Barker v. A.D. Conner, Inc. et al

Filing 85

MEMORANDUM Opinion and Order Signed by the Honorable Robert M. Dow, Jr on 7/11/2011. Notices Mailed by Judge's Staff (tbk, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
JOSEPH A BARKER, REGIONAL DIRECTOR
OF REGION 13 OF THE NATIONAL LABOR
RELATIONS BOARD, for and on behalf of
THE NATIONAL LABOR RELATIONS
BOARD,
Petitioner,
v.
A.D. CONNER INC. and HEIDENREICH
TRUCKING COMPANY, as alter egos,
Respondent.

)
)
)
)
)
)
)
)
)
)
)
)
)
)

Case No.: 11-cv-2255

Judge Robert M. Dow, Jr.

MEMORANDUM OPINION AND ORDER
Before the Court is a petition for injunctive relief [4] pursuant to 29 U.S.C. § 160(j)
(“10(j)”)1 filed by the Director of Region 13 for the National Labor Relations Board
(“Petitioner”), against Heidenreich Trucking Company, as an alter ego of A.D. Conner Inc.
(“Respondent”). For the reasons and in the manner explained below, Petitioner’s request for a
preliminary injunction is granted.
I.

Background
This lawsuit concerns violations of the federal labor laws that allegedly took place at

A.D. Conner Inc. (“Conner”), a fuel hauling company owned by William J. McEnery
(“McEnery”).

In October 2010, Conner shut down and a number of drivers and a major

customer transferred to another (non-unionized) company owned by McEnery, Heidenreich
Trucking Company (“Heidenreich”).

1

Legislative history and case precedent commonly refer to this section as section 10(j), the section
number in the National Labor Relations Act (the “Act”). Likewise, 29 U.S.C. §§ 157-159 and their
subparts are hereafter referred to as Sections 7 through 9.

1

On October 15,2 the Truck Drivers, Oil Drivers, Filling Station and Platform Workers
Union Local No. 142 (“Local 142”), an affiliate of the International Brotherhood of Teamsters,
filed a charge with the National Labor Relations Board (“NLRB” or the “Board”). The same
day, the Truck Drivers, Oil Drivers, Filling Station and Platform Workers Union Local No. 705
(“Local 705”) filed an identical charge. Both Unions3 filed identical amended charges with the
Board on January 19, 2011, alleging that Respondent engaged in (and continued to engage in)
unfair labor practices within the meaning of Sections 8(a)(1), (3) and (5) of the Act. On January
31, 2011, the Board consolidated the cases involving the Unions.
After a period of investigation, on March 8, 9, and 10, 2011, the parties conducted an
administrative hearing before an administrative law judge (“ALJ”) of the NLRB. At the hearing,
the ALJ heard testimony from ten witnesses and received a number of documents into evidence.
On June 24, 2011 (after the instant petition was fully briefed), the ALJ issued his decision, which
Petitioner then filed with the Court [75] (hereinafter “ALJ Decision”). Among other things, the
ALJ concluded the following: that (1) Heidenreich and Conner were alter egos of each other; (2)
Respondents’ conduct in threatening to close its facilities and soliciting employees to decertify
their Unions violated Section 8(a)(1) of the Act; (3) Respondents violated Section 8(a)(5) of the
Act by dealing directly with union-represented employees; and (4) Respondents violated Section
8(a)(5) of the Act by refusing to bargain with the Unions about the effects of their decision to
shut down Conner. The ALJ ordered Respondent to cease and desist in its violations of the Act
and ordered Respondent to take a number of affirmative actions, including re-hiring terminated

2

Unless otherwise indicated, all dates are in 2010.

3

The Court will refer to Local 142 and Local 705 collectively as the “Unions.”

2

employees, paying employees the wages they formerly received under the Union contracts (plus
back-pay), and formally recognizing and bargaining with the Unions.
The following facts are those that are relevant to the instant petition, which requests that
the Court enter temporary injunctive relief prior to the Board’s ruling in the pending
administrative action.4
A.

Background of the McEnery Entities5

In 1993, McEnery created The William J. McEnery Revocable Trust (the “Trust”), of
which he is the sole trustee. Tr. 584. At some point thereafter, McEnery transferred ownership
of his various companies to the Trust. Currently, the Trust is the sole owner of Conner,
Heidenreich, Gas City Ltd. (a chain of gas stations/convenience stores), and a number of other
companies including WJM Leasing, LLC, McEnery Trucking and Leasing, LLC, and McEnery
Enterprises, LLC. Tr. 584-586. McEnery is the president and secretary of all of these entities.
Id. None of these entities have any other officers or directors. Id. 585-586. All of the entities
4

As noted above, the ALJ has issued its ruling in the instant matter before the Board, and in his decision,
the ALJ makes a number of findings of fact and conclusions of law. As the Court will explain in detail
below, the Court’s central task in deciding a petition for Section 10(j) relief is making a “predictive
judgment about how the NLRB is likely to rule.” Lineback v. Spurlino Materials, LLC, 546 F.3d 491,
503 n.4 (7th Cir. 2008). Because the ALJ “is the NLRB’s first-level decisionmaker” and because he has
“presided over the merits hearing,” the “‘ALJ’s factual and legal determinations supply a useful
benchmark against which the Director’s prospects of success may be weighed.’” Id. (quoting Bloedorn v.
Francisco Foods, Inc., 276 F.3d 270, 288 (7th Cir. 2001)). Accordingly, the ALJ’s view of the facts and
evidence presented at the hearing informed the Court’s analysis in ruling on the instant petition. For the
reasons explained in its previous orders [57, 62], the Court denied Respondent’s request for discovery and
a full evidentiary hearing, and has decided the propriety of awarding 10(j) relief on the basis of the record
presented to the ALJ. As the Court will explain below, the Court was not required to make any credibility
findings in order to decide the petition for Section 10(j) relief..
5

The Court will cite the transcript of the hearing at the NLRB as “Tr.” The Court notes that many
statements of fact in both parties’ briefs were not supported with citations to the record adduced at the
hearing before the ALJ. For other facts, citations to the hearing transcript were provided, but the cited
portions of the transcript did not adequately support the particular assertion. The Court has disregarded
these statements. As the Seventh Circuit has stressed, it is not the court’s job to sift through the record to
find evidence to support a party’s claim. Davis v. Carter, 452 F.3d 686, 692 (7th Cir. 2006). Rather, it is
“[a]n advocate’s job * * * to make it easy for the court to rule in his client’s favor * * *.” Dal Pozzo v.
Basic Machinery Co., Inc., 463 F.3d 609, 613 (7th Cir. 2006).

3

engage in business operations that interrelate with Gas City in some fashion.
McEnery incorporated Conner in 1982. Out of all of the companies listed above, only
Conner’s employees ever belonged to a union. Before it shut down, Conner operated out of two
locations, Frankfort, Illinois and Porter, Indiana. The larger location was Conner’s headquarters
in Frankfort. The employees at the Frankfort location belonged to Local 705, and the employees
at the Porter location belonged to Local 142. In 2010, Conner employed 20 drivers in Frankfort
and 15 in Porter. Conner’s business mainly consisted of hauling gas to stations locally. Tr. 66869. One of Conner’s principal customers was Gas City. Conner’s other customers included
Jewel, Marathon, Speedway, Shell, and BP Amoco. Tr. 691-92.
McEnery testified that prior to the events in question, he had essentially removed himself
from day-to-day operations of any of his entities.6 Instead, David Christopher (“Christopher”),
who is McEnery’s son-in-law, managed the day-to-day operations at Conner.

Tr. 664-65.

Christopher’s title was vice president of operations at Conner. Tr. 590. Christopher served as
the “contact person” for Conner’s relations with the Unions and was authorized to sign
agreements with the Unions. Tr. 590-91.
An individual named Robert Heidenreich founded Heidenreich in 1986. The McEnery
Trust bought Heidenreich in 2005, but Mr. Heidenreich remained involved in managing the
business. Management testified that Heidenreich operated nationwide and mainly was in the
business of hauling ethanol to and from refineries.

Id.

However, as discussed below,

Heidenreich also hauled gas to local gas stations (namely, Gas City locations) on a regular basis.
Heidenreich’s business consisted solely of owner-operators; that is, Heidenreich’s drivers owned
6

However, there is testimony in the record suggesting that McEnery did play a major role in Conner’s
operations. For example, a Conner dispatcher, Robert Lofrano, testified that occasionally, McEnery
would call Lofrano and direct him to allocate certain work to Conner and certain work to Heidenreich.
Tr. 310-11; ALJ Decision at 7. Additionally, the ALJ credited testimony establishing that “McEnery took
a hands-on approach to the management of many of the enterprises’ operations.” ALJ Decision at 6.

