Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Overstreet v. Gunderson Rail Servs, LLC

United States District Court, D. Arizona

March 14, 2014

CORNELE A. OVERSTREET, Regional Director of the Twenty-Eighth Region of the National Labor Relations Board, for and on behalf of the National Labor Relations Board, Petitioner,
v.
GUNDERSON RAIL SERVICES, LLC, d/b/a GREENBRIER RAIL SERVICES, Respondent

Order Filed: April 8, 2014

Page 1074

[Copyrighted Material Omitted]

Page 1075

[Copyrighted Material Omitted]

Page 1076

[Copyrighted Material Omitted]

Page 1077

[Copyrighted Material Omitted]

Page 1078

[Copyrighted Material Omitted]

Page 1079

For Cornele A Overstreet, Regional Director of the Twenty-Eighth Region of the National Labor Relations Board, on behalf of National Labor Relations Board, Petitioner: Eva C Shih, John T Giannopoulos, Sophia Alonso, LEAD ATTORNEYS, National Labor Relations Board - Phoenix, AZ, Phoenix, AZ.

For Gunderson Rail Services LLC, doing business as Greenbrier Rail Services, Respondent: Frederick Charles Miner, Steven Gregory Biddle, LEAD ATTORNEYS, Littler Mendelson PC - Phoenix, AZ, Phoenix, AZ.

OPINION

Page 1080

ORDER

Frank R. Zapata, Senior United States District Judge.

Pending before the Court is Petitioner's Petition for Temporary Injunction Under Section 10(j) [29 U.S.C. § 160(j)] of the National Labor Relations Act (" Act" or " NLRA" ).

The Respondent is Greenbrier Rail Services (" Greenbrier" ) which is a unit of the Greenbrier Companies, Inc. which manufactures, repairs, and services railroad cars throughout North America and Europe; the Wheels, Repair, and Parts division repairs and maintains rail cars at approximately 30 locations in North America. One of these locations is a Tucson facility that has approximately 92 production employees which includes welders, airmen, switchmen, painters, and others. Petitioner argues that in response to these employees attempting to unionize, Greenbrier engaged in an extensive anti-union campaign that included laying off a third of its work force, closing its Tucson factory, interrogation and the impression of surveillance of employees, unlawful promises and grants of benefits, unlawful solicitation of employee complaints and grievances, and threats to employees. Petitioner argues that these actions illegally destroyed any past and future support for unionization. While the parties have engaged in administrative litigation for many months and just completed numerous evidentiary hearings as to these issues before an Administrative Law Judge in February of 2014, Petitioner emphasizes that such administrative proceedings are protracted and an enforceable order typically is not forthcoming for an extended period of time. As such, Petitioner has filed this § 10(j) action seeking a temporary injunction from the Court pending the conclusion of the litigation before the Board. For the reasons stated below, Petitioner's Petition for a Temporary Injunction is granted.

Page 1081

GENERAL STANDARD OF REVIEW

" Section 10(j) permits a district court to grant relief it deems just and proper . . . To decide whether granting a request for interim relief under Section 10(j) is just and proper, district courts consider the traditional equitable criteria used in deciding whether to grant a preliminary injunction . . . Thus, when a Regional Director seeks § 10(j) relief, he 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 . . . [S]erious questions going to the merits' and a balance of hardships that tips sharply towards the [Regional Director] can support issuance of a preliminary injunction, so long as the [Regional Director] also shows that there is a likelihood of irreparable harm and that the injunction is in the public interest . . . In all cases, however, the Regional Director must establish that irreparable harm is likely, not just possible, in order to obtain a preliminary injunction . . . [T]he court must evaluate the traditional equitable criteria through the prism of the underlying purpose of section 10(j), which is to protect the integrity of the collective bargaining process and to preserve the Board's remedial power." Frankl v. HTH Corp., 650 F.3d 1334, 1355 (9th Cir. 2011)[1](emphasis added).

