Gottschalk v. Piggly Wiggly Midwest LLC

Filing 35

DECISION AND ORDER Denying Defendant's Motion to Dismiss 10 and Granting Plaintiff's Motion for Preliminary Injunction 2 . (cc: all counsel)((cef), C. N. Clevert, Jr.)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

IRVING E. GOTTSCHALK,
Regional Director of the Thirtieth Region of the
National Labor Relations Board, for and on behalf of the
NATIONAL LABOR RELATIONS BOARD,
Plaintiff,
v.

Case No. 12-C-0152

PIGGLY WIGGLY MIDWEST, LLC,
Defendant.

DECISION AND ORDER DENYING DEFENDANT’S MOTION TO DISMISS AND
GRANTING PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
This case came before the court on the verified petition of Irving E. Gottschalk,
Regional Director of the Thirtieth Region of the National Labor Relations Board (Board) for
preliminary injunction pursuant to Section 10(j) of the National Labor Relations Act, as
amended [61 Stat. 149; 73 Stat. 544; 29 U.S.C. §160(j)] (Act), pending the final disposition
of the claims of unfair labor practices now before an administrative law judge.
Respondent, Piggly Wiggly Midwest, LLC (“Piggly Wiggly”), responded with a motion to
dismiss for lack of subject matter jurisdiction on the ground that petitioner lacks the
statutorily required quorum of three members to authorize the filing of the matter before
this court. The trial before the administrative law judge was held on February 22 and 23,
2012. Afterward, on March 7, 2012, this court conducted a hearing on petitioner’s motion
for injunctive relief and respondent’s motion to dismiss. Now, after due consideration the
court will deny the motion to dismiss and grant the preliminary injunction.
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DEFENDANT’S MOTION TO DISMISS
As an initial matter, respondent filed a motion to dismiss for lack of subject matter
jurisdiction pursuant to Rule 12(b)(1). In considering a motion to dismiss under Rule
12(b)(1), the district court must accept the complaint's well-pleaded factual allegations as
true and draw all reasonable inferences from those allegations in the petitioner’s favor.
Transit Exp., Inc. v. Ettinger, 246 F.3d 1018, 1023 (7th Cir. 2001). The burden of proof is
on the party asserting jurisdiction. United Phosphorus Ltd. v. Angus Chem. Co., 322 F.3d
942, 946 (7th Cir. 2003).
Respondent asserts that this court lacks subject matter jurisdiction because the
petitioner lacks the statutorily required quorum of three members necessary to authorize
pursuit of relief in this proceeding. See 29 U.S.C. § 160(j). The National Labor Relations
Act established the National Labor Relations Board consisting of five members appointed
by the President with the consent of the Senate. Three members of the Board constitute
a quorum. 29 U.S.C. § 153(a) and (b). On January 4, 2012, when the Board membership
dropped to two, President Obama announced his intent to “recess appoint” three
individuals to the Board under the Recess Appointments Clause, U.S. Const. Art. II, § cl.
3. According to respondent, the appointments are invalid because the President acted
without the Senate’s consent and the lack of quorum means a lack of jurisdiction to act as
a Board.
Regardless of whether the President’s recess appointments were valid, this motion
can be resolved on statutory rather than constitutional grounds. The Board delegated to
the General Counsel the authority to bring a 10(j) petition in November of 2011. Under that
delegation, the Acting General Counsel authorized the action separately. Two district
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courts have rejected challenges that mirror the charge by respondent in this case. See
Fernbach ex rel. N.L.R.B. v. 3815 9th Ave. Meat & Produce Corp., 2012 WL 992107 at *1
(S.D.N.Y. Mar. 15, 2012); Paulsen v. Renaissance Equity Holdings, LLC., 2012 WL
1033339 at *14 (E.D.N.Y. Mar. 27, 2012).
Respondent argues that the delegation of Section 10(j) petition power to the Acting
General Counsel is contrary to the intent and purpose of the statute. Sections 3 and 10
distinguish between powers reserved to the Board unless otherwise provided in the Act and
duties that are assignable to the General Counsel. The Board’s longstanding practice
permitted the General Counsel to file 10(j) petitions “only upon approval of the Board.” 15
Fed. Reg. at 6,924 (1950). Alternatively, any delegation made in November of 2011 was
nullified when a third member’s term expired and the Board lost its quorum on January 3,
2012.
The majority of courts considering these arguments have concluded that district
courts may entertain § 10(j) petitions approved by the General Counsel pursuant to the
authority granted him by the Board in December 2007. Frankl v. HTH Corp., 650 F.3d
1334 (9th Cir. 2011); Osthus v. Whitesell Corp., 639 F.3d 841 (8th Cir. 2011); Overstreet
v. El Paso Disposal, L.P., 625 F.3d 844, 851–52 (5th Cir. 2010); Muffley v. Spartan Mining
Co., 570 F.3d 534, 539–40 (4th Cir. 2009). These courts have held that the Board’s valid
delegation of 10(j) authority does not lapse when the Board loses its quorum. See Frankl,
650 F.3d at 1354; Osthus, 639 F.3d at 844; Overstreet, 625 F.3d at 853. Only one court
has relied on corporate and agency principles to hold that the Board’s delegation of its
authority to a three-member panel lapsed when the Board lost its quorum. Laurel Baye

