National Labor Relations Board v. Harris Teeter Supermarkets

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 17, 2000 Decided June 13, 2000

No. 79-1792

National Labor Relations Board,

Respondent

v.

Harris Teeter Supermarkets,

Movant

On Motion to Vacate Consent Decree

D. Christopher Lauderdale argued the cause for Movant.

With him on the briefs was J. Howard Daniel.

Stanley R. Zirkin, Deputy Assistant General Counsel, Na-

tional Labor Relations Board, argued the cause for respon-

dent. With him on the brief were Leonard R. Page, General

Counsel, Linda Sher, Associate General Counsel, and Gary

Shinners, Assistant General Counsel. Aileen A. Armstrong,

Deputy Associate General Counsel, entered an appearance.

Before: Sentelle, Tatel and Garland, Circuit Judges.

Opinion for the Court filed by Circuit Judge Sentelle.

Sentelle, Circuit Judge: This matter comes before us on

Harris Teeter Supermarkets' motion to vacate a consent

decree we approved in 1986 pertaining to conduct by the

company which gave rise to allegations of labor law violations.

In seeking this relief, the company fails to demonstrate any

harm resulting from the decree's continuing effect distinct

from the harms inherent in any injunctive restraint, fails to

establish the imposition of unforeseen obstacles which make

its compliance with the decree unworkable, and fails to prove

the existence of an extended "clean" compliance record.

Therefore, we deny the company's motion.

I. Background

Harris Teeter is a retail grocery chain currently operating

150 stores and related facilities. In the 1970s, the United

Food & Commercial Workers Union launched an organizing

campaign at Harris Teeter's Charlotte, North Carolina, ware-

house facility. In 1976, the union was certified as the collec-

tive bargaining representative of a large bargaining unit of

warehouse employees.

The warehouse organizing campaign resulted in various

unfair labor practice charges being lodged against the compa-

ny. During the campaign, the company promised an employ-

ee future raises if he would refrain from supporting union

organizing activity, granted employees a raise to discourage

union activity, engaged in coercive interrogation and unlawful

solicitation of employees, interrogated employees regarding

their participation in National Labor Relations Board

("NLRB") proceedings, discharged three leading union adher-

ents, and discharged an employee for appearing as a witness

for the NLRB's general counsel. In 1977, the NLRB found

that Harris Teeter's conduct violated the National Labor

Relations Act ("NLRA" or "Act"). See Harris-Teeter Super

Markets, Inc., 231 N.L.R.B. 1058, 1068-69 (1977).

Two years after the first NLRB order, the Board found

that the company had committed additional violations of the

Act at the Charlotte warehouse during 1976 and 1977. Spe-

cifically, the company unlawfully interrogated employees

about the union election, created the impression that the

employees' union activities were under surveillance, threat-

ened employees with discharge for engaging in union activi-

ties, and continued to intimidate and threaten employees with

job-related retaliation after the election of the union. See

Harris-Teeter Super Markets, Inc., 242 N.L.R.B. 132, 167

(1979). In 1981, this court entered a judgment enforcing the

NLRB's 1979 order. See Local 525, Meat, Food and Allied

Workers Union v. NLRB, 644 F.2d 39 (D.C. Cir. 1981) (table).

In 1984, the NLRB sought to have Harris Teeter held in

contempt for violating the court's 1981 enforcement order.

The Board alleged that the company had made threats to

relocate the Charlotte warehouse if employees would not

disavow the union, supported a card-signing campaign to oust

the union, disparately enforced rules regarding access to

company facilities, restricted the break time activity of union

supporters, and stated that it did not hire blacks or other

minorities because they would favor the union. In 1986, this

court approved a stipulation providing for the entry of a

consent order, or consent decree, against the company. The

consent decree required Harris Teeter to (1) fully comply

with the court's 1981 judgment, and not engage in, induce,

encourage, permit, or condone any violation of the judgment;

(2) refrain from engaging in specified anti-union conduct and

from otherwise interfering with, restraining, or coercing the

employees' exercise of their rights under the NLRA; (3) post

a remedial notice for 60 days; (4) mail copies of the notice

and the consent decree to all current and former warehouse

employees; (5) file a sworn statement listing the steps taken

to comply with the court's directives; (6) pay the NLRB's

costs of $8,000; and (7) require supervisor Mike Weaver to

read the consent decree and signify in writing that he had

read and understood the consent decree and the court's 1981

judgment and that he would comply with the 1981 judgment.

