Fifth Circuit Clarifies Standard for Injunctive Relief Under the NLRA | Practical Law

Fifth Circuit Clarifies Standard for Injunctive Relief Under the NLRA | Practical Law

In McKinney v. Creative Vision Resources LLC, the Court of Appeals for the Fifth Circuit held that injunctive relief under Section 10(j) of the National Labor Relations Act (NLRA) is warranted only to remedy egregious or exceptional harm, and that a district court reviewing a 10(j) petition must make specific factual findings regarding whether such harm is present, ongoing and likely to cause further harm to a union or its supporters. The court reconciled the Fifth Circuit's two-part test for evaluating 10(j) petitions with the four-part test adopted by other circuits, finding that the two-part test was consistent with a US Supreme Court decision on injunctive relief. The Fifth Circuit found that the district court abused its discretion when it granted a union's 10(j) petition over a successor company's failure to bargain because the district court failed to make specific findings or account for the National Labor Relations Board's (NLRB) long delay in reducing the need for injunctive relief.

Fifth Circuit Clarifies Standard for Injunctive Relief Under the NLRA

Practical Law Legal Update 6-608-9007 (Approx. 5 pages)

Fifth Circuit Clarifies Standard for Injunctive Relief Under the NLRA

by Practical Law Labor & Employment
Published on 17 Apr 2015 • USA (National/Federal)
In McKinney v. Creative Vision Resources LLC, the Court of Appeals for the Fifth Circuit held that injunctive relief under Section 10(j) of the National Labor Relations Act (NLRA) is warranted only to remedy egregious or exceptional harm, and that a district court reviewing a 10(j) petition must make specific factual findings regarding whether such harm is present, ongoing and likely to cause further harm to a union or its supporters. The court reconciled the Fifth Circuit's two-part test for evaluating 10(j) petitions with the four-part test adopted by other circuits, finding that the two-part test was consistent with a US Supreme Court decision on injunctive relief. The Fifth Circuit found that the district court abused its discretion when it granted a union's 10(j) petition over a successor company's failure to bargain because the district court failed to make specific findings or account for the National Labor Relations Board's (NLRB) long delay in reducing the need for injunctive relief.
On April 13, 2015, in McKinney v. Creative Vision Resources LLC, the US Court of Appeals for the Fifth Circuit held that injunctive relief under Section 10(j) of the NLRA is warranted only to remedy egregious and exceptional harm, and that a district court reviewing a 10(j) petition must make specific factual findings regarding whether such harm is present, ongoing and likely to cause further harm to a union or its supporters. The court reconciled the Fifth Circuit's two-part test for evaluating 10(j) petitions with the four-part test adopted by other circuits, finding that the two-part test was consistent with a US Supreme Court decision on injunctive relief. The Fifth Circuit found that the district court abused its discretion when it granted a union's 10(j) petition over a successor company's failure to bargain because the district court failed to make specific findings or account for the NLRB's long delay. The Fifth Circuit vacated the district court's order granting the 10(j) petition and remanded the case. (No. 14-30839, (5th Cir. Apr. 13, 2015).)

Background

In January 2013, an NLRB administrative law judge (ALJ) found that Creative Vision, a successor employer to a company with unionized workers, engaged in unfair labor practices (ULPs) in 2011 by refusing to bargain with the union. Prior to the ALJ's decision, the NLRB had filed a petition for injunctive relied under Section 10(j) of the NLRA, but the 10(j) petition was not decided by the district court until July 2014. The district court granted the 10(j) injunction, requiring Creative Vision to re-establish the status quo conditions that had existed when the original ULP charge was filed three years earlier, in 2011 (29 U.S.C. 160(j)). Creative Vision appealed.

Outcome

The Fifth Circuit vacated the district court's granting of the NLRB's 10(j) petition and remanded the case to the district court.
The Fifth Circuit noted:
  • The general standard giving district courts the power to remedy a ULP under Section 10(j) by granting injunctive relief as the court "deems just and proper" offers little guidance. (29 U.S.C. 160(j).)
  • The Fifth and Third Circuits apply a two-part test for deciding Section 10(j) petitions, looking at:
  • Other Circuits have adopted a four-part test for reviewing Section 10(j) petitions, requiring the NLRB to make several showings, including a sufficient likelihood of irreparable harm.
  • The Supreme Court's decision in Winter v. Natural Resources Defense Council, a case not involving Section 10(j), applied a four-part test for injunctive relief, requiring that a plaintiff show:
    • a likelihood of suffering irreparable harm;
    • a likelihood of success on the merits;
    • that the balance of equities tips in the plaintiff's favor; and
    • that an injunction is in the public's interest.
      (555 U.S. 7 (2008).)
  • Circuit courts hearing an appeal of a district court's decision on a Section 10(j) petition apply an abuse of discretion standard (Love v. Tyson Foods, Inc., 677 F.3d 258 (5th Cir. 2012)).
  • A district court's review of a 10(j) petition must explain why:
    • injunctive relief is necessary; and
    • the normal NLRB administrative processes and enforcement of NLRB orders are not sufficient to address the ULP.
The Fifth Circuit reconciled its two-part test with the four-part test adopted by other circuits (and concluded that it was consistent with the Supreme Court's test in Winter), holding that:
  • Injunctive relief under Section 10(j) of the NLRA is warranted only to remedy specific egregious and exceptional harm.
  • A district court reviewing a 10(j) petition must make specific factual findings regarding egregious and exceptional harm that is both ongoing and likely to cause further harm to a union or its supporters.
Applying its holding to the district court's granting of the 10(j) petition, the Fifth Circuit found that the district court abused its discretion by:
  • Failing to make specific findings of either egregious or exceptional harm caused by Creative Vision in its refusal to bargain with the union.
  • Making only generalized findings to support its granting of the 10(j) petition.
  • Failing to account for the three years that had elapsed since the conduct complained of in the original ULP charge, and how that lengthy delay reduced the need to maintain the status quo.
  • Not articulating the reasons why a 10(j) injunction was a necessary remedy to address the ULPs, as opposed to an NLRB order enforced through the NLRB's normal administrative processes.

Practical Implications

The Fifth Circuit's decision in McKinney not only reaffirms the test to be applied in evaluating 10(j) petitions in the that circuit, but clarifies how district courts within the circuit should approach these petitions under the abuse of discretion standard. According to the court in McKinney, an employer's refusal to bargain does not itself mean that an injunction is the proper remedy. Rather, courts must identify specific egregious or exceptional harm caused by the employer's actions. Whether the US Supreme Court ultimately resolves the dispute among the circuits over which test to apply in 10(j) cases, the Fifth Circuit indicates that the tests run together, and what matters is the extent of the harm at issue.