Kreisberg v. Healthbridge Management, LLC et al

Filing 55

Memorandum Opinion re 52 Corrected ORDER granting Petition For Injunction Under Section 10(j). Signed by Judge Robert N. Chatigny on 12/14/2012. (Gillenwater, J)

UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
JONATHAN B. KREISBERG,
Petitioner,
V.

:
:
:

Case No. 3:12-CV-1299(RNC)

HEALTHBRIDGE MANAGEMENT, LLC, :
et al.,
:
Respondents.

:
MEMORANDUM OPINION

Petitioner Jonathan B. Kreisberg, Regional Director of
Region 34 of the National Labor Relations Board, brings this
petition on the Board's behalf seeking a temporary
injunction pursuant to section 10(j) of the National Labor
Relations Act, 29 U.S.C. § 160(j), pending the final
disposition of unfair labor practice charges contained in a
complaint that is the subject of ongoing proceedings before
Administrative Law Judge Kenneth Chu.

Both the petition and

the underlying complaint allege that HealthBridge
Management, LLC, together with health care centers it
operates in Connecticut ("Respondents"), have violated and
are currently in violation of sections 8(a)(1)(3) and (5) of
the Act, 29 U.S.C. §§ 158(a)(1)(3) and (5).

On December 11,

2012, the Court granted the petition for injunctive relief
1

in an oral ruling and subsequent written order (Doc. 47).
This memorandum opinion elaborates on the reasoning
underlying the ruling and order.
I.

Background
In 2003, Healthbridge became manager of six health care

centers in Connecticut,1 and assumed the prior management's
contracts with the New England Health Care Employees Union,
District 1199, SEIU ("the Union"), which represents
approximately 700 workers at Respondents' facilities.
Pursuant to a reopener in the predecessor contracts,
Respondents attempted to negotiate new contracts with the
Union in 2004.

The centers all went into bankruptcy in

2005, however, and were unable to make payments into the
Union's funds.
ensued.

Litigation and unfair labor practice charges

The parties ultimately reached a settlement, the

terms of which included a collective bargaining agreement
("CBA") between the Union and each center effective from
December 31, 2004 to March 16, 2011.

1

Five of these centers are Respondents here: Danbury
Health Care Center; Long Ridge of Stamford; Newington
Health Care Center; Westport Health Care Center; and
West River Health Care Center. On June 11, 2012,
Respondents closed a sixth facility, Wethersfield Health
Care Center.
2

Respondents and the Union operated under these
contracts without incident relevant to this litigation until
2010.

In that year (the year before the collective

bargaining agreements were set to expire), Respondents
instituted several unilateral changes to the terms and
conditions of employment of Union employees at various
centers.

Among other changes, Respondents subcontracted out

their unionized housekeeping and laundry employees only to
rehire them at reduced wages and benefits without first
bargaining with the Union; laid off employees without
providing the Union with the notice required under the CBA;
implemented new eligibility standards for employees
regarding holiday pay, personal days, vacation days, sick
days, and uniform allowance; and discontinued their practice
of including lunch breaks in calculating overtime.

Union

representatives filed multiple grievances with Respondents
alleging that these changes violated the CBA, but the
grievances were rejected.

The Union filed charges with the

Board alleging that Respondents had violated sections
8(a)(1)(3) and (5) of the Act, and Petitioner issued a
complaint on March 21, 2011 ("Complaint I").2
2

The unilateral changes were subsequently found to
violate sections 8(a)(1)(3) and (5) of the Act. See
3

It was in this context that Respondents and the Union
began negotiating a successor CBA on January 25, 2011.

At

the first bargaining session, Respondents' lead negotiator,
Jonathan Kaplan, proposed changes to 38 of the 39 articles
of the predecessor contracts, many of which sought to codify
the unilateral changes underlying Complaint I.

These

proposed changes included: a substantial expansion of
Respondents' management rights; increased flexibility for
Respondents' to lay off employees; reductions in minimum
wages; elimination of paid lunches; a change in benefit
calculations from benefits based on hours actually worked to
benefits based on "control hours," which were to be
determined weekly by the centers; a doubling from 20 to 40
of the number of hours an employee must work per week to be
eligible for benefits; reduced overtime eligibility; a
reduction in paid holidays, vacations, and personal days;
reduced health benefits; increased employee contributions to
the employee health insurance plan; and replacement of the
employees' pension plan with a 401(k) plan.

See Affidavit

of Suzanne Clark (Doc. 13, Aff. 1 at 2-10); Union's Initial

Healthbridge Mgmt., LLC, et al., S. 34-CA-12715, 2012 WL
3144346 (N.L.R.B. Div. of Judges Aug. 1, 2012).
4

Proposals (Doc. 13, Ex. 1).3
The Union's lead negotiator, David Pickus, called
Respondents' proposed changes "draconian," a "whole rewrite
of the contract," and stated that "because [Respondents]
would not provide reasons for making these changes . . .
there was nothing the Union could say to respond."
Aff. at 9-11.

