Joseph Frankl v. HTH Corporation, et al

Filing

FILED OPINION (MARY M. SCHROEDER, CONSUELO M. CALLAHAN and N. RANDY SMITH) The Board s petition for enforcement in No. 11-71676 is GRANTED in whole and HTH s petition for review in No. 11-71968 is DENIED. The district court s preliminary injunction in No. 11-18042 is AFFIRMED Judge: MMS Authoring. FILED AND ENTERED JUDGMENT. [8311789] [11-18042, 11-71676, 11-71968]

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JOSEPH F. FRANKL, Regional
Director of Region 20 of the
National Labor Relations Board,
for and on behalf of the National
Labor Relations Board,
Petitioner-Appellee,
v.
HTH CORPORATION, a single
employer, DBA Pacific Beach
Hotel; PACIFIC BEACH
CORPORATION, a single employer,
DBA Pacific Beach Hotel, KOA
MANAGEMENT, LLC, a single
employer, DBA Pacific Beach
Hotel,
Respondents-Appellants.





No. 11-18042
D.C. No.
1:11-cv-00451JMS-RLP



Appeal from the United States District Court
for the District of Hawaii
J. Michael Seabright, District Judge, Presiding

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FRANKL v. HTH CORPORATION

NATIONAL LABOR RELATIONS
BOARD,
Petitioner,
v.
HTH CORPORATION; PACIFIC BEACH
CORPORATION AND KOA
MANAGEMENT, LLC, a single
employer, dba Pacific Beach
Hotel; HTH CORPORATION, dba
Pacific Beach Hotel; KOA
MANAGEMENT, LLC, dba Pacific
Beach Hotel; PACIFIC BEACH
CORPORATION, dba Pacific Beach
Hotel,
Respondents.

HTH CORPORATION; PACIFIC BEACH
CORPORATION, dba Pacific Beach
Hotel; KOA MANAGEMENT, LLC,
dba Pacific Beach Hotel,
Petitioners,
NATIONAL
BOARD,

v.
LABOR RELATIONS
Respondent.





No. 11-71676
NLRB No.
37-CA-7311





No. 11-71968
NLRB No.
37-CA-7311
OPINION



On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted
June 14, 2012—Honolulu, Hawaii
Filed September 6, 2012

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10691

Before: Mary M. Schroeder, Consuelo M. Callahan, and
N. Randy Smith, Circuit Judges.
Opinion by Judge Schroeder

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FRANKL v. HTH CORPORATION

COUNSEL
Catherine J. Trafton, NLRB, Washington, DC, for petitionerappellee Joseph F. Frankl.
Barbara Sheehy, NLRB, Washington, DC, for petitionerrespondent National Labor Relations Board.
Wesley M. Fujimoto, Honolulu, Hawaii, for respondentspetitioners HTH Corporation, et al.

OPINION
SCHROEDER, Circuit Judge:
These two matters have been consolidated for a single
opinion because they both arise out of the same long-running
labor dispute. The employer is HTH Corporation, which operates the Pacific Beach Hotel (“the Hotel”) in Honolulu. The
Union is the International Longshore and Warehouse Union,
Local 142. In NLRB v. HTH Corp., we have cross-petitions
from the 2011 ruling of the National Labor Relations Board

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(“NLRB” or “the Board”) that between August 2005 and May
2008 HTH committed unfair labor practices in violation of the
National Labor Relations Act (“NLRA” or “the Act”), 49
Stat. 449 (1935) (codified at 29 U.S.C. § 151 et seq.). See
HTH Corp., 356 N.L.R.B. No. 182 (2011). In Frankl v. HTH
Corp., HTH appeals from a preliminary injunction that
required it to remedy certain actions taken in 2010. These
actions are the subject of unfair labor practice charges currently pending before the Board.
The background of the labor dispute is explained at length
in our prior opinion, Frankl v. HTH Corp. (Frankl I), 650
F.3d 1334 (9th Cir. 2011), cert. denied, 132 S. Ct. 1821
(2012). We there affirmed a preliminary injunction against
HTH pending final Board disposition of the 2005-2008 unfair
labor practice charges. The Board resolved those charges in
its 2011 ruling, which HTH now asks us to overturn. Notwithstanding the 2010 injunction, HTH repeated the very actions
that had been enjoined that year, prompting yet another round
of litigation before the Board. The district court granted a second preliminary injunction. HTH now appeals that injunction.
We affirm the injunction and grant the Board’s application for
enforcement of its 2011 ruling.
I.

Background

Because this is the second time that we have looked at this
labor dispute, we provide only a summary recitation of the
relevant factual background. A more complete discussion is
contained in Frankl I, 650 F.3d at 1341, 1356-58. See also
HTH Corp., Nos. 37-CA-7311, JD(SF)-35-09, 2009 WL
3147894 (NLRB Sept. 30, 2009).
The Union’s organizing drive began more than ten years
ago. The first NLRB election was held in July 2002. The
Board overturned the first election after finding that HTH had
coercively interrogated employees and engaged in other
objectionable conduct. HTH Corp., 342 N.L.R.B. 372 (2004).