4

their own trucks and were independent contractors of the company. Heidenreich’s drivers never
belonged to a union and were not “employees” of the company under the Act. Heidenreich
operated out of the same Frankfort location as did Conner. Heidenreich also had a Porter
location that was co-located with a Gas City outlet, but it appears that Heidenreich did not share
its Porter location with Conner. See infra n.10.
Robert Heidenreich and Peter Casper managed Heidenreich and were in charge of the
company’s labor relations. However, both Casper and Mr. Heidenreich reported to McEnery,
and McEnery admitted that he “made the ultimate decisions * * * for the company.” Tr. 663; see
also Tr. 668. Mr. Heidenreich left the company sometime in the fall of 2010. Tr. 667.
Conner and Heidenreich had some similarities: They had common ownership, both were
in the business of hauling petroleum products, and they shared the Frankfort location. (In fact,
Conner, Heidenreich, Gas City, McEnery Trucking and Leasing, and McEnery Enterprises all
shared the Frankfort facility. Tr. 586). Further, Lofrano testified that drivers for both companies
obtained the fuel used to run their trucks from the same fuel tank on the Frankfort property.
However, at least while they both were in operation, Conner and Heidenreich maintained
separate drivers, equipment, and had a mostly-distinct customer base. Management testified that
while Conner mostly hauled gas to local filling stations, apart from making Gas City deliveries,
Heidenreich mostly hauled ethanol to and from refineries and operated nationwide.
B.

Events Leading to Conner’s Shutdown

By 2010, both Gas City and Conner were in financial distress. In February 2010,
McEnery wrote a letter to Local 705 in an attempt to engage the Unions in negotiations about
their contract. Tr. 807. Around the same time, Christopher met with a representative of Local
705 to discuss Conner’s precarious situation and to attempt to obtain concessions. Tr. 807-809;

5

Tr. 489. Christopher kept Local 142 apprised of these discussions through phone calls. Tr. 80708.7
In June, Gas City filed for bankruptcy and began procedures to restructure. Gas City lost
its line of credit with Bank of America and was forced to shift to a “cash-basis,” meaning that it
was only able to pay for Conner’s deliveries with cash that it had on hand. See Tr. 835.
On August 5, Christopher sent an e-mail to the Unions with a proposal that included
wage reductions and other concessions. See Pet. Ex. 30. Neil Messino (the Union representative
for Local 705) testified that on August 19, he and Christopher met to discuss the proposal. At
the August 19 meeting, Messina told Christopher that the Union required an independent audit of
Conner’s financials in order to determine the severity of Respondent’s stated economic position
and whether Christopher’s wage and benefits reduction proposals were fair. Tr. 551-52. The
audit was completed within two weeks of that meeting. Id.
There is a heated dispute between the parties about what generally occurred between
February and late September. Respondent’s position is basically that the Unions stonewalled
Conner—while Conner’s financial position became more and more precarious, the Unions
ignored Conner’s pleas for help. Petitioner claims that Conner never gave the Unions an
opportunity to assess their position and bargain with management. Regardless, Conner and the
Unions did not agree on any concessions or enter into any new contracts during this period. It is
unclear whether management and representatives from the Union even spoke to each other
between early August and mid-October.

7

There is some evidence in the record that because each of the Union’s contracts were substantially
identical and the issues facing the Porter and Frankfort drivers were the same, negotiations with one
Union were treated by all parties as pertaining to both of the Unions. See. Resp. Br. at 9; Tr. 807-808.
The collective bargaining agreements between Conner and Local 705 and 142 expired on October 31,
2010, and in addition to discussing concessions, the parties needed to negotiate the terms of a new CBA.

6

Former Conner drivers Gregory Knorr and David Pippin testified that on September 21,
Christopher and McEnery held a meeting with a select group of drivers in the Frankfort facility.
Knorr testified that McEnery starting the meeting by saying “guys, I’ve got some bad news, I
fucked up, we’re broke.” Tr. 83. Pippin testified similarly. According to Pippin, McEnery
started by meeting by saying “that he didn’t have any good news for us and that he was fucking
broke and he wasn’t paying the union any more fucking money.” Tr. 167. According to Pippin,
McEnery said “if we wanted to keep working that we would have to decertify the Union and go
to work for him for less money.” Tr. 167. Similarly, Knorr testified that McEnery said that
“[t]here will be no more fucking union, no more” and that “if the company wanted to continue on
that we would have to decertify to continue as employees.” Tr. 84. Pippin testified that if the
workers refused to get rid of the Union, McEnery said that he would “shut the doors.” Tr. 168.
At the September 21 meeting, Christopher and McEnery passed out a sheet of paper,
showing the drivers how much money they would be paid once they got rid of the Union. Tr.
168; Pet. Ex. 3. It showed significant wage reductions and other concessions. After the drivers
saw this piece of paper, many were “upset” and said that they “couldn’t afford to work for these
wages.” Tr. 169. The drivers discussed going to their Union to discuss McEnery’s demands. In
response, McEnery told the drivers that they “were going to have to talk to everybody and
decertify and let the Union know that we didn’t want to be unionized anymore.” Tr. 169. Knorr
and Pippin gave entirely consistent accounts of the September 21 meeting. At the hearing before
the ALJ, neither McEnery nor Christopher directly contradicted Pippen and Knorr’s testimony.
In fact, Christopher admitted that at the September 21 meeting, McEnery told the drivers that
“the company was broke” and that “he needed concessions.”

Tr. 822-24.

Christopher

characterized the handout that was distributed at the meeting as “a proposal of what was being

7

discussed with the Union.” Tr. 823-24.8
On September 23, Christopher wrote a memorandum addressed to “All AD Conner
Drivers (Porter and Frankfort). See Pet. Ex. 5. In the memorandum, Christopher discusses the
September 21 meeting and summarizes the wage and benefits proposals that were communicated
to the drivers. Christopher wrote, in part:
“We tried taking [sic] a group of select senior drivers to meet with. We felt that
meeting with several drivers would be more productive vs. getting in front of our
entire group of Frankfort and Porter drivers. During the meeting, it was reiterated
to the drivers the importance of getting concessions passed through due to the
financial condition of AD Conner. A proposal was also put onto the table
regarding what we were looking at from a wage and benefit reduction. * * *”
Id. The memorandum also referenced Christopher’s ongoing discussions with the Union. Id.
On September 28, Christopher held a meeting at the Porter facility.

Heidenreich

employee James McClelland and former Conner employee Darin Meadows testified that on
September 28, Christopher held a meeting with approximately 12 Porter drivers. Tr. 223.
According to these employees, Christopher said that “the company was losing money and that
we needed to take a pay cut and [a] cut in our pension” or “the company would have to close.”
Tr. 223. Here again, Christopher distributed a document showing how pay and benefits would
need to be reduced.

Id.; Pet. Ex. 10.

Christopher allegedly said that the Union’s health

insurance, pension, and union wages needed to be eliminated “to save the company.” Tr. 268;
225. Christopher allegedly said that “disbanding the Union” so “there would be less expenses”
would be one way to help the company survive. Tr. 225-26.
Pippin testified that by the beginning of October, management had decided that Conner
would be shut down. Tr. 150-51. At this time, according to Pippin, Christopher began to call
Conner’s clients to tell them of the impending shut down and that they “probably need[ed] to
8

The ALJ also concluded that McEnery’s and Christopher’s testimony at the hearing “served to confirm
and corroborate the descriptions provided by the drivers” of the September meetings. ALJ Decision at 13.

8

look for other carriers.” Tr. 151. According to Pippin, Christopher later admitted to him that he
made these calls and “got rid of the accounts faster than what he should have.” Tr. 150.
Petitioner asserts that these phone calls possibly “hasten[ed] the demise of A.D. Conner.” Pet.
Reply at 7. Whether because of Christopher’s phone calls, or because Conner’s rates were not
competitive (see Tr. 812-15), at around the time of the shutdown, Conner lost most of its major
customers, including BP Amoco, Shell, Marathon, and Jewel. Tr. 691-93.
Representatives from Local 705 had scheduled their first bargaining session with Conner
management for October 18. Tr. 540. Local 705 scheduled a meeting with its employees for
October 9 to “make them aware of what was going on.” Tr. 552. Two days after that meeting
took place, on October 11, Messino testified that he called Christopher with the news that the
drivers had agreed to accept the wage and benefit reductions that the Company said were
necessary. Tr. 905; see also Tr. 865.
On October 13, Christopher canceled the scheduled October 18 bargaining session and
told the Union that Conner would be ceasing operations. Tr. 541-42; 867; Pet. Ex. 29. October
13 was the first that the Union learned of Conner’s decision to close. Union representatives did
not have an opportunity to sit down to bargain with Conner’s representatives before Conner
closed its doors. Between June and October 18 (the date of the shut down), neither of the Unions
had begun to bargain about the terms of the next collective-bargaining agreement, or had sat
down to discuss Christopher’s August 5 wage and benefits reduction proposal in detail. Tr. 553.
After the shut down of Conner, neither Union was permitted to bargain about, for example, who
would be selected to transfer from Conner to Heidenreich, what those workers’ wages would be,
or whether there would be any carryover of seniority at Heidenreich.