LIKELIHOOD OF SUCCESS ON THE MERITS

" On a § 10(j) petition, likelihood of success is a function of the probability that the Board will issue an order determining that the unfair labor practices alleged by the Regional Director occurred and that this Court would grant a petition enforcing that order, if such enforcement were sought . . . [I]n evaluating the likelihood of success, it is necessary to factor in the district court's lack of jurisdiction over unfair labor practices, and the deference accorded to NLRB determinations by the courts of appeals . . . It is, after all, the Board and not the courts, which has primary responsibility for declaring federal labor policy . . . Additionally, and for similar reasons, even on an issue of law, the district court should be hospitable to the views of the General Counsel, however novel . . . Given these considerations . . . the regional director in a § 10(j) proceeding can make a threshold showing of likelihood of success by producing some evidence to support the unfair labor practice charge, together with an arguable legal theory . . . But if the Director does not show that success is likely, and instead shows only that there are serious questions going to the merits, then he must show that the balance of hardships tilts sharply in his favor, as well as showing that there is irreparable harm and that the injunction is in the public interest" Frankl, 650 F.3d at 1355-56 (emphasis added).

§ 8(a)(3) Allegations as to the November 2012 Layoffs

On 11/12/12, Greenbrier laid off approximately a third of its work force. Petitioner argues that this violated § 8(a)(3) of the Act as it was motivated by anti-union animus.

" Section 8(a)(3) of the NLRA prohibits an employer from discriminating against employees in regard to hire or tenure of employment . . . to discourage membership in any labor organization . . . [I]t is well-established that an employer

Page 1082

violates Section 8(a)(3) of the NLRA where it close[s] a part of [its] operations, discharge[s] the employees involved, and subcontract[s] the work for anti-Union purposes." Healthcare Employees Union, Local 399, Affiliated With Service Employees Intern. Union, AFL-CIO v. N.L.R.B., 463 F.3d 909, 918 (9th Cir. 2006); see also Nabors Alaska Drilling, Inc. v. N.L.R.B., 190 F.3d 1008, 1014 (9th Cir. 1999)(" An employer commits an unfair labor practice in violation of § 8(a)(1) & (3) if it discharges an employee because of the employee's union activity." ).

In a Section 8(a)(3) case, the Board uses the burden-shifting scheme set forth in Wright Line to determine whether an employer was motivated by anti-union animus. See 251 N.L.R.B. 1083, 1089 (1980); NLRB v. Transp. Mgmt. Corp., 462 U.S. 393, 399-403, 103 S.Ct. 2469, 76 L.Ed.2d 667 . . . (1983) (upholding Wright Line burden shifting scheme under the NLRA). Under Wright Line, Petitioner must show that employees were engaged in union activities, Respondent knew of these activities, and harbored the requisite anti-union animus. Praxair Distribution, Inc., 357 NLRB No. 91 slip op. at 1 fn. 2 (2011), 2011 WL 4406047, 1. " Once this is established, the burden will shift to the employer to demonstrate the same action would have taken place even in the absence of the protected conduct." Aguayao v. Quadrtech Corp., 129 F.Supp.2d 1273, 1277 (C.D. Cal. 2000). An employer must not only establish a legitimate reason for its actions, but must persuade by a preponderance of the evidence, that it would have taken the same actions even in the absence of the protected activity. Peter Vitalie Co., Inc., 310 NLRB 865, 871 (1993); Healthcare Employees Union, Local 399 v. NLRB, 463 F.3d 909, 923 (9th Cir. 2006). The Petitioner's overall burden of persuasion is identical to its initial burden under Wright Line. Manno Electric, Inc., 321 NLRB 278, 280 n. 12 (1996), enf'd mem., 127 F.3d 34 (5th Cir. 1997).

