Osthus v. Ingredion, Inc.
Filing
36
ORDER denying 2 Petition for Preliminary Injunction. See text of Order. Signed by Chief Judge Linda R Reade on 07/28/16. (jjh)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF IOWA
CEDAR RAPIDS DIVISION
MARLIN O. OSTHUS, Regional
Director of the Eighteenth Region of the
National Labor Relations Board, for and
on behalf of the NATIONAL LABOR
RELATIONS BOARD,
Plaintiff,
No. 16-CV-38-LRR
vs.
ORDER
INGREDION, INC., d/b/a Penford
Products Co.,
Defendant.
____________________
TABLE OF CONTENTS
I.
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II.
PROCEDURAL HISTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
III.
SUBJECT MATTER JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . 2
IV.
FACTUAL BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A.
Parties and Relevant Players . . . . . . . . . . . . . . . . . . . . . . . . . . .
B.
Collective Bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
C.
Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
V.
ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
A.
Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
B.
Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
VI.
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2
2
3
6
I. INTRODUCTION
The matter before the court is Plaintiff Marlin O. Osthus, Regional Director of the
Eighteenth Region of the National Labor Relations Board, for and on behalf of the
National Labor Relations Board’s (“Board”) Petition for Injunction (“Petition”) (docket
no. 2).
II. PROCEDURAL HISTORY
On September 24, 2015, the Bakery, Confectionary, Tobacco Workers, and Grain
Millers Local 100-G (“Union”) filed a charge against Defendant Ingredion, Inc.
(“Company”) with the Board. See Charge Against Employer (docket no. 2-1) at 2. The
charge alleges that Ingredion has engaged in unfair labor practices as defined in Sections
8(a)(1) and (5) of the National Labor Relations Act (“Act”). On December 29, 2015, the
Union filed an amended charge. See id. at 4. On February 29, 2016, the Union filed a
separate charge against Ingredion. See id. at 6. On January 28, 2016, the Board issued
a Complaint and Notice of Hearing against Ingredion. See id. at 8. On March 16, 2016,
the Board filed the instant Petition. On May 13, 2016, the Board filed its Brief (“Petition
Brief”) (docket no. 20). On May 27, 2016, the Company filed a Resistance (docket no.
22). On June 16, 2016, the court held an evidentiary hearing on the Petition. See June
16, 2016 Minute Entry (docket no. 32).
III. SUBJECT MATTER JURISDICTION
The court has jurisdiction in this matter pursuant to Section 10(j) of the Act. See
29 U.S.C. § 160(j) (“The Board shall have power, upon issuance of a
complaint . . . charging that any person has engaged in or is engaging in an unfair labor
practice, to petition any United States district court, 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.”).
IV. FACTUAL BACKGROUND
A. Parties and Relevant Players
Marlin O. Osthus is the Regional Director of Region Eighteen of the Board. The
Company is a Delaware corporation with an office and place of business in Cedar Rapids,
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Iowa, specializing in the manufacture of food products. Penford is a corn wet milling
plant located in Cedar Rapids, Iowa. In March of 2015, the Company purchased Penford
and took over operations. The Union has been the exclusive bargaining representative for
certain Penford employees since the 1940s. The Union represents approximately 150 to
165 bargaining unit employees.
B. Collective Bargaining1
At the time the Company assumed operational control of Penford, the Union and
Penford were operating under a collective bargaining agreement. The agreement was set
to expire on August 1, 2015. Several members of the Company’s management team,
including Ken Meadows, the Director of Human Resources and lead negotiator in
collective bargaining for the Company’s national facilities, visited the Cedar Rapids
location on April 6, 2015. As part of this visit, Meadows met with then-Union president
Chris Eby and other Union officials. The parties dispute the content of discussions that
Meadows engaged in with Union officials and various bargaining unit employees during
that visit, but agree that such discussions took place.
On May 11, 2015, Meadows sent a letter to Jethro Head, International Vice
President of the Union, and Eby, notifying them of the Company’s intent to terminate the
existing collective bargaining agreement upon its expiration and to negotiate a new
contract. See General Counsel (“GC”) Exhibit 15 (docket no. 19-10) at 178. The Union
offered to begin negotiations early, see GC Exhibit 13 (docket no. 19-10) at 176, but
negotiations began on June 1, 2015. Meadows served as the lead negotiator for the
Company and Eby and Head served as the lead negotiators for the Union. The parties
1
In this section, the court will discuss only the facts which appear to be agreed upon
by both parties. Accordingly, the court will not make any determinations regarding the
truth of certain statements or disregard others in setting forth the factual background.