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A second election was held in 2005. Again, the Board found
that HTH engaged in unlawful conduct that cast the result of
the election in doubt. The Board ruled that if the final vote
tally favored the Union the result would stand, but if it
favored HTH the election would be overturned. Pacific Beach
Corp., 344 N.L.R.B. 1160 (2005). The Union won by one
vote and was duly certified on August 15, 2005.
Initial bargaining began in January 2006. Although the parties met 37 times and reached tentative agreement on 170
issues, such apparent progress meant little, because HTH
insisted on three provisions that would have eliminated any
meaningful role for the Union. HTH demanded, first, a recognition clause that would have retained in HTH the “exclusive
right to unilaterally and arbitrarily” change all conditions of
employment. The second demand was for a provision that
would have retained in the Hotel’s management the “sole and
exclusive right to manage its workforce at will,” including all
aspects of hiring, firing, categorizing, and disciplining
employees. Finally, HTH insisted on a grievance procedure
that routed complaints to Hotel management for final determination. With such provisions, there would have been no effective collective bargaining or union representation.
Then, in December 2006, HTH itself ceased bargaining and
assigned management operations to Pacific Beach Hotel Management (“PBHM”), an ostensibly independent entity created
by HTH. PBHM took control of the day-to-day operations of
the Hotel beginning in January 2007, but HTH remained the
owner and continued to call the shots. HTH told the Union to
conduct all further negotiations with PBHM but did not disclose to the Union that HTH retained final approval authority
over any collective-bargaining agreement that would last
more than a year, unless HTH could terminate it on thirty
days’ notice, or would cost more than $350,000.
Toward the end of 2007, PBHM and the Union seemed
close to an agreement. PBHM asked HTH to disclose its

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approval authority to the Union and approve an agreement.
HTH responded by canceling PBHM’s management contract.
Bargaining then ceased on December 1, 2007.
HTH took back management of the Hotel and withdrew
recognition from the Union, claiming that the Union had lost
majority support among the Hotel’s employees. HTH then
unilaterally changed the employees’ terms and conditions of
employment by, among other things, increasing the number of
rooms housekeepers cleaned per day, requiring all employees
to reapply for their jobs, and refusing to rehire seven employees who had been members of the Union bargaining committee, effectively terminating them.
One of the employees HTH declined to rehire was union
organizer Rhandy Villanueva. Villanueva had worked in the
Hotel’s housekeeping department as a houseman for over
fourteen years prior to his termination. In 2005, the housekeeping staff had selected Villanueva to be one of its representatives on the Union’s negotiating committee. He served
continuously on that committee through December 2007, at
which time HTH ceased bargaining. Villanueva was not
rehired by HTH. Villanueva had no written disciplinary
records in his file, although other housemen who were rehired
did.
The Union responded to HTH’s actions by stepping up its
boycotts and demonstrations. The Union also employed Villanueva as a full-time organizer for the Hotel. Hotel management reacted by meeting with the employees in April and
May of 2008, warning them that the Union’s actions would
hurt business, and threatening the loss of jobs. Management
encouraged employees to document with the Hotel’s Human
Resources Department their dissatisfaction with the Union.
HTH’s actions prompted the Union to file a number of
unfair labor practice charges with the Board. These charges
included allegations that HTH had withdrawn recognition of

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the Union without just cause, unilaterally changed the terms
and conditions of employment, threatened and terminated
Hotel employees who were active with the Union, and failed
to release to the Union information necessary for collective
bargaining. The Union argued that these actions constituted
violations of Sections 8(a)(1), (3), and (5) of the Act, which
prohibit an employer from interfering with an employee’s
right to organize and require an employer to bargain in good
faith. See 29 U.S.C. § 158(a)(1), (3) and (5).
The Regional Director of the Board agreed and initiated
enforcement proceedings against HTH. The Regional Director
filed a complaint with the Board alleging that HTH violated
Sections 8(a)(1), (3) and (5) for the reasons complained of by
the Union. After conducting an extensive hearing, an administrative law judge (“ALJ”) found that HTH had violated the
Act as alleged by the Regional Director. HTH Corp., 2009
WL 3147894. HTH appealed the ALJ’s decision to the Board.
In the meantime, the Regional Director asked the District
Court for the District of Hawaii for a preliminary injunction
under Section 10(j) of the Act in order to prevent HTH from
accomplishing its unlawful objectives pending resolution of
proceedings before the Board. See 29 U.S.C. § 160(j). The
district court granted the injunction on March 29, 2010.
Norelli v. HTH Corp., 699 F. Supp. 2d 1176 (D. Haw. 2010).
Pursuant to the injunction, HTH was required to recognize the
Union, bargain in good faith, rescind all unilateral changes to
conditions of employment, rehire the wrongfully terminated
employees, and resume negotiations toward a collective bargaining agreement. Id. at 1206-07. We affirmed the injunction, Frankl I, 650 F.3d at 1366, and the Board adopted the
ALJ’s decision, HTH Corp., 356 N.L.R.B. No. 182.
Although HTH initially reinstated Villanueva, it fired him
only three months later for allegedly breaking unwritten, and
seemingly minor, Hotel rules. HTH first disciplined Villanueva for placing a case of toilet paper on the top shelf of a