" While the General Counsel retains the ultimate burden of persuasion, once the General Counsel establishes that anti-union animus was a motivating factor, the employer bears the burden of establishing any affirmative defense such as the inevitability of termination." Healthcare Employees Union, Local 399, Affiliated With Service Employees Intern. Union, AFL-CIO, 463 F.3d at 919. " An employer will seldom admit that it was motivated by anti-union animus when it made its adverse employment decision . . . Actual motive, a state of mind, being the question, it is seldom that direct evidence will be available that is not also self-serving . . . For that reason, circumstantial evidence is sufficient to establish anti-union motive . . . Motive is a question of fact, and the NLRB may rely on both direct and circumstantial evidence to establish an employer's motive, considering such factors as the employer's knowledge of the employee's union activities, the employer's hostility toward the union, and the timing of the employer's action . . . To determine motive, the Board may rely on indirect evidence and inferences reasonably drawn from the totality of the circumstances." Id. A discriminatory motive may be shown by: (1) the timing; (2) the presence of other unfair labor practices; (3) statements and actions showing the employer's general and specific animus; (4) disparate treatment; (5) departure from past practice; (6) failing to adequately investigate whether the alleged misconduct occurred; and (7) evidence demonstrating that an employer's proffered explanation for the adverse action is a pretext. See, e.g., Golden Day Schools v. NLRB, 644 F.2d 834, 838 (9th Cir. 1981); NLRB v. Rain-Ware, Inc., 732 F.2d 1349, 1354 (7th Cir. 1984); Mid-Mountain Foods, Inc., 332 NLRB 251, 251 n. 2, 260 (2000);

Page 1083

NLRB v. Vemco, Inc., 989 F.2d 1468, 1473-74 (6th Cir. 1993); Affiliated Foods, Inc., 328 NLRB 1107, 1107 (1999); Naomi Knitting Plant, 328 NLRB 1279, 1283 (1999); JAMCO, 294 NLRB 896, 905 (1989), aff'd mem., 927 F.2d 614 (11th Cir. 1991), cert. denied, 502 U.S. 814, 112 S.Ct. 66, 116 L.Ed.2d 41 (1991); W.W. Grainger, Inc., v. NLRB, 582 F.2d 1118, 1121 (7th Cir. 1978); Wright Line, 251 NLRB at 1089; Roadway Express, 327 NLRB at 26. In addition, the " Board has inferred unlawful motive where the employer's action is baseless, unreasonable, or so contrived as to raise a presumption of unlawful motive." J.S. Troup Elec., 344 NLRB 1009, 1015 (2005); see also Shattuck Denn Mining Corp. v. NLRB, 362 F.2d 466, 470 (9th Cir. 1966)(an employer's " self-serving declaration [as to motive] is not conclusive; [one] may infer motive from the total circumstances . . ." ; where it is found that the employer's " stated motive for a discharge is false, [one] can infer that there is another motive. More than that, one can infer that the motive is one that the employer desires to conceal-an unlawful motive, at least where . . . the surrounding facts tend to reinforce that inference." ).

Petitioner has met his burden to show that the 11/12/12 layoff was motivated by anti-union animus. Greenbrier's Tucson employees had been attempting to unionize for an extended period of time. For example, in the fall of 2011, employees sought representation from the United Transport Union (" UTU" ). Employees Rogelio Martinez and Jorge Martinez were actively involved in attempting to get their coworkers to vote for the UTU. Although it was common for employees to solicit one another during working hours (i.e, kids' fundraisers-band, Girl Scouts), talk about non-work related matters (family, kids, sports, politics), and employees were not disciplined for such action, both Rogelio and Jorge both received written discipline for soliciting coworkers about the UTU during work hours. Another employee was told by his supervisor to stay away from two employees involved with the Union, and that Greenbrier was going to get rid of those two employees. Prior to the 10/28/11 UTU election among employees, Greenbrier management held meetings with employees, expressed their opposition to the UTU, and stated that unionization could result in closure of the Tucson plant, layoffs, and transfer of employees to other states. The UTU lost the 10/28/11 election by 3 votes. Pursuant to governing law, another union election could not be held for a year.