Clark

Also at this session, and at several

subsequent meetings, the Union proposed that Respondents
remedy the unilateral changes underlying Complaint I, but
these changes remained in effect throughout the
negotiations.
Including this initial meeting, the parties held
thirty-eight contentious negotiating sessions over the next
year and a half.

Petitioner alleges that Respondents

bargained in bad faith, largely sticking to their proposals
without any economic explanation or justification to the
Union.

Respondents claim that the Union engaged in bad

faith negotiating tactics, pointing out that the Union
refused to move on key issues despite receiving more than
3

According to Petitioner, "Respondents' . . . proposal
on healthcare alone would amount to $5,700 a year in health
costs for employees making on average . . . $31,000 a year .
. . roughly one fourth or more of his or her take-home pay
[after taxes]." Pet. Mem. In Support of Pet. For Temporary
Inj. (Doc. 14) at 11.
5

100 proposals and counter proposals, refused to meet more
than two or three days per month and then only in the late
afternoon or evening, and persisted in bringing large
numbers of boisterous employees to the bargaining sessions.
Resp't Mem. In Opp'n (Doc. 14) at 2.
On October 27, 2011, Respondents presented a "Final
Offer," which consisted of many of the initial proposals
made on January 25, including replacing the Union pension
plan with a 401(k).

Respondents threatened the Union with a

lockout if the Final Offer was not accepted.

When the Union

refused Respondents' proposal, Respondents locked out
employees at West River Health Care Center in Milford,
Connecticut on December 13, making it clear that the Union
could end the lockout immediately by accepting the Final
Offer.
On December 21, 2011, the parties met for their twentyfourth bargaining session.

The Union proposed that all open

issues be submitted to binding arbitration.

Respondents

countered that they would end the lockout, give a three
percent wage increase to all employees, and arbitrate all
other open issues as long as the Union agreed to replace the
pension plan with a 401(k).

The Union refused.

6

On December

22, the Union proposed that the employees would agree to
contribute small amounts to their health insurance provided
Respondents agreed to arbitrate all other issues, including
the pension.

Respondents countered with some additional

economic concessions on December 28, but made no movement on
the pension issue.

Negotiations then broke off for a period

of two months.
On February 29, 2012, Petitioner issued a complaint
alleging that Respondents were engaging in bad faith
bargaining and that the Milford lockout was unlawful.

This

complaint has since been merged into the complaint currently
pending before ALJ Chu ("Complaint II").
the Milford lockout On April 4.4

Respondents ended

On April 24, Respondents

made their "Last, Best, and Final proposals" ("LBFs"), which
included significant economic and noneconomic concessions5
4

Respondents claim that they agreed to end the lockout
because the Union agreed to meet for eight more bargaining
sessions. Resp't Opp'n Br. (Doc. 18) at 9. Petitioner
contends that Respondents ended the lockout only after
learning that Petitioner had submitted the complaint over
the lockout to the Board's General Counsel proposing a
section 10(j) petition. Pet'r Mem. In Supp. 10(j) Pet.
(Doc. 14) at 8.
5

According to Respondents, these economic concessions
included immediate 6 percent wage increases, a total of 8
percent in additional wage increases over the next five
years, and a 25 percent match on all employee contributions
to a 401(k) plan.
7

but left the 401(k) in place, as well as the "control hour"
benefits standard,6 reduced holidays and sick leave, and
increased employee contributions to health care.

The Union

also made concessions at this meeting, including agreeing to
drop the penalty clause from its dues check-off proposal.
According to the Union's bargaining notes, on May 1,
Kaplan asked Pickus and Union attorney John Creane if there
were "no circumstance under which the union would agree to a
401k."

The following dialogue ensued:

Pickus: I think our proposal to you is that we'd like
to look at ways to save money and if we can find a way
to save 4% [of gross payroll].
Creane: Let me ask this- it appears to the union that
you're saying unless you're willing to agree to getting
rid of the pension fund that the Employer is not
willing to make changes to the other non-economics.
Your stance seems part in parcel to you trying to reach
the economic conditions of your non-union facilities.
Kaplan: I understand its important to you, I'm just
trying to see if you would be willing to settle a
contract without the pension in it.
Creane: Realistically, given your proposals, it's hard
to imagine- our responses are more reflective of your
overall proposals to the union than of the importance
or willingness to look at the pension. . . .
Kaplan: We do not see any circumstance under which we
can, we're not willing to sign a contract that has the
current pension plan and evidently as far as we've seen
up until now, you have not been willing to sign a