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Healthcare of Lake Lanier v. N.L.R.B., 564 F.3d 469, 473 (D.C. Cir. 2009). Respondent
contends “the fact that the D.C. Circuit is thus far the only circuit to conclude the Board’s
loss of a quorum terminates its prior delegations of authority does not by itself mean this
conclusion is wrong.”
The United States Supreme Court ruled in New Process Steel LP v. N.L.R.B., 130
S. Ct. 2635 (2010), that following a delegation of the Board's powers to a three-member
group, two members may not continue to exercise that delegated authority once the
group's (and the Board's) membership falls to two. However, the United States Supreme
Court in New Process Steel declined to address the specific issue at bar: “Our conclusion
that the delegee group ceases to exist once there are no longer three Board members to
constitute the group does not cast doubt on the prior delegations of authority to nongroup
members, such as the regional directors of the general counsel. The latter implicates a
separate decision that our decision does not address.” New Process Steel, 130 S. Ct. at
2642 n. 4.
Recently, the United States District Court for the Eastern District of New York
commented on similar delegations of the Board’s power to authorize § 10(j) petitions to the
General Counsel at various times that the Board anticipated losing its quorum. Paulsen,
2012 WL 2044440, at * 8. The first such delegation was in 1993; similar delegations
occurred in 2001, 2002, 2007, and 2011. Id In finding these delegations proper, the court
reviewed the history of the Taft-Hartley Act and found clear congressional intent to allow
the Board to delegate prosecutorial tasks – such as its 10(j) powers – to the General
Counsel while keeping core adjudicative functions in the Board’s domain. Id., at *9-10.

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The court also ruled that the Board’s duly constituted quorum at the time it delegated its
§ 10(j) powers to the General Counsel did not perpetuate the Board’s existence and
therefore did not implicate the concerns of the United States Supreme Court in New
Process Steel. Id., at *14. For these reasons, the court finds the delegation of authority
to the General Counsel to be valid. Consequently, the motion to dismiss will be denied and
the court turns to the issues raised in the request for preliminary injunction.
PLAINTIFF’S MOTION FOR PRELIMINARY INJUNCTION
Section 10(j) of the National Labor Relations Act, 29 U.S.C. §160(j), grants this court
the authority to enter injunctive relief as it deems “just and proper.” However, an injunction
granted under 10(j) is an “extraordinary remedy” and should be granted only in those
situations in which effective enforcement of the Act is threatened by delay in the Board’s
dispute resolution process.” Lineback v. Irving Ready-Mix, Inc., 653 F.3d 566, 570 (7th Cir.
2011).
Injunctive relief is warranted upon a showing that: (1) the petitioner has no adequate
remedy at law; (2) the labor effort will suffer irreparable harm if the injunction is not granted,
and the prospect of that harm outweighs any harm posed to the employer by the proposed
injunction; (3) the public interest will be served by granting the injunctive relief; and (4) the
petitioner has a reasonable likelihood of prevailing on the merits of his complaint. Lineback
v. Spurlino Materials, Inc., 546 F.3d 491, 500 (7th Cir. 2008); N.L.R.B. v. Electro–Voice,
Inc., 83 F.3d 1559, 1566 (7th Cir. 1996). The final requirement does not ask the court to
pass on the merits of the underlying case; rather, the court evaluates only on a preliminary