9

McEnery testified that he made the decision to shut down Conner. Tr. 591. McEnery
never personally attempted to bargain with the Unions about the shutdown; instead he relied on
Christopher’s attempts to do so. Tr. 591-592.
C.

Transfer of Employees and Work to Heidenreich

At the time of the shut-down, Christopher and McEnery discussed how many of Conner’s
drivers should be hired over to Heidenreich in order to continue servicing their customers.
Immediately following the shutdown of Conner, 16 Conner drivers and two dispatchers were
hired to work for Heidenreich. See Tr. 676-77.
On October 13, Christopher wrote an e-mail to Lowrey that indicated that it was intended
to be passed on to the Conner drivers. Pet. Ex. 13. Lowrey had been acting as a sort of
“conduit” for communications between management and the Conner drivers. See ALJ Decision
at 21-25. In the e-mail, Christopher tells Lowrey that “[w]e are still determining the number of
drivers that we would need to service Gas City and any other customers through Heidenreich.”
Pet. Ex. 13.

Christopher instructed Lowrey to tell the drivers to apply online for jobs at

Heidenreich and informed Lowrey what the drivers’ salaries and benefits would be. Id. The email concludes with the phrase: “I could not put the above into a formal letter due to union
issues, but this can be verbally conveyed to them.” Id. (emphasis added). The ALJ described the
e-mail as “smoking gun evidence.” ALJ Decision at 16 n.22 (“It has been my experience that the
record rarely affords “smoking gun” evidence, particularly regarding the intent and motivation of
parties to lawsuits. This e-mail represents a striking exception * * *.”).
On October 12 and 13, Christopher and Lowrey (speaking at Christopher’s behest) began
contacting former Conner drivers, and asked them to apply for a job at Heidenreich. In an e-mail

10

to the drivers, Christopher advised that applications were available “on the web.” See Pet. Ex.
18.
Those drivers that were hired on at Heidenreich were not required to submit new tax or I9 forms when they were initially hired and were not given any sort of orientation upon starting
their new jobs. Tr. 196, 284, 485, 295.9 After being rehired at Heidenreich, the 16 drivers
continued to work out of the same Frankfort facility, and continued to use the same trucks, keys,
and other equipment to make their deliveries. Tr. 67, 92, 178, 180, 274, 295-96.10 Someone at
Heidenreich had just ripped the “A.D. Conner” stickers off the former Conner trucks, and
replaced them with Heidenreich stickers. Tr. 182, 275. The dispatch sheets were in the same
form and format; only a Conner logo had been replaced with a Heidenreich logo. The drivers’
job duties and work processes at Heidenreich were generally the same as they had been at
Conner—they were still responsible for delivering petroleum products, and mostly to the same
Gas City locations that they had previously serviced. See, e.g. Tr. 183; 238-39.
As noted above, around the time of the shutdown, Conner lost most of its major
customers, including BP Amoco, Shell, Marathon, and Jewel. Tr. 691-93. These customers did
not begin to use Heidenreich after Conner’s shutdown. Respondent explains that generally, to
qualify as a carrier for a particular gas station customer, there is a detailed vetting process that
can take months to complete before final approval is given. For that reason, when Conner shut
down suddenly, Heidenreich was not able to haul for most of Conner’s customers, as it had not
9

However, employees proposing to transfer from Conner to Heidenreich were required to fill out some
sort of application form in order to be considered for a position at Heidenreich. See Pet. Ex. 13.

10

Heidenreich’s Porter branch always operated out of a different location than Conner’s Porter branch.
(The Conner branch in Porter operated out of a “Steel City” building while Heidenreich was run out of a
trailer.) Tr. 248-51; 296-98. It is unclear whether the trailer was on the same property as the Conner
location. After the shutdown of Conner, the Heidenreich Porter branch continued to operate out of the
trailer.

11

gone through the vetting process with them. Tr. 871. However, Conner’s biggest account, Gas
City, went to Heidenreich, and the 16 formerly-Conner drivers serviced this account (as they did
when they worked for Conner). Tr. 183.11
When they were at Conner, the driver-employees had earned $25.15 per hour. Tr. 10204; 191. Currently, at Heidenreich, they earn $22.75 per hour. Further, drivers at Conner had
had their medical and dental benefits provided through the Union. Tr. 104-105. At Heidenreich,
they must pay $338 per month for medical and dental benefits. Tr. 191. Drivers at Conner had
received a pension through each respective Local pension fund; while at Heidenreich employees
have no retirement benefits. Tr. 106. As Heidenreich drivers, the 16 have less paid time off than
they did at Conner. See Pet. Br. at 20 n.17; ALJ Decision at 20.
Following the shutdown of Conner, Christopher became the vice president of operations
for Heidenreich.

Tr. 602.

Christopher became responsible for overseeing the 16 driver

employees at the company, while Casper retained management of Heidenreich’s owner-operator
drivers. E-mails and other record evidence establish that during the critical period immediately
prior to and following the shutdown, Christopher was at the reins for all supervisory and
managerial decisions involving the transfer of work from Conner to Heidenreich. See, e.g. Pet.
Ex. 13.

11

While Heidenreich had made regular deliveries to Gas City stores before the shut down of Conner (see
ALJ Decision at 7-8 (citing testimony)), Petitioner introduced evidence that Heidenreich began delivering
to new Gas City locations after Conner closed, and Heidenreich’s volume of deliveries to Gas City greatly
increased. See Pet. Mem. at 12-13 (citing exhibits). Respondent explains that after Conner’s closure, Gas
City needed a new petroleum hauler, and Gas City’s “bankpruptcy status discouraged all other carriers
from agreeing to service them.” Resp. Br. At 9. As a result, according to Respondent, Heidenreich “had
to enter the commercial petroleum hauling business and haul fuel to Gas City to prevent that entity from
also closing its doors.” Id. at 10 (citing Tr. 894-95).

12

II.

Legal Standard
Section 10(j) of the National Labor Relations Act authorizes a district court to enter “just

and proper” injunctive relief pending the final disposition of an unfair labor practices claim by
the National Labor Relations Board (“Board”). Bloedorn v. Francisco Foods, Inc., 276 F.3d
270, 286 (7th Cir. 2001) (citing 29 U.S.C. § 160(j)); see also Lineback v. Spurlino Materials,
LLC, 546 F.3d 491, 499–500 (7th Cir. 2008).
Section 10(j) provides:
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 to the Board such temporary relief or restraining order as it
deems just and proper.
Like many other forms of preliminary injunctive relief, an injunction issued under the
authority of Section 10(j) has been described as an “extraordinary remedy.” NLRB v. ElectroVoice, Inc., 83 F.3d 1559, 1566 (7th Cir. 1996) (quoting Szabo v. P*I*E* Nationwide, Inc., 878
F.2d 207, 209 (7th Cir. 1989)). Relief under Section 10(j) should 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.” Id.
In Bloedorn, the Seventh Circuit set forth the applicable standard for obtaining relief
under Section 10(j).
“The familiar factors that courts reference in weighing the propriety of
preliminary injunctive relief in other contexts—the lack of an adequate remedy at
law, the balance of potential harms posed by the denial or grant of interim relief,
the public interest, and the petitioner’s likelihood of success on the merits of its
complaint—apply to requests for relief pursuant to section 10(j) as well. Thus,
the Director will be entitled to interim relief when: “(1) the Director has no
adequate remedy at law; (2) the labor effort would face irreparable harm without
13

interim relief, and the prospect of that harm outweighs any harm posed to the
employer by the proposed injunction; (3) “public harm” would occur in the
absence of interim relief; and (4) the Director has a reasonable likelihood of
prevailing on the merits of his complaint. The strength of the Director’s case on
the merits affects the court’s assessment of the relative harms posed by the grant
or denial of injunctive relief: the greater the Director’s prospects of prevailing are,
the less compelling need be his showing of irreparable harm in the absence of an
injunction.”
Bloedorn, 276 F.3d at 286-87 (citing Kinney v. Pioneer Press, 881 F.2d 485, 490 & n.3, 493 (7th
Cir. 1989) and Electro-Voice, 83 F.3d at 1566) (internal citations and quotations omitted)); see
also Lineback, 546 F.3d at 500.
“The Director bears the burden of establishing the first, third, and fourth of the above
factors by a preponderance of the evidence.” Lineback, LLC, 546 F.3d at 500; see also Electro–
Voice, Inc., 83 F.3d at 1567. However, as noted above, the strength of the Director’s case on the
merits affects this Court’s assessment of the relative harms posed by the grant or denial of
injunctive relief. Id. (citing Bloedorn, 276 F.3d at 286). As such, the second prong is evaluated
on a sliding scale: the better the Director’s case on the merits, the less compelling need be his
showing of irreparable harm in the absence of an injunction, and vice versa. Id. But even with
the sliding scale between probability of success on the merits and degree of harm, Petitioner
must surpass the “possibility” threshold into “likelihood” on each prong: it must be likely that he
will succeed on the merits and it must be likely that he will suffer irreparable harm in the absence
of an injunction; the sliding scale does not remove the burden of this likelihood threshold from
Petitioner. See Winter v. National Resources Defense Council, Inc., 129 S.Ct. 365, 375
(2008) (“We agree with the Navy that the Ninth Circuit’s ‘possibility’ standard is too lenient.
Our frequently reiterated standard requires plaintiffs seeking preliminary relief to demonstrate
that irreparable injury is likely in the absence of an injunction.”); see also Nken v. Holder, 129
S.Ct. 1749, 1762 (2009) (discussing similar standards for issuance of stay and noting that the