Furthermore, the court may discuss additional facts in conjunction with the court’s
analysis.
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negotiated on thirteen separate occasions: June 1, June 29, June 30, July 27, July 28, July
29, July 30, July 31, August 17, August 18, September 9, September 10 and September
11, 2015. See Joint Exhibit 29 (docket no. 19-4) at 159-160 (setting forth the dates and
approximate times for each negotiating session).
The collective bargaining agreement in effect when negotiations began was
commonly referred to as the Red Book. At the first bargaining session, the Union
presented a proposal that reflected changes to the Red Book. The Company presented a
proposal that reflected a new contract, not based on the Red Book or its prior format. The
Company told the Union that it intended to open “every section of the Red Book for
negotiation . . . .” Resistance at 9; see Transcript (docket no. 19-1) at 410-11, 964. The
negotiations that took place following the first session continued to reflect the Union’s
desire to negotiate using changes to the existing Red Book versus the Company’s intent to
abandon the Red Book and begin with a new contract. On June 30, 2015, at the third
bargaining session, Meadows told the Union that he was willing to put together a “last,
best, and final offer” (“LBF”) in the event they could not reach an agreement. See GC
Exhibit 7 (docket no. 19-10) at 82.
The parties did not meet again for negotiations until the end of July. On July 17,
2015, the Company sent letters to Union employees to address rumors regarding the
Company’s contract proposal. See GC Exhibit 20 (docket no. 19-10) at 191. The letter
includes statements regarding continued GAP insurance coverage and seniority-based
bidding and refutes the suggestion that the Company “is refusing to bargain with the
[U]nion negotiating committee.” Id. The letter also states that employees should educate
themselves on the contract offer and instructs them “to just ask a member of the [U]nion’s
negotiating committee to review in detail the current proposal.” Id. at 192. The letter
goes on to note that
because the [C]ompany and your representatives are still in the
process of negotiating a collective bargaining agreement, the
4
above may not end up reflecting exact changes in contract
language. Also, while the above is meant to accurately reflect
the current positions of management on the rumors I have
heard, this letter itself is not and should not be considered
contractual.
Id. at 2.
Federal Mediator Jim Tuecke attended the July 27, 2015 bargaining session. The
Union and the Company did not make any progress at that meeting. On July 28, 2015, a
ten minute bargaining session took place. On July 29, 2015, the Union and the Company
began substantive negotiations again, but no agreement was reached. On July 30, 2015,
they again failed to reach an agreement after several hours of negotiations. On July 31,
2015, the day prior to expiration of the Red Book, the parties negotiated from
approximately 9:00 a.m. to 3:30 p.m. Twenty-eight bargaining unit members were
considering whether to retire prior to the expiration of the Red Book on August 1, 2015.
Meadows informed Head that August 1, 2015 was a “drop dead date” for the Company.
See Exhibit 8 (docket no. 19-10) at 159. The Company subsequently presented a “final”
offer to the Union.
On the morning of August 1, 2015, the Union held a vote on the “final” offer,
which was rejected by nearly all Union members. Following the rejection of the “final”
offer, the parties did not negotiate again until August 17, 2015. On August 18, 2015,
Meadows presented the Union with the LBF. The Union responded by presenting two of
their own offers. No agreements were reached at the end of this session. On September
10, 2015, the parties negotiated again and the Union presented Meadows with an offer.
Meadows also gave the Union letters of implementation for the LBF. No agreements were
reached at the end of this session. On September 14, 2015, the Company implemented the
LBF.
Following implementation of the LBF, various changes occurred at the Company
with respect to the Union. The parties disagree as to the exact nature of the changes that
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occurred and whether such changes have had a positive or negative overall effect.
However, both parties admit that negotiations have continued to occur in some form
between the Company and the Union. The Board argues that the changes resulting from
the LBF have been, on the whole, detrimental to the Union, while the Company argues
that the changes have been beneficial for the Company and for many Union members.
C. Proceedings2
The instant action arises under Section 10(j) of the Act. On April 18 though April
28, 2016, Administrative Law Judge Mark Carissimi held hearings on the allegations of
unfair labor practices. ALJ Carissimi is responsible for deciding the merits of this case,
which will be appealable to the Board.