In October of 2012, after the narrow 10/28/11 election loss, management was well aware that employees could start organizing another union campaign as the one-year expiration approached and expected such action. Employees such as Jorge Martinez, Murgia, and Ramos led the unionization efforts in the fall of 2012. These employees initially met with the United Food and Commercial Workers Union (" UFCW" ) on 10/24/12 regarding representation, and passed out and collected UFCW authorization cards at the Tucson plant for their coworkers for a couple of days after the 10/24/12 meeting. In this short time, they collected 48 cards which was already a majority of the 92 production employees in Tucson. During the time frame that Martinez was in the process of passing out and collecting UFCW cards, he went to the front-shop of the plant for a work assignment, and while there, a supervisor (front-shop Foreman Martin Torres) asked if it was true that the union was coming around again; Martinez stated that he did not know, asked Torres why, to which Torres responded that rumors had been heard.

Page 1084

In the beginning of November, Martinez and his colleagues decided that the Sheet Metal Workers union (" SMW" ) would better represent their interests as they had more experience in their field; as such, they decided to seek representation from the SMW instead of the UFCW. They met with the SMW on 11/5/12, and began passing out and collecting SMW authorization cards from their co-workers the next day at the Tucson plant. Martinez told his co-workers to read the cards and sign it if they agreed; he witnessed their signatures and placed his initials on them. The signed authorization cards state in part: " I, the undersigned, hereby authorize the SHEET METAL WORKERS INTERNATIONAL ASSOCIATION . . . to represent me for purposes of Collective Bargaining, and in my behalf, to negotiate and conclude all agreements as to hours of labor, wages, and other conditions of employment." When passing out cards, Ramos explained to his co-workers that by signing the card they agreed to be represented by the Union; likewise, Murgia told his co-workers to read the card carefully and sign it if they agreed. There was testimony that employees believed that by signing the cars, the Union would represent them. By 11/8/12, Martinez and his colleagues had already collected 50 SMW authorization cards which again was a majority of the 92 production employees in Tucson.

On 10/31/12, Al Lave (Vice President of Human Resources) led a meeting with Tucson management (shop managers, supervisors, and leadmen along with Plant Manager Lex Morrison and Human Resources representative Margaret Madrigal) regarding renewed unionization efforts among employees in Tucson. Lave instructed management to monitor their respective work areas and bring any union materials they find to the plant manager. On the day of the layoffs, less than two weeks after this management meeting regarding unionization, Tucson Foreman Martin Torres stated to one of the employees that was terminated (Guillermo Murgia) that he thought the layoffs were because of the Union. One of the leads in the meeting was Armando Lopez; Lopez was a friend of the primary union organizer among employees (Jorge Martinez), and Martinez would keep Lopez updated on the union drive such as how many union authorization cards were collected. Likewise, on a daily basis in the months before the November 2012 layoff, Gutierrez would talk about unionization issues with leads Luis Lopez and Ismael Lopez; this group often carpooled to work together.

On 11/12/12, Greenbrier laid off 28 employees from the Tucson plant which constituted about a third of the work force. The close timing between the layoff and the employees' unionization efforts and collection of a majority number of union authorization cards supports a finding of Greenbrier's anti-union animus. See Golden Day Schools, Inc. v. NLRB, 644 F.2d 834, 838 (9th Cir. 1981) (timing of discharge was indicia of discriminatory motive); Healthcare Employees Local 399 v. NLRB, 463 F.3d 909, 920 (9th Cir. 2006) (timing of employer's subcontracting decision, between filing of election petition and date of election, made inference of anti-union motive " stunningly obvious" ). Likewise, Greenbrier's anti-union animus is also shown through the various violations of the Act discussed throughout this Order. Petitioner has met its burden to show that anti-union animus was a motivating factor in laying off a third of its work force. The burden shifts to Respondent to show that the same action would have been taken even in the absence of the renewed unionization efforts.

In response, Greenbrier primarily argues that the 11/12/12 layoffs occurred solely for legitimate economic considerations. For example, Greenbrier argues

Page 1085

that the Tucson plant had been extremely inefficient since it unexpectedly lost a large number of experienced employees and supervisors in an IRS employee false identification audit in 2011. Since that time, less experienced workers were inefficient inasmuch as they physically worked and were paid by Greenbrier for many more hours than they could bill their customers (i.e., most repair jobs had a maximum number hours that could be billed to the customer, but employees were often exceeding these maximum hours, were still paid by Greenbrier for the time they were physically on duty at the plant, but the extra costs to Greenbrier could not be passed on to the customer receiving the repairs). As such, in light of these extreme inefficiencies, the Tucson plant started losing money, attempted to hire and train more workers to increase efficiency to no avail, lost more money as they worked longer due to these inefficiencies, and Greenbrier ultimately lost approximately $250,000 in October of 2012. These economic issues were the sole basis for ultimately deciding to lay off Tucson employees on 11/12/12.