14

“possibility” standard for success on the merits and irreparable harm is too lenient). “Likely”
means more than “better than negligible” and “more than a mere possibility of relief.” Nken, 129
S.Ct. at 1761.
While a court considers a request for an injunction under Section 10(j) “with an eye
toward the traditional equitable principles,” Kinney, 881 F.2d at 490, Section 10(j) proceedings
differ from ordinary preliminary injunction situations in a fundamental sense. As the Court
explained in its prior order ([62] at 1-2), a motion for a preliminary injunction requires the
district court to undertake its own analysis of the moving party’s likelihood of success on the
merits of its claim. By contrast, in considering the moving party’s “likelihood of success” in the
Section 10(j) context, “it is not the district court’s responsibility * * * to rule on the merits of the
Director’s complaint.” Bloedorn, 276 F.3d at 287. In fact, “a federal court has no jurisdiction to
pass on the merits of the underlying case before the Board.” Electro-Voice, 83 F.3d at 1567.
Instead, “deciding the merits of the case is the sole province of the Board.” Lineback, 546 F.3d
at 502. The Seventh Circuit has explained that the “court’s mission” in a Section 10(j) case “is
to determine whether the harm to organizational efforts that will occur while the Board considers
the case is so great as to permit persons violating the Act to accomplish their unlawful
objectives, rendering the Board’s remedial powers ineffectual.” Electro-Voice, 83 F.3d at 1567.
In undertaking that task, “[t]he district judge must assess not only the harm that may go
unchecked during the ‘notoriously glacial’ course of NLRB proceedings * * * , but also the
probability that the General Counsel will succeed in convincing the NLRB that someone has in
fact violated the labor laws.” Kinney, 881 F.2d at 491 (emphasis added). In short, as the court of
appeals has succinctly summarized, “[a]ssessing the Director’s likelihood of success calls for a
predictive judgment about what the Board is likely to do with the case.” Bloedorn, 276 F.3d at

15

288 (emphasis added). As noted above, “[t]he ALJ is the NLRB’s first-level decisionmaker, and,
‘[h]aving presided over the merits hearing, the ALJ’s factual and legal determinations supply a
useful benchmark against which the Director’s prospects of success may be weighed.’”
Lineback, 546 F.3d at 503 n.4 (quoting Bloedorn, 276 F.3d at 288).12
III.

Analysis
A.

Likelihood of Success on the Merits

In his brief in support of his petition for relief under Section 10(j) of the Act [58],
Petitioner identifies six separate violations of the federal labor laws. Below, the Court will make
a “predictive judgment,” Bloedorn, 276 F.3d at 288, about Petitioner’s likelihood of success on

12

Respondent argues that Winter v. National Resources Defense Council, Inc., 129 S.Ct. 365 (2008), cited
above, substantially changed (or in Respondent’s word, “thawed”) the standard that courts in this circuit
use to decide Section 10(j) cases. See Resp. Request for Leave to File Additional Authority [72] at ¶ 3.
In Winter, the Supreme Court confirmed the traditional four-factor test as the test that a plaintiff must
meet in order to obtain a preliminary injunction. 129 S.Ct. at 374 (“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.”). The Court also clarified that, at a minimum, a party moving for a
preliminary injunction must “demonstrate that irreparable harm is likely in the absence of an injunction,”
and that the mere “possibility” of irreparable harm will not suffice. 129 S.Ct. at 375-76 (emphasis in
original). In Nken, the Court cited Winter favorably, and confirmed that “simply showing some
possibility” of irreparable injury or success on the merits fails to satisfy the test. Nken, 129 S.Ct. at 1761
(citing Winter, 129 S.Ct. at 375). In support of its argument that Winter altered the standard that courts in
this circuit apply to 10(j) injunctions, Respondent attaches a recently-issued opinion from the Western
District of Pennsylvania, Chester v. Grane Healthcare Co., et al., Civil No. 3:2010-225; 3:2010-244
(W.D. Pa. June 2, 2011). In Chester, the judge held that the Supreme Court’s endorsement of the
traditional four-prong test for obtaining preliminary injunctive relief in Winter abrogated the two-factor
test that the Third Circuit previously used for evaluating petitions for Section 10(j) injunctions. See id. at
7-8 (discussing two-factor test from Hirsch v. Dorsey Trailers, Inc., 147 F.3d 243, 247 (3d Cir. 1998) (“A
district court’s determination whether to issue temporary injunctive relief under § 10(j) involves a twofold inquiry: (1) whether there is reasonable cause to believe that an unfair labor practice has occurred;
and (2) whether an injunction would be just and proper.”)). However, the analysis from Chester is
inapplicable to this case, as the Seventh Circuit has never adopted the Third Circuit’s two-prong test and
has instead required courts in this circuit to evaluate Section 10(j) petitions under the “traditional” fourprong test. E.g. Bloedorn, 276 F.3d at 286-87; Kinney, 881 F.2d. at 490. In any event, to the extent that
there is a difference between the approaches taken by the Third and Seventh Circuits, Petitioner would be
entitled to relief under either standard.

16

three of the six asserted violations.13 However, the Court first must address the threshold issue14
of whether Heidenreich can be considered an “alter ego” of Conner, such that Heidenreich can be
held to Conner’s obligations under the labor laws.
1.

Alter Ego Analysis

An employer may not avoid its obligations under the Act by substituting one corporate
entity for another where in reality the different corporate entity is only a “disguised continuance”
or alter ego of the other. Southport Petroleum Co. v. NLRB, 315 U.S. 100, 106 (1942); see also
Howard Johnson Co. v. Detroit Local Executive Board, 417 U.S. 249, 259 n.5 (1974) (“a mere
technical change in the structure or identity of the employing entity, frequently to avoid the
effect of the labor laws, without any substantial change in its ownership or management,” is
properly disregarded, and such an alter ego is “subject to all the legal and contractual obligations
of the predecessor.”). The doctrine “focuses on ‘the existence of a disguised continuance of a
former business entity or an attempt to avoid the obligations of a collective bargaining
agreement, such as through a sham transfer of assets,’” Central States, Southeast and Southwest
Pension Fund v. Sloan, 902 F.2d 593, 596 (7th Cir. 1990) (quoting International Union of
Operating Engineers, Local 150 v. Centor Contractors, Inc., 831 F.2d 1309, 1312 (7th Cir.

13

In its brief, Respondent takes issue with the fact that Petitioner did not argue all of the charges asserted
in the Amended Consolidated Complaint in support of the instant petition. Resp. Br. at 6. However,
Respondent cites no law for the proposition that the Director must argue the merits of his entire complaint
when seeking Section 10(j) relief before a district court judge. Petitioner explains that he “demonstrated
prosecutorial restraint in eliminating additional theories which were unnecessary and improper as they
were remedial in nature when this action is equitable.” Pet. Reply at 3 n.4. Similarly, although
Petitioner’s opening brief identified six separate violations of the Act, the Court will address only three of
them. This is because, as the Court explains below, Petitioner has a relatively strong likelihood of
success on the first three claims. As the Seventh Circuit has recognized, “once the Director presents
evidence sufficient to tip the scales in her favor, nothing more is required.” Electro-Voice, Inc., 83 F.3d
at 1567.

14

At the 5/13/11 oral argument on this petition, counsel for Petitioner conceded that the alter ego theory
was the “linchpin” of Petitioner’s case, since that theory allowed Heidenreich to be held responsible for
violations committed at and by Conner. See Transcript of Proceedings on 5/13/2010, at 35.

