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Overstreet v. Apex Linen Service Inc.

United States District Court, D. Nevada

February 12, 2018

CORNELE A. OVERSTREET, Regional Director of the Twenty-Eighth Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Plaintiff,
v.
APEX LINEN SERVICE INC., Defendant.

          ORDER GRANTING IN PART PETITION FOR TEMPORARY INJUNCTION (ECF NO. 1)

          ANDREW P. GORDON, UNITED STATES DISTRICT JUDGE

         Petitioner Cornele Overstreet, Regional Director for the National Labor Relations Board (NLRB or Board), filed a petition for a temporary injunction against respondent Apex Linen Service, Inc. under § 10(j) of the National Labor Relations Act (NLRA). ECF No. 1. Apex operates a laundry business in Las Vegas providing service for commercial entities like hotels and restaurants. ECF Nos. 1-2 at 2; 29-1 at 30-31. It employs engineers to maintain equipment. ECF Nos. 1-2 at 2; 29-1 at 34. On January 24, 2017, the International Union of Operating Engineers Local 501, AFL-CIO petitioned for a vote to become the exclusive bargaining representative for the engineers. ECF No. 1-1 at 139. The vote was held on February 6, and the engineers voted in favor of the union by a vote of 10 to 4. Id. at 56, 104, 143; ECF No. 1-2 at 10. This was the first time a union represented employees at Apex. ECF No. 29-1 at 41. The dispute in this case concerns events leading up to and following the vote.

         Starting in February 2017 and through July 2017, the union filed numerous charges with the NLRB alleging Apex had engaged in unfair labor practices. The NLRB consolidated those charges into a complaint against Apex. Apex filed an answer, and that matter is proceeding before an administrative law judge (ALJ), who will make recommendations to the Board.

         In the meantime, NLRB Regional Director Overstreet petitions for this court to enter a temporary injunction under § 10(j) of the NLRA against Apex arising out of Apex's alleged unfair labor practices. Section 10(j) provides:

The Board shall have power, upon issuance of a complaint as provided in subsection (b) charging that any person has engaged in or is engaging in an unfair labor practice, to petition any United States district court, within any district wherein the unfair labor practice in question is alleged to have occurred or wherein such person resides or transacts business, for appropriate temporary relief or restraining order. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.

29 U.S.C. § 160(j). In determining whether temporary relief is just and proper under the circumstances, I “consider the traditional equitable criteria used in deciding whether to grant a preliminary injunction.” Small v. Avanti Health Sys., LLC, 661 F.3d 1180, 1187 (9th Cir. 2011) (quotation omitted). Those criteria are: (1) a likelihood of success on the merits, (2) a likelihood of irreparable harm, (3) the balance of hardships favors the plaintiff, and (4) an injunction is in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20 (2008). Alternatively, under the sliding scale approach, the party seeking injunctive relief must demonstrate (1) serious questions on the merits, (2) a likelihood of irreparable harm, (3) the balance of hardships tips sharply in the moving party's favor, and (4) an injunction is in the public interest. All. for the Wild Rockies v. Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011).

         In applying these criteria, I am cognizant that the availability of injunctive relief in this context is designed “to protect the integrity of the collective bargaining process and to preserve the [NLRB's] remedial power while it processes the charge.” Avanti Health Sys., LLC, 661 F.3d at 1187 (quotation omitted). The remedy is meant to prevent someone from accomplishing an unlawful objective based on the delay between the unfair labor practice and final resolution of the complaint process. See Miller for & on Behalf of N.L.R.B. v. Cal. Pac. Med. Ctr., 19 F.3d 449, 455 n.3 (9th Cir. 1994) (en banc).

         The fact that the NLRB exercised its discretion to seek a § 10(j) injunction does not mean I must defer to the Board in deciding whether interim relief is appropriate. Small v. Operative Plasterers' & Cement Masons' Int'l Ass'n Local 200, AFL-CIO, 611 F.3d 483, 490 (9th Cir. 2010). However, I “should evaluate the probabilities of the complaining party prevailing in light of the fact that ultimately, the Board's determination on the merits will be given considerable deference.” Id. (quotation omitted).

