Harrell v. American Red Cross Heart of America Blood Services Region

Filing 51

ORDER Entered by Judge James E. Shadid on 11/9/11. The Petition for Injunctive Relief under Section 10(j) of the National Labor Relations Act, as amended 1 is GRANTED IN PART. The parties are directed to confer and submit a proposed order reflecting these rulings for the Court's review within 14 days.(SW, ilcd)

E-FILED

Wednesday, 09 November, 2011 09:27:55 AM
Clerk, U.S. District Court, ILCD

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS

CLAUDE T. HARRELL, JR., Regional Director
of Subregion 33 of the National Labor Relations
Board, For and on behalf of the NATIONAL
LABOR RELATIONS BOARD,
Petitioner,
v.
AMERICAN RED CROSS, HEART OF
AMERICA BLOOD SERVICES REGION,
Respondent.

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Case No. 11-1284

ORDER
This matter is now before the Court on Petitioner’s Petition for Injunctive Relief under
Section 10(j) of the National Labor Relations Act, as amended. For the reasons set forth below, the
Petition [#1] is GRANTED IN PART.
BACKGROUND
Respondent, American Red Cross, Heart of America Blood Services Region, is an
unincorporated operating unit of the American National Red Cross with its headquarters and place
of business in Peoria, Illinois. It is engaged in the process of recruiting donors, collecting blood,
manufacturing various blood products, and distributing those products to facilities throughout the
region. On March 21, 2007, the American Federation of State, County and Municipal Employees
(AFSCME), Council 31, AFL-CIO (hereinafter referred to as the “Union”), filed a petition to
represent a certain class of Respondent’s employees. Following a hearing, the Regional Director
for Subregion 33 of the NLRB issued a decision finding that certain employees should be in the

bargaining unit; Respondent appealed this decision. On June 1, 2007, the bargaining unit employees
voted in an election, but the ballots were impounded pending the outcome of Respondent’s appeal.
On September 1, 2010, the NLRB issued an Order affirming the Regional Director’s
decision. On September 16, 2010, the ballots were counted, and the Union had won the election.
Respondent objected to the results of the election on September 23, 2010. The objections were
overruled and on October 7, 2010, the Union was certified as the exclusive collective-bargaining
representative for the following employees of Respondent:
All full-time, part-time and per diem collections specialists I,
collections specialists II, collections technicians I, collections
technicians II, mobile unit assistants I, mobile unit assistant
I/collections specialists I, mobile unit assistant I/collections
technicians I, mobile unit assistants I/CTI-HH, mobile unit assistants
II, mobile unit assistants II/collections specialists I, mobile unit
assistants II/CTI-HH, mobile unit supply clerks, collections assistants,
and team leaders employed by the Employer in its Donor Services
department, excluding office clerical and professional employees,
guards and supervisors as defined in the Act and all other employees.
There are 170 members in this bargaining unit. On October 21, 2010, Respondent appealed this
decision, and the appeal was denied on December 15, 2010.
While this process was underway, Respondent made changes to bargaining unit employees’
terms and conditions of employment. Petitioner alleges that these changes were made unilaterally
and in violation of the duty to bargain collectively. Respondent argues that it had no duty to bargain
with the Union at this time.
Specifically, Petitioner alleges that from May 29, 2009 through April 14, 2011, Respondent
discontinued matching employees 401(k) contributions, suspended merit pay increases, closed the
retirement pension plan to new employees, changed employee health insurance benefits, reassigned
team leader duties to supervisory employees, refused to bargain, changed employee job

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descriptions/classifications/titles/pay grades or salary tiers, changed its policy regarding the
assignment of employees to load vehicles, changed the work schedules of mobile unit supply
clerks/general services supply clerks, changed its policy regarding the amount of paid time-off
employees can carry over from year to year, and reassigned non-bargaining unit employees to
perform bargaining unit work on blood drives. Petitioner filed charges corresponding to each of
these actions. The parties did not begin bargaining for the first contract until February 27, 2011. On
August 18, 2011, an administrative law judge for the NLRB convened a hearing on the underlying
charges in this matter, and that review remains pending.
On August 1, 2011, Petitioner filed a Petition for Injunctive Relief under Section 10(j) of
the National Labor Relations Act, as amended, seeking preliminary injunctive relief during the
pendency of the underlying matters before the NLRB. Following briefing of the issues, an
evidentiary hearing and oral argument were held on October 31, 2011. During the hearing, Petitioner
advised that it was no longer seeking relief with respect to the portion of the Petition seeking a
bargaining order, as the parties have begun to bargain in good faith. This Order follows.
DISCUSSION
Section 10(j) of the NLRA provides in relevant part:
The Board shall have power, upon issuance of a complaint as
provided in subsection (b) of this section 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 the Board such temporary
relief or restraining order as it deems just and proper.