17

1987)), or through a “simpl[e ] alter[ation of the] corporate form.’” NLRB v. Dane County
Dairy, 795 F.2d 1313, 1321 (7th Cir. 1986).
Whether the successor company is the alter ego of its predecessor is a question of fact.
Chicago Dist. Council of Carpenters Pension Fund v. Cotter, 914 F. Supp. 237, 244 (N.D. Ill.
1996). In determining whether a successor corporation is the alter ego of its predecessor, courts
consider several factors including “whether they have substantially identical management,
business purpose, operation, equipment, customers, supervision, and ownership.” Chicago Dist.
Council of Carpenters Pension Fund v. Cotter, 914 F. Supp. 237, 244 (N.D. Ill. 1996). The
Seventh Circuit has explained that the NLRB has found an alter ego relationship where:
“* * * the new employer is a “disguised continuance of the old employer” * * *;
or was in active concert or participation in a scheme or plan of evasion * * *; or
siphoned off assets for the purpose of rendering insolvent and frustrating a
monetary obligation such as back pay * * *; or so integrated or intermingled its
assets and affairs that “no distinct corporate lines are maintained.” The Board has
also found an alter ego relationship based on substantially identical business
purposes, equipment, type of customers, actual joint day-to-day operations, joint
labor relations, a favorable lease agreement, and the transient nature of the
relationships between the companies. In some instances the criteria have been
equated with the “basic indicia for finding a single employer, i.e., interrelation of
operations, centralized control of labor relations, common management, and
common ownership or financial control” although “more must be shown to
establish that one organization is the alter ego of another.” We have also found an
alter ego relationship to exist “even though no evidence of actual common
ownership was present.”
Sloan, 902 F.2d at 596-97 (quoting Dane County Dairy, 795 F.2d at 1321 and District 23,
United Mine Workers of America (Kentucky Lake Dock Co.), 271 NLRB 461 (1984)).
“‘Unlawful motive or intent are critical inquiries in an alter ego analysis.’” Trustees of Pension,
et al. v. Favia Electric Co., Inc., 995 F.2d 785, 789 (7th Cir. 1993) (quoting Int’l Union of
Operating Engineers v. Centor Contractors, 831 F.2d 1309, 1312 (7th Cir. 1987)). No one
factor is determinative, nor do all of the indicia noted above need to be present to find an alter
ego relationship. US Reinforcing, Inc., 350 NLRB 404, 404 (2007).
18

After carefully considering the record of the proceedings before the ALJ and the parties’
briefs, the Court concludes that Petitioner has demonstrated a “reasonable likelihood,” Bloedorn,
276 F.3d at 286-87, that he will succeed in convincing the Board that Heidenreich is an alter ego
of Conner. In fact, Petitioner has already persuaded the ALJ that Conner and Heidenreich have
an alter ego relationship. ALJ Decision at 31-36. The ALJ determined that each and every
factor in the alter ego analysis supported such a conclusion, id., and the Court agrees with the
ALJ’s analysis.
First, Heidenreich and Conner have identical ownership—both entities are completely
owned by the McEnery Trust. Sloan, 902 F.2d at 596-97. Respondent concedes that this factor
weighs in favor of an alter ego finding. Resp. Br. [59] at 16.
Second, there is sufficient evidence in the record such that the Board could conclude that
both of the entities have “substantially identical management * * * [and] supervision.” Cotter,
914 F. Supp. at 244. Ultimately, McEnery is responsible for supervising and overseeing both
Heidenreich and Conner. There is evidence in the record that McEnery was personally involved
in the day-to-day operations of Conner and in the allocation of work between Conner and
Heidenreich.

Prior to the fall of 2010, Christopher was responsible for the day-to-day

management of Conner and was not closely involved in managing Heidenreich. However, the
record shows that around the fall of 2010, Mr. Heidenreich left his company and Christopher
essentially took the reins at Heidenreich, at least with respect to decisions involving the transfer
of employees from Conner to Heidenreich. Immediately following the shutdown of Conner,
Christopher became the vice president of operations for Heidenreich. On the other side of the
ledger, Casper oversees the majority of Heidenreich’s drivers; Christopher only had managerial
authority over the 16 driver-employees.

19

Third, the Board could conclude that Conner and Heidenreich have identical business
purposes—they are both in the business of hauling petroleum products. As noted above, there is
some testimony in the record from management that before Conner’s demise, Conner hauled gas
to local gas stations and Heidenreich mostly hauled ethanol to refineries across the nation. The
ALJ did not credit this testimony. ALJ Decision at 32. Instead, the ALJ looked to the evidence
in the record that established that in addition to hauling to refineries, a significant portion of
Heidenreich’s business was (and continues to be) deliveries to Gas City retail locations. Id.
Accordingly, the Board could find that this factor supports an inference of alter ego status as
well.
The next two factors (operation and equipment) weigh in favor of an alter ego finding.
Prior to the shutdown, Heidenreich and Conner shared a facility (the Frankfort facility). The two
companies shared a fuel depot. And most importantly, the two companies shared a major
customer—Gas City.

Following their transfer to Heidenreich, the former Conner drivers

reported to the same facilities (in both Frankfort and Porter) that they reported to when they
worked at Conner. Following the shutdown, the trucks that were formerly used by Conner
drivers to deliver petroleum were immediately transferred to Heidenreich and given new
markings. At Heidenreich, the former Conner drivers continued to use the same trucks, keys,
and other equipment to make their deliveries. Their routes, procedures, and other methods of
operations were the same.

Once they shifted to Heidenreich, the former Conner drivers

performed much of the same work and made many of the same deliveries as they did in their
former positions. See Dane County Dairy, 795 F.2d at 1321-22 (the fact that “[e]ssentially, the
same customers were serviced with the same equipment, only without union drivers” supported
alter ego finding).

20

But most importantly, there is copious evidence from which the Board could conclude
that McEnery decided to shut down Conner in order to avoid the collective bargaining and other
labor-related obligations that it had to Conner’s employees.

As discussed above, during

McEnery and Christopher’s meetings with employees on September 21 and 28, they demanded
economic concessions, blamed the unions for Conner’s problems, and encouraged employees to
decertify their representatives. The drivers, however, did not immediately comply with their
demands; Union representation remained in place. Shortly after these meetings, Conner shut its
doors and seamlessly transferred its largest customer (along with 16 drivers) to Heidenreich.15
These events, along with their timing, could support an inference that McEnery and Christopher
closed Conner in order to avoid their obligations under the Act. The October 13 e-mail from
Christopher to Lowrey strongly suggests that the shutdown of Conner was effected at least in
part for this reason. In fact, Christopher’s statement in the e-mail that he could not put his
communication “into a formal letter due to union issues” evidences an awareness of this illegal
purpose.

Pet Ex. 13.

It also is relevant that the statements attributed to McEnery and

Christopher at the September meetings suggest an animus towards the Unions and a desire to be
in business without them. Dane County Dairy, 795 F.2d at 1322 (“to establish the last element,
improper motivation, the general counsel provided the Board with documentary and deposition
evidence demonstrating that [the employer was] openly hostile to the Union and the Board”). In
addition, former Conner employees testified to several statements made by McEnery that could
be interpreted as evidence of an attitude of animus towards the Unions. See Tr. 313-12 (former
Conner dispatcher Robert Lofrano testified that “Mr. McEnery said that the Union was killing
him.”); Tr. 324 (Knorr testified that McEnery said “the Union’s been killing me, it’s been costing
15

The lack of any “hiatus in operations” between alleged alter ego companies is probative evidence of
unlawful motivation. MIS, Inc., 289 NLRB 491, at *2 (1988).

21

me a million dollars a year for the past 15 years, and I just can’t put up with it anymore.”). The
ALJ evaluated the record in its totality, including McEnery’s and Christopher’s demeanor on the
witness stand, and emphatically concluded that unlawful intent and motivation was behind the
decision to close Conner and transfer its remaining work to Heidenreich. ALJ Decision at 34-35.
Doubtless, there are some facts in the record that could lead the Board to conclude that
Conner and Heidenreich are not alter egos of each other. For instance, the Board theoretically
could conclude that McEnery and Christopher shut down Conner not out of a desire to avoid its
labor obligations, but because Conner had been experiencing severe financial difficulty since the
beginning of 2010 and could simply not afford to keep operating at its then-existing cost
structure. But, in order to obtain relief under Section 10(j), Petitioner need not demonstrate that
he surely will convince the Board that Conner and Heidenreich are alter egos; he need only
demonstrate (by a preponderance of the evidence) that he has a “reasonable likelihood” of
success on this theory, Bloedorn, 276 F.3d at 286-87, or put another way, that his chance of
success on this theory is “more than a mere possibility.” Nken, 129 S.Ct. at 1761. For the
reasons discussed above, Petitioner easily had met that threshold.
2.