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basis the petitioner's probability of success before the Board. Bloedorn v. Francisco
Foods, Inc., 276 F.3d 270, 287 (7th Cir. 2001).
Facts
These findings rest on a review of the record and evidence discussed during oral
argument. Respondent, Piggly Wiggly Midwest, LLC, is a wholesaler of grocery, meat and
produce to franchise stores and an operator of corporate retail grocery stores with places
of business throughout the Midwest, including a store located at 3124 South Business
Drive, Sheboygan, Wisconsin (“Store 15"). (G.C. Exs. 1(g) and 1(u)).
United Food and Commercial Workers Union, Local 1473 (“Union”), is the exclusive
collective-bargaining representative for a unit of retail clerks and unit of meat department
employees at Store 15. The following persons have been supervisors for the respondent:
Paul Butera (Owner); John Braunreiter, Jr. (District Manager); Daniel Holtz (Sheboygan
Store Manager); and Mary Zenisek (Manager of Retail Services Operations). (Id.)
After assuming ownership of Store 15 in 2007, respondent recognized the Union as
the exclusive representative of the employees while assuming the collective bargaining
agreements that were in effect at the time the store was acquired. Respondent and the
Union bargained and ratified successor collective bargaining agreements that were
effective May 7, 2009, to September 7, 2011. (Jt. Exs. 1 and 2.)
On June 27, 2011, the Union requested to commence negotiating the successor
agreements for Store 15. (G.C. Exs. 18-19; Tr. of the Official Report of Proceedings before
the National Labor Relations Board, Case No. 30-CA-06117, 30-CA-073311, 308:18-24.)
However, the agreements expired without the parties extending the terms of their
respective contracts. Zenisek, the Retail Services Operations Manager, returned from a
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vacation to attend a September 12, 2011, negotiation session with the Union for another
store but the Union did not attend that bargaining session. (Tr. 431:5-9.)
On September 13, 2011, Holtz and Braunreiter notified 19 bargaining unit
employees that they were being reduced from full-time to part-time status effective
September 18, 2011. (Tr. 61:3-8; 74:7-75; G.C. Exs. 3, 4, 80-98.) Holtz and Braunreiter
cited the opening of a nearby Festival Foods store, and the employer’s projections for a
drop in sales at Store 15. (Tr. 76:10-17; G.C. Exs. 104 and 115.) These reductions were
without prior notice to the Union or the opportunity to bargain over them. (Tr. 75:6-8.)
Meanwhile, frustrated that the Union did not show up for the negotiations and that
the Union was not coming to Store 15 (Tr. 431:5-22), Zenisek wrote the following letter to
John R. Eiden, President of the UFCW 1473, on September 15, 2011:
Dear Mr. Eiden:
As you may or may not know, the Company was forced to reduce the hours
of some employees at Store #15 in Sheboygan today in anticipation of the
opening of a nearby Festival Foods Store. The reduction in hours is required
because it anticipated that the Festival Foods Store will absorb a sizeable
portion of Piggly Wiggly’s sales in that region.
Understandably, the affected employees were concerned about their
reduction in hours and reached out to the Union to voice their questions and
concerns. Unfortunately, Grant Withers informed the employees that he did
not have the time to address their concerns. Needless to say, employees
were incredibly upset to hear that the Union was too busy to help them.
Frankly, the Company is concerned with the Union’s lack of support for our
employees. Rather than leaving the employees hung out to dry, the
Company will be holding an informational meeting for the employees to
address their questions and concerns.
If you have any further questions please do not hesitate to call me directly.

