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SCOTT v. PACIFIC CUSTOM MATERIALS

July 18, 1996

JAMES S. SCOTT, on behalf of the NATIONAL LABOR RELATIONS BOARD, Plaintiff,
v.
PACIFIC CUSTOM MATERIALS, INC., Defendants.



The opinion of the court was delivered by: HENDERSON

 James Scott, Regional Director of the National Labor Relations Board (NLRB), petitions this Court for a temporary injunction pursuant to Section 10(j) of the National Labor Relations Act (NLRA), as amended, 29 U.S.C. § 160(j). For the reasons stated below, this Court GRANTS the petition.

 FACTUAL BACKGROUND

 Port Costa Materials was previously a subsidiary of PLA Holdings, Inc. (PLA), and was the only unionized PLA facility. Although the Port Costa facility operated as a brick plant until 1991, at the time of the TXI acquisition, Port Costa produced lightweight aggregate and did some soil remediation work. Allen Dec. PP 2, 93. Most Port Costa employees had over five years experience, and some had well over twenty years with the company. Aff. at 134, 195, 197.

 The Port Costa employees were jointly represented by International Longshoremen's and Warehousemen's Union Local 6, International Longshoremen's and Warehousemen's Union Local 17, and the Warehouse Council IBT-ILWU (called collectively the Union). At the time of Port Costa Material's closure, a contract effective through May 31, 1998 covered thirty union employees at the facility. Silveira Aff. at 2, 21-57. Only two Porta Costa maintenance employees could be excluded from the bargaining unit, pursuant to this contract. Silveira Supp. Aff. at 348-49.

 In early 1995, Texas Industries, Inc. (TXI) began exploring the possibility of acquiring the Port Costa Materials facility. Although Port Costa Materials was losing about $ 1 million a year, TXI decided to purchase the facility. Lieber Dec., Exh. A at 1110-11. On November 19, 1995, TXI began running advertisements in the San Francisco Chronicle soliciting applications for production, maintenance, and office positions at the Port Costa facility. Allen Dec. P 5; Aff. at 58, 266. Port Costa employees shortly thereafter were told to fill out employment applications for TXI. Every employee submitted an application. Silveira Aff. at 4-5. Mr. Allen reviewed approximately eighty applications which came in as a result of these ads, and forwarded 12-15 of them to TXI's regional operations manager. Allen Dec. P 5. TXI advised the outside applicants that they would be considered at a later time. Allen Aff. at 266.

 About the same time, TXI vice-president Mel Brekhus came to the Port Costa facility and responded to questions raised about the Union by stating that the facility would not have a union. Aff. at 105, 113. Then, TXI interviewed all of the clerical employees, who were non-union, and offered them jobs. Aff. at 106. Lee Allen was also offered the position of plant manager, which he accepted a few days later. Allen Aff. at 249. *fn1"

 On January 22, 1996, Pacific Custom Materials, Inc. (Pacific Custom) purchased the assets of Port Costa Materials and took over the business operations of the facility. Port Costa employees were advised to come in and pick up their final paychecks. Aff. at 5, 174. Mr. Allen again gave assurances to employees that they would be returning to work at the facility. Aff. at 5, 174, 212.

 Some former Porta Costa employees had already been hired and had started working for Pacific Custom. For example, TXI interviewed the two union-exempted mechanics -- Mr. Jasso and Mr. Rudy -- in October 1995, before union employees were even asked to submit employment applications. Silveira Aff. at 5. Mr. Jasso and Mr. Rudy's date of hire was January 23, 1996. Allen Aff. at 343. Other nonunion employees -- such as quality control officers Steve Johnson and Caine Lai, security/janitor Stanford Koch, and three clerical employees -- were also hired as of January 23, 1996. Allen Dec. at P 6; Allen Aff. at 343.