6

"By the Union's estimates, 110 employees will be
reclassified from full-time to part-time as a result of the
"control-hours" definition, affecting . . . eligibility for
benefits." Pet. Mem. In Supp. 10(j) Pet. (Doc 14) at 12.
8

contract that doesn’t have the pension.
Creane: Yes, evidently.
Pickus: The problem is you have so may things you're
trying to take away right now - if you give the workers
enough money they might be willing to give up the
pension. . . . You said in your letter that the pension
was the major issue at stake, the main roadblock- I
would say you're not being truthful, that the issues
are a lot more than that. . . . So to say that you have
tried to reach an agreement and that the pension is the
only area of disagreement is just not true.
Kaplan: I didn't say it was the only area, there are
other points of contention.
Pickus: A lot more than that- your proposal is whole
sale rape. Call it what you want to call it. You want
to give the workers a few million dollars we can get
off the pension.
Creane: For clarification on your statement- is there
no circumstances under which your client is willing to
sign a contract with a defined benefit pension planare you talking about current employees or future
hires?
Kaplan: Any obligation to a pension fund. Not willing
to look at it.
Creane: So even if only for current and not future
employees - still not acceptable?
Kaplan: No.
Creane: Apart from money is there any other factor?
Kaplan: Monetary
Creane: If we found equivalent in other area, though,
you say that you're still not willing to do that?
Kaplan: the problem with these types of pensions id
that they're open holes in the future. Everywhere
everyone all over the country trying to get out of
them.
Bargaining Notes of Suzanne Clark ("Clark Notes") (Doc. 3714) at 362-63.
At the May 15 bargaining session, Kaplan again asked
the Union negotiators if the Union had changed its position
on the pension issue.

Pickus responded:
9

[N]o, as I said we're not willing to negotiate with
ourselves. Your proposal has so many givebacks and so
many illegal proposals . . . I don't see that what
you're saying is helpful. When you change that stance
we have movement to make, but so far we haven't seen
any movement from you. . . .We're not willing to talk
about the pension in a vacuum.
Id. at 366.

In a May 18 letter to Pickus, Respondents

stated that they believed their proposals were "completely
lawful" and the Union was "fully capable of accepting them,"
as evidenced by the fact that the Union "ha[d] agreed to
contracts with other nursing center providers that contain
the same or similar economic terms as those in the [LBFs]."
Pet'r Ex. (Doc. 13) (P-11).

Respondents informed Pickus

that "If [the Union] maintains its current position and
continues to refuse to make any further proposals, then it
appears that [Respondents] and [the Union] have reached an
impasse in their negotiations."

Id.

In its May 18 response

letter, the Union labeled Respondents' suggestion that
impasse had been reached as a "self-serving and disingenuous
characterization."

As evidence of the Union's willingness

to compromise on the pension issue, the letter pointed to
the hypothetical two-tier pension approach that Creane had
proposed at the May 1 meeting, "with current Union employees
remaining in the defined benefit Pension Plan, and new hires

10

going into a 401 K Plan."

Pet'r Ex. (Doc. 13) (P-12).

At the penultimate bargaining session on May 22, Kaplan
again asked if the Union was considering accepting
Respondents' 401(k) proposal.

Pickus answered "we told you

before[,] depending on the overall proposal we would
consider anything. . . . We need to understand your
bargaining position."

Clark Notes at 368.

On June 16,

Respondents sent a letter to the Union officially declaring
impasse and announcing that Respondents would be
implementing their LBFs.

Upon Respondents' implementation

of these LBF proposals on June 17, the Union provided
Respondents with a ten-day notice that it would conduct an
unfair labor practice strike.

On June 22, the Union

unconditionally offered to cancel the upcoming strike and
continue working under the terms and conditions of
employment in effect on June 16, 2012.

Respondents informed

the Union by letter on June 28 that any employee who went on
strike would be permanently replaced.

On July 3, the Union

declared an unfair labor practice strike, with approximately
700 Union employees participating.

On July 6, Petitioner

amended Complaint II to include allegations that Respondents
had implemented their LBFs in the absence of genuine, lawful

11

impasse.

On July 19, the Union again offered to end the

strike and return to the pre-LBF conditions, but Respondents
refused.

Respondents' brought in temporary workers, and had

replaced all the Union strikers by the end of July.
In mid-July, Petitioner sought authorization from the
Board to initiate section 10(j) proceedings.

While the

request was pending, Administrative Law Judge Steven Fish
found that all of Respondents' 2010 unilateral changes
forming the basis of Complaint I violated the Act and
constituted unfair labor practices.
WL 3144346.

See Healthbridge, 2012

Thereafter, on August 16, authorization for

this 10(j) proceeding was provided by both the Board and the
Board's Acting General Counsel.

Petitioner then filed the

instant petition.
The petition charges that Respondents have engaged in
unfair labor practices in violation of sections 8(a)(1)(3)
and (5) of the Act.

The petition points to Respondents'

implementation of their LBF proposals without reaching
impasse, the 2010 unilateral changes to employment
conditions found unlawful by Judge Fish, and Respondents'
lockout of employees at the West River facility.

Petitioner

asks the Court to order Respondents to reinstate the

12

striking Union employees at their previous wages and
benefits, restore the terms and conditions of employment
that predated Respondents' unilateral implementation of the
LBFs, and bargain in good faith with the Union.7
The filing of the petition led to an initial round of
briefing.

An extensive record was also presented to the

Court consisting of affidavits, correspondence, contract
proposals, and bargaining notes of the parties.
was held on October 22.
presented oral argument.