         I. Likelihood of Success on the Merits

         To show a likelihood of success on the merits in a § 10(j) proceeding, the Regional Director must show a “probability that the Board will issue an order determining that the unfair labor practices alleged by the Regional Director occurred and that this Court would grant a petition enforcing that order, if such enforcement were sought.” Frankl ex rel. N.L.R.B. v. HTH Corp., 693 F.3d 1051, 1062 (9th Cir. 2012) (quotation omitted). The Regional Director meets this burden by making a “threshold showing of likelihood of success by producing some evidence to support the unfair labor practice charge, together with an arguable legal theory.” Avanti Health Sys., LLC, 661 F.3d at 1187 (quotation omitted). “Conflicting evidence in the record does not preclude the Regional Director from making the requisite showing for a section 10(j) injunction.” HTH Corp., 693 F.3d at 1063 (quotation omitted).

         Where, as here, [1] the Regional Director “seeks and receives approval from the NLRB before filing a § 10(j) petition, the Director is owed special deference because likelihood of success is a function of the probability that the Board will issue an order determining that the unfair labor practices alleged by the Regional Director occurred.” Avanti Health Sys., LLC, 661 F.3d at 1187 (quotation omitted). “That the NLRB itself decid[ed] to file a Section 10(j) petition might signal its future decision on the merits, assuming the facts alleged in the petition withstand examination at trial.” Id. (quotation omitted).

         A. Section 8(a)(1)

         Section 8(a)(1) of the NLRA makes it an unfair labor practice for an employer to “interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title.” 29 U.S.C. § 158(a)(1). Section 157 gives employees “the right to self- organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .” Id. § 157.

         Overstreet asserts that Apex violated this section through three sets of acts: (1) Apex chief engineer Eugene Sharron interrogated employees about their support for the union, stated he would call employees to discover whether they supported the union, informed employees Apex suspected certain employees supported the union, and told employees the union would not do anything for them except take their money; (2) Apex chief executive officer and part owner Joseph Dramise told employees their wages would be reduced and schedules would no longer be honored if the union came in; and (3) Apex chief operating officer and part owner Marty Martin (Marty)[2] denied engineer Adam Arellano (who participated in bringing the union into Apex) his right to a union representative during an interview that Arellano reasonably believed might result in discipline.

         1. Sharron's Statements and Questioning of Employees

         After Apex learned of the union organizing effort, Marty sent Sharron to find out if there was genuine interest amongst the engineers in voting for the union. ECF No. 29-1 at 219-20. On January 24, 2017, Sharron, who is responsible for supervising the engineers, spoke to Apex engineer Joseph Servin. Id. at 53, 367-68, 530-31. According to Servin, Sharron asked him if he knew anything about the union forcing its way into Apex. ECF Nos. 1-1 at 142; 29-1 at 530-31. Fearing retaliation and possible termination before the union election, Servin stated he did not know anything about it. ECF Nos. 1-1 at 142; 29-1 at 531-32. According to Servin, Sharron told him that if the union came in, it would do nothing for him except take his money. ECF Nos. 1-1 at 142; 29-1 at 532. Sharron asked Servin if he knew how he would be voting and Servin (inaccurately) said he did not know because it was all news to him. ECF Nos. 1-1 at 142; 29-1 at 530-32.

         The next day, Sharron approached Arellano and asked if the engineers wanted a union. ECF Nos. 1-1 at 149-50; 29-1 at 493. Arellano replied that he came from a union company, but he did not say anything else. ECF Nos. 1-1 at 150; 29-1 at 493. Sharron responded that he came from a union company too but that he did not want the union, that the union was trying to force its way in, and that he was going to call everyone to see if they wanted the union to represent them. ECF Nos. 1-1 at 150; 29-1 at 493. Sharron denies that he told Arellano or Servin that he was going to call the other engineers, but Sharron did call the other engineers, who all stated they were going to vote no. ECF No. 29-1 at 368-70. Sharron reported this information back to Marty. Id. at 370.