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housekeeping closet, and then fired him for entering the
Hotel’s housekeeping office after-hours to obtain a can of
insecticide to spray a guest’s hotel room for cockroaches.
HTH also continued making unilateral changes to the terms
and conditions of employment; it increased the number of
rooms employees were required to clean each shift and
banned two Union representatives from the Hotel. HTH also
refused to disclose financial and other information the Union
had requested.
This led the Union to file charges of unfair labor practices
with the Board a second time. The Regional Director again
agreed with the Union and issued another series of labor complaints that were consolidated by an ALJ. The Regional
Director alleged in pertinent part that HTH violated Sections
8(a)(1) and (3) of the Act by disciplining Villanueva and then
terminating his employment. The Director further alleged that
HTH violated Sections 8(a)(1) and (5) by increasing the number of rooms housekeepers were required to clean, by prohibiting two union representatives from entering the Hotel’s
property, and by unreasonably refusing to furnish necessary
financial information to the Union.
The unfair labor practice charges proceeded before the
ALJ, who conducted a sixteen-day evidentiary hearing. On
September 13, 2011, the ALJ found that HTH had violated the
Act in 2010 as alleged by the Union and the Regional Director. HTH Corp., Nos. 37-CA-7965, JD(SF)-34-11, 2011 WL
4073681 (NLRB Sept. 13, 2011). The ALJ admonished HTH
for violating the Act. The ALJ ordered HTH once again to
bargain in good faith, to rescind its unilateral changes, to furnish the Union with the information it requested, to reinstate
Villanueva, and to post and read aloud to the Hotel’s employees a notice of the employees’ rights and the Hotel’s obligations under the Act. The ALJ’s order is currently on appeal to
the Board, and the order is materially similar to the 2009 ALJ
order the Board upheld in 2011 that we are now asked by the
Board to enforce.

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The Regional Director, with the Board’s authorization, then
sought a preliminary injunction in district court to enforce the
ALJ’s 2011 order. The district court held that the Regional
Director had established a likelihood of success on the merits
of the underlying unfair labor practice claims, a likelihood of
irreparable harm, and that the balance of hardships and the
public interest favored the issuance of an injunction. The district court thus granted the Regional Director’s petition and
issued the preliminary injunction that is now before us.
In summary, HTH asks us to review the Board’s 2011 ruling that it violated the Act, and the Board seeks to enforce
that ruling. HTH appeals the district court’s order entering the
second preliminary injunction. We address each ruling in turn.
II.

NLRB v. HTH Corporation: The Board’s 2011 ruling
on the 2005-2008 unfair labor practices.

In its 2011 ruling, the Board found that HTH violated its
statutory duty to bargain in good faith between 2005 and
2008, that it made unilateral changes to the terms and conditions of employment, and that it unlawfully interfered with its
employees’ right to collectively bargain. HTH Corp., 356
N.L.R.B. No. 182. The Board now seeks enforcement of its
order requiring HTH to prospectively bargain in good faith,
rescind its unilateral changes, and cease interfering with its
employees’ rights under the Act.
HTH challenges the Board’s decision on two grounds.
First, it contends that its bargaining position from August 15,
2005, up until the transfer of management to PBHM at the
end of 2006 was not in bad faith. Second, it claims that it
could not have violated the Act after late 2007 by withdrawing recognition of the Union because the Union by then had
lost majority support.
The Board found that HTH violated Sections 8(a)(1) and
(5) of the Act (prohibiting an employer from interfering with