A hearing

At the hearing, Petitioner
Respondents presented oral

argument and made an offer of proof regarding anticipated

7

Respondents argue that the Court should not grant
equitable relief because Petitioner's delay in bringing the
petition exacerbated the harm sought to be prevented. The
argument lacks merit. See Kaynard v. MMIC, Inc., 734 F.2d
950, 954 (2d Cir. 1984) ("There is no merit whatsoever in
the company's final contention that the delays [2 months
between the Board filing a complaint against the employer
and the Regional Director bringing a 10(j) petition] have
rendered [injunctive relief] inappropriate. The Board does
not take lightly the commencement of a § 10(j) action.");
Maram v. Universidad Interamericana De Puerto Rico, Inc.,
722 F.2d 953, 960 (1st Cir. 1983) ("A busy administrative
agency cannot operate overnight. The very fact that it must
exercise discretion . . . indicate[s] that it should have
time to investigate and deliberate. . . . We must reject the
[district] court's reliance on the four months delay.").

13

testimony by Mr. Kaplan.

Respondents requested leave to

file a supplemental written brief and additional exhibits.8
Respondents subsequently filed an extensive supplemental
brief, with affidavits and bargaining notes attached, along
with a motion to dismiss for lack of subject matter
jurisdiction.

After carefully reviewing the parties'

submissions and the underlying record, the Court issued an
oral ruling on December 11, denying Respondents' motion to

8

In their submissions, Respondents argue that the Court
should have granted them expedited discovery and the
opportunity to hold an evidentiary hearing because of the
hotly contested facts at issue in this case. The argument
is unavailing for several reasons. First, the statutory
policies underlying section 10(j) call for expedited
proceedings and deference to the Regional Director, even
when facts are disputed. See Kaynard v. Mego, 633 F.2d
1026, 1031 (2d. Cir. 1980); Dunbar for & on Behalf of
N.L.R.B. v. Landis Plastics, Inc., 977 F. Supp. 169, 176
(N.D.N.Y, 1997) ("[10(j)] injunction proceedings in federal
court must not evolve into a hearing on the merits of the
unfair labor practice charges because the district court
must not usurp the NLRB's role.").
Second, unlike
applications for injunctions by private parties that reach
the judiciary without any prior screening, section 10(j)
petitions are investigated by the Board before they are
filed in court. Notably, Respondents refused to participate
in the Board's investigation. See Tr. Oral Argument of
10/22/12 (Doc. 35) at 19 ("[W]e got no cooperation from the
employer, we never got their notes. We got some position
statements, we got some nice letters with some legalese from
the lawyers, and we got some copies of some of the
proposals, but we didn't hear their side of things because
they didn't want to give it.").
14

dismiss9 and granting the petition for injunctive relief.
II.

Standard of Review
Section 10(j) authorizes district courts to grant

temporary injunctions pending the outcome of unfair labor
practice proceedings before the Board.

29 U.S.C. § 160(j).

"The Board shall have power, upon issuance of a complaint .
. . charging that any person has engaged in or is engaging
in an unfair labor practice, to petition any United States
district court . . . for appropriate temporary relief."
U.S.C. § 160(j).

29

While an extraordinary remedy, 10(j)

reflects Congress's recognition that, in the absence of
injunctive relief, the Board's often lengthy administrative
proceedings could render a final Board order ineffectual.
Silverman v. Major League Baseball Player Relations Comm.,
Inc., 880 F. Supp. 246, 252-53 (S.D.N.Y. 1995) aff'd, 67
F.3d 1054 (2d Cir. 1995).
In reviewing a section 10(j) petition, the legal
9

Respondents motion to dismiss for lack of subject
matter jurisdiction was fully addressed and denied in the
Court's oral ruling (Doc. 49). The Court rejected
Respondents' argument that the Board's General Counsel
lacked authority to authorize a 10(j) petition in this case
for substantially the reasons stated in Paulsen v.
Renaissance Equity Holdings, LLC, 849 F. Supp. 2d 335, 350
(E.D.N.Y. 2012) (finding that the Board's November 2011
delegation to the General Counsel constituted valid
authority to bring a 10(j) petition under the NLRA).
15

standard is two-pronged: the court must determine (1)
whether there is reasonable cause to believe that unfair
labor practices have been committed and, if so, (2) whether
the requested relief is 'just and proper.'

Kaynard v. Mego

Corp., 633 F.2d 1026, 1030 (2d Cir. 1980).

Respondents

argue that following the Supreme Court's decision in Winter
v. Natural Res. Def. Council Inc., 555 U.S. 7 (2008), the
traditional two-prong test should be replaced by a more
demanding four-part test.

See id. at 20 ("A plaintiff

seeking a preliminary injunction must establish that he is
likely to succeed on the merits, that he is likely to suffer
irreparable harm in the absence of preliminary relief, that
the balance of equities tips in his favor, and that an
injunction is in the public interest.").

Adopting the

stricter approach urged by Respondents would be inconsistent
with the remedial purposes of section 10(j), see Chester ex
rel. N.L.R.B. v. Grane Healthcare Co., 666 F.3d 87, 96 (3d
Cir. 2011),10 as well as Second Circuit precedent.
10

See

In Chester, the Third Circuit recently stated that:
"Congress' clear purpose in creating § 10(j) was not to
limit the scope of the Board's authority to decide
violations, but to preserve its powers to do so by
giving the NLRB an opportunity to seek an injunction of
alleged violations before an injury becomes permanent
or the Board's remedial purpose becomes meaningless. .
. . Section 10(j) does not so expand the scope of the
district court's role in labor disputes as to permit it
16

Mattina ex rel. N.L.R.B. v. Kingsbridge Heights Rehab. &
Care Ctr., 329 F. App'x 319, 322 (2d Cir. 2009).
A. Reasonable Cause
Courts in this Circuit owe considerable deference to
the Board's Regional Director when determining whether
reasonable cause exists.