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(Jt. Ex. 3.) There is evidence that Zenisek posted the letter on a bulletin board visible to
all employees in Store 15. (Tr. 83:5- 84:2; 210:18-21; 245:10-247:17.)
On September 19, 2011, Eiden, the Union President, responded to Zenisek’s letter
stating that the Union members were disturbed by the employer’s actions to reduce hours,
take home pay, health insurance, and pension benefits. (Jt. Ex. 41.) He also stated that
“Paul Butera is destroying the lives of the people who work for him. The Union will
continue to fight Mr. Butera’s attempts to drive his workers into poverty.” (Id.) Eiden
requested information in his letter, including a complete list of affected employees, and a
telephone contact for each employee. (Id.)
On September 20, 2011, Zenisek refused to provide the telephone numbers
maintaining that the Union had that information inasmuch as all employees are required
to complete a Union membership application with their phone number listed. (Jt. Ex. 42.)
She responded separately to Eiden on September 22, 2011, with the following letter:
… Shame on you! It is true that the Employer has the right under the
contract to reduce hours, but the Union is in part to blame for causing the
Company’s need to reduce hours. Since January, the Employer has warned
the Union time and again that the non-union Festival Foods stores were
going to compete for Piggly Wiggly business, especially in Sheboygan. We
have asked the Union why it is not organizing the non-union stores to create
a level playing field. Also, why is the Union not picketing or handbilling the
non-union stores telling the potential customer to not favor the non-union
store and shop at the Union represented Piggly Wiggly store? I do not
understand why the Union is not doing something to support the Store and
our Union employee’s jobs ….
(Jt. Ex. 46.) There is evidence that this letter was also posted in the store. (Tr. 102:3-22.)
During the trial on February 22 and 23, 2012, Withers testified that the term
“business needs” in Section 3.3 of the Collective Bargaining Agreement has an explicit
meaning that limits when respondent can reduce the hours of its employees from full-time
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to part time. (Tr. 530:2-25). Withers testified that respondent and the Union bargained
over the term “business needs” and reached an agreement, which limits management’s
discretion:
And the example that was given was if a Festival Foods opened up across
the street - ironically, we were talking about Festival back at that time as well
– that there had to be some component to address the Union’s concerns as
far as the Employer’s unilateral right to reduce full-time and to address the
Employer’s concerns about reduced business needs, so - or reduced
business. So that’s why we developed or agreed to the “business needs”
language, because it was something tangible that we could both review.
(Id. at 530:12-21.)
Withers admitted that a “40% reduction” was an example and that there was no
agreed upon trigger number in terms of reduced sales for a reduction in hours. (Id. at
533:1-5.) In addition, he admitted that respondent warned the Union in January that
Festival Foods was coming to Sheboygan. (Id. at 398:12-24.) In 2010 the parties utilized
Section 3.3 when three employees, Sue Sanders, Lisa Barthels, and Ka Yang Lo, were
reduced from full-time to part-time after another store closed and employees transferred
into Store 15. (Id. at 423:21-435:11.)
Holtz testified that Festival Foods opened on September 16, 2011, which was the
same day he posted the schedule moving 19 employees from full-time to part-time. (Id.
at 509:5-11.) Holtz also testified that Store 15 lost 5% of total sales in the first week when
Festival Foods was open for three days. (Id. at 509:12-510:6.) The loss of sales following
the opening of Festival Foods averaged 13% over the course of the next six weeks. (Id.
at 510:7-7; 527:5.)

