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AEROGROUND, INC. v. CITY AND COUNTY OF SAN FRANCISCO

July 9, 2001

AEROGROUND, INC., PLAINTIFF,
v.
CITY AND COUNTY OF SAN FRANCISCO, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Walker, District Judge.

ORDER

Plaintiff Aeroground, Inc, a company that provides cargo-handling services for airlines at the San Francisco International Airport, challenges the airport commission's "Labor Peace/Card Check" rule. For the reasons set forth below, Aeroground's motion for a preliminary injunction (Doc # 11) is GRANTED.

I

The City and County of San Francisco owns the airport, which is operated by the city's airport commission headed by. the airport director, John L Martin (collectively, defendants). Beccia Decl (Doc # 14), Exh A at 1. On February 1, 2000, the airport commission adopted a rule called the "Labor Peace/Card Check" rule in an effort to minimize the perceived threat of labor unrest arising out of union organizing drives at the airport. Id, Exh B. While obligating unions not to undertake economic actions such as strikes, picketing and boycotts in relation to organizing campaigns, the rule requires certain employers operating at the airport to enter into a "Labor Peace/Card Check" agreement with any union that has registered with the airport director and requested such an agreement. Id § II (3)(c); id § II (1)(a).

Under the rule, the labor agreement must provide that the preference of the company's employees with respect to union representation be determined by a card check procedure. Id § I (1)(a); id § II (1)(a). A card check procedure is a process whereby a union provides employees with cards that ask them to designate the union as their bargaining representative; if a majority of the employees sign and return the cards to an objective third party, the union becomes the employees' exclusive bargaining representative. See Hotel Employees, Local 2 v. Marriott Corp., 961 F.2d 1464, 1465 n. 1 (9th Cir. 1992). Absent an agreement recognizing the card check procedure, an employer has the right under the National Labor Relations Act (NLRA) to insist that the issue of union representation be determined by a secret ballot election conducted by the National Labor Relations Board (NLRB). Id. at 1468; 29 U.S.C. § 159 (e). The card check rule, therefore, compels employers desiring to continue to do business at the airport to forego their right to have the union status of their employees determined by NLRB elections.

Aside from mandating the card check procedure, the rule also includes several other provisions affecting the conduct of employers at the airport. The rule requires the labor agreement to compel the parties to submit to binding arbitration over disputes about the proper interpretation of the agreement or regarding issues arising out of the card check process. Beccia Decl (Doc # 14), Exh B § I (1)(b). The rule also obligates employers to include in any subcontract a provision requiring the subcontractor to abide by the terms of the rule. Id § II (1)(d). And in the event the employer and union fail to negotiate a labor agreement within 30 days of the union's request, the parties become bound by the "Model Card Check Agreement," which requires, among other things, that the employer provide the union with the names, addresses and phone numbers of its employees. Id § III; see also id, attachment § 1(I).

Aeroground is currently one of the employers subject to the card check rule. To be sure, the rule explicitly exempts an employer's operations at the airport that are regulated by the Railway Labor. Act (RLA), 45 U.S.C. § 151 et seq, as determined by a final decision of a court or agency or by agreement between the employer and its employees' bargaining representative. Id § II (4)(d). Aeroground asserts that its operations at the airport are governed by the RLA, but that issue is not before the court. Indeed, the RLA status of Aeroground is currently being evaluated by the National Mediation Board. In any event, whether Aeroground is covered by the RLA is not yet resolved, and thus the provisions of the card check rule continue to govern its relationship with the airport.

On February 2, 2001, the Teamsters, Local 85 requested that Aeroground enter into a labor agreement with it pursuant to the card check rule. Aeroground petitioned the airport director for an exemption as an RLA-governed company. The airport director denied Aeroground's petition and the airport commission later confirmed that decision. Rather than agreeing to enter a labor agreement with the Teamsters, Aeroground initiated this litigation on April 25, 2001, seeking declaratory and injunctive relief from the rule. See Compl (Doc # 1). A refusal by Aeroground to enter such an agreement triggers the airport director's authority to terminate Aeroground's aviation support services permit. Beccia Decl (Doc # 14), Exh B § IV(2); see also id, Exh A § 11.14. Without this permit, Aeroground would be unable to conduct its business at the airport.

Aeroground asserts that the card check rule is preempted by the NLRA, the RLA and the Airline Deregulation Act (ADA). In addition, because the NLRA provides rights with which states and municipalities may not interfere, Aeroground similarly contends that the rule deprives Aeroground of its NLRA rights in violation of 42 U.S.C. § 1983. By the present motion, Aeroground seeks an order preliminarily enjoining defendants from enforcing the card check rule against it during the pendency of this action.

II

As a preliminary matter, defendants argue that because Aeroground signed the permit with the city in October 2000, which explicitly requires compliance with the card check rule, Aeroground waived the ability now to argue that the rule is preempted by federal law. It is well established, however, that waiver is not effective unless it is a "voluntary or intentional relinquishment of a known right." Matsuo Yoshida v. Liberty Mut. Ins. Co., 240 F.2d 824, 829 (9th Cir. 1957). The court's analysis of waiver should focus on the mental attitude of the actor. Id.

In this regard, Aeroground points out that it did not voluntarily sign the permit. See Bonino Decl (Doc # 82), ¶¶ 2-5. In fact, Aeroground protested to the airport that it did not want to sign the permit because of the requirement of compliance with the card check rule. Id, ¶ 5. Defendants, however, gave Aeroground no choice because without the permit Aeroground could not service its airline customers at the airport. Aeroground's decision to sign the permit thus appears not to have been voluntary. Accordingly, the court concludes that defendants' argument based on waiver lacks merit.

III

To prevail on a motion for preliminary injunction, the moving party must satisfy one of two tests available in this circuit. Under the traditional test, the party must demonstrate: (1) irreparable injury if the relief is denied; (2) probability of success on the merits; (3) the balance of potential harm favors the moving party; and (4) the public interest favors the injunction. See International Jensen, Inc. v. Metrosound USA Inc., 4 F.3d 819, 822 (9th Cir. 1993). Under the alternative test, the moving party can prevail "by demonstrating either (1) a combination of probable success on the merits and the possibility of irreparable injury if the relief is not granted; or (2) the existence of serious questions going to the merits and that the balance of hardships tips sharply in its favor." Id. These two formulations under the alternative test ...


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