On June 16, 2016, the court held a hearing on the Petition. See June 16, 2016
Minute Entry. At the hearing, the following seven witnesses testified on behalf of the
Board: Mike Sacora, Adam Beitz, Kenneth Frost, Todd Railsback, Elaine Sweiger,
Richard Beitz and James Kersten. See June 16, 2016 Witness List (docket no. 32-1). The
witnesses’ testimony included their experiences working at the Cedar Rapids plant since
the Company assumed operational control, changes in scheduling and overtime, differences
with respect to insurance plans, implementation of the LBF since the expiration of the
previous agreement, their views of the Union and its effectiveness since the Company took
over and the witnesses’ general impressions regarding the Company’s impact on the Union
and the Cedar Rapids plant in general. The following witnesses testified on behalf of the
Company: Erwin Froehlich and Andy Sullivan. See id. Froehlich testified as to the effect
2
The parties raised various evidentiary objections. The court is mindful of the fact
that even if “evidence was inadmissible under the Federal Rules of Evidence, . . . a district
court may grant a preliminary injunction based on less formal procedures and on less
extensive evidence than a trial on the merits.” Dexia Credit Local v. Rogan, 602 F.3d
879, 885 (7th Cir. 2010). Therefore, the court shall consider the evidence submitted by
the parties and give it the appropriate weight in reaching a determination on the Petition.
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the LBF has had on the Cedar Rapids plant, including the reduction in forced shutdowns
due to understaffing. Sullivan testified regarding ongoing negotiations between the Union
and the Company.
V. ANALYSIS
The Board alleges that the Company engaged in various unfair labor practices,
beginning with the Company leadership’s initial visit to the Penford plant and lasting up
until the filing of the Complaint.
These practices include the Company’s “illegal
implementation of [the LBF]; its bad faith at the bargaining table; its undermining and
denigration of the Union away from the bargaining table; and its unlawful unilateral
changes to employees’ terms and conditions of employment.” Petition Brief at 3 (footnote
omitted). The Board argues that the court should grant the Petition “to prevent [the
Company] from achieving through unlawful means, that which it cannot achieve
lawfully—unilaterally imposing its desired terms and conditions of employment, without
regard for the Union . . . or its obligation to bargain in good faith under the Act.” Id. at
2.
A. Applicable Law
“Whether a preliminary injunction should issue involves consideration of (1) the
threat of irreparable harm to the movant; (2) the state of balance between this harm and
the injury that granting the injunction will inflict on other parties litigant; (3) the
probability that movant will succeed on the merits; and (4) the public interest.” Dataphase
Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981); see also McKinney ex rel.
N.L.R.B. v. S. Bakeries, LLC, 786 F.3d 1119, 1122-23 (8th Cir. 2015) (reiterating that
courts apply the four Dataphase factors to determine whether an injunction is warranted).
Section 10(j) injunctions are “a limited exception to the federal policy against labor
injunctions and [are] reserved for serious and extraordinary cases when the remedial
purpose of the Act would be frustrated unless immediate action is taken.” McKinney ex
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rel. N.L.R.B., 786 F.3d at 1123 (quoting Sharp v. Parents in Cmty. Action, Inc., 172 F.3d
1034, 1037 (8th Cir. 1999)) (quotation marks omitted); see also Osthus v. Whitesell Corp.,
639 F.3d 841, 845 (8th Cir. 2011) (“Section 10(j) relief is reserved for serious and
extraordinary cases.” (quoting Parents in Cmty. Action, Inc., 172 F.3d at 1037) (quotation
marks omitted)). When deciding whether to grant an injunction, “the judge need only
make brief, definite, pertinent findings and conclusions upon the contested matters; there
is no necessity for over-elaboration of detail or particularization of facts.” Whitesell
Corp., 639 F.3d at 845 (quoting Fed. R. Civ. P. 52 advisory committee’s note (1946)).
“Merely indicating the factual basis for the ultimate conclusion will suffice in most cases.”
Id. (quoting SquirtCo. v. Seven-Up Co., 628 F.2d 1086, 1092 (8th Cir. 1980)).
The first question courts should focus on is “the question of irreparable injury.”
Id. (quoting Parents in Cmty. Action, Inc., 172 F.3d at 1039). The party seeking an
injunction
must satisfy “the court that the case presents one of those rare
situations in which the delay inherent in completing the
adjudicatory process will frustrate the Board’s ability to
remedy the alleged unfair labor practices.” In this circuit, the
court proceeds to examine the likelihood of success on the
merits and the other relevant factors only if the [Board] clears
the ‘relatively high hurdle’ of establishing irreparable injury.