The consent decree also subjected Harris Teeter to a pro-

spective non-compliance fine of $10,000 for each future viola-

tion of the decree and the 1981 judgment. The decree

applied to all of Harris Teeter's facilities.

Harris Teeter promptly complied with requirements (3)

through (7) of the consent decree. With regard to the

remaining requirements, Harris Teeter has never been found

in contempt of the decree. However, the NLRB has issued

decisions finding that Harris Teeter has engaged in post-1986

unfair labor practices. Specifically, in 1989, the Board found

that the company had violated the NLRA when, at the

Charlotte warehouse, it unilaterally promulgated a sexual

harassment policy, unilaterally changed a break policy and

issued an unlawful warning pursuant to the changed policy,

unilaterally implemented a change regarding a job progres-

sion policy, and bypassed the union and engaged in direct

dealing with employees by asking them their opinions of a

four-day work week. See Harris-Teeter Super Markets, Inc.,

293 N.L.R.B. 743, 747 (1989). In 1990, the Fourth Circuit

enforced the NLRB's 1989 order. See NLRB v. Harris-

Teeter Supermarket, 905 F.2d 1530 (4th Cir. 1990) (table).

Likewise, in 1992 and 1993, the NLRB found that the compa-

ny had violated various provisions of the Act by prohibiting

employees from receiving gifts from vendors based on an

employee's union sympathies, issuing a series of warnings to

employees because of their discussion of protected activity,

and acting unilaterally on certain matters and directly dealing

with employees. See Harris-Teeter Super Markets, Inc., 307

N.L.R.B. 1075, 1088 (1992); Harris-Teeter Super Markets,

Inc., 310 N.L.R.B. 216, 217 (1993). All of the aforementioned

misconduct occurred in 1990 or earlier.

In addition, several unfair labor practice charges filed

against the company have been settled between 1986 and

1995. Most of the settlements resulted in the withdrawal of

charges. The most recent settlement cited occurred in 1995

and involved an allegation of the unlawful implementation of a

leave early policy.

Harris Teeter now seeks to have this court vacate the 1986

consent decree. The company contends that the consent

decree should be vacated because it has "never been held in

contempt of any provision of [the] order since its entry in

1986," "has not been found to have violated the NLRA in

approximately ten years" while at the same time experiencing

substantial growth as a company, has made significant

changes in its management personnel since the decree's en-

try, has taken other various organizational measures to en-

sure compliance with the decree, and should be freed from

the "stigma" of the decree. The NLRB opposes vacating the

consent decree.

II. Discussion

Rule 60(b)(5) of the Federal Rules of Civil Procedure

provides the basis for this motion to vacate the consent

decree. See Rufo v. Inmates of Suffolk County Jail, 502 U.S.

367, 378-79 (1992) (applying Rule 60(b) to modification of

consent decrees); United States v. Western Elec. Co., 46 F.3d

1198, 1203 n.5 (D.C. Cir. 1995) (associating Rufo analysis

specifically with Rule 60(b)(5)). In part, the rule provides:

On motion and upon such terms as are just, the court

may relieve a party or a party's legal representative from

a final judgment, order, or proceeding for the following

reasons ... (5) the judgment has been satisfied, released,

or discharged, ... or it is no longer equitable that the

judgment should have prospective application....

Fed. R. Civ. P. 60(b)(5). As we have previously stated, the

"[m]odification [of a judgment] is an extraordinary remedy, as

would be any device which allows a party ... to escape

commitments voluntarily made and solemnized by a court

decree." Twelve John Does v. District of Columbia, 861 F.2d

295, 298 (D.C. Cir. 1988). Therefore, we approach Harris

Teeter's modification request with caution. Fortunately, Su-

preme Court precedent provides us with guidance.