Coercive Statements in the September Meetings

Section 7 of the Act provides that “[e]mployees shall have the right to self-organization,
to form, join, or assist labor organizations, to bargain collectively through representatives of their
own choosing, and to engage in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection * * *.” 29 U.S.C. § 157. Section 8(a)(1) of the Act
provides that “[i]t shall be an unfair labor practice for any employer * * * to interfere with,
restrain, or coerce employees in the exercise of the right[ ]” to organize collectively under the
Act. 29 U.S.C. § 158(a)(1). In order to establish a violation of this provision, “‘[n]o proof of

22

coercive intent or effect is necessary * * * the test being whether the employer engaged in
conduct, which, it may reasonably be said, tends to interfere with the free exercise of employee
rights under the Act.’” Brandeis Machinery & Supply Co. v. NLRB, 412 F.3d 822, 830 (7th Cir.
2005) (quoting NLRB v. Gen. Thermodynamics, Inc., 670 F.2d 719, 721 (7th Cir. 1981)).
“Threats of discharge, discipline, plant closure or other reprisals against employees for engaging
in union activity are unlawful and violative of section 8(a)(1) of the Act because these acts
reasonably tend to coerce employees in the exercise of their rights, regardless of whether they
do, in fact, coerce.” Fleming Companies, Inc. v. NLRB, 349 F.3d 968, 973 (7th Cir. 2003) (citing
N. Wire Corp. v. NLRB, 887 F.2d 1313, 1318 (7th Cir. 1989)). It is also settled that a coercive
threat may be implied rather than stated expressly.

Id. (citing Nat’l By-Products, Inc. v.

NLRB, 931 F.2d 445, 451-52 (7th Cir. 1991) and NLRB v. Gissel Packing Co., 395 U.S. 575,
617-18 (1969)).
Here, former Conner drivers Knorr and Pippen testified that on September 21,
Christopher and McEnery held a meeting with a select group of drivers in the Frankfort facility
during which Christopher and McEnery threatened that if the drivers did not decertify the Union,
the company would close. Tr. 87, 167-68. Similarly, Heidenreich employee McClelland and
former Conner employee Meadows testified that Christopher held a meeting at the Porter
location a week later at which he spoke to the dire financial condition of the company and
warned that “the company would have to close,” unless the employers agreed to pay and benefits
cuts. Tr. 268; 225. Christopher allegedly said that “disbanding the Union” so “there would be
less expenses” would be one way to save the company from shutting down. Tr. 225-26. As
explained above, the testimony from these four employees went uncontested at the hearing
before the ALJ. These threats of closure and admonitions to decertify the Unions are precisely

23

the sort of statements that have been found to be unlawful and violative of Section 8(a)(1) of the
Act because they tend to coerce employees in the exercise of their rights. See, e.g. N. Wire
Corp., 887 F.2d at 1318 (“the threats of plant closure and other reprisals for union activity
reasonably tended to coerce employees in the exercise of their statutory organizational rights”);
Multi-Ad Services, Inc. v. NLRB, 255 F.3d 363, 373 (7th Cir. 2001) (“a threat of plant closure is
per se a violation of § 8(a)(1)); NLRB v. Champion Laboratories, Inc., 99 F.3d 223, 228 (7th Cir.
1996) (same); Central Transport, Inc. v. NLRB, 997 F.2d 1180, 1190-91 (7th Cir.
1993) (supervisor’s threats to close down plant were unfair labor practice despite supervisor’s
lack of authority to effect plant closure). The ALJ concluded that management’s threatening
statements at the September 21 meetings violated Section 8(a)(1) of the Act, in that they
“constituted direct and obvious threats to shutdown Conner and terminate its workforce if the
employees decided to maintain their membership in the Union.” ALJ Decision at 27. Similarly,
the ALJ found that Christopher’s statements to the Porter drivers also violated this section of the
Act. Id. at 27-28.
In response, Respondent cites Section 8(c) of the Act, which, in acknowledgment of the
First Amendment, makes it clear that “[t]he expressing of any views, argument, or opinion, or
the dissemination thereof, * * * shall not constitute or be evidence of an unfair labor practice.”
29 U.S.C. § 158(c). “This is a limited privilege, however,” as the “Act accords no protection for
views, arguments, or opinions that contain a threat of reprisal or force or promise of benefit.”
NLRB v. Overnite Transp. Co., 938 F.2d 815, 819 (7th Cir. 1991). Respondent maintains that
“Conner never threatened its employees, nor did it ever instruct its employees to decertify their
unions.” Resp. Br. at 13. Instead, Respondent argues that the meetings were intended to
“inform[] the drivers of the bleak outlook” of the company and the pamphlet distributed by

24

Christopher was intended to “prevent surprises, since McEnery and Christopher did not know
what was communicated to the employees by the unions since June, 2010.” Resp. Br. [59] at 9.
Respondent maintains that “even if McEnery expressed his frustration, * * * an employer is
protected by § 8(c) for saying anything he wants, even spewing epithets directed at the union, as
long as there are no threats accompanied with the criticism.”
Despite the potential availability of a defense based on Section 8(c) of the Act, the Court
concludes that Petitioners have a strong likelihood of proving their Section 8(a)(1) allegations to
the Board. First, many of the statements attributed to McEnery and Christopher appear—on their
face—to be potentially of a threatening character. See, e.g. Tr. at 84 (“[t]here will be no more
fucking union, no more” and “if the company wanted to continue on that we would have to
decertify to continue as employees.”). And even if the executives never expressly told the
employees that they would be fired if they did not decertify their Union, it is “settled that a
coercive threat may be implied” from the totality of the circumstances surrounding the statement.
Fleming, 349 F.3d at 973; Empire State Weeklies, 354 NLRB No. 91, at *3 (2009). On the basis
of testimony from Knorr, Pippin, McClelland, and Meadows, the Board could conclude that
McEnery’s and Christopher’s statements were of the type that would “reasonably tend to coerce
employees.” Fleming Companies, Inc., 349 F.3d at 973. Further, whether or not McEnery and
Christopher subjectively intended their statements to be threatening or merely expressive of their
own opinions is irrelevant to the analysis, as “[n]o proof of coercive intent or effect is necessary”
for a violation of this section of the Act. Id.; see also Scripps Memorial Hospital Encinitas, 347
NLRB 52, at *2 (2005) (“in considering whether communications from an employer to its
employees violate the Act, the Board applies the objective standard of whether the remark tends

25

to interfere with the free exercise of employee rights. The Board does not consider either the
motivation behind the remark or its actual effect.”).
3.

Direct Dealing with Employees

An employer who deals directly with its unionized employees regarding terms and
conditions of employment violates Section 8(a)(5) of the Act. Northwest Graphics, Inc., 343
NLRB 84, 93 (2004). Unlawful direct dealing occurs when an employer communicates directly
with union-represented employees, without the benefit of Union representation, for the purpose
of changing wages, hours, and terms and conditions of employment. El Paso Electric Co., 355
NLRB No. 95, at *2 (2010); see also Alan Ritchey, Inc. et al., 354 NLRB No. 79, at *64 (2009).
Further, direct dealing need not take the form of actual bargaining. Allied Signal, Inc., 307
NLRB 752, 753 (1992). “In any case, involving an allegation of direct dealing, the inquiry must
concern whether the employer’s direct solicitation is likely to erode ‘the union’s position as
exclusive representative.’” Alan Ritchey, Inc. et al., 354 NLRB No. 79, at *64 (quoting Modern
Merchandizing, 284 NLRB 1377, 1379 (1987)). “Implicit in the obligation to bargain in good
faith ‘is the principle that the employer is not to go behind the union’s back and negotiate with
individual workers, nor otherwise to undermine the union’s status as exclusive bargaining
representative.’” Naperville Ready Mix, Inc. v. NLRB, 242 F.3d 744, 757 (7th Cir. 2001)
(quoting Szabo v. U .S. Marine Corp., 819 F.2d 714, 718 (7th Cir. 1987)). “This prohibition
forecloses individual negotiations with unit employees, in most cases even if collective
bargaining negotiations have reached an impasse.” Id.
In this case, Petitioner has a high likelihood of success of establishing that McEnery and
Christopher wrongfully bypassed both of the Unions when they attempted to directly bargain
with Conner drivers in Frankfort and Porter. There is no suggestion in the record that a Union

26

representative was present at either of these meetings. Respondent admits that he distributed a
document at the September meetings that contained Conner’s proposal for reductions in wages
and other benefits. See Pet. Exs. 3, 4. In fact, in his September 23 memorandum, Christopher
effectively admitted that he bargained directly with employees. The memorandum summarizes
the wage and benefits concessions that he communicated to drivers at the September 21 meeting
and stresses the “importance of getting concessions passed through due to the financial condition
of AD Conner.” Pet. Ex. 5. When viewed through the lens of the solicitations of decertification
and threats of closure made at these same meetings, the Board could conclude that McEnery’s
and Christopher’s direct dealing about proposed changes to employees’ terms of conditions of
employment were calculated to undermine the Union’s position as their exclusive representative.
See Alan Ritchey, Inc. et al., 354 NLRB No. 79, at *64; Modern Merchandizing, 284 NLRB
1377, 1379. The ALJ concluded that “it is obvious that management engaged in unlawful direct
dealing during both meetings.” ALJ Decision at 44. This Court agrees that Petitioner has a high
likelihood of establishing that Christopher communicated “directly with union-represented
employees” without their Union representatives present, “for the purpose of changing wages,
hours, and terms and conditions of employment.” El Paso Electric Co., 355 NLRB No. 95, at
*2.
Again, in his response, Respondent characterizes the meetings as “informational” and
explains the document distributed by Christopher as intended to “prevent surprises.” Resp. Br.
[59] at 9. According to Respondent, Christopher and McEnery were not attempting to “bargain”
with the employees, in that they did not demand that the employees accept Conner’s terms. But
such a requirement is not present in the law. As explained above, “direct dealing need not take
the form of actual bargaining.” Allied Signal, Inc., 307 NLRB at 753. Instead, the “question is

27

whether an employer’s direct [* * * communications with employees] is likely to erode the
Union’s position as exclusive representative.” Id. Here, for the reasons explained above, the
Board could find McEnery’s and Christopher’s communications to be an attempt at an end-run
around the Union’s exclusive representation of the drivers.
4.