 About this same time, TXI began interviewing the unionized Port Costa employees. During these interviews, Gordon Yonz, TXI's Human Resources Administrator, told employees that TXI did not have any unionized plants. Yonz Dec. at P 24. Although he denies saying more, many former Port Costa employees also recall Mr. Yonz stating that the Pacific Custom employees would not have a union. Aff. at 119, 126-27, 137, 151, 169, 175, 192, 199, 204, 235, and 240. Finally, Mr. Yonz allegedly told employees that, if hired, Respondent wanted them to work for several months without a union. Aff. at 119, 199, 204, 235.

 Gary Silveira, a long-time Port Costa unionized maintenance mechanic, was hired by Respondent, and he went to the facility on February 9th for an orientation and to perform electrical work. He spoke to Steve Johnson, a nonunion Port Costa quality control officer who Respondent hired to be the production supervisor, about whether or not Pacific Custom could begin operations due to electrical problems that existed. In reply, Mr. Johnson stated that electrical problems were nothing compared to trying to start up the facility with "60% new people." Aff. at 7-8. *fn2" An office employee, Gina Benevidez, also recalled Mr. Allen stating that he could only hire a certain amount of ex-employees because TXI was afraid they would vote in the Union. Aff. at 108.

 Unsatisfied with the number of applications, Pacific Custom placed a second round of ads in the Contra Costa Times in early February. Yonz Dec. at P 15. Respondent also contacted the Mare Island Re-Employment Center and the Employment Development Department in Pleasant Hill, asking each of them to put job descriptions on their computer networks. Yonz Dec. at P 13. TXI received over 200 applications as a result. Allen Dec. P 6. Mr. Allen prescreened these outside applications for "experience, aptitude and other qualifications required by TXI, such as cross-training ability, attitude and working as member [sic] of a team." Aff. at 266. He forwarded promising applications on to TXI's Human Resources Department, which conducted the initial interviews. Yonz Dec. P 18.

 On February 23, 1996, Respondent began operations at the Port Costa facility. Allen Dec. at P 13. By March 1, 1996, Pacific Custom had thirty-four employees -- nineteen new hires and fifteen former employees. Allen Dec. at P 13. The former employees working for Respondent included the two union-exempt mechanics. Although former Port Costa employees received comparable wages, their health, retirement, and pension benefits were substantially different. Aff. at 7, 21-57, 59-81. Respondent made these changes to the terms and conditions of employment without prior notice to the Union. The Union has made a formal demand for recognition and bargaining, but Pacific Custom has not responded. Aff. at 352.

 Respondent did not hire sixteen former Port Costa employees who were active union members. These employees have either not been given a reason for not being hired back or been told that other applicants had more experience or skills. Aff. at 127, 137, 175-76, 193, 212. In comparison with other non-union facilities which TXI acquired at the same time, TXI rehired 14 Ridgelite Plant employees after receiving 109 applications. Yonz Dec. at P 5 & 10. All 3 employees at the non-union Olancha Plant were rehired after TXI received 5 applications. Yonz Dec. at P 6 & 9. *fn3"

 DISCUSSION

 In order to prevent parties from frustrating the purposes of the NLRA during the pendency of protracted proceedings before the NLRB, Congress passed Section 10(j), which states as follows:

 
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. Upon the filing of any such petition the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction to grant to the Board such temporary relief or restraining order as it deems just and proper.

 29 U.S.C. § 160(j). Any injunctive relief which a district court might order pursuant to this section lasts only until the NLRB renders its final decision on a complaint issued by the Board's General Counsel. Sears, Roebuck & Co. v. Carpet, etc., Layers Local 419, AFL-CIO, 397 U.S. 655, 25 L. Ed. 2d 637, 90 S. Ct. 1299, 1301 (1970).

 The Ninth Circuit has directed district courts to apply traditional equitable criteria in determining whether relief is "just and proper." Miller v. California Pacific Medical Center, 19 F.3d 449, 459 (9th Cir. 1994) (en banc). This analysis involves consideration of: 1) the public interest in ensuring that unfair labor practices do not undermine the NLRA simply because the Board takes too long to investigate and adjudicate the charge; 2) a likelihood of success on the merits, which at a minimum should involve a fair chance of success and serious questions going to the ...


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