Hoffman ex rel. N.L.R.B. v. Inn

Credible Caterers, Ltd., 247 F.3d 360, 365 (2d Cir. 2001).
The Regional Director need only present evidence "sufficient
to spell out a likelihood of violation" to satisfy the
reasonable cause requirement.

Danielson v. Joint Bd. of

Coat, Suit and Allied Garment Workers' Union, 494 F.2d 1230,
1243 (2d Cir. 1974); Silverman, 67 F.3d at 1059 ("The court
need not make a final determination that the conduct in
question is an unfair labor practice.").

Even when disputed

issues of fact exist, "the Regional Director's version of
the facts should be sustained if within the range of
rationality, . . . inferences from the facts should be drawn
in favor of the charging party."

Mego, 633 F.2d at 1031;

Blyer v. Pratt Towers, Inc., 124 F. Supp. 2d 136, 143
(E.D.N.Y. 2000) ("In making its determinations, the Court
to intrude upon the Board's exclusive authority to
decide the merits of the cases. . . . We do not believe
the Court intended its decision[] in . . . Winter to
extend to the context of such a distinct statutory
scheme." 666 F.3d at 96.
17

should give the Regional Director's interpretation of the
facts the benefit of the doubt.").

By its very nature, the

"reasonable cause" prong contemplates that a 10(j)
injunction will be issued despite the existence of
unresolved issues before the Board.
329 F. App'x at 322.

Kingsbridge Heights,

Even with respect to issues of law,

"the Regional Director is not required to show that . . .
the precedents governing the case are in perfect harmony,"
and "the district court should be hospitable to the views of
the [Regional Director], however novel."
1031-33.

Mego, 633 F.2d at

A district court should decline to grant relief

only if convinced that the NLRB's legal or factual theories
are "fatally flawed."

Hoffman v. Polycast Tech. Div. of

Uniroyal Tech. Corp., 79 F.3d 331, 333 (2d Cir. 1996).
B. Just and Proper
"Injunctive relief under § 10(j) is just and proper
when it is necessary to prevent irreparable harm or to
preserve the status quo."
at 321.

Kingsbridge Heights, 329 F. App'x

The status quo that requires protection under §

10(j) is the status quo as it existed before the onset of
the alleged unfair labor practices, not the status quo that
has come into being as a result of the unfair labor

18

practices being litigated.

Inn Credible Caterers, 247 F.3d

at 360 (2d Cir. 2001); Seeler v. Trading Port, Inc., 517
F.2d 33, 38 (2d Cir. 1975).

The Second Circuit has made it

clear that courts should review petitions in § 10(j) cases
"in accordance with traditional equity practice, as
conditioned by the necessities of public interest which
Congress has sought to protect."

Morio v. N. Am. Soccer

League, 632 F.2d 217, 218 (2d Cir.1980) (per curiam)
(internal quotation marks omitted).

Thus, in applying the

just and proper standard, it is necessary to consider "the
context of federal labor laws" and the "underlying purposes
of § 10(j)," specifically, the "protect[ion of] employees'
statutory collective bargaining rights," and the prevention
of "irreparable harm to the union's position in the
[workplace] [and] to the adjudicatory machinery of the
NLRB."

Inn Credible Caterers, 247 F.3d at 368; see also

Kreisberg ex rel. N.L.R.B. v. Stamford Plaza Hotel &
Conference Ctr., L.P., 849 F. Supp. 2d 279, 283-84 (D. Conn.
2012) ("The disappearance of the 'spark to unionize' may be
an irreparable injury for the purposes of § 10(j).").
Consistent with these policies, the proper plaintiff in
a proceeding under section 10(j) is the Regional Director

19

rather than the individual employees.
Caterers, 247 F.3d at 369.

Inn Credible

The Regional Director's judgment

that injunctive relief is necessary to promote the
effectiveness of the Board's remedial procedures receives
deference, especially in cases concerning fundamental and
well-established tenets of federal labor law where "the
prevailing legal standard is clear and the only dispute
concerns the application of that standard to a particular
set of facts."

Mattina ex rel. N.L.R.B. v. Kingsbridge

Heights Rehab. & Care Ctr., 08 CIV. 6550 (DLC), 2008 WL
3833949 (S.D.N.Y. Aug. 14, 2008) aff'd, 329 F. App'x 319 (2d
Cir. 2009).
III.

Discussion
A.

Is there reasonable cause to believe Respondents
have violated the Act?

The petition is based on Petitioner’s determination
that Respondents violated §§ 8(a)(1)(3) and (5) of the Act,
when they unilaterally imposed new conditions on the Union
on June 17, 2012, without first reaching lawful impasse.
Accordingly, the first inquiry is whether the record before
the Court provides reasonable cause to believe that lawful
impasse had not been reached.