In Rufo, the Suffolk County Sheriff moved to modify a

consent decree which provided remedial relief for unconstitu-

tional jail conditions. See Rufo, 502 U.S. at 374-75. The

relief included the construction of a new jail containing single

occupancy cells for pretrial detainees. See id. at 375. Dur-

ing a delay in construction, the inmate population increased

considerably and rendered the original plans inadequate to

handle the increase. See id. at 375-76. The sheriff moved to

modify the decree to allow at least some double bunking but

both the district court and First Circuit Court of Appeals

refused to order the modification. See id. at 376-78. In

vacating and remanding the case for reconsideration, the

Supreme Court rejected the modification standard adopted by

the lower courts which required a "clear showing of grievous

wrong evoked by new and unforeseen conditions," United

States v. Swift & Co., 286 U.S. 106, 119 (1932). It held

instead that "a party seeking modification of a consent decree

must establish that a significant change in facts or law

warrants revision of the decree and that the proposed modifi-

cation is suitably tailored to the changed circumstances."

Rufo, 502 U.S. at 377, 393. According to the Court, modifica-

tion "may be warranted when changed factual conditions

make compliance with the decree substantially more oner-

ous"; "when a decree proves to be unworkable because of

unforeseen obstacles"; "or when enforcement would be detri-

mental to the public interest." Id. at 384.

Although Rufo concerned the institutional reform of an

instrumentality of government, we have applied the Rufo

Rule 60(b)(5) equity analysis to other types of cases involving

requests for consent decree modification. See Western Elec.

Co., 46 F.3d at 1203. In doing so, we reasoned that "the

Supreme Court's summary of what might render a modifica-

tion 'equitable' relates to all types of injunctive relief." Id.

However, we also noted, as a general proposition, "it should

generally be easier to modify an injunction in an institutional

reform case than in other kinds of cases." Id. Keeping in

mind both the flexibility and limitations contained in a Rule

60(b)(5) modification analysis, we will evaluate a request for

consent decree modification concerning the in-house reform of

a private entity under the Rufo standard. Thus, we proceed

to address Harris Teeter's request to vacate the consent

decree based on its allegation of "a significant change in

facts."

Applying that standard to the facts before us, we hold that

Harris Teeter has not met its burden of demonstrating events

or changed facts that "make compliance with the decree

substantially more onerous," make the decree "unworkable

because of unforeseen obstacles," or make "enforcement [of

the decree] detrimental to the public interest." First, Harris

Teeter completely fails to demonstrate how any personnel

changes, internal reorganization, increase in facility size, or

alleged "stigma" attached to being subject to a consent order

has made its compliance with the decree "substantially more

onerous." Harris Teeter does no more than complain about

harms inherent in all injunctive restraints. Second, Harris

Teeter does not cite to any "unforeseen obstacles" which

make compliance with the consent decree "unworkable." In-

ternal compliance mechanisms instituted to effectuate the

decree, company growth not affected by or affecting the

consent decree, and any "stigma" attaching to a consent

decree do not rise to the level of "obstacles" envisioned by the

Supreme Court as justifying relief nor hardly make compli-

ance with the decree "unworkable." Cf. Rufo, 502 U.S. at 391

(referring to modification as a means "to resolve the problems

created by the change in circumstances") (emphasis added).

Self-imposed hurdles and hurdles inherent in a consent de-

cree's entry do not count as "obstacles." Cf. id. at 380-81,

384 (describing with approval the Third Circuit's reference in

Philadelphia Welfare Rights Organization v. Shapp, 602 F.2d

1114, 1121 (3d Cir. 1979), to "circumstances largely beyond

the defendants' control and not contemplated by the court or

parties"). Moreover, the company does not even claim that

the change in circumstances makes the decree "unworkable."