         According to Servin, between February 1st and 6th, Sharron approached him and stated “they” suspected Arellano, Charles Walker, and another employee named Rico were the three main people behind the union organizing effort. ECF No. 1-1 at 143. Sharron testified at the ALJ proceedings that he suspected Arellano was behind the union organizing effort and that Arellano told him before the election that Arellano supported the union. ECF No. 29-1 at 371. Although all of the engineers told Sharron they were voting no, the engineers voted in favor of the union.

         Overstreet has shown a likelihood of success on these charges. Marty sent Sharron to investigate the union organizing effort, and Sharron later stated “they” knew who was behind it. The NLRB “has long held that, when, in comments to its employees, an employer specifically names other employees as having started a union movement or as being among the union leaders, the employer unlawfully creates the impression, in the minds of its employees, that he has been engaged in surveillance of his employees' union activities.” In Re Royal Manor Convalescent Hosp., Inc., 322 NLRB 354, 362 (1996).

         Additionally, Overstreet has shown a likelihood of success related to Sharron's questioning of Servin and Arellano. An employer has a First Amendment right to ask questions of and communicate with its employees about union matters “so long as the communications do not contain a threat of reprisal or force or promise of benefit.” Westwood Health Care Ctr., 330 NLRB 935, 947 (2000); see also 29 U.S.C. § 158(c) (providing that “[t]he expressing of any views, argument, or opinion . . . shall not constitute or be evidence of an unfair labor practice . . . if such expression contains no threat of reprisal or force or promise of benefit”). To determine the line between legitimate communications and unlawful coercion, the NLRB asks “whether under all of the circumstances the interrogation reasonably tends to restrain, coerce, or interfere with rights guaranteed by the Act.” Westwood Health Care Ctr., 330 NLRB at 948. Some factors that may be considered include (1) the background of hostility toward the union (or lack thereof); (2) the nature of the information sought; (3) the questioner's identity; (4) the place, tone, duration, purpose, and method of questioning, and (5) whether the questioning is repeated. Id. These are not the only factors to consider and the ultimate question is “whether under all the circumstances the interrogation reasonably tends to restrain, coerce, or interfere with rights guaranteed by the Act.” Id.

         There is no evidence that anyone at Apex expressed hostility toward the union before Sharron made his statements. However, Sharron's statements themselves appear hostile because he characterized it as the union “forcing” its way in, told Servin the union would do nothing but take his money, and told Arellano he did want the union and was going to call other employees to see where they stood. Within a day of the union's petition, Sharron had questioned two different engineers and indicated he was going to question all of them about their union views. Sharron was a supervisory engineer and was sent by Marty to investigate the union organizing effort. It is unclear from the record what Sharron's tone was, but apparently both Servin and Arellano felt intimidated enough to be circumspect in response to Sharron's questions. Indeed, all of the engineers denied they were going to vote for the union, even though a majority of them later did. Overstreet thus has presented some evidence of coercive questioning.

         Additionally, Overstreet presented evidence that Sharron commented that the union would do nothing but take Servin's money. The NLRB has held that “comments designed to impress on the employees the futility of having selected the Union as their collective-bargaining representative” violate § 8(a)(1). See Flamingo Hilton-Reno, Inc., 321 NLRB 409, 416 (1996). Consequently, Overstreet has shown a likelihood of success on these allegations by presenting some evidence and arguable legal theories.