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its employees’ collective bargaining rights and requiring an
employer to bargain in good faith) in the negotiations that
took place from the time of the Union’s initial certification in
2005 until the end of 2006 when it substituted PBHM in the
negotiations. The Board found that HTH’s insistence on three
provisions was unacceptable because each prevented any
good faith agreement with the Union. The provisions would
have given HTH unilateral power to determine all conditions
and terms of employment and resolve all employee complaints. The Board found that the Hotel bargained in bad faith
because these demands demonstrated that, although HTH
went through the motions of bargaining, it never intended to
reach an agreement.
[1] In its petition to review the Board’s ruling, HTH argues
that its demands reflected hard bargaining, not bad faith.
However, as we have already recognized during the course of
this dispute, under the NLRA an employer cannot insist on
provisions that “would exclude the labor organization from
any effective means of participation in important decisions
affecting the terms and conditions of employment of its members.” Frankl I, 650 F.3d at 1359 (quoting United Contractors, Inc., 244 N.L.R.B. 72, 73 (1979)) (internal quotation
marks omitted). These demands excluded the Union from any
meaningful representational role. Indeed, the record shows
that HTH adopted a calculated bargaining posture that
ensured all bargaining would be futile. The Board has long
recognized that such a bargaining posture conflicts with the
employer’s statutory obligation to bargain in good faith. See
Liquor Indus. Bargaining Grp. & Fedway Assocs., 333
N.L.R.B. 1219, 1220-21 (2001) (finding employer’s demand
for control over wages constituted bad faith bargaining
because it “eliminated entirely the Union’s role” and showed
the employer had “no real intent to reach a collectivebargaining agreement”); Radisson Plaza Minneapolis, 307
N.L.R.B. 94, 95 (1992) (finding that a provision giving an
employer the right to change policies at any time constituted
bad faith bargaining); Hydrotherm, Inc., 302 N.L.R.B. 990,

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994-95 (1991) (concluding that a proposal requiring the union
to sacrifice its statutory rights without offering anything significant in return indicates bad faith).
[2] Therefore, substantial evidence supports the Board’s
finding that HTH adhered to unreasonable positions on key
issues during the negotiations. HTH cites no evidence to the
contrary. The Board’s finding must be upheld. 29 U.S.C.
§ 160(e); Retlaw Broad. Co. v. NLRB, 53 F.3d 1002, 1005-06
(9th Cir. 1995) (upholding the NLRB’s findings if supported
by substantial evidence).
The Board also concluded that HTH violated Sections
8(a)(1), (3) and (5) of the Act when, beginning in October
2007, HTH unilaterally promulgated employment policies
that unlawfully discouraged employees from engaging in protected activity. The Board found such actions included withdrawing recognition of the Union, discharging seven
employees because they were union activists, threatening
employees with the loss of their jobs if the Hotel had to close
because of boycotts, unlawfully polling employees concerning their union sympathies, and unilaterally closing a Hotel
restaurant.
HTH maintains it did not commit these unfair labor practices because it believed by October 2007, the Union lacked
majority support. Because the Union was illegitimate at that
point, HTH argues, it was no longer required to recognize and
bargain with the Union. HTH offers no objective evidence
that the Union had lost majority support at that time.
[3] An employer cannot refuse to recognize a union as the
elected representative of its employees on the basis of a subjective belief the union has lost support. The last time HTH
was before this court, we expressly held that an employer may
withdraw recognition from a union only when it has “objective evidence.” Frankl I, 650 F.3d at 1360 (citing Levitz Furniture Co. of the Pac., Inc., 333 N.L.R.B. 717, 723-25

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(2001)). “Objective evidence” consists of a showing that the
union has “in fact” lost the support of a majority of employees. Levitz, 333 N.L.R.B. at 725. An example of such objective evidence would be an uncoerced petition signed by a
majority of the employees in the bargaining unit. See id.
[4] HTH did not show any objective basis for believing
there was a lack of majority support for the Union. HTH has
offered only testimony from a handful of employees concerning the reaction of other employees to the Union boycott. This
amounts to no more than evidence of the employees’ subjective assessment of the situation and is therefore insufficient.
See id. at 727-28 (noting that the Board will “not consider
employees’ unverified statements regarding other employees’
antiunion sentiments to be reliable evidence of opposition to
the union” for purposes of unilateral withdrawal of recognition). Because HTH failed to show a loss of majority support
following the Union elections, the Board’s finding that HTH
repeatedly violated the Act beginning in late 2007 was amply
supported by the evidence. See id. at 725 (holding that even
an employer with objective evidence “withdraws recognition
at its peril”).
[5] The Board further found that, in December 2007, HTH
terminated seven employees, including Villanueva, because
they were union activists. The Board’s finding of anti-union
motivation is supported by the record. It shows that HTH
chose to retain employees in similar positions who had worse
employment records than Villanueva. For example, another
houseman, who was not active in the Union, was rehired even
though he had been disciplined five times in a seven-month
period. The record also supports the finding that Villanueva
was a key participant in Union organizing and bargaining.
Thus, we must uphold the Board’s conclusion that Villanueva’s termination was motivated by anti-union animus. See
Clear Pine Mouldings, Inc. v. NLRB, 632 F.2d 721, 726 (9th
Cir. 1980) (“[T]he determination of motive is particularly
within the purview of the Board.”).