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Holtz testified that the decision to reduce the hours of employees was due to the
impact of a competing grocery store, Festival Foods, opening within a few miles of Store
15. (Id. at 76:10-17.) There was no consideration of whether an employee was a union
member. (Id. at 22-23.) Nor was there any consideration as to whether an employee had
benefits as a full-time or a part-time employee under the collective bargaining agreement.
(Id. at 81:25-82:6.)
In addition, Holtz stated that the decision to reduce scheduled hours “was based on
the fact that we knew that our sales were going to decrease, which means there is less
actual work to perform in the building.” (Id. at 82:9-13.) Holtz further testified that in
August he worked with John Braunreiter as they tried to anticipate the impact on the store
in terms of decreased sales. (Id. at 92:4-25.) His decision to post a schedule with reduced
hours was motivated by his desire to match the decreased workload. (Id. at 82:9-13;
100:3-19.) Holtz noted that he posts new schedules for the following calendar week every
Thursday. (Id. at 99:17-20.)
Former bargaining unit employee, Laurie Hoffman (Id. at 161:14-162:12), and
current employee, David Meinhardt (Id. at 251:2-252:14), admitted that they did not apply
for any full-time positions at Store 15. On cross-examination Hoffman also acknowledged
that she walked out of her grievance meeting after being told that she could bump two
other employees to stay in a full-time position and that she did not refuse the full-time
position she was offered during the grievance meeting. (Id. at 160:7-21 and 161:1-16.)
She further admitted that after she walked out of the grievance meeting she went to
Festival Foods on September 27, 2011, where she had previously interviewed in June of

10

2011, and talked to someone at Festival Foods about full-time employment with Festival
Foods. (Id. at 161:14-162:12.) Jeff Gross testified he obtained new employment that pays
a higher hourly wage and provides health benefits. (Id. at 191:6-192:7.)
Hoffman admitted she was offered another full-time position as Liquor Department
Manager with respondent after she was employed full-time at Festival Foods but that she
rejected the offer. (Id. at 152:24-153:18.) David Meinhardt admitted he was aware that
two full-time positions (Customer Service Manager and Liquor Department manager) were
open full-time bargaining unit positions at Store No. 15 in January and February of 2012,
and that he did not apply for the positions and could not explain why did he did not apply
for these open full-time positions. (Id. at 251:2-252:21-22.)
Hoffman admitted that her insurance stayed in effect until December and that she
did not lose any insurance coverage while working for respondent. (Id. at 159:25-160:6.)
Current bargaining employee, Laurie Hoppert, also acknowledged that she did not lose
her insurance. (Id. at 200:13-210:13.) Hoppert returned to full-time in November in an
office position with the respondent. (Id. at 201:6-17.)
Another current bargaining unit employee, Robin Schubert, testified that she went
back to full-time when another person in her department left (Id. 220:2-7) and admitted that
she never lost her insurance. (Id. at 220:2-7; 221:10-15). Schubert also testified that her
Department Manager, Denise Perl, told her and another employee in her department that
they might be reduced to part-time. (Id. at 223:1-22.)
The trial testimony also established that respondent met on September 21 with the
Union to process its grievances for all 19 of the employees who were reduced from

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full-time to part-time on the September schedule. (Id. at 93-24-95:23; 322:21-323:10;
324:24-326:7.)

Respondent met with the Union again on November 8 to mediate the

grievances for all 19 of the employees who were reduced from full-time to part-time on the
September 16 Schedule. (Id. at 355:6-25; 436:15; 437:17.) As a result of these meetings,
Laura Hoffman (435:8-16), Laurie Hauptman (433:15-434:7) and Tammie Helder
(435:17-24) returned to full-time status pursuant to contractual bumping rights. (Id.
435:25-436:5.)
Daniel Holtz stated in his affidavit that on Thursday, February 23, 2012, he posted
a schedule for employees at Store 15 for the week ending March 3, 2012, which provided
40 hours per week for the following bargaining unit employees and restored them to fulltime status: Tammie Edler, Tanya Gruenke, Kelly Haack, Laurie Hauppert, Sue Fliss,
Kimberly Fischer, Abe Gerharz, Debbie Gerdes, Dave Meinhardt, Louis Rosden, Robin
Schubert, Andy Sommersberger, Brenda Thede, and Tanya Wiesfield. (Holtz Aff. ¶¶ 4, 5.)
Holtz further stated that the subsequent schedule posted on March 1, 2012, for the next
work week scheduled these employees for another 40 hour week. (Id. at ¶¶ 6, 7.)
According to Holtz, these employees are eligible for benefits, including health insurance,
and were returned to full-time status for the foreseeable future. (Id. at ¶¶ 8, 9.) In addition,
Holtz testified that the total number of employees has increased by three since September
of 2011. (Id. at 118:8-18.)
Former bargaining unit employee, Lauriel Hanson, testified that she did not see the
letters written by Mary Zenisek, but that her attitude toward the Union did not change after