         2. Dramise's Statements to Servin and Arellano

         About a week after Sharron spoke to Arellano and Servin about how they were going to vote, Sharron approached Servin and said that Dramise wanted to talk to Servin and Arellano. ECF No. 1-1 at 142; ECF No. 29-1 at 372 (Sharron testifying that Dramise requested the meeting). Dramise, Sharron, Servin, and Arellano met in the conference room. According to Servin, Dramise stated that if the union came in, he would no longer be able to honor contracts he had with the employees, including shifts, days off, and benefits. ECF Nos. 1-1 at 142, 150; 29-1 at 496-97. Servin and Arellano were both hired on the condition that they had day shifts and weekends off. ECF No. 1-1 at 142-43. Sharron testified at the ALJ proceeding that Dramise told Arellano and Servin that if the union came in, there would be a new contract and Arellano and Servin's contracts would be null and void. ECF No. 29-1 at 373. This was the first time Arellano had ever met with Dramise even though he had been employed by Apex since 2011. ECF No. 29-1 at 496-97, 515.

         Overstreet has shown a likelihood of success on this allegation. Three different witnesses testified that Dramise stated that if the union came in, he would no longer be able to honor contracts he had with the employees, including shifts, days off, and benefits. That suggested to Servin and Arellano that they would lose benefits if they voted for the union. Threatening loss of benefits if employees vote for the union interferes with their rights to proceed collectively. See Longview Fibre Paper & Packaging, Inc., 356 NLRB 796, 803 (2011). Overstreet thus has presented some evidence and an arguable legal theory for this allegation.

         3. Arellano's Request for Union Representation

         On February 13th, Marty called Arellano into a conference room. ECF No. 1-1 at 159. Arellano sought to invoke his right to be represented by a union member during the meeting, but Marty responded that this right did not apply because Apex had already made its decision, and Arellano was terminated. Id. at 117, 159. Marty asked Arellano if he wanted to make a written statement, but Arellano refused without a union representative present. Id. at 117-18, 159. Arellano was then escorted off the property. Id. at 159-60.

         Under N.L.R.B. v. J. Weingarten, Inc., employees have the right under § 157 to have a union representative at any interview the employee reasonably fears might result in disciplinary action. 420 U.S. 251, 261 (1975). “[A]n employee has no Section 7 right to the presence of his union representative at a meeting with his employer held solely for the purpose of informing the employee of, and acting upon, a previously made disciplinary decision.” Baton Rouge Water Works Co., 246 N.L.R.B. 995, 997 (1979). But this exception itself has an exception:

if the employer engages in any conduct beyond merely informing the employee of a previously made disciplinary decision, the full panoply of protections accorded the employee under Weingarten may be applicable. Thus, for example, were the employer to inform the employee of a disciplinary action and then seek facts or evidence in support of that action . . ., such conduct would remove the meeting from the narrow holding of the instant case, and the employee's right to union representation would attach.

Id.

         Arellano invoked his Weingarten rights and was denied. Although Marty testified that he had already decided to terminate Arellano, Marty also asked Arellano if he wanted to make a written statement. Overstreet thus has presented some evidence and an arguable legal theory that the meeting went beyond merely informing Arellano of his termination, but instead sought to obtain a written statement from him. See El Paso Healthcare Sys., Ltd. d/b/a Las Palmas Med. Ctr. & Nat'l Nurses Org. Comm. - Texas/NNU, 28-CA-23368, 2011 WL 4527336 (N.L.R.B. Sept. 29, 2011) (“[T]he Board has held that where an employer informs an employee of a disciplinary action and then questions the employee to seek information to bolster that decision, the employee's right to representation applies.”).

         B. Section 8(a)(3)

         Section 8(a)(3) provides that it is an unfair labor practice for an employer “by discrimination in regard to . . . tenure of employment . . . to encourage or discourage membership in any labor organization.” 28 U.S.C. § 158(a)(3). “An employer violates Section 8(a)(3) when the employee's involvement in a protected activity was a substantial or motivating factor in the employer's decision to discipline or terminate the employee.” HTH Corp., 693 F.3d at 1062. The Regional Director bears the initial burden of “showing that the employee was engaged in protected activity, the employer knew of such activity, and the employer harbored anti-union animus.” Id. If he does so, then “the burden shifts to the employer to demonstrate that it would have taken the same action regardless of the employee's union activity.” Id. “An employer cannot prove this affirmative defense where its asserted reasons for a discharge are found to be pretextual.” United Nurses Ass'ns of Cal. v. Nat'l Labor Relations Bd., 871 F.3d 767, 779 (9th Cir. 2017) (quotation omitted).