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To remedy these unfair labor practices, the Board extended
the certification period for one full year, ordered HTH to pay
costs and expenses incurred by the Union in the preparation
and conduct of collective bargaining negotiation sessions, and
issued a broad cease and desist order forbidding HTH from
violating the Act in any manner.
[6] We must enforce these measures unless they are unreasonable. See NLRB v. Dist. Council of Iron Workers of the
State of Cal., 124 F.3d 1094, 1098 (9th Cir. 1997). Here, the
Board’s extension of the certification period by one full year
was a reasonable application of the Act. HTH argues that the
numerous meetings and tentative agreements reached with the
Union early on show that some part of the original year-long
certification period was not wasted. However, we need not
sort through the original certification period to determine how
many days of bargaining were productive and how many were
stymied by HTH’s bad faith. NLRB v. Nat’l Med. Hosp. of
Compton, 907 F.2d 905, 910-11 (9th Cir. 1990) (“[T]he
extension time need not be the product of ‘simple arithmetic
calculation.’ ”). The record shows that HTH’s continued defiance of the labor laws is the reason the parties, after years of
delay, still have not struck a collective-bargaining agreement.
See H.K. Porter Co. v. NLRB, 397 U.S. 99, 100 (1970) (“This
delay . . . is not because the case is exceedingly complex, but
. . . because of the skill of the [employer] in taking advantage
of every opportunity for delay.”); cf. Am. Med. Resp., 346
N.L.R.B. 1004 (2006). We thus enforce the Board’s decision
to extend the certification period.
[7] The Board’s imposition of costs and expenses was also
a reasonable application of the Act. The Board followed its
standard for awarding expenses set out in Frontier Hotel &
Casino, 318 N.L.R.B. 857, 859 (1995), enfd. in relevant part
sub nom., Unbelievable, Inc. v. NLRB, 118 F.3d 795 (D.C.
Cir. 1997). Reimbursement is proper in cases of unusually
aggravated misconduct, like the case at hand, “where it may
fairly be said that [an employer’s] substantial unfair labor

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practices have infected the core of the bargaining process to
such an extent that their effects cannot be eliminated by the
application of traditional remedies.” See Unbelievable, Inc.,
118 F.3d at 798 (internal quotation marks omitted). Here, the
Union wasted resources over a period of years during which
HTH had no intention of reaching an agreement. HTH is not
entitled to benefit financially from the consequences of the
delay created by its unlawful bargaining tactics. See Frontier,
318 N.L.R.B. at 858 (“[L]imiting the remedy to the conventional bargaining order would effectively permit the Respondent to benefit from its violations of the Act by ensuring
bargaining with Unions that have been economically weakened by the Respondent’s misconduct.”).
[8] To help prevent future violations the Board also issued
a broad cease and desist order. This too was a reasonable
application of the Act. Such an order is appropriate “when a
respondent is shown to have a proclivity to violate the Act, or
has engaged in such egregious or widespread misconduct as
to demonstrate a general disregard for the employees’ fundamental statutory rights.” NLRB v. Blake Constr. Co., Inc., 663
F.2d 272, 285 (D.C. Cir. 1981) (quoting Hickmott Foods, Inc.,
242 N.L.R.B. 1357, 1357 (1979)). This standard has been met
and exceeded here.
[9] We therefore conclude that substantial evidence supports the Board’s 2011 ruling and grant the Board’s petition
for enforcement of its decision regarding HTH’s conduct during 2005-2008. We turn now to the 2011 preliminary injunction relating to HTH’s conduct in 2010, the second injunction
issued by the district court in this labor saga.
III.

Frankl v. HTH Corporation: HTH’s appeal from the
second preliminary injunction.

HTH contends that the district court abused its discretion in
granting a preliminary injunction with respect to three of the
Regional Director’s unfair labor practice claims. See Small v.

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Avanti Health Sys., LLC, 661 F.3d 1180, 1186 (9th Cir. 2011)
(abuse of discretion standard). HTH specifically challenges
the district court’s orders that it reinstate Rhandy Villanueva
a second time, rescind unilateral restrictions imposed on
Union representatives’ access to Hotel premises, and provide
to the Union financial information that is necessary to continue the parties’ bargaining efforts.
A district court may grant a Regional Director’s request for
a preliminary injunction under Section 10(j) of the NLRA so
long as the Director establishes that he is likely to succeed on
the merits of the underlying unfair labor practice claims, that
irreparable harm is likely in the absence of preliminary relief,
that the balance of hardships tips in his favor, and that an
injunction is in the public interest. Frankl I, 650 F.3d at 1355
(quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20
(2008)). The district court did not abuse its discretion in holding that the Regional Director met those requirements in this
case. We thus affirm the preliminary injunction.
A.

Likelihood of success on the merits.

To show a likelihood of success on the merits 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.” Id. The Regional Director has carried his burden if
he can “produc[e] some evidence to support the unfair labor
practice charge, together with an arguable legal theory.” Id. at
1356 (internal quotation marks omitted); see also Small, 661
F.3d at 1187. In cases like this, moreover, we owe the
Regional Director special deference because the Board took
the rare step of endorsing the Director’s Section 10(j) petition.
Small, 661 F.3d at 1187. We have observed that this may
“signal [the Board’s] future decision on the merits, assuming
the facts alleged in the petition withstand examination at
trial.” Id. (internal quotation marks omitted).