12

she was moved from full-time to part-time. (Id. at 183:6-184:14.) To date, the Board has
not issued its decision.
Conclusions of Law
The court begins the analysis with the acknowledgment that section 10(j) relief is
an extraordinary remedy designed to prevent employers from taking advantage of the
“extraordinarily slow” N.L.R.B. resolution process to quash union support in the interim.
Spurlino Materials, LLC, 546 F.3d at 500. The longer that an employer is able to chill union
participation or avoid bargaining with a union, the less likely it is that the union will be able
to organize and to represent employees effectively once the N.L.R.B. issues its final order.
Francisco Foods, Inc., 276 F.3d at 297. This court does not have a timetable for when the
Board will issue its decision, but the parties have indicated that their post-hearing briefs
were due to the ALJ by March 29, 2012.
Petitioner’s focus in seeking injunctive relief is on the “unilateral reduction” of the 19
bargaining unit employees from full to part-time status and the corresponding reduction in
take-home pay and benefits. In addition, the petitioner relies on the respondent’s actions,
which it feels has undermined the Union and affected the Union’s ability to represent its
members.
Section 10(j) does not confer jurisdiction on this court to rule on the merits of this
unfair labor practice dispute. Spurlino Materials, LLC, 546 F.3d at 502. Accordingly, the
likelihood of success on the merits requires the court to “evaluate[] only on a preliminary
basis the Director's probability of success before the Board.” Bloedorn v. Francisco Foods,
Inc., 276 F.3d 270, 287 (7th Cir. 2001). Petitioner maintains that it has demonstrated a

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strong likelihood of success in proving violations of Sections 8(a)(1), (3), and (5). Section
8(a) of the Act states in relevant part:
It shall be an unfair labor practice for an employer:
(1) to interfere with, restrain, or coerce employees in the exercise of the
rights guaranteed in section 157 of this title;
(3) by discrimination in regard to hire or enure of employment or any term or
condition of employment to encourage or discourage membership in any
labor organization . . . .
(5) to refuse to bargain collectively with the representatives of his employees,
subject to the provisions of section 159(a) of this title.
29 U.S.C. §§ 158(a)(1), (3), and (5).
It is well settled law that when parties are engaged in negotiations over a collective
bargaining agreement, the employer must refrain from making unilateral changes, absent
an impasse in bargaining for the agreement as a whole. RBE Electronics of S.D., 320
N.L.R.B. 81, 81 (1995). Indeed, Section 8(a)(5) obligates the employer to notify and
consult with the Union regarding changes in the conditions of employment before imposing
the changes. N.L.R.B. v. Katz, 369 U.S. 736 (1962). Moreover, absent a clear and
unmistakable waiver, an employer’s failure to provide the union with prior notice and an
opportunity to bargain over unilateral changes to the hours and/or days violates Section
8(a)(5). See N.L.R.B. v. Hardesty Co., Inc., 336 N.L.R.B. 258, 259 (2001), enfd. 308 F.3d
859 (8th Cir. 2002). There is no dispute that this case involves a unilateral change. The
evidence establishes that the respondent individually notified the 19 bargaining unit
employees that their full-time positions were being reduced to part-time effective
September 18, 2011. Respondent never provided the Union with prior notice of the