McKinney ex rel. N.L.R.B., 786 F.3d at 1123 (quoting Parents in Cmty. Action, Inc., 172
F.3d at 1039).
Irreparable injury under § 10(j) “is the harm to the collective bargaining process or
to other protected employee activities if a remedy must await the Board’s full adjudicatory
process. . . . The question in each case is whether the extraordinary remedy of a
preliminary injunction is ‘necessary either to preserve the status quo or to prevent
frustration of the basic remedial purpose of the Act.’” Parents in Cmty. Action, Inc., 172
F.3d at 1038-39 (quoting Minn. Min. & Mfg. Co. v. Meter for and on Behalf of N.L.R.B.,
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385 F.2d 265, 270 (8th Cir. 1967)); see also Hubbel v. Patrish LLC, 903 F. Supp. 2d 813,
817 (E.D. Mo. 2012). “Irreparable injury under Section 10(j) is established when the
alleged unfair labor practice ‘so chilled on-going protected employee activity, such as
collective bargaining or union organizing, that delay will frustrate the effectiveness of the
Board remedies.’” Hubbel, 903 F. Supp. 2d at 817 (quoting Parents in Cmty. Action,
Inc., 172 F.3d at 1040). The burden of demonstrating irreparable harm is on the movant,
who must demonstrate that such harm is not only possible, but “is likely in the absence of
an injunction.” Sierra Club v. U.S. Army Corp. of Eng’rs, 645 F.3d 978, 992 (8th Cir.
2011) (quoting Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22 (2008)).
B. Application
The Board argues that “[t]he injuries to the collective-bargaining process and
employee rights that have already been caused by [the Company] will be irreparable if [the
Company] is allowed to bear the fruits of its labor.” Petition Brief at 24. The Board
argues that employee support for the Union has waned in light of the Company’s alleged
undermining of the collective bargaining process and that diminished support will render
the Union “unable to bargain effectively regardless of the ultimate relief granted by the
Board.” Id. at 24-25 (quoting Small v. Avanti Health Sys., LLC, 661 F.3d 1180, 1193 (9th
Cir. 2011)). Finally, the Board lists the following issues as reflective of the irreparable
injury that the Union will suffer absent an injunction: (1) “loss of faith in the Union’s
ability to aid [employees] in affecting terms and condition[s] of employment and adjusting
grievances”; (2) “loss of faith in the collective-bargaining process due to [the Company’s]
unlawful implementation of its LBF, and the Union’s subsequent inability to affect that
implementation”; (3) Union “[e]mployees and their families forgoing medical care due to
the increased costs under [the Company’s] unilaterally imposed health insurance plans”;
(4) the “voting out [of] incumbent union leadership in the fall of 2015 due to [the
Company’s] unlawful direct dealing and misinformation about negotiations”; (5)
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“employees looking for new jobs due to . . . unworkable conditions”; (6) employees being
disciplined under the “unilaterally imposed attendance plan while taking care of sick
children, spouses, and other family members”; (7) “employees working excessive and
unsafe amounts of overtime, while other employees have not been able to volunteer for
overtime that they are otherwise qualified to work—all occurring without regard to
seniority”; (8) “lack of sufficient notice for overtime,” causing undue hardship; and (9)
“[e]mployee sentiments that [the Company] now operates as an essentially non-union
employer, as their working conditions depend on who is supervising them, not on the
terms of [the Company’s] LBF.” Id. at 26-27.
The Company argues that the Board “cannot show the Union will suffer irreparable
harm in the absence of injunctive relief.” Resistance at 20 (formatting omitted). The
Company argues that the instant action is not reflective of “egregious conduct [that is]
likely to chill protected activities . . . ,” and that an injunction is, therefore, unwarranted.
Id. (quoting Osthus v. TruStone Fin. Fed. Credit Union, __ F. Supp. 3d __, __, 2016 WL
1643770, at *7 (D. Minn. April 26, 2016)) (alteration in original).