20

i.

Did the parties bargain to impasse?

The duty to bargain collectively is defined in § 8(d)
of the Act as the "mutual obligation of the employer and the
representative of the employees to . . . confer in good
faith."

29 U.S.C. § 158(d).

The Supreme Court has divided

the subjects of collective bargaining into two categories:
mandatory and permissive.

See N.L.R.B. v. Wooster Div. of

Borg Warner Corp., 356 U.S. 342, 349 (1958).

Mandatory

subjects include rates of pay, wages, hours of employment,
and other conditions of employment such as retirement and
pension plans.

See Inland Steel Co. v. N.L.R.B., 170 F.2d

247 (7th Cir. 1948) aff'd sub nom. Am. Communications Ass'n,
C.I.O., v. Douds, 339 U.S. 382 (1950) (citing NLRA §§
8(a)(5), 9(a)).

"When a collective agreement expires, an

employer may not alter terms and conditions of employment
involving mandatory subjects until it has bargained to an
impasse over new terms."

Kingsbridge Heights, 2008 WL

3833949 at *20; see also Carpenter Sprinkler Corp. v.
N.L.R.B., 605 F.2d 60, 64 (2d Cir. 1979) ("Unilateral action
by an employer concerning subjects of mandatory bargaining
is a violation of the duty to bargain in good faith, in the

21

absence of a true impasse in negotiations.").
"Impasse," in the collective bargaining context, is an
imprecise term of art:
The definition of an 'impasse' is understandable
enough — that point at which the parties have
exhausted the prospects of concluding an agreement
and further discussions would be fruitless — but
its application can be difficult. Given the many
factors commonly itemized by the Board and courts
in impasse cases, perhaps all that can be said
with confidence is that an impasse is a 'state of
facts in which the parties, despite the best of
faith, are simply deadlocked.' The Board and
courts look to such matters as the number of
meetings between the company and the union, the
length of those meetings and the period of time
that has transpired between the start of
negotiations and their breaking off. There is no
magic number of meetings, hours or weeks which
will reliably determine when an impasse has
occurred."
Laborers Health & Welfare Trust Fund For N. California v.
Advanced Lightweight Concrete Co., Inc., 484 U.S. 539, 544
(1988) (citing R. Gorman, Basic Text on Labor Law:
Unionization and Collective Bargaining 448 (1976)).

Put

more succinctly, "an impasse is a situation where good-faith
negotiations have exhausted the prospects of concluding an
agreement."

Anderson Enterprises, 329 NLRB 760, 823 (1999).

For impasse to occur, both parties must be unwilling to
compromise.

Grinell Fire Protection Sys. Co., 328 NLRB 585,

22

586 (1999).

When one party makes concessions and evinces a

willingness to compromise further "it would be both
erroneous as a matter of law and unwise as a matter of
policy . . . to find impasse merely because the party is
unwilling to capitulate immediately and settle on the other
party’s unchanged terms."

Id.

Although impasse on a single

critical issue can create impasse on an entire agreement,
impasse on this critical issue must lead to a breakdown in
the overall negotiations.

Erie Brush & Mfg. Corp. v.

N.L.R.B., 700 F.3d 17, 21 (D.C. Cir. Nov. 27, 2012).
The requirement that a clear impasse be reached before
unilateral changes in the terms of employment are made
exists to protect the integrity of the collective bargaining
process.

Carpenter, 605 F.2d at 65.

Whether impasse has

been reached "is a question of fact peculiarly suited to the
NLRB's expertise," Carpenter, 605 F.2d at 65, and the burden
of proving the existence of an impasse rests on the party
asserting it.

CJC Holdings Inc., 320 NLRB 1041, 1044

(1996).
Petitioner advances two distinct legal theories to
support his conclusion that Respondents have violated the

23

Act: no impasse existed in fact, and no impasse existed as a
matter of law.
a.

No impasse in fact

It is undisputed that the terms and conditions of
employment imposed by Respondents in their Last, Best and
Final proposals constitute mandatory bargaining subjects.
Petitioner urges that the record provides reasonable cause
to believe that the imposition of these LBFs was unlawful
because the parties did not, in fact, bargain to impasse as
evidenced by the Union's demonstrated willingness to make
movement on the pension and other issues after Respondents
proposed their LBFs on April 24.

Respondents contend that

the record clearly demonstrates that neither party was
willing to compromise on the pension issue and point to the
lengthy negotiating period and number of bargaining sessions
as objective indicia that further negotiations would have
been futile.

Respondents point to the Union’s notes of the

May 1 bargaining session as support for their position.
These notes reflect that Mr. Creane said it would be
hard to imagine the Union agreeing to any contract with
Respondents that did not have the pension in it, but he
qualified his statement by adding that the Union's

24

"responses are more reflective of [Respondents'] overall
proposals to the union than of the importance or willingness
to look at the pension."

Clark Notes at 362-363.