Petitioner argues that Respondent's position is pretext, and points to numerous factors that call its justification into doubt. Petitioner emphasizes that for many months, and even years, the Tucson shop lost money in some months and made a profit some months. Then after the unionization efforts began resurfacing in October and November of 2012, Greenbrier abruptly decided to lay off a third of their Tucson work force. Furthermore, less than two months before the layoffs, upper management was criticizing Tucson management and demanding an explanation for failing to hire enough workers to meet hiring goals for Tucson (the Tucson shop was supposed to expand to 95 employees, but only had 73 employees in August of 2012). In the first weeks of November, Greenbrier was still trying to hire welders in Tucson. As to the month of October, there were numerous one-time expenses in Tucson that contributed to the larger losses such as the death of an employee causing the factory to close, and the introduction of a new accounting system (" Syspro" ) which resulted in numerous inaccuracies in financial statements in the months leading up to the November layoffs. In addition, there were two other Greenbrier locations (Dothan and Atchison) that had large losses as of 11/1/12, but there was no sudden decision to layoff a third of those workforces in contrast to Tucson.

There also is a substantial amount of conflicting and vague testimony from management relating to the November layoffs. See Maywood, Inc., 251 NLRB 979, 993-994 (1980) (inconsistent testimony from company witnesses as to who made decision to discharge employee and the reason for the discharge is evidence of pretext to hide the real reason, advocacy for the union); Cf. Planned Building Services, Inc., 347 NLRB 670, 713-15 (2006) (in a refusal-to-hire case, inconsistent testimony as to who made decision to not hire employees supports a finding of pretext); Jennings & Webb, Inc., 288 NLRB 682, 687-88 (1988), enf'd., 875 F.2d 315 (4th Cir. 1989) (Table) (conflicting and inconsistent testimony from employer's witnesses, including as to when the decision to terminate employee was made, supports a finding of discriminatory intent); Black Entertainment Television, Inc., 324 NLRB 1161, 1161 (1997)( " The Board has long expressed the view that when an employer vacillates in offering a rational and consistent account of its actions, an inference may be drawn that the real reason for its conduct is not among those asserted." ). For example, Mike Torra from upper management (who gave final approval for the layoffs) could not recall when the need for a layoff was first discussed, who raised the topic, who discussed the topic, and stated that the

Page 1086

need for the layoff was generally a process issue. While Torra gave final approval, regional managers Kevin Stewart and Juan Maciel were the ones who decided that there needed to be a layoff in Tucson, and were responsible for deciding how many people and who should be laid off. Stewart stated that he raised the need for layoffs in late October in a conference call, and that he was directed by his superiors to come up with a plan (along with Maciel) for fixing the Tucson situation, and to be ready to present the plan at Greenbrier's annual managers' conference in Chicago from 11/5/12 to 11/7/12. He stated that he consulted with Maciel prior to the conference, and they presented a plan during the conference. In contrast, Maciel (who was the joint decision maker with Stewart regarding the Tucson layoffs), stated that he learned about the layoffs for the first time while he was at the conference, and he discussed the layoff plan with Stewart after the conference started. As to choosing what employees to layoff, the factors they used in making their decisions were skill and ability, productivity, safety record, cross-training, and seniority. However, they ultimately never reviewed any performance reviews, attendance records, or other documents in deciding who they laid off. Stewart also testified that he was not familiar enough with the Tucson employees to place a name with a face, so he relied on Maciel to tell him names of who to retain and who to layoff. However, Maciel had not worked in Tucson for over 12 years and was brought in to help deal with the layoffs. Maciel, in turn, stated that he relied in part on Tucson production manager Freddy Valdez as to who to layoff or retain as he was very familiar with the Tucson employees. However, Valdez stated that nobody spoke to him about who to retain or layoff prior to the actual layoffs on 11/12/12, and the first time he learned of the layoffs was when they announced the layoffs to the entire plant on 11/12/12. There is also evidence that there were employees that were laid off who had higher performance evaluations than some of those retained.