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In this appeal, HTH argues that the district court erred in
finding that it likely violated Sections 8(a)(1), (3) and (5) by
disciplining and then terminating Villanueva, banning two
union representatives from Hotel property, and withholding
certain financial information.
1.

The discipline and termination of Villanueva.

HTH terminated Villanueva again in 2010, and the district
court once again held Villanueva’s employment was likely
terminated on account of his union activity and ordered HTH
to reinstate him a second time.
[10] Sections 8(a)(1) and (3) of the Act prohibit employers
from interfering with or discouraging an employee’s right to
join a labor union and bargain collectively. 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.
Healthcare Emps. Union, Local 399 v. NLRB, 463 F.3d 909,
919 (9th Cir. 2006). This can be established by showing that
the employee was engaged in protected activity, the employer
knew of such activity, and the employer harbored anti-union
animus. Intermet Stevensville, 350 N.L.R.B. 1270, 1274
(2007). Once these are shown, the burden shifts to the
employer to demonstrate that it would have taken the same
action regardless of the employee’s union activity. Id.; see
also Healthcare Emps. Union, 463 F.3d at 919.
Here, the district court held that the Regional Director was
likely to succeed in showing that HTH violated Sections
8(a)(1) and (3) when it disciplined and then terminated Villanueva in 2010. HTH does not argue that the Regional Director
failed to show that it knew of Villanueva’s union involvement
and that it harbored anti-union animus. Indeed, it would be
difficult to do so given the decisions of the agency and courts
finding that HTH wrongfully fired Villanueva once before
because of his union activities. HTH argues on appeal only

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that it has shown that it would have disciplined and terminated Villanueva regardless of his union activity.
[11] Specifically, HTH argues that it properly disciplined
Villanueva and then terminated his employment because he
failed to follow unwritten Hotel rules, lied to gain access to
the Hotel’s housekeeping office, and stole a can of insecticide. The record created before the ALJ and relied upon by
the district court, however, tells a different story, one that supports the Regional Director’s position that HTH disciplined
and terminated Villanueva in violation of the Act. The
Regional Director need only “produc[e] some evidence to
support the unfair labor practice charge, together with an
arguable legal theory.” Frankl I, 650 F.3d at 1356 (internal
quotation marks omitted). Here, the record shows that the
Hotel had no established rules for stocking housekeeping
closets, accessing the housekeeping office after hours, or
using bug spray. Even if the Hotel had established rules, there
is no evidence that Villanueva knowingly violated such rules.
The ALJ also found Villanueva to be a credible witness and
dismissed as unfounded HTH’s assertions that Villanueva was
a dishonest and deceitful employee. An ALJ’s credibility
determinations will be upheld “unless they are inherently
incredible or patently unreasonable.” See New Breed Leasing
Corp. v. NLRB, 111 F.3d 1460, 1465 (9th Cir. 1997) (internal
quotation marks omitted). On appeal, HTH presents us with
nothing that would suggest the ALJ’s credibility determination was unreasonable.
The ALJ’s findings were emphatic that the Hotel “made up
its rules in ad hoc fashion” to “rid itself yet again of a union
supporter.” Although not binding on this court, this determination by the ALJ serves as a useful benchmark for gauging
the Regional Director’s likelihood of success on the merits.
See Small, 661 F.3d at 1186. Indeed, the district court agreed
with the ALJ’s finding, ruling that HTH was “looking for reasons to discipline Villanueva and contoured the Hotel rules to

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suit their needs,” thereby evincing an “animus towards Villanueva.” Given HTH’s history of animus against Villanueva’s
union activity and the lack of clear rules, we see no reason to
disturb the district court’s determination.
[12] HTH points to some conflicting evidence in the record
to support its position, but this alone is insufficient to warrant
a reversal. Conflicting evidence in the record “does not preclude the Regional Director from making the requisite showing for a section 10(j) injunction.” Scott ex rel. NLRB v.
Stephen Dunn & Assocs., 241 F.3d 652, 662 (9th Cir. 2001),
abrogated on other grounds as recognized by Frankl I, 650
F.3d at 1355. Here, at the very least, there is sufficient evidence to support the Regional Director’s unfair labor practice
charges together with an arguable legal theory. See Frankl I,
650 F.3d at 1356. We thus hold that the district court acted
well within its discretion in concluding that the Regional
Director demonstrated a likelihood of success on the merits of
these unfair labor practice claims involving Villanueva.
2.

Unilateral changes to Union representatives’
access to Hotel property.

[13] The district court ordered HTH to allow Union representatives Dave Mori and Carmelita Labtingao access to the
Hotel because HTH had unilaterally changed the terms and
conditions of employment so as to establish a likely violation
of Section 8(a)(5) of the Act. This section makes it unlawful
for “an employer . . . to refuse to bargain collectively with the
representatives of his employees.” 29 U.S.C. § 158(a)(5).
Where an employer has a past practice of providing union
representatives access to its facilities, that past practice
becomes a term and condition of employment that cannot be
changed without first notifying and bargaining with the union
to agreement or good faith impasse. Ernst Home Ctrs., Inc.,
308 N.L.R.B. 848, 865 (1992); Granite City Steel Co., 167
N.L.R.B. 310, 315-16 (1967).