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29 U.S.C. § 160(j). In order to determine whether relief is “just and proper”, the Seventh Circuit has
directed that courts apply the general standards applicable to requests for preliminary injunction.
NLRB v. Electro-Voice, Inc., 83 F.3d 1559, 1566 (7th Cir. 1996).
Thus, injunctive relief is warranted if the Regional Director can make a showing: (1) that
the Director has no adequate remedy at law ; (2) that the labor effort will suffer irreparable harm if
the injunction is not granted, and the prospect of that harm outweighs any harm posed to the
employer by the proposed injunction; (3) that the public interest will be served by granting the
injunctive relief; and (4) that the Director has a reasonable likelihood of prevailing on the merits of
his complaint. Lineback v. Spurlino Materials, Inc., 546 F.3d 491, 500 (7th Cir. 2008); ElectroVoice, 83 F.3d at 1566-67; Ty, Inc. v. Jones Group, 237 F.3d 891, 895 (7th Cir. 2001); Abbott
Laboratories v. Mead Johnson & Co., 971 F.2d 6, 11-12 (7th Cir. 1992). “The Director bears the
burden of establishing the first, third and fourth of these circumstances by a preponderance of the
evidence. The second prong is evaluated on a sliding scale: The better the Director’s case on the
merits, the less its burden to prove that the harm in delay would be irreparable, and vice versa.”
Spurlino, 546 F.3d at 500; Electro-Voice, 83 F.3d at 1567-68.
I.

Adequacy of Remedy at Law

Section 10(j) relief is an extraordinary remedy to be granted only in “those situations in
which the effective enforcement of the NLRA is threatened by the delays inherent in the NLRB
dispute resolution process.” Bloedorn v Francisco Foods, Inc., 276 F.3d 270, 286 (7th Cir. 2001).
That being said, it is widely accepted that the longer the employer avoids bargaining with the union,
the more likely it is that participation in the union will be chilled and that the union will not be able
to be effective in its representation. Id., at 299; Electro-Voice, 83 F.3d at 1573. “This risk is

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particularly true in cases involving fledgling unions, where the passage of time is especially critical.”
Spurlino, 546 F.3d at 501.
Here, the Union is undeniably a “fledgling union” in the preliminary stages of organization
and representation of this bargaining unit. It is also clear that the Union has been put in the position
of having to bargain to get back benefits or conditions of employment that its members would
already have had in the absence of the post-election changes made by Respondent. Evidence was
presented indicating that some employees have left their employment with Respondent to obtain
better pay. Petitioner also introduced testimony from Union staff representative, Tim Lavelle, that
attendance at membership meetings for this bargaining unit has declined from an initial 80 members
present in October 2010 to as few as 8-10 members attending in August 2011. There may be many
reasons to explain this, but one plausible inference is that it is due to the actions of the Respondent.
The Respondent introduced evidence from five current or former employees indicating that
their level of support for the Union was not affected by the delay in this case. This factor alone does
not establish that the Union’s effectiveness has not been hampered. Respondent also introduced
evidence in the form of its Human Resource Manager, Michelle Agnew’s, analysis of employee exit
surveys. Although Agnew suggested that only one of the surveys from potential bargaining unit
employees mentioned the 401(k) benefits as a reason for leaving, she also acknowledged that she
hadn’t considered whether employees mentioning salary or wages as a reason for leaving could have
been referring to the elimination of the merit increases or reduction of hours for certain bargaining
unit employees as a result of the post-election changes.
If Respondent is permitted to make changes affecting the bargaining unit’s terms and
conditions of employment without having brought them to the bargaining table, there is a reasonable
inference that payment of damages after the fact will not be sufficient to remedy the adverse impact
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to the Union and its members in the interim. In addition, being forced to bargain from a substantially
worse position that the Union would have been in had bargaining started shortly after the election
places the Union at a continuing disadvantage. One of Respondent’s positions is that there was not
a union to bargain with. This is due to the Respondent’s actions, and although Respondent had every
legal right to challenge the union effort, the law does not permit the Respondent to have it both ways.
As such, when the Respondent chose to challenge the union attempt, it had a minimum duty to keep
things at the status quo or face the consequences of acting unilaterally. The Court is mindful of the
need to operate a business nationally, but clearly a better balance was necessary here. Accordingly,
Petitioner has minimally met his burden of establishing that he has no adequate remedy at law.
II.