The May 1

notes also show that the Union offered to figure out a way
to save Respondents four percent of gross payroll, Pickus
stated the Union would consider giving up the pension if
Respondents would give the employees a few million dollars,
and Creane asked Respondents if they would consider a twotiered system in which current employees would retain their
pensions while new employees would enroll in the 401(k)
plan.

Id.

Respondents dismiss the Union’s proposal to save

four percent of payroll as a "bare promise," claim that
Pickus actually said the Union would only give up the
pension if Respondents gave "each worker" a few million
dollars, and argue that Crean's two-tiered pension/401(k)
hypothetical was not a proposal but merely a request for
clarification of Respondents' position.
The burden of proving that the parties reached impasse
on the pension issue, and that this impasse led to a
breakdown in the overall negotiations, lies with
Respondents.

Erie Brush, 700 F.3d at 21.

Whether a party

has met this burden is a question Petitioner is particularly

25

well suited to evaluate.

Carpenter, 605 F.2d at 65; see

also, Mego, 633 F.2d at 1031.

With this in mind, I find

that the record provides reasonable cause to believe that
the Union was willing to compromise further when Respondents
declared impasse on June 17.

Objectively viewed, the notes

of the May bargaining sessions show that the Union was
signaling a willingness to make concessions to retain the
pension plan, to compromise on the pension plan, or to give
up the pension plan altogether if offered enough economic
concessions in exchange.

In fact, it is undisputed that the

Union has signed agreements with other nursing center
employers that do not include a pension plan.
b. No impasse in law
Petitioner argues that Respondents could not declare
impasse due to unremedied unfair labor practices.

The law

is clear that "a lawful impasse cannot be reached in the
presence of unremedied unfair labor practices."
Tire Corp., 333 NLRB 1156, 1158 (2001).

In Re Titan

An employer that

has committed unfair labor practices cannot "parlay an
impasse resulting from its own misconduct into a license to
make unilateral changes."
NLRB 260, 265 (1976)).

Id. (quoting Wayne's Dairy, 223

Yet not all unremedied unfair labor

26

practices committed during negotiations will give rise to
the conclusion that impasse was declared improperly.

"Only

serious unremedied unfair labor practices preclude
declaration of impasse."
AMR 81.

Westin Providence Hotel, 38 NLRB

Unremedied ULPs are serious when they "increase

friction at the bargaining table. . . . [or,] by changing
the status quo, . . . move the baseline for negotiations and
alter the parties' expectations about what they can achieve,
making it harder for the parties to come to an agreement."
Alwin Mfg. Co., Inc. v. N.L.R.B., 192 F.3d 133, 139 (D.C.
Cir. 1999).
Petitioner argues that the unfair labor practices
underlying Complaint I, later found unlawful by ALJ Fish,
were unremedied at the time of bargaining and undermined the
Union's ability to effectively represent its employees.
Petitioner claims that these unfair labor practices caused
negotiations to start off badly when Respondents' refused to
discuss them with the Union, weakened the Union's bargaining
position, and antagonized Union representatives such that
bargaining sessions were characterized by accusations of bad
faith and lawbreaking.

Respondents argue that no causal

connection exists between the unfair labor practices found

27

by Judge Fish and the impasse at issue here because the
unfair labor practices occurred well before bargaining
began, were discussed only in passing in several bargaining
sessions, and were unrelated to the pension plan.

While

Respondents' characterization may be factually accurate, it
is devoid of legal significance.

The relevant inquiry is

whether the existence of these unremedied unfair labor
practices increased friction at the bargaining table and
made it harder for the parties to agree.
Judge Fish's factual findings and legal conclusions
show that in 2010, only months before the negotiations at
issue here began, Respondents subcontracted employees and
rehired them at reduced wages and benefits, terminated
employees without contractually mandated notice to the
Union, and unilaterally changed significant terms and
conditions of employment in violation of the parties'
collective bargaining agreement.

See Healthbridge Mgmt.,

LLC et al., S. 34-CA-12715, 2012 WL 3144346 (N.L.R.B. Div.
of Judges Aug. 1, 2012).

The Union filed internal

grievances with Respondents over these practices to no
avail.

It is undisputed that these unilateral changes

remained in place during the parties' negotiations for

28

successor contracts and that many were incorporated into the
proposals that precipitated the West River lockout as well
as the LBFs.

It is reasonable to believe that Respondents'

unfair labor practices, while not directly related to the
pension issue, could indeed increase friction at the
bargaining table and make it more difficult for the parties
to reach agreement on any issue.

Accordingly, there is

reasonable cause to believe that Respondents' unilateral
implementation of its LBFs constituted an unfair labor
practice.
B.

Is injunctive relief just and proper?

Petitioner urges that injunctive relief restoring the
status quo is necessary to prevent irreparable harm because
support for the Union is currently eroding and will continue
to erode if the Union is perceived as being unable to
adequately protect the employees or affect their working
conditions.

Since the strike began on July 3, between fifty

and seventy-five employees have crossed picket lines and at
least ten employees have resigned from the Union.
Petitioner argues that by the time the Board issues its
final ruling on Complaint II, it will be too late to regain
the original status quo with the same relative bargaining

29

position of the parties, making meaningful collective
bargaining impossible and effectively rewarding Respondents
for their unfair labor practices.