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HTH does not dispute that since 2006 it had a practice of
allowing Union representatives access to Hotel facilities provided they requested permission and, once on Hotel property,
they refrained from entering unauthorized areas or disrupting
Hotel operations. In this case, Union representative Mori
requested permission to have lunch at the Hotel’s Oceanarium
Restaurant with fellow Union organizer Labtingao. HTH
granted Mori’s request, but, shortly following their visit, HTH
forbade them both from thereafter entering Hotel property and
publicly posted notices to the employees announcing the banishment.
HTH contended before the district court that Mori and Labtingao disrupted Hotel operations during their luncheon and
therefore the banishment was consistent with the access policy. The Regional Director’s position was that HTH fabricated the alleged disruption to justify its unilateral change of
the access agreement.
[14] The evidence before the ALJ, upon which both parties
relied, was conflicting as to whether there had been a disruption. As noted by the district court, the ALJ credited the
Regional Director’s version of the incident. HTH does not
dispute the ALJ’s credibility determination. See New Breed
Leasing, 111 F.3d at 1465 (holding that an ALJ’s credibility
determinations will be upheld by the court “unless they are
‘inherently incredible or patently unreasonable’ ”). HTH cites
to conflicting evidence in the record, but that is insufficient to
overturn the injunction. See Scott, 241 F.3d at 662. Given this
record, we conclude that the district court did not abuse its
discretion in holding the Regional Director had showed a likelihood of success in establishing an unfair labor practice.
3.

The refusal to release necessary financial
information.

[15] The district court ordered HTH to give certain financial information to the Union. As part of its duty to bargain

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in good faith, an employer must provide the union with information that is relevant and necessary to bargaining. H&R
Indus. Servs., Inc., 351 N.L.R.B. 1222, 1223 (2007) (citing
NLRB v. Acme Indus. Co., 385 U.S. 432, 435-36 (1967)). For
instance, when an employer justifies its bargaining position
during negotiations on an inability to pay, this entitles the
union to request financial documents sufficient to substantiate
the employer’s position. NLRB v. Truitt Mfg. Co., 351 U.S.
149, 152-53 (1956). An employer may limit its disclosure by
demonstrating “a ‘legitimate and substantial’ concern for
employee confidentiality interests which might be compromised by disclosure.” Ormet Aluminum Mill Prods. Corp.,
335 N.L.R.B. 788, 801 (2001) (quoting Detroit Edison v.
NLRB, 440 U.S. 301, 315, 318-20 (1979)). Whether an
employer has failed to bargain in good faith by refusing to
provide certain financial documents turns upon the particular
facts of a case. Truitt Mfg. Co., 351 U.S. at 153.
Here, HTH claimed that an inability to pay justified unilateral changes to the terms and conditions of employment. The
Union, in accordance with Truitt, as well as with the district
court’s first preliminary injunction, requested that HTH
release specific financial documents to justify the change in
policy. In response, HTH required the Union’s accountant to
sign a confidentiality agreement and then provided only a
one-page, uncertified Statement of Income and Loss for 2008
and another for 2009—far less information than the Union
had requested. The Union’s accountant repeatedly informed
HTH, and later the ALJ, that the information HTH had
released was insufficient for him to render any opinion on
HTH’s financial status.
HTH contends that under Albany Garage, Inc., 126
N.L.R.B. 417 (1960), the information it provided was sufficient for it to discharge its duty. Albany Garage, however, is
a very different case. In Albany Garage, the employer voluntarily substantiated its claim of inability to pay by providing
the union with a financial statement that included a compara-

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tive sales and profit report. Id. at 418. The union responded
by asserting a general need for additional, but unspecified,
financial information. Id. at 432. The employer refused the
union’s request. Id. The Board ruled that the employer did not
violate the Act because the employer had a history of bargaining in good faith, the accuracy of the financial information
provided was not questioned, the union did not articulate why
it needed additional information, and the employer had provided the same type of financial information to the union as
well as to the employer’s bank, mortgagee, and tax authorities
in the past. Id. at 418-19, 432-33.
Here, unlike Albany Garage, HTH has had a long history
of negotiating in bad faith with the Union, and the accuracy
of the financial documents HTH has provided is at issue. In
addition, the Union has articulated why it needs additional
financial information. The Union’s accountant testified before
the ALJ that because the statements were not certified, he had
no confidence in their accuracy and no way to verify the numbers. The district court correctly noted that the Board considers uncertified financial statements insufficient to meet the
employer’s burden. See R.E.C. Corp., 307 N.L.R.B. 330, 333
(1992); Am. Model & Pattern, 277 N.L.R.B. 176, 184 (1985);
Tony’s Meats, Inc., 211 N.L.R.B. 625, 626-27 (1974). HTH
ignores this precedent, instead arguing that the information
provided was sufficient because it gave the same type of
information to the Board and to the Union in other cases.
HTH fails to discuss what exactly was required in those other
cases or why they are probative here. As the district court also
correctly noted, HTH’s “naked assertion[s]” are insufficient
for it to carry its burden.
[16] HTH further implies that it limited disclosure due to
confidentiality concerns, but, because it did not raise this
argument below, it is waived. See Lambert v. Ackerley, 180
F.3d 997, 1011 (9th Cir. 1999) (waiver rule). Even if we were
to consider this argument, HTH’s confidentiality concerns
were adequately addressed because the Union’s accountant

