenticeship program. In October 2004, it filed suit against SDI in Los Angeles County Superior Court, alleging that SDI violated California Labor Code § 1777.5 by failing to employ plastering apprentices on public works projects, and that SDI violated wage and hour laws on past, present, and future public works projects (“the Wage and Hour Lawsuit”). Local 200 sought payment of wages lost from SDI's failure to employ its members on public works projects and an injunction against further violations. In May 2005, Local 200 representatives offered to dismiss the Wage and Hour Lawsuit if SDI would sign an agreement assigning Local 200 the disputed plastering work. SDI relented, agreeing to reassign some of the plastering work from the Carpenters to Local 200.

The Carpenters hit back. They threatened to strike SDI if SDI went ahead with its plan to reassign some of the disputed work to Local 200. To prevent a strike, SDI filed a charge with the Board, alleging that the Carpenters' threatened strike was an unfair labor practice under the NLRA. 29 U.S.C. § 158(b)(4)(ii)(D). That section makes it an “unfair labor practice” for a labor organization

to threaten, coerce, or restrain any person engaged in commerce or in an industry affecting commerce, where in either case an object thereof is-... (D) forcing or requiring any employer to assign particular work to employees in a particular labor organization or in a particular trade, craft, or class rather than to employees in another labor organization or in another trade, craft or, class....

Id. The Board was authorized “to hear and determine the dispute” pursuant to section 10(k) of the NLRA. 29 U.S.C. § 160(k).

The Board concluded that there was “reasonable cause to believe that the Carpenters used proscribed means to enforce its claim to the work in dispute.” Acting pursuant to its section 10(k) authority, the Board assigned the work to the Carpenters, finding that it had a collective bargaining agreement with SDI; that SDI preferred that the Carpenters perform the work; that area and industry practice weighed in favor of assigning the work to the Carpenters; and that the Carpenters members were sufficiently skilled to perform the work. Sw. Reg'l Council of Carpenters (Standard Drywall, Inc.), 346 N.L.R.B. 478 (2006) (hereinafter “ SDI I ”).

Local 200 then sought other means to secure the disputed work for its members. Following the Board's decision to award the disputed work to the Carpenters, Local 200 notified SDI that it would drop the Wage and Hour Lawsuit as to the Fine Arts Project, but insisted on prosecuting the suit as to all other public works projects. With its back against the wall, SDI wrote to the Carpenters explaining that SDI “may have no choice but to assign plastering work to employees represented by [Local 200] on projects on the enclosed list and on any new projects in Southern California.” The list set forth the projects which SDI determined were the subject of Local 200's lawsuit. The letter also requested that the Carpenters inform SDI of its position should SDI assign plastering work to members of Local 200.

The Carpenters wrote back, informing SDI that if it “attempts to reassign any work currently being performed by members of the Carpenters Union, [it would] immediately strike the Company.” In February 2006, SDI filed another unfair labor practice charge against the Carpenters, once again alleging that the Carpenters' threat to strike violated the NLRA. As in the first 10(k) proceeding, the Board found that both the Carpenters and Local 200 laid claim to disputed work-in this case, all current and future public works projects constructed by SDI in twelve California counties. The Board again considered the parties' previous relationships with one another, the unions' skills and experience, area and industry practice, and other relevant factors, and “conclude[d] that employees represented by Carpenters are entitled to perform the work in dispute.” Sw. Reg'l Council of Carpenters (Standard Drywall, Inc.), 348 N.L.R.B. 1250, 1255 (2006) (hereinafter “ SDI II ”).

Despite the Board's second adverse 10(k) determination, Local 200 fought on. It again amended its complaint in the Wage and Hour Lawsuit, this time to include claims on behalf of a class of plastering apprentices enrolled in Local 200's state-approved apprenticeship program which sought lost wages due to SDI's failure to employ its members on public works projects. The amended complaint also sought an injunction against further violations. In addition, Local 200 filed another state lawsuit in Los Angeles County Superior Court, alleging that SDI and the Carpenters tortiously interfered with Local 200's economic advantage in its relationships with plastering subcontractors (the “Tortious Interference Lawsuit”). Local 200 sought damages...