         1. Arellano

         Overstreet has met his burden of showing a likelihood of success on the claim that Apex fired Arellano in retaliation for his union activities. Arellano was behind the initial unionization effort. Sharron stated that Arellano was suspected to be a main person behind it and that before the election, Arellano told Sharron that he supported the union. Additionally, Arellano wore a union button on the day of the election. ECF No. 29-1 at 504. Arellano thus engaged in protected conduct and Apex was aware of that conduct. There is some evidence that Apex harbored anti-union animus, as discussed above with respect to the statements made by Sharron and Dramise.

         Apex contends it had a legitimate reason to fire Arellano because he encouraged another employee to make a false worker's compensation claim. Overstreet has presented some evidence that this reason is pretextual. Prior to the incident at issue, Marty considered Arellano a good and talented employee. Id. at 46. Arellano was fired despite having no history of discipline and without Marty interviewing either the complaining witness, Victoria Hernandez, or Arellano. ECF No. 1-1 at 106, 108-11. Instead, Marty took the word of Hernandez's supervisor, Cristina Linares, who relayed Hernandez's allegations to Marty. Id. at 107-08. Marty testified he did not speak to Hernandez because she speaks only Spanish. ECF No. 29-1 at 62. But he could have interviewed Hernandez through an interpreter.

         A reasonable fact finder could question why the employer would not talk to the only two employees involved in the conversation before deciding to terminate an employee who otherwise had no disciplinary issues. Upon questioning at the ALJ proceedings, Hernandez testified that her eye was not red before she came to work, it became irritated two or three hours after she started work, and once she informed Arellano that she did not think her eye injury occurred at work, the conversation ended. ECF No. 29-1 at 595-96, 605. Arellano denies that he encouraged Hernandez to commit fraud. ECF No. 1-1 at 158. Thus, had Marty interviewed the employees, he would have learned that Arellano did not continue to encourage Hernandez to make a worker's compensation claim even after learning that she did not believe the injury occurred at work.

         Additionally, there is some evidence of shifting reasons for the firing. Arellano was accused of sabotaging equipment and his termination record states he was fired for “insubordination, dishonesty, [and] willful or careless destruction of company assets.” ECF No. 1-2 at 16. Marty testified at the ALJ proceeding that Arellano was not involved in damaging company equipment, that those allegations had nothing to do with his termination, and that the basis for the discharge was for allegedly encouraging the false worker's compensation claim. ECF No. 1-1 at 108, 112-14. Finally, the proximity in time between the union vote on February 6 and Arellano's firing on February 13 supports a retaliatory motive. Overstreet thus has presented some evidence and an arguable legal theory for this charge.

         2. Charles Walker

         Walker was one of three individuals Sharron identified as being behind the union organizing effort. Id. at 143. Walker volunteered to observe the union election. ECF No. 1-2 at 3. On February 10, Marty told Ed Martin, the union bargaining representative, that Apex was contemplating a layoff because, among things, [3] it no longer needed a graveyard shift. ECF No. 29-3 at 1. Marty identified potentially affected engineers as Walker, Jaime Valdovimos Magana, and Leonardo Porter. Id. at 1-2. On February 15, Sharron told Walker he was being laid off. ECF No. 1-2 at 3. According to Walker, during his termination meeting, Marty stated that Apex “didn't want the Union in, but of course that didn't happen.” Id. at 48.[4] Walker avers that Marty said that the union had nothing to do with why Walker's position was being eliminated and that ...


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