Balance of Harms

The question of whether the labor effort will suffer irreparable harm overlaps significantly
with the question of whether the employees have no adequate remedy at law. For many of the same
reasons discussed above, the Court finds that the labor effort is likely to suffer substantial and
irreparable harm in the absence of preliminary injunctive relief.
As time passes the likelihood of union formation diminishes, and the
likelihood that the employees will be irreparably deprived of union
representation increases. . . . The union’s position in the plant may
deteriorate to the point that effective organization and representation
is no longer possible. As time passes, the benefits of unionization are
lost and the spark to organize is extinguished. The deprivation to
employees from the delay in bargaining and the diminution of union
support is immeasurable. That loss, combined with the likelihood
that the Board’s ability to rectify the harm is diminishing with time,
equals a sufficient demonstration of irreparable harm to the collective
bargaining process.
Electro-Voice, 83 F.3d at 1573.
The Respondent argues that the Union has not suffered harm because several of the purported
unilateral changes have been resolved either through bargaining or voluntarily. However, it is
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generally accepted that voluntary remedial action does not render such claims moot in the absence
of a finding that “the likelihood of further violations is sufficiently remote to make [judicial] relief
unnecessary.” Ahrens v. Bowen, 852 F.2d 49, 52 (2nd Cir. 1988), citing United States v. W.T. Grant
Co., 345 U.S. 629, 632 (1953); Kobell v. United Paperworkers International Union, AFL-CIO, CLC,
965 F.2d 1401, 1411 (6th Cir. 1992). As the record in this case does not support such a finding, the
Court concludes that partial remedial action does not render the complaints in this action moot.
With the exception of claimed harm that would result from a retroactive restoration of 401(k)
benefits, Respondent has offered no countervailing demonstration of irreparable harm that would
result from a grant of injunctive relief. Any legitimate compliance burdens and/or interest in
Respondent’s management prerogatives can be acknowledged by fashioning an appropriately tailored
remedy.
III.

Public Interest

The Seventh Circuit has held that “[t]he public interest is furthered, in part, by ensuring that
‘an unfair labor practice will not succeed because the Board takes too long to investigate and
adjudicate the charge.’” Electro-Voice, 83 F.3d at 1574, citing Miller, for and on Behalf of NLRB
v. California Pacific Medical Center, 19 F.3d 449 (9th Cir. 1994). In other words, it is in the public
interest to prevent the remedial purpose of the NLRA or the remedial powers of the NLRB from
being undermined. Id. Forcing the Union to bargain at a substantial deficit would indeed frustrate
the remedial purpose of the NLRA, and it certainly cannot be said to be “in the public interest” to
now use the restorations of benefits as a bargaining chip. The Respondent has made no contrary
showing that injunctive relief would harm the public interest. Thus, the Court finds that the public
interest weighs in favor of at least a partial award of injunctive relief.
IV.

Likelihood of Success on the Merits
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In this respect, the Court’s inquiry is confined to the narrow question of the likelihood that
the Director will prevail before the NLRB. Spurlino, 546 F.3d at 502. “For our purposes, we must
decide whether the Director has a better than negligible chance of success: whether the Director has
‘some chance’ of succeeding on the merits.” Id., citing Electro-Voice, 83 F.3d at 1568. After a
review of the evidence of record, the Court must conclude that Petitioner has made a”better than
negligible” showing of likelihood of success on the merits on the charge that Respondent made
unilateral changes in the terms and conditions of employment without bargaining over those issues.
Petitioner has demonstrated that the Union election was held on June 1, 2007. Ballots were
impounded pending appeal, and the Union was certified as the collective bargaining representative
for the bargaining unit on October 7, 2010. The first bargaining session was not held until February
27, 2011. In the interim, Respondent made changes arguably affecting the terms and conditions of
bargaining unit employees’ employment on or about April 2, 2009 (discontinued matching 401(k)
contributions, suspended merit pay increases, closed the pension plan to new employees, and
changed health insurance benefits), April 5, 2009 (reassigned team leader duties to supervisory
employees), September 2010 (changed employee job descriptions, classification/titles, pay grades
and/or salary tiers), January 1, 2011 (changed the amount of paid time-off employees could carry
over), February 2, 2011 (reassigned work on blood drives to non-bargaining unit employees), and
February 7, 2011 (changed the assignment of employees to load vehicles and schedules of mobile
unit supply clerks/general services supply clerks). These changes were made without consulting the
Union or being brought to the table for bargaining.
Respondent’s defense is based largely on the suggestion that because it acted before the date
that the Union became certified, there was no representative in place to trigger the obligation to
bargain and that the requirement to bargain is not triggered unless the employer actually knew that
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the union had majority support at the time. This argument is unavailing. NLRB precedent clearly
establishes that:
[A]bsent compelling economic considerations for doing so, an
employer acts at its peril in making changes in terms and conditions
of employment during the period that objections to an election are
pending and the final determination has not yet been made. And
where the final determination on the objections results in the
certification of a representative, the Board has held the employer to
have violated Section 8(a)(5) and (1) for having made such unilateral
changes. Such changes have the effect of bypassing, undercutting,
and undermining the union’s status as the statutory representative of
the employees in the event a certification is issued. To hold
otherwise would allow an employer to box the union in on future
bargaining positions by implementing changes of policy and practice
during the period when objections or determinative challenges to the
election are pending.
NLRB v, Mike O’Connor Chevrolet-Buick-GMC Co., Inc., 209 NLRB 701, 703 (Mar. 14, 1974);
NLRB v. Laney & Duke Storage Warehouse Co., Inc., 151 NLRB 248, 266-67, enforced in relevant
part, 369 F.2d 859, 869 (5th Cir. 1966). The Seventh Circuit has reached the same holding. NLRB
v. Livingston Pipe & Tube, Inc., 987 F.2d 422, 428 (7th Cir. 1993); NLRB v. Friends of Specialized
Living Center, 879 F.2d 1442, 1445 (7th Cir. 1989). Given this precedent, Petitioner has met his
burden of demonstrating a considerable chance of success on the merits. Any other construction of
this precedent would empower an employer wanting to make additional changes to the terms and
conditions of employment to paralyze the union by simply challenging the election process and
having the ballots impounded while the changes were made. Such a result would clearly undermine
the goals of the NLRA and the remedial powers of the NLRB.