14

reduction in hours. However, there is evidence that during a January 7, 2011, meeting, the
respondent and Union discussed a competitor opening a nearby store.
Whether petitioner has established a likelihood of success turns on whether
respondent maintained a contractual right to continue adjusting employee schedules after
the expiration of the collective bargaining agreements or could make those changes
consistent with past practice. Article III, Section 3.3. of the CBA sets forth the procedure
for scheduling employee work hours based upon employees’ contractually defined
seniority. According to respondent, Section 3.3 survived contract expiration and became
a term and condition of employment that must be maintained under prevailing Board law
as the status quo ante until the parties reach a successor agreement or impasse. See e.g.
Frontier Homes Corp. and Un. Steel Workers of Am., AFL CIO, 153 N.L.R.B. 1070, 1076
(1965).
Section 3.3 of the CBA provides as follows:
3.3 The Employer will schedule hours of work on a seniority basis. The
Employer will schedule employees who are full-time within the meaning of
this Agreement for hours not below the full-time classification threshold
unless:
(I)
The employee requests a temporary reduction in hours
for two or more weeks and/or
(ii)
The employer makes a permanent reduction in the
full-time positions in a classification based on business needs.
Employees who are reduced in hours may, by seniority,
assume the full schedule of less senior employees within the
department classification in order to maintain his/her regular
number of hours; however, such assumed schedule shall not
result in overtime. Nothing herein shall limit the right of the
Employer to establish the schedule of hours of work.

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The Board has held that absent evidence of the parties’ contrary intention,
reservation of rights provisions or management rights provisions do not survive the
expiration of the contract. See E.I. DuPont de Nemours, 355 N.L.R.B. No. 176, slip op. at
3 (August 27, 2010). There is no evidence that the parties intended this provision to
survive. Nevertheless, Beverly Health and Rehabilitation Services, 297 F.3d 468 (6th Cir.
2002), has been cited for its ruling that a pattern of unilateral change can become a term
and condition of employment and that a similar unilateral change after the termination of
the agreement is permissible to maintain the status quo.
However, the evidence of a “pattern” is limited to a one-time event in 2010 when
respondent closed a store and transferred three full-time employees in the deli department
to Store 15 with part-time hours because the deli department was overstaffed. There are
obvious differences between the 2010 reductions and the present reductions, which
affected 19 employees after the expiration of the agreements. According to the petitioner,
19 employees is nearly 35% of the work force. In addition, the respondent did not hire
additional part-time employees in 2010, however there is evidence that following the
reductions at issue the respondent hired additional part-time employees to work at Store
15. For these reasons, the court is not persuaded that the 2010 example is the type of
reduction that would lead employees to reasonably expect the practice to continue or recur
on a regular and consistent basis.
Having found that petitioner’s chances of success on the merits are better than
negligible, the next issue is whether there is an adequate remedy at law or irreparable
harm that will occur. The United States Supreme Court in Winter v. Natural Res. Def.
Council held that the plaintiff seeking preliminary injunctive relief must demonstrate that
16

irreparable injury is likely in the absence of an injunction. 129 S. Ct. 365, 375 (2008).
Petitioner argues that the irreparable harm is caused by the loss of health insurance
coverage. In addition, the petitioner asserts that the respondent’s refusal to bargain
collectively disrupts employee morale and discourages Union membership.
During the hearing, counsel for respondent indicated that all employees who
remained at Store 15 have returned to full-time status and are eligible for health insurance.
The key language is “employees who have remained.”

Four employees resigned.