Failure to Bargain About Effects of Conner’s Closure

Irrespective of its ongoing course of negotiations with the Union about wage and benefits
concessions, once McEnery and Christopher decided to close Conner, they had a duty under
Section 8(a)(5) to bargain with the Union “concerning the ‘effects’ of [their] decision to close.”
NLRB v. Emsing’s Supermarket, Inc., 872 F.2d 1279, 1286 (7th Cir. 1989) (citing First Nat’l
Maintenance Corp. v. NLRB, 452 U.S. 666, 681-82 (1981)); see also Central Transport, Inc. v.
NLRB, 997 F.2d 1180, 1188 (7th Cir. 1993) (“An employer is obligated to negotiate with the
certified representative of its employees over the effects of a closure of all or a part of its
business.”); Sea-Jet Trucking Corp., 327 NLRB 540, 544 (1999) (“Under Section 8(a)(5) and
8(d) of the Act, an Employer who relocates is required to bargain in good faith with the
collective-bargaining representative of its employees regarding the effects of the relocation on
those employees, even where decisional bargaining is not required as a mandatory subject of
bargaining.”). And this bargaining had to be done “in a meaningful manner and at a meaningful
time.” Emsing’s Supermarket, 872 F.2d at 1286-87. When an employer shuts down a business
unit and reallocates workers, it is required to bargain over the effects of the shutdown, including
bargaining over which workers would be reallocated, the reallocated workers’ wages, work
locations, schedules, carryover of seniority, and other terms. See, e.g., Sea-Jet Trucking Corp.,
327 NLRB at 545; Holly Farms Corp., 311 NLRB 273, 279 & n.25 (1993); Cooper
Thermometer Co., 160 NLRB 1902, 1912 (1966).

28

Here, the Union first learned of the shutdown on October 13. On October 13, Local 142
sent Christopher an “official notice of [the Union’s] desire to enter into negotiations relative to
the decision and effects of the closure.” Pet. Ex. 23. Conner officially closed five days later, on
October 18. On October 27, the Union sent McEnery and Christopher a list of interrogatories for
information that the Union needed “in order to bargain effectively, concerning the decision to
close AD Conner and the effects of this decision.” Pet. Ex. 33. At no time were the Unions
permitted to bargain about the effects of Conner’s closure; for example, who would be selected
to transfer from Conner to Heidenreich, what the workers’ wages would be, whether there would
be any carryover of seniority to Heidenreich, and so forth. Management never responded to the
Union’s request for information.16 Respondent does not address this specific violation in its
briefs.17 Accordingly, Petitioner has shown a likelihood of proving to the Board that Respondent
failed to properly notify and bargain with the Unions over the effects of the decision to close
Conner in violation of Section 8(a)(5) of the Act.
B.

Irreparable Harm, Inadequate Remedy at Law, and Balancing of the
Equities

As the Court explained above, Section 10(j) relief is an extraordinary remedy, reserved
for those situations in which the effective enforcement of the Act is threatened by the delays
inherent in the NLRB dispute resolution process. Lineback, 546 F.3d at 502. The purpose of
Section 10(j) is to prevent employers from taking advantage of the “extraordinarily slow” NLRB
resolution process to quash union support in the interim. Id. at 500; see also Kinney, 881 F.2d at
16

Petitioner cites this failure to provide information to Local 705 as an independent violation under the
Act. See Pet. Br. at 20 (citing NLRB v. Acme Industrial Co., 385 U.S. 432 (1967)).

17

Respondent argues that it “persistently attempted to negotiate in good faith beginning in February,
2010,” (Resp. Br. at 21) and the record does support the contention that Respondent made some attempts
to secure concessions with the Unions prior to Conner’s closure. However, there is no contention (nor
evidence in the record to support such a contention) that Respondent attempted to negotiate over the
effects of the shutdown.

29

488 (citing S. Rep. No. 80–105, 80th Cong., 1st Sess. 8 (1947)). “A court should evaluate the
equities through the prism of the underlying purpose of § 10(j), which is to protect the integrity
of the collective bargaining process and to preserve the Board’s remedial power while it
processes the charge.” Lineback v. Printpack, Inc., 979 F. Supp. 831, 847 (S.D. Ind. 1997)
(internal quotation and citation omitted).
In assessing the propriety of injunctive relief, consideration must be given to the
collective bargaining rights of the employees and what belated relief may mean to the future
exercise of those rights. Bloedorn, 276 F.3d at 297. The Court must consider whether, in the
absence of the requested injunctive relief, the collective bargaining and organizing rights of the
employees will be irreparably undermined.

Id.; Electro-Voice, Inc., 83 F.3d at 1567

(“[C]onsidering the aforementioned factors * * *, this Court’s mission is to determine whether
the harm to organizational efforts that will occur while the Board considers the case is so great as
to permit persons violating the Act to accomplish their unlawful objectives, rendering the
Board’s remedial powers ineffectual.”).
Considering the facts of this case, the remedial authority of the Board cannot entirely
cure the harms that are likely to occur in the interim. Notably, McEnery’s and Christopher’s
actions have dramatically changed the status quo between management and the 16 former
Conner drivers. Heidenreich’s management has refused to recognize the Union’s representation
of these 16 drivers and has refused to abide by the terms of the expired collective bargaining
agreement.

Further, as time passes, management’s actions diminish the Unions’ ability to

organize and effectively represent the 16 drivers after the Board issues its order. Consequently,
the Director is without adequate remedies at law and temporary injunctive relief is necessary.

30

First, it is undisputed that Heidenreich refuses to recognize the Unions’ representation of
the 16 former Conner drivers, thereby, stripping those employees of their collective bargaining
rights. This disruption of the balance of economic power sufficiently demonstrates the type of
irreparable harm that cannot be adequately remedied by a protracted Board decision.

See

Lineback, 979 F. Supp. at 849. Further, the former Conner drivers working for Heidenreich are
doing so under a number of unilateral and regressive changes to the employees’ terms and
conditions of employment. Such a demonstrated loss of benefits, secured in a manner other than
through good-faith collective bargaining, is another type of harm that cannot be fully remedied
by a future Board decision in the Director’s favor. See Bloedorn, 276 F.3d at 299-300 (“The
longer that [an] employer is permitted to benefit from a state of affairs that its own wrongdoing
has brought about, the less likely it is that a final order in the Board’s favor will be able to
redress the wrongs that have been done and to restore the status quo ante.”).
Moreover, a remedial order by the Board cannot cure harms being made to the Union’s
ability to effectively organize and represent the driver-employees in the future. It may be many
months before the Board reaches the merits of the Director’s case. See, e.g. Electro-Voice, 83
F.3d at 1573; Barker v. Regal Health and Rehab Center, Inc., 632 F. Supp. 2d 817, 833 (N.D. Ill.
2009) (“Given that the Board is seriously shorthanded, it could be quite a while before it renders
a decision in this proceeding.”). In the interim, however, the alleged unfair labor practices have
the potential to be “enormously destructive” to the Union’s organizational efforts. See ElectroVoice, 83 F.3d at 1573 (“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 [facility] may deteriorate to the point that effective organization
and representation is no longer possible. As time passes, the benefits of unionization are lost and