The court finds that the Board has failed to meet its burden to demonstrate that
irreparable injury is likely to occur absent injunctive relief. At the hearing, the court heard
testimony from various bargaining unit employees. Such testimony demonstrated that
numerous employees are upset over the Company’s handling of the collective bargaining
process, the changes that have resulted from implementation of the LBF and that some
employees are actively seeking other jobs. However, the crux of the issue facing the court
is not the merits of the underlying allegations, which will be resolved by the administrative
process. See Parents in Cmty. Action, Inc., 172 F.3d at 1040 (“The district court in a
§ 10(j) proceeding does not decide whether the respondent has committed unfair labor
practices. That is the province of the Board’s on-going adjudicatory proceeding, subject
to judicial review by a court of appeals.”). The issue is whether an injunction, a judicial
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tool reserved for only “extraordinary circumstances,” is necessary, lest “the alleged unfair
labor practices threaten to frustrate the remedial purposes of the Act unless immediate
action is taken.” Id. at 1039. Here, the Board has not presented sufficient evidence of
irreparable injury.
In cases where preliminary injunctions have been granted, there have generally been
allegations of more egregious behavior than in the instant action. See e.g., McKinney ex
rel. N.L.R.B., 786 F.3d at 1124-25 (vacating a district court’s grant of an injunction and
noting the types of behavior often warranting injunctive relief); Osthus v. A.S.V., Inc.,
Civil No. 14-4445 ADM/HB, 2015 WL 1530434, at *6 (D. Minn. April 2, 2015)
(unpublished decision) (citing cases where an injunction was warranted due to conduct
including (1) a company refusing to recognize a union and laying off employees after the
end of a strike and (2) a company that interrogated employees “about their support for the
union, discharged employees because of their support for the union [and] threatened
employees with physical harm, loss of wages and benefits”); Hubbel v. Patrish LLC, 903
F. Supp. 2d 813, 817 (E.D. Mo. 2012) (finding a threat of irreparable harm to the
collective bargaining process existed where a “respondent completely eliminated the
bargaining unit and replaced the union workers with non-union members after flat-out
refusing to negotiate with the union”); Osthus v. Vincent/Metro Trucking LLC, Civil No.
09-1726(DSD/JJK), 2009 WL 2516165, at *1 (D. Minn. Aug. 14, 2009) (unpublished
decision) (granting an injunction where an employer, among other things, refused to
implement and honor a negotiated collective bargaining agreement and withdrew
recognition from the union).
Here, there is no evidence that the Union is losing members as a result of the
alleged unfair labor practices or that such loss is likely to occur in the future. In fact, at
the hearing, the court heard testimony that the Union has not lost any active members still
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working at the Company since the expiration of the Red Book.3 Additionally, “[w]hile the
[c]ourt may take into consideration the timeliness of the petition, [it] is not required to do
so. Rather . . . the appropriate focus is on whether it is necessary to return the parties to
status quo pending the Board’s proceedings in order to protect the Board’s remedial powers
under the [Act], and whether achieving status quo is possible.” Hubbel, 903 F. Supp. 2d
at 818 (quoting Chester v. CMPJ Enters., Civil No. 07-2530, 2007 WL 1994045, at *3
(D. Minn. July 2, 2007) (unpublished decision)) (third alteration in original).
The Board argues that Union officials have been replaced as a result of the unfair
labor practices. However, those replacements were the result of closely contested Union
elections and the resignation of several Union officials. The Board does not allege that the
Company itself took action against the former Union officials. Furthermore, the Union
has continued to meet with the Company for the purpose of conducting collective
bargaining sessions at several points during the spring of 2016 and the court heard
testimony regarding such negotiations. See Sullivan Affidavit, Company Exhibit A (docket
no. 22-1) at 1-3.
At the hearing, the Board presented testimony from current Union employees. The
Union employees testified that they are, on the whole, worse off under the LBF than under
the Red Book. The Union employees discussed, among other things, changes to the
seniority system, scheduling of overtime, health benefits and the arbitration process since
the implementation of the LBF. It is not the province of the court, however, to judge
whether the Union employees’ grievances are the product of unfair labor practices. That
is a matter for ALJ Carissimi and, ultimately, the Board to determine. The only issue this
court can address is the propriety of granting the Board’s petition for injunction. Because
3
The Union has not lost any members since multiple bargaining unit employees
retired just prior to the expiration of the collective bargaining agreement on August 1,
2015.
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the record in the instant action does not demonstrate the likelihood that irreparable harm
will occur absent an injunction, the court need not address the other Dataphase factors and
shall deny the Petition.
VI. CONCLUSION
In light of the foregoing, the Petition (docket no. 2) is DENIED.
IT IS SO ORDERED.
DATED this 28th day of July, 2016.
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