Third, any argument that the continued enforcement of the

decree would be "detrimental to the public interest" would

seem most unlikely given Harris Teeter's purely private

interest in wanting to be free of the decree. Accordingly, we

heed the Supreme Court's warning to order modification in

light of "significant change" and where "genuine changes

requir[ing] modification" exist. Id. at 384, 379 (emphasis

added). Therefore, we hold that Harris Teeter has failed to

meet its burden of establishing changes which give rise to an

entitlement to modification.

Apart from citing to in-house changes and an alleged

stigma as grounds to vacate the decree, Harris Teeter points

out that there has been no finding of a failure by the company

to comply with the decree since the decree's inception. Spe-

cifically, the company has complied with the affirmative por-

tions of the order, has never been found to violate the

negative portions of the order, and has not engaged in any

conduct since 1990 found to violate the NLRA. While we

agree that good faith compliance certainly matters, extended

compliance alone does not compel the modification of a con-

sent decree. As the Supreme Court explained in Board of

Education v. Dowell, 498 U.S. 237 (1991), a case involving the

modification of a desegregation decree, "compliance with pre-

vious court orders is obviously relevant." Id. at 249. Howev-

er, Dowell and Rufo must be read together and the precedent

leads us to conclude that compliance over an extended period

of time is not in and of itself sufficient to warrant relief. As

we noted above, parties who have successfully sought modifi-

cation have also established events or changed circumstances

which "make compliance with the decree substantially more

onerous," make the decree "unworkable because of unfore-

seen obstacles," or make "enforcement [of the decree] detri-

mental to the public interest." We do not rule out the

possibility that an extended period of good faith compliance

will convince us to modify a consent decree. However, we

find it unnecessary to erect a bright line test regarding the

definition of extended good faith compliance or determine

how a compliance showing interrelates with a Rufo burden or

detriment showing in order to deny relief to Harris Teeter

because the company fails to establish any significant or

genuine burden or detriment caused by the proffered

changed circumstances.

Regardless of what the standard would be for an adequate

period of compliance, Harris Teeter has failed to establish a

"clean" time frame of compliance given the company's post-

1986 violations of the NLRA, its failure to adequately explain

the numerous charges filed against it, and its failure to

adequately explain the settlements it reached between 1986

and 1995. The sparse record provided by the company does

not clarify matters. True, the company toned down its

tendency to commit unfair labor practices after the entry of

the consent decree. However, we are mindful that the reduc-

tion in violation frequency might be a reflection of the effec-

tiveness of the prospective fine schedule contained in the

consent order rather than a result of good intentions on the

company's part. Nonetheless, Harris Teeter's post-1986

track record shows two litigated decisions, numerous unex-

plained charges filed against the company, and several unex-

plained settlements. In short, the company does not carry its

burden of showing a clean record of compliance over a

substantial period of time. Thus, Harris Teeter does not

establish a case for modification on any count.

III. Conclusion

Harris Teeter fails to establish "a significant change in

facts" which would prompt this court to vacate the consent

decree. We do not need to delve into the company's failure

to address the portion of Rufo requiring a party seeking

modification to show that "the proposed modification is suit-

ably tailored to the changed circumstance," 502 U.S. at 393,

because the company did not prove changed circumstances

warranting relief. Therefore, we deny the company's motion

to vacate the consent decree.1

__________

1 In its brief, Harris Teeter stated that it "further s[ought] to

dissolve this order based on the suggestion ... of the Ninth Circuit

that a failure to request vacation based on good-faith compliance

with a consent decree will preclude a party from raising such

compliance as a defense to a contempt petition. See, e.g., NLRB v.

Ironworkers Local 433, 169 F.3d 1217[, 1222] (9th Cir. 1999)." Br.

of Harris Teeter at 11. Assuming without deciding that the Ninth

Circuit intended such a rule, we have never held that a party is

required to move for modification or vacation prior to raising a

defense of good faith compliance in a contempt proceeding. As a

matter of judicial economy, we do not want to encourage parties

subject to consent decrees to come to court challenging a decree

____________

merely in order to preserve a defense which may or may not

become relevant in some future proceeding.