31

the spark to organize is extinguished. The deprivation to employees from the delay in bargaining
and the diminution of union support is immeasurable.”). Diminution in Union support in the
interim increases the likelihood that the employees will be irreparably deprived of Union
representation when the Board finally issues its order. Id.; see also Lineback, 979 F. Supp. at
848; Franks Bros. Co. v. NLRB, 321 U.S. 702, 703 (1944) (“the unlawful refusal of an employer
to bargain collectively with its employees’ chosen representatives disrupts the employees’
morale, deters their organizational activities, and discourages their membership in unions”).
Indeed, there is evidence that the erosion process has already begun, as employees already have
stopped returning Union Representative Les Lis’s calls. Tr. 516-18; see also Regal Health and
Rehab Center, Inc., 632 F. Supp. 2d at 833 (that “at least two employees who had signed union
authorization cards would not return [Union representative’s] phone calls” was evidence of
diminution of Union support). Consequently, the diminution of Union support is also a sufficient
demonstration of irreparable harm to the collective bargaining process to justify interim relief.
The longer that management is able to avoid bargaining with the Unions, the less likely the
Unions will to be able to organize and represent their employees effectively if and when the
Board orders Respondent to commence bargaining. See Lineback, 546 F.3d at 500.
Respondent argued that “there is no need for expediency” here because “[t]his case is in
its later stages, and all that is needed is the ALJ’s final decision.” Resp. Br. at 25. While it is
true that the ALJ has now rendered his decision, there is no indication of how long it will take
before the Board completes its review. As noted above, the Seventh Circuit has recognized that
NLRB proceedings are “notoriously glacial.” Kinney, 881 F.2d at 491. In any event, the Court
does not see why the possibility that the Board might quickly render a decision is a reason why
interim relief should not issue. In such a case, the interim relief would be in place for a relatively

32

short time,18 and the only thing wasted would be the parties’ time in litigating this petition and
the Court’s time in deciding it. Further, Respondent faults Petitioner for “allow[ing] six months
to lapse without calling for an injunction.” Id. The Court has reviewed the timeline provided in
Petitioner’s reply brief ([61] at 13-14) and finds no evidence of unreasonable delay.
This Court concludes that temporary injunctive relief is necessary to protect the collective
bargaining and organizational rights of the former Conner employees. For the same reasons,
there is no adequate remedy at law. Further, as discussed above, because Petitioner made a
relatively strong showing on his likelihood of success, he was not required to make an equally
strong showing of irreparable harm. Lineback, LLC, 546 F.3d at 500. Keeping that in mind,
Petitioner certainly has made the required showing of irreparable harm.
Considering the balance of harms, Respondent does not even argue that it would be
harmed by an injunction, other than to argue that a bargaining order would “essentially require
Heidenreich to negotiate with a union despite the fact that it has never, in its over two decades of
existence, been unionized.” Resp. Br. at 24. But the Director is clear—he does not seek to
impose bargaining obligations on the majority of Heidenreich’s owner-operator labor force.
Instead, the injunction that Petitioner seeks would cover only the 16 former driver-employees
who were hired from Conner.
C.

Public Interest of the Injunction

The Court also must examine whether Section 10(j) relief is in the public interest,
weighing the potential public benefits against the potential public costs. Electro-Voice, 83 F.3d
at 1573-74. The Seventh Circuit has indicated that “the interest at stake in a section 10(j)
proceeding is the public interest in the integrity of the collective bargaining process.”
18

The 10(j) decree will terminate by operation of law upon the issuance of the Board’s decision and
order. See Barbour v. Central Cartage, Inc., 583 F.2d 335, 337 (7th Cir. 1978).

33

Bloedorn, 276 F.3d at 300 (internal quotation marks omitted). “The public interest is furthered,
in part, by ensuring that an unfair labor practice will not succeed” because of the protracted
nature of Board adjudication. Electro-Voice, 83 F.3d at 1574 (internal quotation marks omitted).
Similarly, the public interest is harmed when the NLRB’s remedial powers lose their
effectiveness due to the passage of time. Lineback, 979 F. Supp at 487.
The public interest would be served by interim injunctive relief here due to the serious
nature of the alleged unfair labor practices and the relatively strong evidence that supports the
Director’s allegations. Interim relief will “help to preserve the Board’s remedial authority and in
that way serve the collective bargaining process.” Bloedorn, 276 F.3d at 300. Furthermore,
there is no evidence that injunctive relief would lead to any public harm. Interim relief is
therefore in the public interest.
D.

Requested Relief

In their Petition ([4] at 13-15), Petitioners request the following relief:
A.

That the Court issue an order directing Respondent, pending final Board

adjudication of the instant charge, to cease and desist from:
(1) refusing to recognize Locals 142 and 705;
(2) threatening to close because of employees’ membership and activities on
behalf of the Unions;
(3) telling employees that they will not be represented by a Union or that they
should decertify the Union;
(4)

bargaining directly with employees;

(5)

shutting down operations without bargaining with Locals 142 and 705 and

in retaliation for union activity;

34

(6)

transferring bargaining unit work to a non-union entity in order to avoid

contract obligations;
(7)

repudiating the collective-bargaining agreements;

(8)

failing and refusing to respond to Local 705’s request for information; and

(9)

interfering with, restraining, or coercing employees in the exercise of their

Section 7 rights, in any like or related manner.
B.

That the Court direct Respondent to take the following affirmative action:
(1)

recognize and bargain with Locals 142 and 705 as the exclusive

collective-bargaining representatives of the Respondent’s Local 142 Unit and Local 705 Unit
employees, including bargaining about the decision and effects of discharging A.D. Conner
employees and transferring them to Heidenreich;
(2)

apply the terms of the expired collective-bargaining agreements to the

respective unit employees at Heidenreich;
(3)

provide Teamsters Local 705 with the information requested on October

(4)

post a copy of this Order at the Respondent’s facilities in Frankfort, IL and

28, 2010;

Porter, IN where notices to employees are customarily posted, said posting to be maintained
during the Board’s administrative proceedings, free from all obstructions and defacements, and
agents of the Board be granted reasonable access to Respondent’s facilities to monitor
compliance with the posting requirement; and
(5)

within 20 days of the issuance of this order, file with the Court a sworn

affidavit from responsible officials of Respondent setting forth with specificity, the manner in

35

which the Respondent has complied with the terms of the Court’s decree, including how the
documents have been posted.
Respondent did not take issue with the specific details of the relief requested and the
Court notes that such relief closely mirrors that granted in similar cases. See, e.g. Barker v.
Regional Health and Rehab Center, Inc., 632 F. Supp. 2d 817, 836-37 (N.D. Ill. 2009).
IV.

Conclusion
For the foregoing reasons, Petitioner’s petition for injunctive relief [4] pursuant to 29

U.S.C. § 160(j) (“10(j)”) is granted.
Upon the entire record, it is hereby ORDERED, ADJUDGED, AND DECREED that,
pending the final disposition of the matters now pending before the Board, Respondent, its
officers, representatives, supervisors, agents, servants, employees, attorneys, and all persons
acting on its behalf or in participation with it, be, and they hereby are, enjoined and restrained
from:
(1) refusing to recognize Locals 142 and 705;
(2) threatening to close because of employees’ membership and activities on behalf of the
Unions;
(3) telling employees that they will not be represented by a Union or that they should
decertify the Union;
(4)

bargaining directly with employees;

(5)

shutting down operations without bargaining with Locals 142 and 705 and in

retaliation for union activity;
(6)

transferring bargaining unit work to a non-union entity in order to avoid contract

obligations;

36

(7)

repudiating the collective-bargaining agreements;

(8)

failing and refusing to respond to Local 705’s request for information; and

(9)

interfering with, restraining, or coercing employees in the exercise of their

Section 7 rights, in any like or related manner.
It is further ORDERED, ADJUDGED, AND DECREED that, pending the final disposition of
the matters herein now pending before the Board, Respondent, its officers, representatives,
supervisors, agents, servants, employees, attorneys and all persons acting on its behalf or in
participation with it, shall within five (5) days hereof, take the following steps:
(1)

recognize and bargain with Locals 142 and 705 as the exclusive collective-

bargaining representatives of the Respondent’s Local 142 Unit and Local 705 Unit employees,
including bargaining about the decision and effects of discharging A.D. Conner employees and
transferring them to Heidenreich;
(2)

apply the terms of the expired collective-bargaining agreements to the respective

unit employees at Heidenreich;
(3)

provide Teamsters Local 705 with the information requested on October 28, 2010;

(4)

post a copy of this Order at the Respondent’s facilities in Frankfort, IL and Porter,

IN where notices to employees are customarily posted, said posting to be maintained during the
Board’s administrative proceedings, free from all obstructions and defacements, and agents of
the Board be granted reasonable access to Respondent’s facilities to monitor compliance with the
posting requirement; and
(5)

within 20 days of the issuance of this order, file with the Court a sworn affidavit

from responsible officials of Respondent setting forth with specificity, the manner in which the

37

Respondent has complied with the terms of the Court’s decree, including how the documents
have been posted.

Dated: July 11, 2011

______________________________
Robert M. Dow, Jr.
United States District Judge

38