In further support of the finding that Greenbrier's justification is pretext, Petitioner emphasizes that Greenbrier inexplicably decided in January of 2013 to start rehiring the employees they just laid off. The reasons for the layoff included skill, ability, and productivity for the purpose of having more efficient employees to increase Greenbrier's profits in Tucson. However, a couple of months later, Greenbrier decided to start rehiring these same former employees. The employees that were just laid off were required to submit a new employment application, interview with the new plant manager (Eric Valenzuela), and management and human resources were directed to keep track of such things as their attitudes, and whether they would present further issues to Greenbrier. Valenzuela mentioned during one such interview that the unionization efforts " may or may not have" contributed to the layoffs, and that employees wasted time at work related to union activities that made the efficiency and economic situation in Tucson worse. Both Stewart and Maciel decided in mid-January of 2013 to start rehiring laid off employees because labor utilization rates (measuring employee efficiency) were acceptable. Stewart stated that labor utilization rates between 60-80% were acceptable, but the rates in December 2012, January 2013, and February 2013 were all below 60%, and rates were at 46% in January 2013 when the decision was made to start rehiring people. In rehiring former employees, Stewart and Maciel focused on the particular skill sets needed, and again stated they relied in part on feedback from Tucson production manager Freddy Valdez in determining who to rehire. However, Valdez said he was never consulted about who should be

Page 1087

rehired, and was only told after the fact that Greenbrier was recalling employees.

Based on the record before the Court, Petitioner has shown that he is likely to prevail on his position regarding the § 8(a)(3) claims pertaining to the 11/12/12 layoffs.

§ 8(a)(3) Allegations Pertaining to Closure of the Tucson Shop

After the layoffs in November of 2012, the decision to rehire employees in January of 2013, and the rehiring of numerous laid off employees for the first several months of 2013, Greenbrier decided in August of 2013 that the Tucson shop had to be closed with operations winding down for several months thereafter. Like the layoffs, Petitioner argues that Greenbrier was motivated by anti-union animus to close the facility to dissuade union support throughout its organization.

The Wright Line burden-shifting standard also applies to the evaluation of whether the employer's decision to close a facility and move the work to another facility was motivated by anti-union animus. See Aguayao v. Quadrtech Corp., 129 F.Supp.2d 1273, 1277 (C.D. Cal. 2000); see also Healthcare Employees Union, Local 399, Affiliated With Service Employees Intern. Union, AFL-CIO ., 463 F.3d at 918 (" Section 8(a)(3) of the NLRA prohibits an employer from discriminating against employees in regard to hire or tenure of employment . . . to discourage membership in any labor organization." ).

The record reflects that Greenbrier was aware of the employees unionizing activities (which culminated in the July 2013 elections as to the SMW union), and that Greenbrier had an anti-union animus. Like the layoffs, the timing of the decision to close the Tucson plant in August of 2013 supports an anti-union motive. Likewise, Greenbrier's anti-union animus is also shown through the various violations of the Act discussed throughout this Order. In May of 2013, Greenbrier received notice that the upcoming SMW union election was going to proceed. Later, in July of 2013 [2], only a couple of weeks after the July 2013 election whereby the union was again defeated (by a wide margin this time), Greenbrier proposed a large rate increase of approximately 18% to its largest Tucson customer (TTX-which accounted for approximately 70-80% of the business in Tucson). TTX, however, had a very large, nationwide fleet of railcars that could receive the same repairs at other Greenbrier facilities in Mira Loma, California and San Antonio, Texas at much lower rates thereby saving TTX a substantial amount of money. Thus, TTX rejected Greenbrier's large rate increase for Tucson, stopped sending work to Tucson, and redirected their business to Mira Loma and San ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.