These are exactly the

harms the 10(j) mechanism was designed to prevent.
Credible Caterers, 247 F.3d at 368-69.

See Inn

Respondents argue

that the potential harm to patients at Respondents' health
care facilities and harm to Respondents' finances are
equitable considerations that outweigh any potential harm to
the Union and make injunctive relief improper.
i.

Patient safety

Respondents allege that, before striking, Union
employees performed acts of sabotage such as mixing up the
names on Alzheimer patients' doors, photos, and wristbands
to confuse the new employees; stealing and hiding medical
equipment; and breaking patient lifts.

Respondent has

submitted an affidavit from Registered Nurse Lorraine
Mulligan stating that "a court order requiring the
reinstatement of any of these striking workers who engaged
in such sabotage and those who had knowledge of it and
failed to act, could expose the residents to immediate
danger and put them at risk of suffering serious harm or
death."

Mulligan Aff. (Doc. 27)

30

The right to reinstatement is not absolute and an
employer may refuse to reinstate a specific unfair labor
practice striker if the employer can demonstrate that the
striker engaged in "serious misconduct" during the course of
the strike.

Mattina, 2008 WL at *27 (allowing hearings for

evidence of misconduct by particular strikers only).
Respondents allegations of sabotage by union members are
thus far unsubstantiated.

Respondent has not submitted any

evidence that Union employees committed sabotage, nor have
they identified any suspected employees.

Furthermore, it is

undisputed that since the strike began Respondents have
actively encouraged employees to cross picket lines and
return to work.

It is also undisputed that more than fifty

employees have responded to this encouragement by returning
to work.
Respondents also urge the Court to consider a
related equitable argument, that patients prefer the
replacement employees to the strikers.

Assuming patients

have such a preference, it does not justify withholding
injunctive relief necessary to adequately serve the purposes
of 10(j).
ii.

Financial hardship

31

Pointing to the health centers' net operating losses in
2011 under the predecessor contracts, Respondents' argue
that restoration of the June 16, 2012 terms and conditions
of employment would significantly harm Respondents'
financial stability.

Respondents have operated since 2004

under the terms of the contracts with the Union as they
existed on June 16, 2012, and never made these arguments of
potential financial calamity to the Board when it conducted
its 10(j) investigation or to the Union at the negotiating
table.12
Granting the petition will have a significant impact on
Respondents' replacement workers.
insensitive to their interests.

The Court is not
It is well settled,

however, that the right to interim reinstatement of workers
striking in response to an unfair labor practice are
superior to the interests of workers hired to replace them.
See Aguayo for & on Behalf of N.L.R.B. v. Tomco Carburetor
Co., 853 F.2d 744, 750 (9th Cir. 1988) overruled on other
grounds by Miller for & on Behalf of N.L.R.B. v. California
12

At the May 26, 2011 bargaining session Respondents'
lead negotiator, Jonathan Kaplan, stated to Union
negotiators "with respect to the pension . . . did you hear
me say we can't afford it? . . . if I said that we'd have to
open up our books, we're not pleading an inability to pay."
Clark Notes at 159.
32

Pac. Med. Ctr., 19 F.3d 449 (9th Cir. 1994).
Finally, this is not, as Respondents' argue, a case in
which Petitioner has sought interim relief in support of an
unprecedented application of the Act.

This case concerns

fundamental and well-established questions of labor law,
whether impasse was reached and whether strikers should be
reinstated, where "the prevailing standard is clear and the
only dispute concerns the application of that standard to a
particular set of facts."

Mattina, 2008 WL 3833949 at *25

(reinstating employees and requiring employer to bargain in
good faith).13

"In such cases, deference to the Regional

Director's considered decision that injunctive relief is
necessary to insure the effectiveness of the NLRB's remedial
procedures and to further the policies of the act is

13

Contrary to respondents' assertions, cases where "a
federal judge has issued a 10(j) injunction directing the
respondent to 'bargain in good faith'" are not rare.
Between 2001 and 2005, the NLRB brought four cases alleging
failure to bargain in good faith in violation of Section
8(a)(5) or 8(b)(3) involving "a wide variety of violations."
End-of-Term Report on Utilization of Section 10(j)
Injunction Proceedings June 1, 2001, through December 31,
2005, Memorandum GC 06-02, 2006 WL 118303 at *9 (January 6,
2006). The NLRB was successful in all four cases. See
e.g., Miller v. Renzenberger, Inc., CIV. S-04-1518 WBS PAN
(E.D. Ca. September 16, 2004) (issuing an interim bargaining
order and a reinstatement order where respondent had failed
to bargain in good faith).
33

'especially appropriate.'"

Id. (quoting Silverman v. 40-41

Realty Associates, Inc., 668 F.2d 678, 679 (2d Cir. 1982)).
IV.

Conclusion
Accordingly, there is reasonable cause to believe that

Respondents have failed and refused to bargain with the
Union in good faith as alleged in the petition, and the
requested injunctive relief is just and proper.

Date: December 14, 2012

/s/RNC
Robert N. Chatigny
United Stated District Judge

34