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Respondent also maintains that these changes were made for sound business reasons rather
than for the purpose of undermining the Union and were part of changes applied on a national level.
This Court does not challenge the assertion that the Respondent’s actions were for a business
purpose, but “whether unlawfully motivated or not, an employer violates Section 8(a)(5) and (1)
where it makes changes in terms and conditions of employment during the pendency of objections
to an election which ultimately results in the certification of the union.” Mike O’Connor Chevrolet,
209 NLRB at 704, citing NLRB v. Fleming Manufacturing Company, Inc., 119 NLRB 452, 465 (Jan.
1, 1957).
Having said this, the Petitioner’s request for complete recission of all unilateral changes does
create practical issues. For instance, healthcare coverage cannot be “rolled back.” There is no
testimony that employees went without coverage, only that premiums were increased, and the
Respondent has made plans available to choose from during an open enrollment period. Similarly,
the objected to changes in job classifications/descriptions/titles/grades, assignments, and schedules
raise practical concerns that would require the Court to micro-manage the employment relationship.
As such, they are best addressed in collective bargaining discussions and do not warrant injunctive
relief at the present time.
The same is true of the employer’s 401(k) match. Summarily rescinding the unilateral
change could cause issues that cannot be foreseen, such as amending tax returns, speculating as to
whether the employee would have participated and how much his or her contribution would have
been. The reality today is that the 401(k) match is being reinstated effective January 2012. The
Court finds that as to the years 2009, 2010, and 2011, the matter is best addressed in the collective
bargaining discussions. While the Court is aware that this has the effect of requiring the Union to
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negotiate for a return of a benefit that was previously in place, the practical effect of outright recision
of the change by Court order is not, at this time, an appropriate means to resolve the issue. With that
in mind, the Court will reserve ruling on this issue and set the matter for telephonic status conference
in mid-January 2012.
The unilateral change as to merit pay increases does warrant immediate action by this Court.
The Respondent actually made two unilateral changes with respect to merit pay. The first (before
the Union was certified) taking it away and the second (after the Union was certified) giving it back
to all employees except these bargaining unit members. Respondent testified that there are nearly
18,000 employees nationwide and stated that the exclusion of the 170 employees in this case was
done as a result of ongoing bargaining negotiations with the Union. Assuming that this was done
in good faith rather than as a bargaining tool, the effect of this action could nevertheless chill the
bargaining unit employees’ support, create dissension and/or cause members to question whether
their bargaining unit can adequately represent them, as well as undercut or undermine the Union’s
status as the statutory representative of the employees at the very time that the bargaining is
occurring. The unilateral action as to merit pay is therefore rescinded. To the extent that this relief
needs further implementation, the Court reserves the right to revisit the issue upon the motion of
either party. Additionally, if an alternate resolution of this issue is otherwise reached through good
faith negotiations between the Union and the Respondent, the Court would be willing to entertain
a request to modify the terms of the injunction.

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CONCLUSION
For the reasons set forth above, the Petition for Injunctive Relief under Section 10(j) of the
National Labor Relations Act, as amended [#1] is GRANTED IN PART. The parties are directed
to confer and submit a proposed order reflecting these rulings for the Court’s review within 14 days.
ENTERED this 9th day of November, 2011.

s/ James E. Shadid
James E. Shadid
United States District Judge

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