Moreover, the terms of the collective bargaining agreements require that an employee work
35 or more hours per week for four consecutive weeks during the calendar month before
the employee can be covered under the health and welfare funds. In addition, petitioner
represents that at least one of the employees, Pat Gruenke, was forced to borrow against
her Social Security to make payments to maintain her health insurance. Certain other
employees were forced to forego needed medication and preventative treatment.
There is also evidence that in February of 2012, respondent made additional
reductions in hours without providing the Union with the opportunity to bargain over the
decision. These actions taken without Union participation continue to shift the status quo
and hinder the Union’s ability to effectively represent Store 15 employees. Indeed, the day
before the hearing in this court, petitioner filed the affidavits of Shantal Edler, Sue Fliss,
Debra Gerdes, Pat Guenke, Kelly Haack, Laura Hoffman, Laurie Hoppert, David
Meinhardt, Tina Meinhardt, Robin Schubert, Andrew Sommersberger, Tanya Weisfield,
and Grant Withers. Each of these individuals indicated that employees are frustrated with
the Union, “fed up and disgusted with the Union,” or otherwise feel that the Union is
powerless in comparison to their employer. Sue Fliss stated under oath that negative
17

feelings about the Union before the reductions have intensified. Andrew Sommersberger
wrote:
Before the reduction of the full-timers, people did not really talk about the
Union – I am sure there were some that were happy with the Union and
some that did not like the Union – but now it seems like everyone has a very
negative opinion about the Union. We feel this way because the Company
is just doing whatever it wants with its employees and the Union can’t do
anything about it.”
In addition, Holtz’s notes of September 15, 2011, indicate that an employee had come to
him asking how to decertify the Union and that “many, the majority of the full-time and most
of the part time would be interested in voting the union out.” Holtz gave the employee a
contact provided by Zenisek. (G.C. Ex. 140.)
These affidavits and exhibits must be weighed against evidence that: (1) the Union
has established majority status and has processed 19 grievances under the expired
agreements (2) Lauriel Hanson, who is alleged to have been constructively discharged,
testified at the administrative hearing that the reduction in hours did not change her opinion
of the Union; and (3) there is no evidence that any employee has resigned membership
in the Union since September of 2011. In the final analysis, that one employee’s opinion
has not been affected or that no employee has resigned to date does not mean there has
been no harm.
When considering the balance of hardships, the court takes into account “the
probability that declining to issue the injunction will permit the alleged[ ] unfair labor
practices to reach fruition and thereby render meaningless the Board's remedial authority.”
Frankl, 650 F.3d at 1365. The Seventh Circuit has likewise commented, “[a]s time passes,
the benefits of unionization are lost and the spark to organize is extinguished. The
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deprivation to employees from the delay in bargaining and the diminution of union support
is immeasurable.” Electro–Voice, Inc., 83 F.3d at 1573.
Given the unilateral reductions, open hostility to the Union, the respondent’s efforts
to undermine the Union’s credibility, granting injunctive relief appears to be the prudent
course.

The economic impact to respondent appears to be overstated where the

respondent concedes that all but four have returned to full-time with access to health
insurance and that the remaining four have indicated that they do not wish to return to
Store 15. There is a strong public interest in the integrity of the collective bargaining
process.” Bloedorn, 276 F.3d at 300 (internal quotation marks omitted). That 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 N.L.R.B.'s remedial
powers lose their effectiveness due to the passage of time. Lineback, 979 F. Supp. at 847.
As a final matter, when issuing injunctive relief, the court must state the reasons why
an injunction is issued, state the terms of the injunction with specificity, and describe in
reasonable detail the act or acts restrained. Fed. R. Civ. P. 65(d); Spurlino, 546 F.3d at
504. The scope of injunctive relief is limited to restraining only those acts which are "of the
same type or class as [the] unlawful acts which the court has found to have been
committed or whose commission in the future[,] unless enjoined, may fairly be anticipated
from the defendant's conduct in the past." Id. (quoting N.L.R.B. v. Express Pub. Co., 312
U.S. 426, 435–37, 61 S. Ct. 693, 85 L. Ed. 930 (1941)). Because the petitioner's
requested relief is appropriate in scope,

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IT IS ORDERED that respondent’s motion to dismiss is denied.
IT IS FURTHER ORDERED that petitioner’s motion for injunctive relief is granted.
Dated at Milwaukee, Wisconsin, this 17th day of May, 2012.
BY THE COURT
/s/ C. N. Clevert, Jr.
C. N. CLEVERT, JR.
CHIEF U. S. DISTRICT JUDGE

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