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signed a confidentiality agreement with HTH. See Gas Spring
Co., 296 N.L.R.B. 84, 99 (1989). We therefore conclude that
the district court did not abuse its discretion by holding that
the Regional Director showed a likelihood of success of
establishing HTH committed an unfair labor practice by not
disclosing the requested financial documents.
B.

The remaining requisites for the injunction:
Irreparable harm, balance of hardships, and public
interest.

[17] Our conclusion on the remaining required factors for
an injunction mirrors our holding in Frankl I, where we
upheld the first injunction against HTH in response to its substantially identical alleged violations of the Act. 650 F.3d at
1362-66. No less than in Frankl I, the various unfair labor
practices at issue in this appeal, if allowed to continue, will
cause irreparable harm to the Union and HTH’s employees.
HTH’s unwarranted discipline and termination of Villanueva
are likely to cause irreparable harm because the discipline and
“discharge of active and open union supporters” sends a message that the employer will take action against union supporters, which adversely impacts employee interest in and support
of unionization. Id. at 1363 (quoting Pye v. Excel Case Ready,
238 F.3d 69, 74 (1st Cir. 2001)) (internal quotation marks
omitted). HTH’s public banning of Union representatives and
its refusal to provide necessary financial information similarly
show a failure to bargain in good faith, which “has long been
understood as likely causing an irreparable injury to union
representation.” Id. at 1362. The district court thus did not
abuse its discretion by finding a likelihood of irreparable
harm stemming from these actions.
[18] We held in Frankl I that, because the Regional Director showed irreparable harm flowing from identical violations
by HTH, the balance of the hardships favored an injunction.
Id. at 1365. Allowing unlawful labor practices to continue
damages the Board’s very ability to enforce the statute. See

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id.; see also Small, 661 F.3d at 1196 (noting that the court
must consider whether failing to issue the injunction will
enable the employer to succeed in resisting the union organizing effort). HTH’s claims to hardship are all premised on its
version of the events—that it will be forced to rehire a dishonest employee, grant access to disruptive Union representatives, and disclose confidential financial information. Both the
district court and the ALJ soundly rejected HTH’s position,
and, given HTH’s ongoing engagement in unfair labor practices, we have no reason to disagree with their conclusion. In
fact, we agree that HTH will face little hardship by being
required to do simply what the law demands. We therefore
hold that it was not an abuse of discretion for the district court
to find that the balance of hardships weighed in favor of
granting an injunction.
We have repeatedly held the public interest is served by
ensuring that an unfair labor practice will not continue while
the Board takes time to investigate and adjudicate the charge.
Small, 661 F.3d at 1197 (citing Frankl I, 650 F.3d at 1365).
HTH’s only argument that the public interest is not served by
this injunction is that the Board will, eventually, likely grant
the same relief. We rejected this exact argument made by
HTH in Frankl I, holding that in most labor cases “a § 10(j)
remedy will be identical, or at least very similar, to the
Board’s final order.” Frankl I, 650 F.3d at 1366 (emphasis in
original); see also Small, 661 F.3d at 1198 (reaffirming this
conclusion). This is, as Yogi Berra said, “deja vu all over
again.” If HTH can countermand orders of the agency and of
the district court, as it has done here, and succeed in its
unlawful labor practices by exploiting administrative delays,
then relief pursuant to Section 10(j) and the employees’ statutory rights under the NLRA become meaningless. See Small,
661 F.3d at 1197-98. The district court, therefore, properly
found that enforcement of the ALJ’s order serves the public
interest.

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IV.

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Conclusion

Our rulings likely come as no surprise to the parties. Two
themes repeat themselves in the decade-long history of this
dispute. The first is HTH’s defiance of the Labor Act and its
employees’ statutory rights. The second is HTH’s consistent
losses before the agency and the courts. A skeptical adjudicator might question whether HTH has ever taken seriously its
obligations under the law. We hope that we do not need to
consider that question again.
The Board’s petition for enforcement in No. 11-71676 is
GRANTED in whole and HTH’s petition for review in No.
11-71968 is DENIED. The district court’s preliminary injunction in No. 11-18042 is AFFIRMED.